COMPLIANCE AUDIT ____________ Wakefield Ambulance Relief Association Lancaster County, Pennsylvania For the Period January 1, 2010 to December 31, 2013 ____________ August 2015 Mr. Kevin Brown, President WAKEFIELD AMBULANCE VOLUNTEER FIREFIGHTERS’ RELIEF ASSOCIATION Lancaster County We have conducted a compliance audit of the Wakefield Ambulance Volunteer Firefighters’ Relief Association pursuant to authority derived from Article VIII, Section 10 of the Constitution of the Commonwealth of Pennsylvania, Section 403 of The Fiscal Code, Act of April 9, 1929, (P.L. 343, No. 176), and mandated by the Volunteer Firefighters’ Relief Association Act, as consolidated by the Act of November 23, 2010 (P.L. 1181, No. 118), at 35 Pa.C.S. § 7411 et seq., for the period January 1, 2010 to December 31, 2013. We conducted this compliance audit in accordance with Government Auditing Standards applicable to performance audits, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our audit results and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our audit results and conclusions based on our audit objectives. The objectives of the audit were: 1. To determine if the volunteer firefighters’ relief association took appropriate corrective action to address the findings contained in our prior audit report; and 2. To determine if the volunteer firefighters’ relief association received state aid and expended state aid and accumulated relief funds in compliance with applicable state laws, contracts, bylaws and administrative procedures. Our audit was limited to the areas related to the objectives identified above. Volunteer firefighters’ relief association officers are responsible for establishing and maintaining effective internal controls to provide reasonable assurance that the Wakefield Ambulance Volunteer Firefighters’ Relief Association’s administration of state aid and accumulated relief funds complies with applicable state laws, contracts, bylaws and administrative procedures including the safeguarding of assets. In conducting our audit, we obtained an understanding of the volunteer firefighters’ relief association’s internal controls as they relate to the association’s compliance with those requirements and that we considered to be significant within the context of the audit objectives, and assessed whether those significant controls were properly designed and implemented. Our audit procedures also included tests of documentary evidence supporting the Wakefield Ambulance Volunteer Firefighters’ Relief Association’s recorded financial transactions, tests of the physical existence of inventories, interviews of selected officials and direct confirmation of the Wakefield Ambulance Volunteer Firefighters’ Relief Association’s cash, investments, and certain other assets and liabilities as of December 31, 2013, with the custodians of the funds, debtors, creditors, and financial institutions to the extent necessary to satisfy the audit objectives. Additionally, we performed procedures to provide a reasonable assurance of detecting instances of violations of legal and regulatory requirements or violations of provisions of contracts that are significant within the context of the audit objectives. The results of our audit, for the period January 1, 2010 to December 31, 2013, found the Wakefield Ambulance Volunteer Firefighters’ Relief Association took appropriate corrective action to address one of the three findings contained in our prior audit report. However, the Wakefield Ambulance Volunteer Firefighters’ Relief Association failed to take appropriate corrective action to address the two remaining findings contained in our prior audit report, as listed below and discussed in the Status of Prior Audit Findings section of this report. In addition, the results of our audit found the Wakefield Ambulance Volunteer Firefighters’ Relief Association did not, in all significant respects, receive state aid and expend state aid and accumulated relief funds in compliance with applicable state laws, contracts, bylaws, and administrative procedures, as noted in the findings and observation listed below and discussed later in this report. Therefore, the Wakefield Ambulance Volunteer Firefighters’ Relief Association may be subject to the potential withholding of its upcoming state aid distribution, as discussed in the Potential Withhold of State Aid section of this report. Finding No. 1 – Noncompliance With Prior Audit Recommendation – Unauthorized Expenditures Finding No. 2 – Noncompliance With Prior Audit Recommendation – Failure To Maintain A Complete And Accurate Equipment Roster Finding No. 3 – Untimely Deposit Of State Aid Finding No. 4 – Failure To Maintain Minutes Of Meetings Observation – Wakefield Ambulance Association’s Primary Purpose Is to Provide Emergency Medical Services and Transport the General Public The results of our tests also indicated the Wakefield Ambulance Volunteer Firefighters’ Relief Association expended funds as presented in the Accompanying Expenditure Information and, as of December 31, 2013, had a cash balance of $21,211 and an investment balance with a fair value of $10,817. The contents of this report were discussed with the management of the Wakefield Ambulance Volunteer Firefighters’ Relief Association and, where appropriate, their responses have been included in the report. We would like to thank the relief association officials for the cooperation extended to us during the conduct of the audit. January 30, 2015 Eugene A. DePasquale Auditor General CONTENTS Page Background ......................................................................................................................................1 Status of Prior Findings ...................................................................................................................3 Findings and Recommendations: Finding No. 1 – Noncompliance With Prior Audit Recommendation – Unauthorized Expenditures ................................................................................................4 Finding No. 2 – Noncompliance With Prior Audit Recommendation – Failure To Maintain A Complete And Accurate Equipment Roster ...........................13 Finding No. 3 – Untimely Deposit Of State Aid ..................................................................14 Finding No. 4 – Failure To Maintain Minutes Of Meetings ................................................15 Observation: Observation – Wakefield Ambulance Association’s Primary Purpose Is to Provide Emergency Medical Services and Transport the General Public ..................17 Potential Withhold of State Aid .....................................................................................................19 Accompanying Expenditure Information ......................................................................................20 Report Distribution List .................................................................................................................21 BACKGROUND Pursuant to Article VIII, Section 10 of the Constitution of the Commonwealth of Pennsylvania, Section 403 of The Fiscal Code, Act of April 9, 1929, (P.L. 343, No. 176), and the Volunteer Firefighters’ Relief Association Act, as consolidated by the Act of November 23, 2010, (P.L. 1181, No. 118), at 35 Pa.C.S. § 7411 et seq., the Department of the Auditor General’s duty is to audit the accounts and records of every volunteer firefighters’ relief association to determine that funds received under the Foreign Fire Insurance Tax Distribution Law, Act of December 18, 1984, (P.L. 1005, No. 205), as amended, 53 P.S. § 895.701 et seq. (commonly referred to as Act 205), are properly expended. The Wakefield Ambulance Relief Association, herein referred to as the Wakefield Ambulance Volunteer Firefighters’ Relief Association, is a charitable organization that was formed primarily to provide emergency medical services and transport the general public. Act 118 governs the overall operation of the volunteer firefighters’ relief association. The relief association’s bylaws define the specific operational procedures by which the volunteer firefighters’ relief association conducts business. To fulfill its primary purpose, Act 118 authorizes specific types of expenditures and prescribes appropriate volunteer firefighters’ relief association investment options. Within the parameters established by Act 118, it is the responsibility of the volunteer firefighters’ relief association to choose investments in a proper and prudent manner. Volunteer firefighters’ relief associations receive public tax monies, and the association officers therefore have a responsibility to the public to conduct the association’s financial affairs in a businesslike manner and to maintain sufficient financial records to support the propriety of all association transactions. Volunteer firefighters’ relief association officers are also responsible for ensuring that the association operates in accordance with applicable state laws, contracts, bylaws and administrative procedures. Act 205 sets forth the computation of the Foreign Fire Insurance Tax Distribution paid to each applicable municipality throughout the Commonwealth of Pennsylvania. The amount of the distribution is based upon the population of each municipality and the market value of real estate within the municipality. Upon receipt of this distribution, the municipality must allocate the funds to the volunteer firefighters’ relief association of the fire service organization or fire service organizations, which is or are recognized as providing the service to the municipality. 1 BACKGROUND – (Continued) The Wakefield Ambulance Volunteer Firefighters’ Relief Association was allocated state aid from the following municipalities: Municipality County 2010 2011 2012 2013 Drumore Township Lancaster $4,877 $ 6,663 $6,236 $6,711* Fulton Township Lancaster $7,108 $12,000 $6,883 $5,000 Little Britain Township Lancaster $2,572 $ 4,338 $2,484 $2,799 *The 2013 state aid allocation received from Drumore Township was not deposited by the Wakefield Ambulance Volunteer Firefighters’ Relief Association until January 6, 2014 as disclosed in Finding No. 3 in this report. The volunteer firefighters’ relief association and the affiliated service organization are separate, legal entities. The Wakefield Ambulance Volunteer Firefighters’ Relief Association is affiliated with the following ambulance service organization: Wakefield Ambulance Association 2 WAKEFIELD AMBULANCE VOLUNTEER FIREFIGHTERS’ RELIEF ASSOCIATION STATUS OF PRIOR FINDINGS COMPLIANCE WITH PRIOR AUDIT FINDING AND RECOMMENDATION The Wakefield Ambulance Volunteer Firefighters’ Relief Association has complied with one of the three prior audit findings and recommendations, as follows: • Inadequate Surety (Fidelity) Bond Coverage By ensuring their name-scheduled bond policy is in the name of the current treasurer. NONCOMPLIANCE WITH PRIOR AUDIT FINDINGS AND RECOMMENDATIONS The Wakefield Ambulance Volunteer Firefighters’ Relief Association has not complied with two of the three prior audit findings. These findings are noted below and discussed in detail in the Findings and Recommendations section of this report: • Unauthorized Expenditures Although the relief association received reimbursement amounting to $8,738 on August 17, 2010 for the unauthorized expenditures identified in the prior audit report, a similar condition occurred during the current audit period as disclosed in Finding No. 1 contained in this report. • Failure To Maintain A Complete And Accurate Equipment Roster We are concerned by the relief association’s failure to correct those previously reported audit findings. The association management should strive to implement the recommendations and corrective actions noted in this audit report. 3 WAKEFIELD AMBULANCE VOLUNTEER FIREFIGHTERS’ RELIEF ASSOCIATION FINDINGS AND RECOMMENDATIONS Finding No. 1 – Noncompliance With Prior Audit Recommendation – Unauthorized Expenditures Condition: Although the relief association received reimbursement amounting to $8,738 on August 17, 2010 for the unauthorized expenditures identified in the prior audit report, a similar condition occurred during the current audit period. The relief association expended funds for the following items during the current audit period that are not authorized by Act 118: Date Check No. Description Amount 01/15/10 774 Cell phone service $ 184 01/15/10 775 Pager repairs 68 02/26/10 900 Cell phone service 184 03/12/10 901 Cell phone service 186 03/19/10 902 Radio/pager parts 42 03/26/10 903 Radio repairs 206 04/09/10 904 Docking station for computer 867 04/09/10 905 Low band radio 1,425 04/09/10 906 Motorola talkabouts 120 04/16/10 907 Cell phone service 184 04/16/10 908 Radio repairs 288 04/23/10 909 Radio parts 90 04/30/10 910 Lightboxes, console, flashlight 662 04/30/10 911 Mounting hardware for computer-ambulance 5-13-2 287 05/14/10 913 Cell phone service 184 05/26/10 914 Radio repairs 153 05/28/10 915 Radio parts 72 06/04/10 916 Purchase/installation of rear view camera system 455 06/11/10 917 Radio repairs 200 06/16/10 918 Cell phone service 186 06/16/10 919 Labor/installation for equipment in ambulance 2,092 06/25/10 920 Wi-fi modem and antenna for ambulance 1,550 07/15/10 921 Cell phone service 187 08/10/10 922 Cell phone service 436 08/26/10 923 Installation of wi-fi modem and antenna 125 08/26/10 924 2 phones with cases, sd cards, and cables 374 08/26/10 925 29 embroidered polo shirts 709 08/31/10 926 Training for water rescue for the first responder class 275 09/13/10 927 Cell phone service 278 10/05/10 928 Radio repairs 78 10/19/10 930 Embroidery digitizing fee 45 10/19/10 931 Cell phone service 279 4 WAKEFIELD AMBULANCE VOLUNTEER FIREFIGHTERS’ RELIEF ASSOCIATION FINDINGS AND RECOMMENDATIONS Finding No. 1 – (Continued) Date Check No. Description Amount 10/19/10 932 Tablet $ 1,850 10/25/10 933 EMT re-certification 75 11/02/10 934 19 tactical shirts 1,072 11/08/10 935 Purchase and installation of siren 840 11/12/10 936 4 cotton t-shirts, 8 polo shirts 268 11/12/10 937 Portable radio and desk charger 683 11/12/10 938 3 tactical shirts 185 11/19/10 939 Cell phone service 279 11/19/10 940 Radio parts 87 12/03/10 941 Radio repairs 78 12/14/10 942 Cell phone service 278 12/14/10 944 Repairs to pagers 72 01/17/11 946 Cell phone service 279 01/17/11 947 UHF antenna 10 02/08/11 948 Mounting brackets, docking stations, phone spring clip 210 02/22/11 949 Cell phone service 279 03/11/11 950 Ship pagers for warranty repair 10 03/16/11 951 Cell phone service 419 03/29/11 953 Repairs to repeater 190 04/12/11 955 Remove/install communications equipment into 2,402 ambulance and rearview camera system/set-up 04/18/11 956 Cell phone service 341 04/21/11 957 Interface plate and universal vehicle docking station 448 05/14/11 958 21 station short sleeve shirts 650 05/14/11 959 Cell phone service 341 05/27/11 960 Radio repairs 180 06/13/11 961 Cell phone service 340 07/12/11 962 Cell phone service 340 08/12/11 964 Cell phone service 344 08/13/11 965 CPR class and Emergency Responder class 294 08/16/11 966 Pager repairs 68 09/02/11 967 EMS conference 200 08/26/11 968 6 shirts 129 09/02/11 969 EMS conference 200 09/13/11 970 Cell phone service 340 10/11/11 972 7 short sleeve station shirts 198 10/12/11 973 Cell phone service 337 10/18/11 974 Purchase/installation of lightbar and various lights 6,774 5