Goodman Fire District Receives Poor Rating

STATE AUDIT OUTLINES ISSUES REGARDING DEBIT CARDS, RECORDS, PROPERTY

A performance rating of “Poor” — the lowest possible rating — was given to the Goodman Area Fire Protection District in an audit performed by the Missouri Auditor’s office.

The audit was released Monday by Missouri State Auditor Nicole R. Galloway, CPA.

According to the auditor, the objectives of this audit were to:

• Evaluate the district’s internal controls over significant management and financial functions;

• Evaluate the district’s compliance with certain legal provisions;

• Evaluate the economy and efficiency of certain management practices and operations, including certain financial transactions.

The audit disclosed numerous findings which require the district’s

Board of Directors’ immediate attention. The audit identified deficiencies in internal controls; noncompliance with legal provisions, and the need for improvement in management practices and procedures.

Board President Jim Morgan said he is in the process of preparing a rebuttal to all the data in the audit.

“There are explanations regarding the items listed on the audit,” Morgan said.

According to the audit, on Dec. 31, 2013, the president of the board was Marshall Long, not Morgan. Morgan became president of the board in April 2014.

Morgan commented that this whole thing, which is a “witch-hunt type situation,” stemmed from a couple of people at the fire department who were not doing their jobs, therefore, they were dismissed. “Now they have a vendetta against me,” Morgan said, “and that is why this audit came about.”

“Much of the audit data is not true and there needs to be a more in-depth look at the Goodman Area Fire Protection District rather than jumping to conclusions,” Morgan said.

Morgan noted that many of the items the audit questioned happened before he became president.

Morgan said, regarding the items on his property, “there was never a problem before where the property was located. The items are on five acres I own and are there because it makes it easier for me to work on them — work I do for the department without any compensation.”

“There are just some things we went ahead and did using common sense,” Morgan said. “For example, a couple of times, the firefighters had to remain at the fire scene during the night — up to six hours. They were tired and hungry and we used the debit card for someone to go to Casey’s to get them something to eat. That is being fixed now — we have drawn up a resolution which will cover these types of situations.”

The Goodman Area Fire Protection District was organized in 2005. It covers 96 square miles and has three fire stations. It is not connected in any way with the city government of Goodman.

The elected board acts as the policy-making body for district operations. The five board members serve either four or six-year terms without compensation.

The fire chief and all firemen positions are volunteer with no compensation. The audit found: • Improper district debit card use and online purchases including personal and unsupported purchases.

• The district does not have a policy restricting or limiting the use of the debit cards.

• A district debit card was used to pay fees for six calls using Skype totaling $60 which Morgan indicated were fraudulent, however the charges were not disputed or a refund obtained.

• The district debit card assigned to Morgan was used to pay eight vendor invoices that did not show the district as the customer.

• In March 2012, Morgan circumvented debit card purchase limits by splitting a purchase.

• District debit cards were also used to make several food purchases during trips when overnight travel was not required. Regarding capital assets: • The district does not maintain records of capital assets, including land, buildings, vehicles, equipment, and other personal property. Numerous district assets are maintained at the personal residence of Morgan and a district generator is maintained at the personal residence of the district’s lieutenant. The audit states it is questionable why the district is storing assets on Morgan’s property when the district maintains buildings and land at three other locations within the district.

• The district failed to obtain insurance coverage on four district vehicles. Regarding disbursements: The board does not maintain a list of bills approved and does not document its approval of individual invoices; and does not have adequate controls over bank accounts and checks.

Regarding accounting controls:

• Accounting duties are not segregated. There is no supervisory review of the work performed by the board secretary/treasurer, who is responsible for all record-keeping duties of the fire district.

• The district does not issue receipt slips for monies received in accordance with district bylaws.

• The district does not maintain accurate accounting records. Financial reports presented for board review were not always accurate or consistently prepared.

Regarding budgetary process:

• District budgets did not contain all required elements. The board does not adequately monitor budget-to-actual revenues and expenditures.

Regarding meetings and bylaws:

• The board secretary/ treasurer failed to document the voting and approval process of some board decisions and meeting minutes were not always signed as required by district bylaws. The district also does not have an official copy of up-to-date bylaws, and the board has not adopted resolutions and ordinances in accordance with district bylaws.

Regarding electronic data security:

• The district does not backup financial and other computer system data, leaving the district’s electronic data at risk if data could not be recovered. The district does not have anti-virus software installed on the computer systems to ensure protection of district data.

Regarding conflicts of interest:

• Officials and employees did not always follow the district’s bid policy. Bylaws indicate that no construction or purchase contract for work or materials or both, involving an expense of $10,000 or more shall be entered into unless a notice for bids shall first be published once a week for three consecutive weeks in at least one newspaper of general circulation in the Goodman area.

• Some activities involving elected board members, President Jim Morgan and Board Member Paul Sprenkle, created actual, or at the very least, the appearance of conflicts of interest.

• The district did not solicit bids for any of the services provided by President/Vice President Morgan or his company. Morgan was former board vice president and is the current board president. Morgan owns a business called Morgan’s Backhoe and Excavating. Morgan has lived in McDonald County for over 60 years.