JEFFERSON CITY, Mo (Sept. 26, 2018) Auditor Galloway today released a citizen-requested audit of the Smithville Area Fire Protection District, which serves citizens in both Clay and Platte counties. Among the findings, the audit questioned the district's improper incentive payments, poor planning for the construction of Fire Station #3, and credit card and travel expenditures.
The audit began in May 2017, but faced significant delays when fire district officials were unable to account for documentation requested by auditors. After numerous attempts to compel the district and former fire chief to provide documents, Auditor Galloway took the unusual step of issuing a subpoena to ensure auditors had all available information.
"Citizens need to be confident that their hard-earned tax dollars are going to worthwhile expenses that support the health and safety of their community, not bonus payments and meals for district officials," Auditor Galloway said. "Mismanagement in the fire district went so far that officials were unable to provide basic information to audit staff, making it necessary to compel cooperation to get answers."
Fire district staff, including the former Fire Chief and Assistant Fire Chief, received more than $200,000 in incentive payments between 2011 and 2015 that likely violated Missouri law. The former fire chief would calculate the payments based on a percentage of the budget surplus expected to carry over into the next year. The board would approve these estimated payments, but the actual incentive payments consistently exceeded the estimated amounts approved, resulting in $86,000 in overpayments. Additionally, these payouts are likely to have violated the Missouri Constitution's prohibition on bonus payments to public employees.
The report also discussed poor planning for the construction of Fire Station #3. Voters approved a bond issuance to construct the new station. Despite the failure of a tax increase to support additional staffing and cover ongoing operational and maintenance costs, the board moved forward with construction of the new station. There was no analysis of proposed additional costs or other long-term financial planning. This lack of proper planning meant the fire district did not have the resources to staff or fully equip the station when it was completed in May 2017. As of August 2018, the station continues to essentially sit unused.
Auditors examined travel and credit card expenditures between Dec. 2015 and May 2017 and found $3,600 in purchases with inadequate documentation showing how the expenses related to district business. This included food and drink purchases at local restaurants, food and gift cards for a Christmas event and purchases at a surplus store, convenience stores, and auto supply stores. The audit also detailed how the district wasted over $2,000 in unnecessary travel costs and overpaid travel expenses.
The audit also questioned the employment contract of the former fire chief. The terms of the contract did not address termination for reasons other than cause and included an automatic renewal. The board placed the former fire chief on leave Aug. 21, 2017, but he remained employed with the district until Feb. 28, 2018. Due to the nature of the contract, the former fire chief was paid salary and benefits totaling $92,000 during that time.
Since 2016, the district's Board of Directors has experienced 100 percent turnover. The current Board consists of five members, one of whom took office in mid-2016, one in 2017, and three in 2018. In addition, the new fire chief was appointed March 1, 2018.
"Citizens requested this audit after questioning the management of the finances and operations of their fire protection district, and we've detailed many of those concerns to give them the answers they deserve," Auditor Galloway said. "This report also lays out specific recommendations and provides guidance to the board's new leadership so they can fix the problems that plagued the district for years."
The audit recommends better oversight of accounting processes and establishing policies and procedures for firefighter health, safety, training and respiratory protection. The audit also identified weaknesses in Sunshine Law compliance related to proper retention of closed meeting minutes documenting board decisions and public access to records.
The audit has been provided to local, state and federal law enforcement officials. A complete copy of the report for Smithville Area Fire Protection District, which received an overall rating of poor, can be found here.