Changes vowed in wake of Fund Drive report

Accountant makes
11 recommendations for association’s operation
By carolyn o’connell
Staff Writer

LONG BRANCH — Although an auditor has completed his report of the Long Branch Fire Department Fund Drive Association Inc. and has made 11 recommendations for the operation and management of its financial records, the Fund Drive is still not out of the woods.

The results of the audit were filed with the Attorney General’s Office on June 30 as requested, following two formal complaints about the organization’s operation. The complaints were filed with the state Division of Consumer Affairs, a regulatory body within the state’s Department of Law and Public Safety which oversees Charitable Registrations and Investigations.

Harvey "Ross" Schiffler, president of the Elberon Fire Company, filed the initial complaint with the Attorney General’s Office and a second complaint was filed by another member of the fire department.

Fire Chief Sam Tomaine said he was not aware that the Attorney General’s Office is looking into the operation of the fund drive.

Before the complaints were filed with the state Stephen M. Fitzpatrick, a 27-year member of the fire department and a lieutenant in the city’s paid fire division twice brought the matter before the mayor and council. At that time Fitzpatrick requested answers about the legal operation of the fund drive from City Attorney James Aaron of Ansell, Zaro, Grimm and Aaron, Ocean Township

In response to the complaints filed with the state an auditing committee for the Fund Drive Association was formed at the Nov. 18 Fire Department Association of Officers meeting. One member from each of the nine firehouses was elected to the committee.

Councilman Anthony Giordano, a volunteer firefighter was selected as chairman of the committee, which retained the firm of Michael Rescinio of Lawson, Rescinio and Schibell, Oakhurst, to look into the drive’s financial records.

According to Giordano, Rescinio completed a general audit randomly selecting transactions from the years ending Dec. 31 2000 and 2001. The transactions were tested by verifying the activity making sure there was an invoice that corresponds with the check or checks issued and in turn identifying the transaction with the vendor for validity.

"Most of the recommendations are boiler plate suggestions," said Giordano, a senior vice president and chief financial officer of Monmouth Community Bank, "and many of them have been implemented or will be implemented shortly."

"It’s what I expected to see," said Schiffler. "It’s a typical audit; certain items are checked and the books are looked into. Whether it is a true picture or not I can’t say."

He said he also could not say if the money the association collected was spent properly. "That is up to the attorney general, and he may have some questions on how the money was spent," Schiffler said. "And then it would be his (the attorney general’s) decision to take corrective actions."

"What we know now," said Tomaine, "is that we have to have the assets audited that are over $100,000. We did not know that before but will do it from this point forward."

The recommendations, according to Giordano, include having more people handle the day-to-day operations of the organization. As an example, Giordano noted, that whoever is doing the bookkeeping should not be doing the bank reconciliations.

Another recommendation was to require the board in charge of the fund to have written minutes of actions taken and documentation of the approval of transactions.

The organization should also consider using a lockbox service, according to the auditor’s recommendations. That is a service provided by a bank where money can be sent and deposited directly into the fund drive account.

"The fund drive does not generate enough activity to warrant a lockbox," said Giordano. "This is an example of a boiler-plate accounting practice."

Rescinio, according to Giordano, also suggested expanding the number of trustees who oversee the drive’s operation.

The accountant also recommended ending the process of making final disbursements of funds before the end of the fiscal year on Dec. 31.

Giordano explained that the existing policy was to make the year’s final disbursement in November to give the drive time to file financial activity statements for the year with the state and the Internal Revenue Service.

The organization should also consider adding a statement, "no cash please," to its fund drive request mailers and developing a formal accounting manual outlining the drive’s accounting procedures, according to Rescinio.

He also said invoices should be canceled when paid to avoid the risk of duplicate payments and the organization should consider adding board job descriptions to its bylaws for its board members to review.

Lastly, the accountant recommended obtaining bond insurance for anyone who handles money for the drive.

"The auditing committee has done their job," said Giordano. "Now it’s up to the chiefs to take the leadership along with the current board of trustees because, even though the drive is established as a 501 (C)3 not-for-profit organization, it is still part of the Long Branch Fire Department."

Giordano did say that he is certain that the board will hold elections this year as called for in the organization’s bylaws.

As for the by-laws, Tomaine noted, they will be revamped for modern times.

An election of trustees was not held due to lack of interest, the fund drive’s director Robert Faye had said earlier this year. He did not return calls seeking comment for this story.

Schiffler said the organization’s failure to follow its bylaws is what led to his filing a complaint with the state.

"I am not saying that they spent it (the money) improperly and I am not and have never accused anyone of spending the money improperly; but the situation does raise some questions," he said, adding, "it’s now up to the attorney general to decide and they (the trustees) are responsible to this (the attorney general’s) office.

Schiffler said he filed another letter with the state as an amendment to the complaint suggesting a thorough discussion of the issues in the complaint.

Tomaine also is not ready to let the matter rest. He said he is looking into the possibility of taking legal action against those who brought the complaints for bringing embarrassment to the fire department.