It Won’t Happen to us…Our Treasurer is Honest Harry

Treasurer arrested, fire company president accused, chief steals funds; the newspaper headlines scream and the citizens of multiple communities sadly shake their heads on a daily basis.  Why do these otherwise civic minded individuals do this?  The answer, unfortunately, is easy.  They’re dishonest; it’s as simple as that.  Maybe they had personal financial problems, gambling issues, or thought they could just get away with it.  Those rationalizations are excuses but don’t change the central fact that those who steal from fire departments are criminals.  Unfortunately, there’s no surefire method to keep them out, at least completely.   Think about the CIA and FBI agents who are vetted more carefully than any firefighter; go through regular polygraphs, and we still end up with the occasional bad apple which we hear about on the 6:30 PM national news.   

There are ways, though you can reduce the chances of your department being on the front page of the newspaper with a photo of your company president doing a perp walk in hand cuffs.  With some basic business controls, procedures, and processes, you can make it harder for these individuals, less tempting, and hopefully discover nefarious activities before they become bank account busting.   

This isn’t about trusting good old Harry who’s as honest as the day is long.  Honest Harry and others like him will welcome financial controls because it removes trust from the equation and the opportunity for questionable activities.  If the opportunity exists, somebody, eventually, will take it.  Maybe not Harry, but who knows about the gambling problem his brother-in-law, the company president has.   

The basics have a lot of common sense components.  You don’t need an MBA to put these in place. 

·         Establish rules.  They need to apply to everyone—no exceptions. 

·         If it involves cash, more than one person needs to be involved.  This can’t be repeated too often, and as the teacher said before the test, you will see this material again. 

·         Have a line item budget.  The treasurer should monitor receipts and revenue versus that projected.  Likewise, the expenditures for each line item should be noted.  A monthly report with this data provides a transparent picture to the organization and helps the leadership with their management responsibilities. 

·         Reconcile bank accounts on a monthly basis.  Another job for the treasurer, right?  Wrong.  Someone other than the treasurer or anyone else handling funds or writing checks should have this job.  This provides an independent verification and removes one obvious opportunity for someone to cook the books. 

·         Periodic audits.  Annual is best, but at least every couple of years, an audit should be completed.  When treasurers change is also another good time to ensure a clean bill of financial health.  Accountants are expensive, you say, and you’re right.  If the funds are hard to come by to pay for an audit, consider asking a local CPA who lives or works in your first due if they would consider doing it as a donation.  Wait until after tax season, though.  Ask if they see any opportunities to improve financial management, procedures or record keeping.  Use their expertise to your advantage. 

·         The two (or more) person rule.  Multiple signatures on checks, counting cash, opening mail, are all times to have more than one person involved.  Cash is not your friend when it comes to financial safeguards.  Minimize it where possible and always, always have more than one person involved. 

This isn’t a comprehensive list but just these few items will go a long way in limiting the opportunity for financial funny business.   

So it’s all about the money, right?  Wrong; the money is important but the main issue is trust.   Not Honest Harry, the long term treasurer.  The trust of the citizens we’ve sworn to protect is what we need to ensure.  It is easily damaged and difficult to repair.  We’re the stewards of that trust, measured by how we take care of their money—whether raised by taxes or chicken barbecues and pancake breakfasts.  These folks have the right to know that it’s being spent carefully and honestly. 

The Professional Voluneer

In a recent speech, President Obama paid homage to the firefighters in West, Texas who lost their lives in the explosion and fire at a fertilizer plant.  In doing so, he actually insulted a large percentage of volunteer firefighters; out of ignorance, one hopes, and not purposely.   The assignment of the term “professional” to career firefighters and departments has always struck a sore spot with me.  The President’s remarks compounded this feeling.  It is good to know I’m not the only one.  The National Volunteer Fire Council sent a letter to the President on April 30^th protesting these remarks. 

A simple check of the dictionary points out the fallacy of the common usage.  One of the definitions is “a person who is expert at his or her work.”  Another references “a vocation requiring knowledge of…learning or science.”  Nowhere in these admittedly selective definitions is there a mention of financial compensation. 

Professionalism isn’t about pay, it’s about attitude.  It’s about your approach to a job.  There are volunteers who join departments for all the wrong reasons and there are career personnel for whom the job is nothing but a paycheck.  However, there are many truly professional firefighters, officers, and chiefs in the volunteer ranks which should be recognized as such. 

Old "Rules" Aren't Necessarily Wrong

Fire Chief’s, like Presidents, are often proudest of what didn’t happen on their watch. That thought reminded me of a few rules my father taught me from day one in the “business” which in the subsequent decades, I have not found reason to question.

The first rule was “there ain’t no water damage if the building burns down.” Put enough water on the fire and it goes out. Try to “save” water, and you end up with a long day.

The second was “there is no such thing as a rekindle.” The fire you didn’t fully extinguish via complete overhaul is not a rekindle, and Class A foam is not a substitute for properly conducting this important component of extinguishment.

Old fashioned? Maybe; but old isn’t necessarily wrong.