Marydel Volunteer Fire Company
Investigation – Fiscal Years 2021-2023
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Investigation Summary
The Delaware State Fire Prevention Commission (“the Commission”) received allegations that certain personnel were abusing their managerial authority and improperly handling the financial assets of the Marydel Volunteer Fire Company (“MDVFC”, the “Company”). In addition, the Office of Auditor of Accounts (“AOA”) received allegations of financial misconduct by MDVFC on the Delaware State Auditor’s hotline. The Commission and the AOA jointly agreed to evaluate the allegations.
On October 21, 2014, AOA issued an inspection of the MDVFC and identified significant deficiencies, including the absence of written policies and procedures, and a management culture that exhibited a flagrant disregard even informal policy guidelines. Overall, the Company displayed weak internal controls and poor financial management, leaving it at risk for fraud and abuse. AOA also noted that one member engaged in excessive spending. Despite the seriousness of these findings in AOA’s report, there were no apparent corrective actions or responses from the public, legislators, fire commissioners, or county officials to prevent similar issues from recurring.
For this report, the allegations reported were consistent with concerns previously identified in the October 21, 2014 report. AOA summarized and reviewed the allegations within the scope for fiscal years 2021, 2022, and 2023. The individuals who held the positions of President, Treasurer, and Secretary during the time period of our investigation are no longer with MDVFC. The results indicate that the MDVFC failed to comply with its own bylaws regarding budgeting practices, engaged in unrestrained spending on fundraising events, gift cards and conference travel, and operated unauthorized poker tournaments. No legitimate financial records existed to document the income or expenses associated with these poker events, making it impossible to determine the amount of cash generated. Additionally, AOA could not trace the gross revenue from these tournaments back to the Company’s accounts.
MDVFC receives funding from the State of Maryland, Caroline County of Maryland, the State of Delaware and Kent County of Delaware. AOA limited its scope to funds distributed by Delaware. Maryland State and County funding mechanisms require the Company to segregate its funds and report on Maryland’s distributed funds annually. Delaware’s State and County distributions have no established requirements for the funding provided.
The results and recommendations contained in this investigation identify a requirement for enhanced fiscal oversight of the Fire Companies. Delaware Administrative Code 700 Section 708 Chapter 1, requires Fire Companies to submit an annual review. An annual review provides the lowest level of assurance available under standard financial oversight practices. Previous MDVFC review reports noted that the Company failed to file IRS Form 1099s, lacks formal policies and procedures, and may not have recorded all transactions in the bookkeeping software provided to the audit firm. Despite its lack of compliance or control, the Company will continue to receive funds from the State and County of Delaware. Without effective oversight or meaningful consequences for financial mismanagement, this pattern of misconduct and abuse is likely to continue in future years unless the Company’s governing body or community intervenes.