Sounding The Alarm: Volunteer Theft in NY State

In the aftermath of 140 arrests for insider theft from volunteer fire departments in New York state in the past six years, State Comptroller Thomas DiNapoli wants fire departments to tighten their financial controls.

The comptroller’s office has been auditing fire companies and is seeking to educate firefighters on what they need to do to safeguard their funds.

WBFO quoted DiNapoli as saying:

  • “Many of the fire companies, even if they are covering a small area, may spend an awful lot of money these days.”
  • “Fire equipment is not cheap. Maintaining a fire house is not inexpensive. So you’re talking about some big dollars and we need to treat the fire districts, the fire companies, the fire boards as an extension of government, cause that’s what they are.”
  • “We’ve had more requests for training by the fire associations that are out there, on a regional and a statewide basis. We’ve let them know that we’ve stepped up our audits in this area, as well. So there’s more oversight that there had been a number of years ago.”
  • “But one of the challenges is that there’s always a turnover. So, you may train a group of commissioners or heads of the fire company one year but that doesn’t mean they are going to be the folks in charge two or three years down the road.”

As for the 140 arrests, DiNapoli said:

  • “Sometimes it’s very tempting. If you’re paying the bills for the fire company, then you pay your American Express bill as well”
  • “But we’re seeing it happen time and again. People are getting caught. They are paying big penalties. Some people are going to jail. We’re going to continue to be vigilant until the message gets out there. You should not be stealing from public resources. You should not be stealing taxpayer money. If you do, you’re going to get caught.”

More on the story.

For those concerned about insider theft in their department, what can you do? Here are a few easy steps:

  1. Ensure all bank and financial statements are mailed to someone other than a person with check signing authority.
  2. Ensure credit card statements are mailed to someone other than an authorized card holder.
  3. All bank, credit card, and financial statements should be audited each month by someone who does not have check signing/card authority (an audit committee made up of board members who do not have check signing/card authority is preferable). Every expenditure/withdrawal should be reconciled to ensure it was properly authorized and for a legitimate expense/purpose.
  4. Prohibit anyone from writing a check to him/herself and/or a family member.
  5. Require 2 signatures on all checks over $500.
  6. Have all books subject to an external audit annually, biennially, or at most triennially.

Incidentally, we see an analogous theft problem in the career service coming from cases of embezzlement from unions. One big difference is that union theft is usually caught before it reaches $50k, whereas volunteer theft often reaches into the hundreds of thousands before it is caught. At the heart of the problem is the trust firefighters have for each other. It makes us easy marks for those who would steal. Remember President Reagan’s famous quote – “Trust but verify”… these guidelines would serve unions equally as well as volunteer fire companies.

About Curt Varone

Curt Varone has over 40 years of fire service experience and 30 as a practicing attorney licensed in both Rhode Island and Maine. His background includes 29 years as a career firefighter in Providence (retiring as a Deputy Assistant Chief), as well as volunteer and paid on call experience. He is the author of two books: Legal Considerations for Fire and Emergency Services, (2006, 2nd ed. 2011, 3rd ed. 2014) and Fire Officer's Legal Handbook (2007), and is a contributing editor for Firehouse Magazine writing the Fire Law column.

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