A Herald-Mail examination of three kinds of reports filed by volunteer fire and rescue companies in Washington County turned up several financial "red flags" — information that raises questions.
The reports are:
- The annual financial report that the county government requires each of the 27 fire and rescue companies to file. Normally two pages long, this report lists several categories for revenues and expenses. It also lists cash and investment balances, and the costs of assets such as vehicles and buildings, as well as such liabilities as salaries, payroll taxes and mortgages.
- The annual Form 990 financial report that all but one of the companies must send to the Internal Revenue Service because it exempted them from paying income tax. These forms have been prepared and signed by local certified public accountants. Often more than 20 pages long, the Form 990 lists revenues, expenses, investments and liabilities. Sometimes, companies list the money they take in and spend on their bingo and tip jar operations — details not found in the county report. Mount Aetna Volunteer Fire Co. is applying for tax-exempt status and doesn't yet file a Form 990.
- The annual Charitable Gaming Report issued by the Washington County Gaming Office. This form lists how many tip jars each fire and rescue company sold, as well as the revenues and cash prize expenses. The Gaming Office also issues bingo permits to some companies, but those companies don't have to report their revenues.
Miscellaneous findings
The Herald-Mail reviewed years of documents relating to each of the companies. The list below covers only fiscal year 2009.
For about half of the companies, this was their Jan. 1, 2009, through Dec. 31, 2009, calendar budget year. For the others, it was their July 1, 2008, through June 30, 2009, fiscal year.
The "red flags" the newspaper found are not necessarily signs of wrongdoing. There was not enough information in the reports to draw a conclusion.
One company noted that the county's report forms don't offer enough revenue and expense reporting options, which can force companies to list more under "miscellaneous." Another company solved that problem by adding more lines.
Here are some of the findings:
- Although it listed a number of separate operating expenditures, such as for building maintenance and fundraising activities, the Volunteer First Hagerstown Hose Co. reported on its county form spending $25,627 on "miscellaneous" — 46 percent of its operating costs.
- Funkstown Volunteer Fire Co. told the IRS the fire company took in $67,185 from its bingo games. The company didn't report paying for any prizes. It listed $16,313 in bingo expenses. Meanwhile, in the area of Form 990 where gaming revenues and expenses are supposed to be reported, the lines are left blank. The county Gaming Office said the fire company had a $64,649 gross profit from tip jar sales.
- The Volunteer Fire Co. of Halfway reported to the IRS that the fire company lost $520,391 on its bingo operation, while grossing $500,977 on tip jars. To the IRS, it said its bingo and tip jar sales totaled $3.41 million.
- Although it listed a number of separate operating expenditures, Hancock Rescue Squad said in its report to the county that it spent $46,302 on "miscellaneous" — 15 percent of its operating costs.
- Although it listed a number of separate operating expenditures, Independent Junior Fire Engine Co. in Hagerstown told the county the fire company spent $40,709 on "miscellaneous." That's 44 percent of its operating costs.
- Although it listed a number of separate operating expenditures, Long Meadow Volunteer Fire Co. reported to the county it spent $38,000 on "miscellaneous." That works out to 27 percent of its operating expenses.
- Although it listed a number of separate operating expenditures, Maugansville Goodwill Volunteer Fire Co. reported to the county it spent $60,581 — nearly 22 percent of its operating costs — as "miscellaneous."
In addition, the Maugansville fire company told the IRS that its tip jar sales totaled $286,639. The county Gaming Office said the fire company reported $309,307 in tip jar sales.
- Although it listed a number of separate operating expenditures, Pioneer Hook & Ladder Co. in Hagerstown told the county government the fire company spent $45,286 on "miscellaneous" — almost 66 percent of its operating costs.
- Although it listed a number of separate operating expenditures, Sharpsburg Volunteer Fire Co. listed on the county form $22,403 in "miscellaneous" expenses. That was 24 percent of its operating costs.
- Although it listed a number of separate operating expenditures, Smithsburg Community Volunteer Fire Co. reported spending $35,102 on "miscellaneous." That was 19 percent of its operating costs.
- Although it listed a number of separate operating expenditures, South Hagerstown Fire Co. told the county government it spent $12,651 on "miscellaneous" — 38 percent of its operating costs.
- Western Enterprise Fire Co., in Hagerstown, told the county that fire company ended one budget year on Dec. 31, 2007, with $124,568, but began the next, on Jan. 1, 2008, with $109,122. Likewise, it reported having $63,687 on New Year's Eve 2008 and $117,837 on New Year's Day 2009. The back-to-back numbers should be the same.
- Although it listed a number of separate operating expenditures, Williamsport Volunteer Fire and Emergency Medical Services Inc. said it spent $73,371 on "miscellaneous," nearly 11 percent of its operating costs. And, according to the Gaming Office, the fire company had $95,005 in total tip jar sales. But the newly merged fire and EMS company, in its report to the IRS, showed $35,656 in total tip jar sales.
