COLUMBIA — After the release of an audit by the Homeland Security Department's inspector general that could result in the Boone County Fire Protection District having to return more than $750,000 to the Federal Emergency Management Agency, officials at the Fire District said they were optimistic that the agency’s day-to-day operations would be unaffected.
Furthermore, Fire District board members Dave Griggs and Shelley Dometrorch said the agency has taken steps toward correcting weaknesses in bookkeeping that contributed to the irregularities revealed by the audit.
Division Chief Gale Blomenkamp said that if the Fire District has to repay the full sum recommended by the inspector general, it would have an impact on the reserve fund. The Fire District still must pay former Fire Chief Steve Paulsell roughly $150,000 as part of the settlement agreed to when he left the Fire District in 2008. The combination of payments could nearly deplete the Fire District’s reserve fund, which contains about $1.2 million.
What that means for the Fire District is possible delays in replacing older equipment, among other issues. However, Blomenkamp said Missouri Task Force One, one of FEMA’s 28 Urban Search and Rescue emergency task forces, would continue to train and maintain the equipment it needs to respond to disasters.
Task Force One's most recent deployment was to Hurricane Ike in September. Members of the 190-person group have responded to hurricane-stricken areas and ground zero of the World Trade Center attack, among other assignments.
But it was the Task Force’s deployment to Hurricane Katrina in 2005 that drew the scrutiny of the inspector general. According to the audit released to the public this week, the Fire District overpaid itself about a half-million dollars for its two deployments to Katrina and another $250,000.
The audit was requested by the FBI, which has been investigating the Fire District since at least 2006. The audit recommends that the Fire District pay back FEMA a total of $752,453. Both FEMA and the Fire District dispute some of the findings of the audit, according to a news release Wednesday morning from the Fire District.
"We received FEMA money for the (Hurricane) Katrina deployments twice," Dometrorch said Wednesday morning. But she said the half-million dollars the Fire District paid itself for providing urban search and rescue help on the Gulf Coast is only part of the improper use of funds the audit uncovered.
The audit focuses on years when the Fire District was headed by Paulsell, who retired amid controversy in November, and when former Assistant Chief Sharon Curry was grants manager for Task Force One. Curry resigned from the Fire District in February 2007.
When asked whether any criminal charges might be filed against either Paulsell or Curry in connection with some of the audit's findings, Griggs said he was "not aware of anything like that at this moment." But he said he thought it would be roughly another year before FEMA's own audit of the Fire District's use of the funds could be completed and then reviewed by Homeland Security.
The audit was broken down into three categories: cash management, cost eligibility and supporting documentation. The Fire District's spending practices for fiscal years 2002-06 were reviewed.
As part of the cash management findings, the audit found:
- The Fire District did not comply with FEMA's National Urban Search and Rescue "drawdown" requirements — similar to an electronic funds transfer — for preparedness grants. The total amount the Fire District paid itself exceeded its total documented grant expenses from Nov. 25, 2005, to the audit cutoff date of Dec. 5, 2007. During this time period, the Fire District's "daily drawdown balance exceeded daily grant expenditures," according to the audit.
- FEMA did not review the Fire District's financial and performance reports closely enough to notice inaccuracies.
- The Fire District used some of the excess grant funds for non-grant activities and mixed drawdown amounts with its own general funds.
The audit also reviewed the use of preparedness grant funds and found:
- The money the Fire District paid itself was often more than its nonreimbursed expenses for responding to hurricanes after 2005. On Feb. 12, 2007, "when the District had been fully reimbursed for its deployment expenses, cumulative grant funds drawn down in excess of actual grant expenditures exceeded the District's bank balance by $501,800," according to the audit.
When reviewing supporting documentation, the audit found:
- The Fire District claimed $285,533 in costs that were not supported with source documentation showing the date expenses were paid or proving that the costs were actually incurred. "District personnel attributed the lack of records to a turnover in financial management personnel," according to the audit.
The inspector general listed 13 recommendations in the audit for reconciling the records. Among them were:
- A recommendation that the Office of General Counsel and other program authorities be consulted about "appropriate actions" consistent with the part of the law governing FEMA funds for search and rescue. Read the full law here.
- A recommendation that the Fire District identify and return any unused preparedness grant funds and require the establishment of separate bank accounts for urban search and rescue funds and deployment reimbursements received from FEMA.
- A recommendation that the Fire District remain on "high-risk grantee status," which means that it will continue to be required to submit paperwork to be reimbursed for any grant expenses. The Fire District has been in the "high risk" category since 2007.
- Recommendations that the Fire District disallow and recoup a total of $752,453.
Dometrorch said that she could not find fault with most of the audit's findings because the Fire District had a responsibility to provide documentation of how it spent federal money.
"That's how federal grants work," she said. "You can't just take this money and do whatever you want with it."
But Dometrorch said she disagreed with the audit's findings that the Fire District needed to return grant money it received from FEMA during improperly approved extensions of its grant funding periods. After all, she said, FEMA OK'd the extensions.
"That's on FEMA, as far as I'm concerned," Dometrorch said.
Griggs also pointed out the unfairness of that finding. And he disagreed with the audit's finding that the Fire District did not have adequate cash flow. Griggs said he thinks this was the result of misunderstanding and miscommunication, not impropriety.
The Fire District keeps money in its checking account as well as a pool investment account with other Boone County agencies. Griggs said he thinks the audit only looked at the checking account and not the pool investment account, to which the Fire District has instant access.
"There were funds drawn improperly; there is no question about that," Griggs said. But he said the money was not spent improperly.
In response to the recommendation to keep separate bank accounts for FEMA funds, Griggs said keeping separate accounts would be "very onerous" to the bookkeeping process.
He said the Fire District has very specific funds that are clearly accounted for in its accounting systems and that the Fire District can tell "to the cent" the sum in each fund.
Griggs said the Fire District has completely rebuilt its financial accounting systems, processing procedures and personnel, and said he thinks if the system were audited in 2008 or 2009, the outcome would have been different.
Dometrorch also said the Fire District's bookkeeping has been improved.
"I believe we've got the bookkeeping situation cleaned up," she said. "I'm very satisfied by the way we account for funds now."
In addition, Blomenkamp said that Assistant Chief Doug Westhoff, the current leader of Task Force One, and Executive Assistant Shawna Scholl, grants manager for the Fire District, have both received grants management training through FEMA.
As part of its disagreement with the audit's findings, the Fire District has submitted a written response to Homeland Security. This response has also been submitted to FEMA. The FEMA Program Office will be conducting an audit review of Missouri Task Force One on Aug. 24.
Missourian reporter Matt Schatt contributed to this report.