Below is the now third statement from the Borough of Conshohocken on its decision to remove the Borough-owned fire trucks from the Washington Fire Company on July 5th.
At this time we are only going to point out one thing. The Borough removed the fire trucks after 30 days of not receiving financial information to conduct an audit. This is not an ongoing festering situation.
We will be back with some commentary.
For now, below is the full statement.
Conshohocken Fire Company #2 and Washington Fire Company both receive appropriations of tax dollars annually of approximately $100,000. In 2017, the Borough conducted an agreed upon procedures audit with respect to the Borough’s appropriations distributed to Washington Fire Company and Conshohocken Fire Company #2 for the years ending 2015 and 2016. An “agreed upon procedures” audit is a targeted approach that involves testing only specific balances or transactions that in this case consisted of Borough appropriations. The audit reviewed financial activity for variances that appeared to be significant, unusual or unexpected and provided recommendations to Fire Company management for internal controls. During the process of this audit, the Borough offered significant assistance to both Fire Companies as needed.
On June 5, 2019, the Borough, at a Public Meeting, again authorized an audit for both Conshohocken Fire Companies for fiscal year 2018. Two years have passed since the “agreed upon procedures audit” for fiscal years 2015 and 2016, during which time the Fire Companies had an opportunity to address any operational or internal control deficiencies. For the current audit, therefore, the Borough’s 3rd party auditor was engaged to complete a full audit of both Fire Companies. A full audit consists of the following: drafting a financial statement; evaluating operating/internal controls; generation of an auditor’s opinion; and drafting of a letter to management documenting the outcome of the audit and any findings.
Importantly, a full audit also includes evaluation of financial activity as a whole as opposed to an audit of just Borough appropriations. As the Borough enters budget season, fiscally responsible decisions have to be made as it relates to appropriations in the Borough’s budget. While the fiscal year 2015 and 2016 audits were beneficial for purposes of identifying operational or internal control issues, the audits did not provide the Borough with a full picture of the financials of the Fire Companies, notwithstanding their receipt of significant Borough appropriations. Balancing the Borough’s budget requires careful analysis of all appropriations—not just the Fire Companies—and the Borough is doing a thorough review of the financial deficiencies and/or surpluses throughout the Borough’s myriad financial obligations.
Since both Fire Companies are partners in providing emergency services to Borough residents, businesses and visitors, we expected full cooperation from the management at each Company. The Borough contacted both Fire Company presidents on May 28, 2019 notifying them that Council would be discussing the approval of the financial audit of both Fire Companies at the June 5th Public Meeting. They were also given a courtesy notice that both respective treasurers would be contacted directly by the Borough auditor.
Although Conshohocken Fire Company #2 has provided its financial information and is fully cooperating, the Borough’s auditors were informed that they would not be given access to Washington Fire Company’s financial information—aside from limited financials related specifically to use of Borough appropriations (i.e. the same type of information given for fiscal years 2015 and 2016). This was the case even after the Borough’s auditor offered to assist Washington Fire Company’s treasurer as needed.
As a result, the Borough is unable to complete an audit of the financials of an entity receiving approximately $100,000 in public monies.
As previously stated, the Borough has a fully operational Fire Department that has opened its doors to all volunteer Fire Fighters from Washington Fire Company. This collective team deploying from one centralized location did a fantastic job ensuring the safety and well-being of our residents, businesses and visitors this past weekend in their response to emergency situations and we thank them for their service.
The Borough reemphasizes its commitment to dedicating financial resources to ensure appropriate fire and emergency services in the Borough. Indeed, the Borough is currently in the process of securing over $1.5 million for the purchase of new fire trucks in the Borough, including innovative funding options. As an example, when the County Redevelopment Authority sold their land to Keystone Development Group, those funds were earmarked for use within the Borough of Conshohocken. The Borough has made a formal request to use $1.5 million of those funds for the new Fire Trucks, as safety is paramount to Borough operations. With the amount of development occurring in Conshohocken, we are pleased to have the opportunity to use funds stemming from that development to better the health, safety, and welfare of the Borough’s residents, business owners, and visitors, without burdening the taxpayers of Conshohocken. This request is formally under review.
The key to the continued financial success of the Borough is full, open, and careful analysis of the use of funds across all Borough operations. That analysis cannot occur without all necessary information.
At this time, the Borough will be making no decisions regarding Washington Fire Company until our 3rd party auditor comes back with a status report on the audit. At that time, we will identify if the Borough wants to continue its partnership with Washington Fire Company regarding fire services. The Borough has provided notification to Washington Fire Company management via email that they have until close of business day Wednesday, July 10th to comply with the Borough’s request for a full audit.
More to come.