SLAUGHTER BEACH, Del.- A recent performance audit of the Memorial Volunteer Fire Company uncovered multiple gaps in the organization’s financial oversight, according to a report released by the Delaware Office of Auditor of Accounts.
The audit, covering fiscal years 2021 through 2023, was conducted at the request of the Delaware Fire Commissioners Office, which received multiple concerns from MVFC members regarding the company’s financial management.
The audit focused on three areas: the effectiveness of internal financial controls, the fire company’s governance and financial operations, and compliance with a Sussex County grant agreement.
MVFC, a nonprofit volunteer fire and rescue service founded in 1954, serves both Kent and Sussex counties from two stations in Milford. The organization relies on state funds, grants, and fundraising, and its operations are overseen by a volunteer board. During calendar years 2021 through 2023, MVFC received more than $2.6 million in state funds.
According to the audit, significant deficiencies were found in several areas:
Cash Handling: Some deposits were misclassified in the company’s records, and documentation was missing for a number of transactions.
Check Endorsements: A review of 123 deposited checks found that 77 percent lacked the required endorsement stamp.
Expense Approvals: Out of 180 randomly selected expense transactions, 70 percent were not properly approved by the board, and 42 percent lacked supporting documentation.
The total expenses reviewed over the three years exceeded $3.3 million, with nearly all of the questioned expenditures tied to these internal control issues.
The audit attributes many of the deficiencies to inconsistent record-keeping and lapses by a former treasurer, but notes that the current MVFC board has already begun implementing new policies and procedures to strengthen oversight. The report recommends steps such as:
Proper endorsement and documentation of all checks and deposits.
Board approval for all purchases over $500, with supporting receipts and invoices maintained.
Detailed financial reports provided at membership meetings for transparency.
The Auditor of Accounts noted that while these changes are a positive step, a future audit will be needed to ensure the new controls are effective.
MVFC’s formal response acknowledged the audit’s findings and in a statement, the company said, “We are proud of the corrective actions already taken to improve transparency, strengthen financial integrity, and restore confidence in our operations.”
Those actions include hiring an independent accounting firm, establishing segregation of duties across financial functions, requiring documentation for major expenditures, adding payroll controls with timesheet verifications, updating travel, credit card, and payroll policies, and developing an annual budget with board and membership oversight, according to the fire company.
The full audit report can be found here.