COMPLIANCE AUDIT

____________

Duncansville Volunteer Fire

Department Relief Association
Blair County, Pennsylvania
For the Period
January 1, 2018 to December 31, 2020
____________
November 2021
Mr. Craig Hazlett, President
Duncansville Volunteer Fire Department
Relief Association
Blair County

We have conducted a compliance audit of the Duncansville Volunteer Fire Department Relief
Association (relief association) for the period January 1, 2018 to December 31, 2020. The audit
was conducted pursuant to authority derived from Article VIII, Section 10 of the Constitution of
the Commonwealth of Pennsylvania; Section 403 of The Fiscal Code, 72 P.S. § 403; and the
Volunteer Firefighters’ Relief Association Act, 35 Pa.C.S. § 7411 et seq. (“VFRA Act”), as most
recently amended by Act 91 of 2020.

The objectives of the audit were:

1. To determine if the relief association took appropriate corrective action to address the finding
contained in our prior audit report.

2. To determine if the relief association complied with applicable state laws, contracts, bylaws,
and administrative procedures as they relate to the receipt of state aid and the expenditure of
relief association funds.

Our audit was limited to the areas related to the objectives identified above and was not, nor was
it required to be, conducted in accordance with Government Auditing Standards issued by the
Comptroller General of the United States.

Relief association officers are responsible for establishing and maintaining effective internal
controls to provide reasonable assurance that the relief association’s administration of state aid and
accumulated relief funds complies with applicable state laws, contracts, bylaws, and administrative
procedures, including the safeguarding of assets. Relief association officers are responsible for
complying with applicable state laws, contracts, bylaws, and administrative procedures. It is our
responsibility to perform procedures to obtain sufficient, appropriate evidence to the extent
necessary to satisfy the audit objectives. We believe that our audit provides a reasonable basis for
our conclusions.
We were not able to obtain an independent confirmation of a portion of the cash balance directly
from the financial institution. Therefore, while the relief association provided bank statements
that indicated that, as of December 31, 2020, the relief association had a cash balance of $31,644,
we were not able to verify a portion of this cash balance.

Based on our audit procedures, we conclude that, for the period January 1, 2018 to
December 31, 2020:

• The relief association did not take appropriate corrective action to address the finding
contained in our prior audit report, as detailed below and discussed in the Status of Prior
Finding section of this report.

• Because of the significance of the matters described in Finding Nos. 2 and 3 below and
discussed later in this report and the effects, if any, of the matter described in the preceding
paragraph, the relief association did not, in all significant respects, comply with applicable
state laws, contracts, bylaws, and administrative procedures as they relate to the receipt of
state aid and the expenditure of relief association funds, collectively as a whole. Therefore,
the relief association may be subject to the potential withholding of its upcoming state aid
distribution, as discussed in the Potential Withhold of State Aid section of this report.

Finding No. 1 – Noncompliance With Prior Audit Recommendation –

Untimely Receipt And Deposit Of State Aid

Finding No. 2 – Unauthorized Expenditures

Finding No. 3 – Undocumented Expenditures

Finding No. 4 – Inadequate Minutes Of Meetings

The four findings contained in this report cite conditions that existed in the operation of the relief
association during the current audit period. We are concerned by the number of findings noted
and strongly encourage timely implementation of the recommendations noted in this audit report.

The contents of this report were discussed with the management of the relief association and, where
appropriate, their responses have been included in the report.

November 3, 2021 Timothy L. DeFoor

Auditor General
 CONTENTS

Page

Background ......................................................................................................................................1

Status of Prior Finding .....................................................................................................................5

Findings and Recommendations:

Finding No. 1 – Noncompliance With Prior Audit Recommendation – Untimely

Receipt And Deposit Of State Aid ...............................................................6

Finding No. 2 – Unauthorized Expenditures ..........................................................................7

Finding No. 3 – Undocumented Expenditures .......................................................................9

Finding No. 4 – Inadequate Minutes Of Meetings ...............................................................10

Potential Withhold of State Aid .....................................................................................................12

Report Distribution List .................................................................................................................13

 BACKGROUND

Pursuant to Article VIII, Section 10 of the Constitution of the Commonwealth of Pennsylvania,

Section 403 of The Fiscal Code 1, and the Volunteer Firefighters’ Relief Association Act 2 (“VFRA
Act”), the Department of the Auditor General’s duty is to audit the accounts and records of every
volunteer firefighters’ relief association to determine that funds received under the Foreign Fire
Insurance Tax Distribution Law 3 (commonly referred to as Act 205) are properly expended.

The relief association is a charitable organization that was formed primarily to afford financial
protection to volunteer firefighters and to encourage individuals to participate in volunteer fire
service.

The VFRA Act governs the overall operation of volunteer firefighters’ relief associations. Relief
association bylaws define the specific operational procedures by which relief associations conduct
business. To fulfill its primary purpose, the VFRA Act authorizes specific types of expenditures
and prescribes appropriate volunteer firefighters’ relief association investment options. Within the
parameters established by the VFRA Act, it is the responsibility of relief associations to choose
investments in a proper and prudent manner.

Volunteer firefighters’ relief associations receive public tax monies, and the association officers
therefore have a responsibility to the public to conduct the association’s financial affairs in a
businesslike manner and to maintain sufficient financial records to support the propriety of all
association transactions. Volunteer firefighters’ relief association officers are also responsible for
ensuring that the association operates in accordance with applicable state laws, contracts, bylaws
and administrative procedures.

Act 205 sets forth the computation of the Foreign Fire Insurance Tax Distribution paid to each
applicable municipality throughout the Commonwealth of Pennsylvania. The amount of the
distribution is based upon the population of each municipality and the market value of real estate
within the municipality. Upon receipt of this distribution, the municipality must allocate the funds
to the volunteer firefighters’ relief association of the fire service organization or fire service
organizations that is or are recognized as providing the service to the municipality.

1
72 P.S. § 403 (as last amended by Act 44 of 2017).
2
35 Pa.C.S. § 7411 et seq. See specifically, 35 Pa.C.S. § 7418 (amended by Act 91 of 2020).
3
53 P.S. § 895.701 et seq. (Act 205 of 1984, as amended by Act 119 of 1990).
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 BACKGROUND – (Continued)

The relief association was allocated state aid from the following municipalities:

Municipality County 2018 2019 2020

Blair Township Blair $6,441 $6,989 $7,016

Duncansville Borough Blair $5,796 $6,230 $6,198
Juniata Township Blair $2,763 $3,080 $3,084*
Newry Borough Blair $1,082 $1,181 $1,191

* The 2020 state aid allocation received from Juniata Township was not deposited by the
relief association until March 10, 2021 as disclosed in Finding No. 1 in this report.

Based on the relief association’s records, its total cash and investments as of December 31, 2020
were $41,849, as illustrated below:

Cash $ 31,644

Fair Value of Investments 10,205

Total Cash and Investments $ 41,849

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 BACKGROUND – (Continued)

Based on the relief association’s records, its total expenditures for the period January 1, 2018 to
December 31, 2020 were $63,233, as noted below. The accuracy of these expenditures was
evaluated as part of the Department’s audit to conclude on the relief association’s compliance with
applicable state laws, contracts, bylaws, and administrative procedures as they relate to the receipt
of state aid and the expenditure of relief association funds. 4 The scope of the Department’s audit
does not include the issuance of an opinion on the accuracy of these amounts.

Expenditures:

Benefit Services:
Insurance premiums $ 4,706

Fire Services:
Equipment purchased $ 12,253
Equipment maintenance 13,006
Training expenses 3,571
Total Fire Services $ 28,830

Administrative Services:
Officer compensation $ 650
Other administrative expenses 503
Bond premiums 100
Total Administrative Services $ 1,253

Other Expenditures:
Undocumented expenditures $ 16,221
Unauthorized expenditures 12,124
Sales tax* 99
Total Other Expenditures $ 28,444

Total Expenditures $ 63,233

*In 2019, the relief association paid $99 in sales tax. We disclosed this issue to relief association
officials as a verbal observation during the conduct of our audit.

4
Accuracy was evaluated for a selection of transactions based on dollar amount, category, and/or random selection.
3
 BACKGROUND – (Continued)

The volunteer firefighters’ relief association and the affiliated fire service organization are
separate, legal entities. The relief association is affiliated with the following fire service
organization:

Duncansville Volunteer Fire Company

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 DUNCANSVILLE VOLUNTEER FIRE DEPARTMENT RELIEF ASSOCIATION
STATUS OF PRIOR FINDING

NONCOMPLIANCE WITH PRIOR AUDIT FINDING AND RECOMMENDATION

The relief association has not complied with the following prior audit finding. This finding is
noted below and discussed in detail in the Findings and Recommendations section of this report:

• Untimely Receipt And Deposit Of State Aid

We are concerned by the relief association’s failure to correct this previously reported audit
finding. The relief association management should strive to implement the recommendation and
corrective action noted in this audit report.

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 DUNCANSVILLE VOLUNTEER FIRE DEPARTMENT RELIEF ASSOCIATION
FINDINGS AND RECOMMENDATIONS

Finding No. 1 – Noncompliance With Prior Audit Recommendation – Untimely Receipt And
Deposit Of State Aid

Condition: The relief association did not deposit the 2020 state aid allocation it received from
Juniata Township, in the amount of $3,084, until March 10, 2021. The foreign fire insurance tax
allocation was distributed to the municipal treasurer on September 22, 2020; however, municipal
officials failed to forward the state aid allocation to the relief association until January 8, 2021,
which is not within 60 days of receipt, as required by Section 706 (b)(2) of the Act of
December 18, 1984, (P.L. 1005, No. 205). In addition, upon receipt of the state aid allocation, the
relief association did not ensure the funds were deposited timely into a relief association account.

A similar condition was noted in our prior audit report.

Criteria: Section 706 (b)(2) of the Act of December 18, 1984, (P.L. 1005, No. 205), states:

The foreign fire insurance premium tax amount applicable to a municipality

served solely by volunteer firefighters shall be paid to the municipality, which
shall within 60 days of the date of the receipt of the moneys from the
State Treasurer pay the amount received to the relief association fund of the
fire department or departments, or fire company or companies, now existing or
hereafter organized, inside or outside of the municipality, which is or are actively
engaged in the service of the municipality and duly recognized by the governing
body of the municipality.

Furthermore, prudent business practice dictates that upon receipt of its state aid allocation, the
relief association should establish adequate internal control procedures to ensure the funds are
deposited in a timely manner.

Cause: The Treasurer of the relief association did not deposit the state aid check in a timely manner
and relief association officials did not provide any further reason for why this occurred despite the
relief association being notified of this condition during our prior audit.

Effect: As a result of the untimely receipt and deposit, funds were not available to pay general
operating expenses or for investment purposes. In addition, an untimely receipt and deposit of
funds increases the risk that funds could be lost or misappropriated.

Recommendation: We again recommend that the relief association officials adopt internal control
procedures to ensure the timely receipt and deposit of all future income received. For further
guidance, please refer to the Auditor General’s publication, MANAGEMENT GUIDELINES FOR
VOLUNTEER FIREFIGHTERS’ RELIEF ASSOCIATIONS.

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 DUNCANSVILLE VOLUNTEER FIRE DEPARTMENT RELIEF ASSOCIATION
FINDINGS AND RECOMMENDATIONS

Finding No. 1 – (Continued)

Management’s Response: Relief association management agreed with the finding as presented at
the audit exit conference and indicated they will take action to comply with the recommendation.

Auditor’s Conclusion: We are concerned by the relief association’s failure to correct this
previously reported audit finding and strongly encourage timely implementation of the
recommendation noted in this audit report.

Finding No. 2 – Unauthorized Expenditures

Condition: The relief association expended funds for the following items during the current audit
period that are not authorized by the VFRA Act:

Date Check No. Description Amount

01/09/18 892 Service on fire company owned vehicle $ 1,007

07/08/18 903 Property insurance 200
12/09/18 919 Service on fire company owned vehicle 1,018
04/23/19 928 Service on fire company owned vehicle 4,576
06/28/19 930 Service on fire company owned vehicle 310
11/05/19 942 Service on fire company owned vehicle 2,593
01/07/20 1002 Service on fire company owned vehicle 1,500
07/02/20 1012 Property insurance 328
10/02/20 1015 Service on fire company owned vehicle 592

Total $ 12,124

In addition, subsequent to the period under review, the relief association expended additional funds
for the following items that are also not authorized by the VFRA Act:

Date Check No. Description Amount

04/24/21 1021 Service on fire company owned vehicle $ 539

04/24/21 1022 Service on fire company owned vehicle 963
05/18/21 1024 Service on fire company owned vehicle 249
07/14/21 1027 Service on fire company owned vehicle 397

Total $ 2,148

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 DUNCANSVILLE VOLUNTEER FIRE DEPARTMENT RELIEF ASSOCIATION
FINDINGS AND RECOMMENDATIONS

Finding No. 2 – (Continued)

Criteria: Section 7416(f) of the VFRA Act states:

The funds of any volunteer firefighters’ relief association may be spent:

(1) To pay for such normal and reasonable running expenses as may be
appropriate to the businesslike conduct of the affairs of the association,
including legal fees, rental or purchase of offices, payment of reasonable
compensation of employees and purchase of office equipment and supplies.

(11) To purchase safeguards for preserving life, health and safety of volunteer
firefighters to ensure their availability to participate in the volunteer fire
service.

Costs associated with service on a fire company owned vehicle and insurance on fire company
property do not qualify as authorized volunteer firefighters’ relief association expenditures;
consequently, these disbursements are not authorized under the VFRA Act.

Cause: Relief association officials indicated that they were unaware that the aforementioned
expenditures were not authorized by the VFRA Act.

Effect: As a result of these improper expenditures, relief association funds were not available for
investment purposes, or to pay for expenditures authorized by the VFRA Act. Furthermore, the
relief association’s future state aid allocations may be withheld until the finding recommendation
is complied with.

Recommendation: We recommend that the relief association be reimbursed $14,272 for the
unauthorized expenditures and that relief association officials become familiar with
Section 7416(f) of the VFRA Act to aid them in determining the propriety of future expenditures.
For further guidance, please refer to the Auditor General’s publication, MANAGEMENT
GUIDELINES FOR VOLUNTEER FIREFIGHTERS’ RELIEF ASSOCIATIONS.

Management’s Response: Relief association management agreed with the finding as presented at
the audit exit conference and indicated they will take action to comply with the recommendation.

Auditor’s Conclusion: Due to the potential withhold of state aid, the relief association’s
compliance with the finding recommendation will be monitored subsequent to the release of the
audit report and through our next audit of the relief association.

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 DUNCANSVILLE VOLUNTEER FIRE DEPARTMENT RELIEF ASSOCIATION
FINDINGS AND RECOMMENDATIONS

Finding No. 3 – Undocumented Expenditures

Condition: The relief association was unable to provide adequate supporting documentation for
the following expenditures made during the current audit period:

Date Check No. Payee Description Amount

01/02/18 888 Training vendor $ 1,200

02/04/18 897 Equipment vendor 68
03/13/18 898 Supplies vendor 764
09/23/18 911 Maintenance vendor 290
10/30/18 913 Supplies vendor 183
03/01/19 921 Training vendor 490
04/04/19 925 Equipment vendor 226
08/06/19 934 Training vendor 3,500
10/29/19 939 Training vendor 1,200
03/10/20 debit Supplies vendor 200
05/10/20 1007 Maintenance vendor 1,193
05/15/20 1009 Maintenance vendor 2,127
07/02/20 1014 Equipment vendor 4,000
10/27/20 1016 Equipment vendor 780

Total $ 16,221

Criteria: Section 7418(a) of the VFRA Act states:

The Office of Auditor General shall have the power and its duty shall be to audit
the accounts and records of every volunteer firefighters’ relief association receiving
money under Chapter 7 of the Act of December 18, 1984 (P.L. 1005, No. 205),
known as the Municipal Pension Plan Funding Standard and Recovery Act, as far
as may be necessary to satisfy the Auditor General that the money received was or
is being expended for no purpose other than that authorized by this subchapter.
Copies of all audits shall be furnished to the Governor.

Prudent business practice dictates that supporting documentation be maintained to evidence the
propriety of all financial transactions.

Cause: The relief association officials were unable to locate the missing invoices.

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 DUNCANSVILLE VOLUNTEER FIRE DEPARTMENT RELIEF ASSOCIATION
FINDINGS AND RECOMMENDATIONS

Finding No. 3 – (Continued)

Effect: Lack of supporting documentation, such as invoices, itemized receipts and detailed minutes
of meetings, made it impossible to determine if the expenditures were made in accordance with
Section 7416(f) of the VFRA Act. In addition, the failure to maintain adequate supporting
documentation for relief association expenditures can lead to an increased risk of errors occurring
and funds being misappropriated. Furthermore, the relief association’s future state aid allocations
may be withheld until the finding recommendation is complied with.

Recommendation: We recommend that the relief association officials provide this department with
adequate supporting documentation, such as invoices and/or itemized receipts, to ensure the
propriety of the expenditures or that the relief association be reimbursed $16,221 for the
undocumented expenditures. We also recommend that the relief association officials maintain
supporting documentation for all future expenditures. For further guidance, please refer to the
Auditor General’s publication, MANAGEMENT GUIDELINES FOR VOLUNTEER
FIREFIGHTERS’ RELIEF ASSOCIATIONS.

Management’s Response: Relief association management agreed with the finding as presented at
the audit exit conference and indicated they will take action to comply with the recommendation.

Auditor’s Conclusion: Due to the potential withhold of state aid, the relief association’s
compliance with the finding recommendation will be monitored subsequent to the release of the
audit report and through our next audit of the relief association.

Finding No. 4 – Inadequate Minutes Of Meetings

Condition: The relief association failed to maintain detailed minutes of meetings as required by
the VFRA Act and the relief association’s bylaws. Specifically, the relief association’s minutes
did not address all of the financial-related transactions that occurred during the audit period and
the minutes were not signed by the secretary. In addition, the relief association’s bylaws require
monthly meetings; however, the relief association officials only provided meeting minutes for
seven meetings in 2018, two meetings in 2019 and three meetings in 2020.

Criteria: Section 7415(a) of the VFRA Act states, in part, that the relief association:

. . . must provide for taking and preserving minutes of all meetings and maintenance
of such books of account as may be necessary and appropriate to afford a permanent
record of its fiscal affairs.

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 DUNCANSVILLE VOLUNTEER FIRE DEPARTMENT RELIEF ASSOCIATION
FINDINGS AND RECOMMENDATIONS

Finding No. 4 – (Continued)

The relief association’s bylaws at Article II, Section 1 states:

Business meetings of this association shall be held once a month following the
regular meeting of the Duncansville Volunteer Fire Department.

In addition, the relief association’s bylaws at Article IV, Section 3 states, in part:

The Secretary shall keep an accurate record of all business transacted by the
Association.

Cause: The relief association officials stated that they were unable to locate the documents on their
computer. Relief association officials did not provide a response to why the meeting minutes were
not signed.

Effect: Without detailed minutes of meetings, evidence that relief association business was
presented before the membership for approval does not exist.

Recommendation: We recommend that the relief association officials maintain detailed minutes
of meetings, evidencing the discussion and approval of all financial-related business conducted by
the relief association and ensure all meeting minutes are signed by the secretary of the relief
association. For further guidance, please refer to the Auditor General’s publication,
MANAGEMENT GUIDELINES FOR VOLUNTEER FIREFIGHTERS’ RELIEF
ASSOCIATIONS.

Management’s Response: Relief association management agreed with the finding as presented at
the audit exit conference and indicated they will take action to comply with the recommendation.

Auditor’s Conclusion: Compliance will be subject to verification through our next audit.

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 DUNCANSVILLE VOLUNTEER FIRE DEPARTMENT RELIEF ASSOCIATION
POTENTIAL WITHHOLD OF STATE AID

Conditions such as those reported by Finding Nos. 2 and 3 contained in this audit report may lead
to a total withholding of state aid in the future unless those findings are corrected. However, such
action may not be considered if sufficient documentation is provided within 60 days to verify
compliance with this department’s recommendations. Such documentation should be submitted
by the relief association to: Department of the Auditor General, Bureau of Fire Relief Audits,
Room 327 Finance Building, Harrisburg, PA 17120.

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 DUNCANSVILLE VOLUNTEER FIRE DEPARTMENT RELIEF ASSOCIATION
REPORT DISTRIBUTION LIST

This report was initially distributed to the following:

The Honorable Tom W. Wolf

Governor
Commonwealth of Pennsylvania

Duncansville Volunteer Fire Department Relief Association Governing Body:

Mr. Craig Hazlett

President

Mr. Mike Gonsman

Vice President

Mr. Brynn Gable

Secretary

Ms. Holly McGonigle

Treasurer

Ms. Brooke Giselman

Assistant Secretary

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 DUNCANSVILLE VOLUNTEER FIRE DEPARTMENT RELIEF ASSOCIATION
REPORT DISTRIBUTION LIST

The following municipalities allocated foreign fire insurance tax monies to this relief association
and received a copy of this report:

Ms. Betty Robertson

Secretary
Blair Township

Ms. Paula J. Fox

Secretary
Duncansville Borough

Mr. Ronald E. Neff

Secretary
Juniata Township

Ms. Kelly Moyer

Secretary
Newry Borough

This report is a matter of public record and is available online at www.PaAuditor.gov. Media
questions about the report can be directed to the Pennsylvania Department of the Auditor General,
Office of Communications, 229 Finance Building, Harrisburg, PA 17120; via email to:
news@PaAuditor.gov.

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