Citing early retirement incentives that are unconstitutional, a $26,000 service awards banquet, Sunshine Law violations and other questionable practices, Missouri State Auditor Tom Schweich is giving the Monarch Fire Protection District a "C" in its performance on a state audit of 2010 expenses.
"It's not one of the best audit results, but I've seen worse," Schweich said. "Allegations presented to us in the request for the audit were very bad, but the results didn't turn out quite as bad as some of the allegations would have suggested."
Schweich said this was the only such audit ever requested by Gov. Jay Nixon because of various allegations surrounding the district. The audit will cost $36,500 and Nixon's office will pay the bill.
About 40 residents listened Feb. 15 as Schweich explained his audit results at district headquarters in Chesterfield.
Monarch board president Kim Evans has said she sought assistance from the auditor's office last year because she believed the district had incurred an inordinate amount of legal fees. She said she'd witnessed mismanagement of the budget and seen wasteful spending.
But some members of Monarch Concerned Taxpayers, a watchdog group of residents, contend Evans' request for the audit was timed to influence the outcome of the Monarch board election in April 2011.
Schweich, in giving the audit results, cited "a lot of turmoil in the district recently, some political and some financial."
"But I'm not interested in taking sides in political battles," he said. "My job is to determine if people in Monarch are spending public resources in a way that complies with the law, the Missouri Constitution and sound financial practices."
Some areas of concern the audit found were:
• An early retirement incentive package that violates the Missouri Constitution. It has cost the district $231,000 and could cost $280,000 more over the next five years. The board approved the package to reduce salary and overtime expenses, Evans said. The package was limited to the first seven employees to sign up, which included former Fire Chief Clifford Biele. It allowed for additional compensation based on years of service and additional health benefits.
• Failure to obtain bid proposals or written contracts for some legal services. The breakdown allowed a pension attorney to overcharge the district by about $4,300. The district spent more than $212,000 on legal services in 2010.
• An awards banquet for which the district spent about $26,000. The banquet honored 63 employees for reaching various years of service milestones. They were given bronze bells, rings, watches and other items. A dinner, attendance prizes and guest speaker also were provided. "In a district of this size, $26,000 for an employee party is too much money," Schweich said.
• Violation of the state open meetings law. The district's board didn't document reasons for or votes, required by state law, during 40 such closed meetings held between January 2010 and September 2011. The closed meeting minutes did not demonstrate that issues discussed — such as how to respond to inquiries about the audit or discussion of a search firm for the fire chief position — were allowable under the Sunshine Law.
• Failure to include 18 higher level staff positions in a 2008 salary survey of firefighters and emergency medical technicians. Auditors said it is unclear whether the salaries of those posts are in line with similar districts. For the 2010 year, the district paid about $10.7 million in payroll to 125 full-time employees.
• Failure by the district controller to perform bank reconciliations promptly and adequately resolve differences discovered. A $266,000 discrepancy wasn't investigated until audit staff made inquiries. Most of the discrepancy was attributed to conversion to a new accounting system, but $2,200 of that still remains unexplained.
"There's no evidence of fraud or embezzlement, but Monarch needs to tighten up how money is handled," Schweich said.
• Inadequate record keeping. The district does not conduct an annual physical inventory of property, making it more susceptible to theft or misuse. For instance, a computer on the district's property list could not be located. Also, the district doesn't effectively monitor fuel and vehicle use. The district maintains bulk fuel tanks at district headquarters and at one fire house but doesn't keep logs of fuel pumped. And some vehicle logs don't contain information on mileage or reason for use.
Evans said she was pleased with the audit findings, adding the district has committed to implementing audit recommendations, some of which have already been done.
"I think they did a good job of carefully and thoughtfully evaluating our financial situation," she said. "Ours is a complete commitment to making changes."
Richard Belding, of Chesterfield, said he thought the audit findings "weren't as bad as expected, showing that things can be fixed."
"The district has a lot of money, and that sets up a situation where things can fall through the cracks," he said.
Marlyn Flauter, of Chesterfield, said the findings "gave good, positive feedback on what's wrong, identifying problems to be resolved, and the board made a commitment to fix them."
Schweich said his office will be back in three months for a follow up to the audit.
"I hope everyone will commit to correcting deficiencies so you can put this turmoil and these problems behind you," Schweich said.
Monarch covers all or parts of Chesterfield, Clarkson Valley, Wildwood, Maryland Heights, Creve Coeur, Ballwin and unincorporated West County.
