Two tense meetings have transpired since Tillamook Fire District revealed payroll and volunteer stipend discrepancies found in an audit of the 2017-2018 fiscal year. The District is paying $11,554 to volunteers who weren’t compensated correctly.
At a May meeting of the District board of directors, a preliminary review of the volunteer stipend point system showed 1,313 points were not given to firefighters, 159 points were reported but not paid, and 75 points were either extra or were paid without a point being reported. Volunteers firefighters earn $8 per stipend point, volunteer officers earn $9, and one point is assigned per emergency call or training event.
The board of directors voted unanimously to instruct Interim Fire Chief Dale Kamrath to calculate the exact dollar figure for what was owed to volunteer firefighters and officers from the previous fiscal year. Payroll errors in the current fiscal were also discussed, but no action was taken regarding those discrepancies. Kamrath said errors were found up to October of 2018 and nothing was found after that time.
The way paid staff overtime and compensatory time have been being accrued and paid out is a separate accounting issue. Kamrath said buyback payments for surplus vacation hours valued at time-and-a-half have been made at two-and-a-quarter since 2009 due to bookkeeping policy, though no documentation of that policy could be found. It appears time-and-a-half calculations happened when the hours were banked and also when they were bought back by the District.
Kamrath advised the board of directors not to take action that would rectify any overpayments to staff firefighters. The board unanimously voted in a policy that in the future, overtime accruals will continue at time-and-a-half, but time buybacks will be done at straight time. A report prepared by Kamrath showed paid staff payroll discrepancies went back at least to the 2015-2016 fiscal year.
Adding to the accounting issue, a review of three years of time cards showed paid staff earned vacation hours that were somehow deleted, possibly due to caps on time buildups. However, rather than losing hours that were accrued after a cap, firefighters should have been reimbursed for those hours, according to District policy.
Board Vice-Chair Tim Hamburger questioned how the volunteers would respond to compensation for the previous year when some have requested more years be examined, possibly six to ten years. Board Chair Debra Reeves said the recent audit was for the previous fiscal year and that is where the board should be concerned, noting that previous audits did not find payroll discrepancies.
“The rest of the audits have never caught any of this,” Reeves said. “So, I don’t know if they all want to go hire an attorney and sue the district for back-pay or how they want to handle it, but we only have one audit that we’re dealing with.”
A representative of the Tillamook Volunteer Firefighters Association read a statement to the board of directors requesting a look back at the past six years of stipend payments. He said the Association would not endorse, recognize or accept a new fire chief until the discrepancy issue is resolved.
The representative also asked the board four questions: was there misappropriation of funds that affected volunteer stipends, a request for a third-party review of volunteer reimbursements, a request for improved transparency in the fire district, and lastly, he asked the board members about their responsibilities as fire district officials.
Reeves suggested that the statement be submitted formally in writing, adding that legal counsel would be consulted before answering the questions.
Prior to a special meeting that was held in late April, fire district officials delved deeper into the discrepancies, examining how the payroll and stipend systems work and where errors were found for the previous fiscal year.
With examples of the point-based volunteer stipend system on an overhead projector at the April special meeting, Reeves said she examined a three-month window and found a majority of cases in which the records that were sent to the District’s bookkeeper did not match up with records that were sent to state regulators. A third set of payroll records also showed discrepancies.
“None of the numbers on any of these reports really match up,” Reeves said.
Board member Eric Swanson said he examined two months of records, finding that no stipend points were recorded for some call responses, but in other cases more points were recorded than should have been. Having found a calculating error that he himself made in reviewing the records, Swanson called the process for tracking the volunteer stipends convoluted and confusing, saying it needs revision and simplification.
Hamburger also examined a portion of call response records, locating similar errors to what Reeves and Swanson found. Fire Marshal Rueben Descloux facilitated an example of the emergency call system on the overhead projector. He went through the steps of entering a call that would result in a stipend payment, showing how the call is coded, responding personnel are noted, and how the points are eventually added by an administrator with special access.
Kamrath was instructed to prepare a report determining how much was owed to firefighters who weren’t paid correctly during the past fiscal year after calculating for any overages. There was some discussion among the board members about examining other fiscal years, but the consensus was to focus on the 2017-2018 fiscal year in which the auditor found discrepancies. Getting advice from legal counsel was also discussed.
“I’m very disappointed that this has not come up in the last four years,” Swanson said. “We have paid staff members, we have volunteers who apparently have had concerns about this but didn’t follow the policy to address it, and that makes me very concerned.”
“We’re all obligated as members of this fire district, no matter what our role is, to do the right thing,” Swanson said. “And I think as a board, we’re trying to do that. I am not willing to place blame on any of us, whether it be people who get a paycheck, volunteers, board members – I think we need to be clear – let’s not worry about the blame, let’s fix this and move forward.”
Hamburger said he had asked firefighters why they didn’t come forward if they knew there was a payroll problem. He said he was told those who went to previous fire chief did not understand where to go next. Swanson suggested firefighters should periodically be trained on how to address human resources concerns. Reeves also suggested ethical training for the board of directors.
Kamrath emphasized that there was not an issue of missing funds, theft or misuse of District funds. Reeves chalked up the payroll errors to “misinformation that has been accumulated.” Swanson said he had heard the “missing funds” rumor himself, echoing Kamrath and Reeves in saying the issue was clerical and stemmed from accounting errors.
Swanson put a motion before the board to state for the record that there was no missing funds, that the issue was clerical and would be resolved, and declaring that no blame for the payroll discrepancies would be assigned to any current or past employees, board members or volunteers.
“I think it’s critically important that we are making a decision on the record and voting on that issue,” Swanson said.
Reeves questioned the need for the motion. Board member David Mattison seconded the motion, which was defeated by down votes from Reeves, Hamburger and board member Brian Cameron.
A lengthy regular meeting in early April was focused on the payroll and stipend issues as well. The District’s auditor found a lack of accounting safeguards – not enough eyes on the process to prevent errors or fraud. That concern was raised in previous audits as well.
The lack of oversight may have contributed to errors in payments of volunteer stipends. A letter from the auditor said, “we specifically noted errors in the payments of volunteer stipends where the number of service calls from the attendance system did not match the number of service calls paid.”
Referencing a rundown of calls from 2017 to 2018, Reeves said there were two people involved in the accounting process for those calls: one inputting service calls and another inputting points to a system that determines stipend payouts. A review of the call log compared to the points system uncovered a deficiency.
In the April meeting, Hamburger described the volunteer stipend point system as “pretty bulletproof,” showing who logs in from where and what they input. When a volunteer goes on a call, they log into the attendance system. That information goes to another person who then inputs points for the calls, dictating how much of a stipend the volunteer will receive for their service.
Hamburger said his review of the process also showed it to be flawed, finding instances where points weren’t assigned, or where some volunteers received points while others on the same calls did not. Previous discussions had questioned whether there was a data breach or some manipulation of the system. Kamrath said an investigation found that was not the case, saying it was case of errors being made.
Reviewing a recent audit, Tillamook Fire District directors discussed a lack of accounting safeguards during a three-hour long April board meeting.