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Audit finds Chesapeake VFD mishandled state funds

CHARLESTON, W.Va. - A state audit has found the Chesapeake Volunteer Fire Department did not properly account for some state funds.

The audit was discussed Monday during a Legislative Post Audits Subcommittee meeting. The audit found the VFD inappropriately commingled state funds with money from other sources totaling about $42,311.

The VFD also didn't have documentation showing where $9,435 was spent and misspent about $600 in state money, according to the audit.

Fire Chief P.J. Johnson refused to comment, saying he hadn't yet seen the audit.

However, the VFD issued a statement to the auditor's office saying it intended to "comply fully with both the intent and letter of the law regarding the use of state funds."

The VFD also said it would cease to commingle state funds with other money.

The state provides revenue from a .5 percent surcharge on fire and casualty insurance premiums to fire departments. Chesapeake was to receive about $12,000 from the insurance surcharge during the first quarter of this year.  

Kanawha County Commissioner Dave Hardy has been a vocal critic of the VFD's financial practices. Hardy called for a county-led audit of the department's books after he discovered it had grossed about $4.2 million from bingo and raffle from the beginning of 2009 to the end of 2010.

Hardy became increasingly frustrated with the department after agency officials refused to provide some records to the commission during the audit. The VFD instead sent the commission a confidentiality agreement, demanding that it be signed before officials would turn over the documents.

Commissioners refused to sign the agreement. Hardy called it the most "bizarre document" ever to be sent to the commission office.  

"I think the department continues to embarrass the residents of Chesapeake," Hardy said Monday after hearing about the state's findings.

The state ordered the VFD to pay the $600 back into its state account, according to the audit. The department also must pay $9,435 back into the account used to hold state funds.

Fire departments must keep funds provided by the state separate from funds raised by other means, such as raffles and bingo, said Delegate Tim Armstead, R-Kanawha.

Armstead, who is the House minority leader, sits on the Legislative Post Audits Subcommittee, which is made up of members of the House and Senate.

The department, which owns a car wash and a radio communications company, used $567.69 in state money to pay a water bill for the car wash. 

The state audit arose as a direct result of the VFD failing to provide proper financial documentation to the county, said Stacy Sneed, director of the Legislative Post Audits Division during a previous interview.

The VFD also initially refused to provide the state with the financial documentation requested. However, the state withheld the $12,000 until the documentation was provided.

The VFD coughed up the paperwork on Jan. 9. It is also the target of an ongoing criminal investigation being conducted by the Kanawha County Prosecuting Attorney's office.

"Evidence is still being collected," Prosecutor Mark Plants said. "As soon as it's collected, we'll review it and make a determination on if any crimes were committed."

Armstead said VFD officials' conduct did raise some eyebrows and cause concerns.

"I think there's a heightened awareness when it comes to Chesapeake," he said.

He said it's the committee's job to ensure that all state funds are spent properly, not just the funds for fire departments.

Commission President Kent Carper also reviewed the state audit. He said most of Chesapeake's problems originated with its failure to cooperate with the audits in a timely fashion.

However, he pointed out that one of the three findings was for less than $600.

"That doesn't mean it's not important, but it doesn't seem like it really showed any significant conduct that should give rise to a lot of concern," Carper said.   

Contact writer Paul Fallon at paul.fallon@dailymail.com or 304-348-4817. Follow him at www.twitter.com/PaulBFallon.

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