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Morning Sun
  • Ex-fire chief's apparent violations revealed

  • GIRARD — An examination of selected accounting records and transactions of the Girard Fire Fighters Relief Association has uncovered apparent violations of four Kansas statutes.

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  • GIRARD — An examination of selected accounting records and transactions of the Girard Fire Fighters Relief Association has uncovered apparent violations of four Kansas statutes.
    Results of the examination, conducted by Diehl, Banwart, Bolton CPAs PA, Fort Scott,  covered the period from Jan. 1, 2009, to Dec. 31, 2011. They  are public records and were made available Friday.
    In a special meeting on March 28 the Girard City Council discussed information and various documents regarding Fire Chief Dustin Johnson and the Fireman’s Relief Association Fund. At that time the council voted to suspend Fire Chief Dustin Johnson pending results from an ongoing investigation. He was terminated from his position on April 9.
    In the first apparent violation listed, of KSA 40-1706(a), the Girard Firefighters Relief Association failed to submit to the Kansas  Insurance Department annual reports showing in full the receipts and disbursements of the association for the years ended Dec. 31 2009, 2010 and 2011.
    “We had the firm complete the forms for those three years,” said Girard mayor Maurice Harley. “The Firefighters Relief Association could not recoup the funds for 2009, but was able to recoup the funds for 2010 and 2011. The amount was around $6,800 for each year.”
    In the second apparent violation, of KSA 40-1706(g), expenditures over $1,500 were not submitted to the city attorney for certification prior to payment in 2009, 2010 and 2011.  In each year the expense was $1,931 for the Provident Accident and Health premium.
    In apparent violation of KSA 40-1706(a), the treasurer’s bond was allowed to lapse on July 10, 2010, and no  replacement coverage was noted.
    “Whoever is the treasurer of the association is required to have a fiduciary bond,” Harley said.
    A fiduciary bond is a judicial bond that guarantees that a court-appointed fiduciary will fully perform his or her duties.
    Fourth and final apparent violation, of KSA 40-1707, a loan appears to have been initiated on the cash value of the life insurance contract covering the life of the fire chief. Proceeds were not deposited in the Girard Firefighters Relief Association accounts. Also, the premium payments on all life insurance contracts held by the Girard Fire Fighters Relief Association were paid by the cash values for the three years reviewed.
    “The Firefighters Relief Association holds funds in trust and uses them to purchase insurance for firefighters and their families,” Harley said. “I don’t know if you can take out a loan against these policies, though there are provisions that when a firefighter retires or serves a specified number of years and then leaves the department, he can cash out the policy.”
    He said he did not have any figures on the dollar amount of the apparent loan that was taken out.
    Gary Emry, Girard city administrator, said that after the city has done its due diligence, the Kansas State Insurance Department office which overlooks the Firefighters Relief Act Fund will take a look at these apparent violations. Any further action regarding them would be taken by the state.
    Page 2 of 2 - However, Emry added that the city’s involvement in  the situation is still not resolved because there are still unemployment issues that are being worked through.
    “I really can’t comment on that,” Emry said.
    He did want to comment on some rumors currently going on around Girard.
    “The rumors that we’re going to an all-volunteer fire department are untrue,” Emry said. “We have had a five-member committee looking at the fire department and the major instructions were to look at the operations of the fire department within to parameters. Those are that there would be no recommendations that would cause an increased public safety risk or that would impact negatively the ISO rating of the community, which is the insurance rating.”
    He added that, since it is considered that going to an all-volunteer department would increase public risk, it is not an option that the committee is looking at.
    “What we’re doing with the committee is, basically, we’ve fixed the carburetor so let’s see what else might be wrong with the engine while we’ve got the hood up,” Emry said. “That’s all there is to it. There will be one more committee meeting, then it will wrap up its work and make its report to the city council. I have every confidence it will make a proper recommendation. I’d like to get all this behind us.”
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