HOPE — An Indiana State Board of Accounts audit has determined the former Hope Volunteer Fire Department treasurer needs to pay back more than $40,000 in missing funds to the department.
The state audit, released Thursday, says former treasurer Mathew Mathis owes $48,252.21 for a variety of financial improprieties, including issuing checks to himself without supporting documentation, more than $31,000 in undocumented cash withdrawals and failure to deposit money from fundraisers and other events into fire department accounts.
The total includes $4,611 in charges to be paid to the state of Indiana for the special audit, which covers financial records between Jan. 1, 2015 and July 27, 2016.
The audit has been forwarded to the Indiana Attorney General’s office and Bartholomew County Prosecutor’s Office, which could consider filing criminal charges in the matter.
Hope Fire Chief Randy Wood and fire department Lt. Bruce Neal, a former fire chief who serves as treasurer, said they could not comment on the audit results pending further investigation.
Wood did say Mathis is on suspension, and not on the fire department roster, and could not provide contact information for the former firefighter.
Attempts to reach Mathis on Thursday and Friday were not successful.
Mathis became treasurer of the Hope Volunteer Fire Department in December 2014 when longtime treasurer Edwin Stone declined the nomination for another term as treasurer. After an audit was completed of the fire department’s financial records under Stone, the records were to be turned over to Mathis.
Kenny Chandler, a retired certified public accountant and emergency medical technician who does the department’s tax returns, said the fire department’s financial suspected improprieties came to light somewhere around April and May of 2016.
This was around the time the town of Hope and the fire department were in negotiations for a new contract amid concerns about the department’s finances and a lawsuit by the contractor who built the town’s new fire station against the fire department, which has since been settled with terms staying private.
As the person who prepares the department’s tax returns, Chandler said he was gathering the distribution books and bank statements to begin putting together the department’s 2015 return when he noticed some unusual transfers of money.
The Hope Fire Department has several bank accounts and part of Chandler’s work in preparing the tax returns is to track where the money is transferred, he said.
“Before this, I was always able to track it to other fire department accounts,” he said.
Chandler also found duplicate payments for a firefighter clothing allowance for Mathis, although all firefighters had received a 2014 clothing allowance on Jan. 11, 2015, according to the audit.
As town of Hope officials became more concerned about the fire department’s finances, Chandler said the matter was turned over to the Indiana State Police, which asked for the State Board of Accounts financial audit.
According to the audit, five checks totaling $2,600 were issued to Mathis between Jan. 27, 2015 and June 9, 2016, all signed by him. There was no documentation to support the validity of the payments, and one check’s memo line stated it was for “cash,” the audit said.
In addition to those checks, no documentation was presented to support 44 cash withdrawals from the fire department’s various checking and savings account totaling $31,905 between April 15, 2015 and July 14, 2016, the audit report states.
Of the cash withdrawals, 23 were made by issuing checks made payable to “cash” and 21 were made by savings account withdrawal slips, the audit states. All of the checks and savings account withdrawal slips were signed by Mathis as the creator, the audit states. None of the checks were recorded in the check register or other financial ledger used to account for the department’s financial transactions, the audit states.
In addition to those allegations, a cash withdrawal of $1,800 was made Sept. 25, 2015 from a Hope Fire Department savings account to supply a cash change fund for the annual fish fry, the audit states. There was no deposit of the returned $1,800 to the savings account following the fish fry, the audit states, and no supporting documentation indicated the disbursement of the $1,800.
Related to that fish fry is the notation in the audit that the fire department collected $7,081 from the 2015 fish fry before paying expenses, the audit states. Collections from that fish fry were not deposited in the fire department’s bank accounts, although fundraiser expenses were paid out of the fire department’s bank account, the audit states.
The fire department also paid $255 in penalties, interest and service charges when fire department banking accounts failed to meet minimum account balances, had deficit balances or incurred late fees on loan payments in 2015 and 2016, the audit states.
Chandler said he questioned where the deposit of money was from the Heritage Days event, as there was usually an annual “nice large deposit” into fire department funds after the fish fry.
The audit reminded fire department officials that the Indiana State Board of Accounts requires entities receiving financial assistance from governmental sources that they must maintain a financial management system that provides effective control over and accountability for all funds, property and other assets.
Mathis had authority on the accounts without adequate controls in place to monitor him, Chandler said of the way the fire department handled its finances then.
“My guess is it was pretty much one of those trust things,” Chandler said.
Since then, three people — including Neal, the new fire department treasurer — are meeting monthly to monitor deposits, expenditures and other financial matters for the department, Chandler said.
The audit indicates the fire department had obtained a $100,000 crime insurance policy in 2014-2017 as part of its insurance coverage.
An exit conference to explain the contents of the audit was conducted with Mathis on Nov. 1 and a separate exit conference was also conducted with Jason Mack, president of the fire board, Neal and Chandler on the same day.