Audit & Accountability
How the Pennsylvania Auditor General ensures relief associations use funds responsibly.
Public Accountability
Every firefighters' relief association in Pennsylvania that receives state aid is subject to audit by the Pennsylvania Auditor General. This oversight ensures that public funds — generated through the 2% tax on foreign fire insurance premiums — are used only for authorized firefighter-benefit purposes. Audit reports are public record, providing transparency to both firefighters and taxpayers.
Types of Audits
The Auditor General conducts two types of examinations:
Limited Procedures Engagement (LPE)
A focused review of financial records, typically covering 2–3 years. LPEs examine key compliance areas including authorized expenditures, proper documentation, and meeting minutes. Most relief associations undergo LPEs on a regular cycle. LPEs are less intensive than full audits but still examine all critical areas of compliance.
Full Audit
A comprehensive examination of all financial records, governance practices, and legal compliance. Full audits may be triggered by findings from an LPE, complaints, or as part of a risk-based selection. They include detailed testing of transactions, review of internal controls, and thorough examination of compliance with Act 84 requirements.
What Auditors Examine
During an audit, the Auditor General's team reviews:
- Financial records — Bank statements, check registers, receipts, invoices, and financial reports
- Meeting minutes — Documentation that all expenditures were authorized by membership vote
- Membership records — Rolls, eligibility documentation, and benefit applications
- Bylaws compliance — Whether the association follows its own governing documents
- State aid usage — That funds were spent only on categories authorized under 35 Pa.C.S. § 7416(f)
- Internal controls — Safeguards against fraud, waste, and mismanagement
- Officer responsibilities — That fiduciary duties are being fulfilled
Common Audit Findings
The Auditor General commonly identifies these issues across relief associations statewide:
- Expenditures not authorized by membership vote or not recorded in minutes
- Funds used for purposes not permitted under Act 84 (building costs, social events, non-firefighter expenses)
- Inadequate documentation — missing receipts, incomplete records, unsigned checks
- Failure to maintain current bylaws or follow bylaw procedures
- Commingling of relief association funds with fire company funds
- Lack of proper internal controls (single signatory on checks, no reconciliation)
Findings can result in required corrective action, repayment of misused funds, or in serious cases, loss of future state aid eligibility.
Internal Controls & Best Practices
Sound internal controls protect both the association and its officers:
- Dual signatures — Require two authorized signatures on all checks above a threshold amount
- Separation of duties — Different people handle receiving funds, recording transactions, and reconciling accounts
- Regular reconciliation — Monthly bank reconciliation reviewed by someone other than the treasurer
- Documentation — Receipts and invoices attached to every expenditure, filed systematically
- Annual review — Internal audit committee reviews records before the membership annual meeting
- Record retention — Financial records maintained for a minimum of 7 years per PA requirements
Internal Audit Committee
In addition to periodic state audits, the association maintains its own internal oversight. Each January, the President appoints three (3) auditors from the membership to audit all association accounts. The committee must produce a written report within 60 days of their appointment.
This annual internal review provides an additional layer of accountability between state audit cycles and helps identify any issues before they become findings in an Auditor General examination.
Budget Philosophy
Responsible stewardship means balancing current needs against long-term sustainability:
- Member benefits first — Direct firefighter support (injury, survivor, physicals, insurance) takes priority
- Equipment and training — Protective gear and professional development serve the core mission
- Reserve maintenance — Maintain adequate reserves for unexpected claims and emergencies
- Sustainability — Budget conservatively to ensure the association can meet obligations year after year
- Transparency — Financial reports presented to membership at regular meetings
State aid revenue varies annually based on insurance tax collections. A prudent budget accounts for fluctuations while maintaining core programs.