State: Monterey ‘negligent’ in oversight
MONTEREY—The New York State Comptroller’s Department released its report detailing how nearly $140,000 in funds were misappropriated from the Monterey Fire Company.
The audit covers Jan. 1, 2007, to March 14, 2013, right before it was released. It states that Larry States, fire chief, and then treasurer and chief’s wife, Kimberly States took nearly $140,000 from the department during the time audited. The report added the Monterey Fire Company should seek full reimbursements from the couple, as well as maintain better reviews of the finances.
The state said, “the (department) board and membership were negligent in the performance of their oversight of the company’s financial operations. All financial activities were performed solely by the treasurer, and the board did not implement compensating controls. This egregious lack of oversight created a weak control environment.”
The audit said Larry and Kimberly States were able to initiate non-company transactions without detection by making purchases with the company’s bank debit card and on the department’s credit with vendors. Additionally, Larry used the company’s accounts to make sales tax-exempt purchases for his contracting business—some of which he paid with the department’s debit card—and used fire funds to help purchase a personal vehicle.
Finally, the state added Kimberly deposited company revenues totaling $213 into her personal credit union account. These personal purchases, payments, cash withdrawals, and misappropriated revenues totaled $113,311. The state also identified another $26,386 in questionable payments and purchases that appeared to be personal in nature.
The report adds, Kimberly States gave the comptroller’s office a signed statement saying she had used the fire department’s money for personal use. On Jan. 11, 2013, the state police arrested both States and charged them with grand larceny.
The comptroller’s office added the couple reimbursed the fire department a combined total of $5,846 in late 2011 and early 2012. This leaves the total known misappropriated funds at an estimated $134,000. The state recommended the department seek reimbursement for the $35,303 in improper payments to the couple’s family; the $9,530 in ATM withdrawals and related fees from the former treasurer; the deposit of $213 in company funds into personal credit union account; and the $68,265 in improper purchases by the States.