By Joe Beck -- firstname.lastname@example.org
FRONT ROYAL -- A state audit of the Shenandoah Farms Volunteer Fire Department bingo operations for 2010 lists nine record-keeping failings and ordered the organization to take seven corrective actions.
The five-page audit, obtained Thursday from the Office of Charitable Gaming at the request of The Northern Virginian Daily, echoes some criticisms contained in another, more sweeping audit conducted around the same time by a certified public account hired by Warren County officials. The state audit was conducted in May, and the county's third-party audit ran from late May to mid-June.
A few months earlier, $1,000 to $2,000 was discovered missing from a safe containing bingo money. The money was never recovered.
"The auditor notes that the organization's internal controls for surrounding inventory is weak," the Office of Charitable Gaming stated in a sentence that was bold-faced. The list of corrective actions includes:
• An order that reconciled bank balances agree with each other.
• An accurate and complete check register be maintained.
• All checks be accounted for in the check register, including each check's date, number, amount, payee name and the purpose for each listed payment.
The state audit blamed a $938 imbalance in the bingo operation's annual financial report on "failure to properly maintain and account for their bingo game session cash on hand."
The audit also said the fire department "did not report all game session disbursements on the financial reports. The auditor also noted that the organization reported an incorrect beginning gaming bank account balance."
The audit, which was addressed to Don Hoover, president of the Shenandoah Farms board of directors, includes a space for him to sign the audit to acknowledge agreement with the audit's findings and a willingness to execute the seven remedial actions listed.
State officials were unavailable to discuss whether the fire department had complied.
Reached by telephone Thursday, Hoover said he "would have to refresh my memory on [the audit] to see if I have anything to say about it."
"I wouldn't want to comment until I have a chance to look at it" he added.
The board of directors has contended that earlier evidence of financial mismanagement and probable fraud at the department stemmed from the actions of an earlier board with a mostly different membership. Hoover and other members of the current board have strenuously argued that they have been working hard to improve the department's financial mismanagement and solve other problems.
Suzanne "Suni" Perka, the Clarke County commonwealth's attorney, decided in late September she lacked enough evidence to file criminal charges against anyone in the department. Perka issued her findings after she and state police conducted a follow-up investigation to Warren County's third-party audit.
Although she filed no charges, Perka criticized the department for shoddy financial management.
The state audit accuses the fire department of failing to meet a requirement that at least 10 percent of bingo games' disbursements go to charity. The audit said Shenandoah Farms "failed to make charitable contributions during ... 2010."
In another section of the audit, the department was found to have "failed to utilize $4,700 for charitable purposes during the gaming year. The organization reported that they paid out more in prizes than collected in bingo receipts. Their reported payout was 123 percent of receipts."
The audit reports that Shenandoah Farms treasurer Judy Moriarty "stated that at bingo gaming start-up in September 2010, the organization did not structure payouts to reflect patron attendance. Therefore, gaming sessions had not been profitable."
Moriarty could not be reached for comment.
After faulting Shenandoah Farms for failing to account for paper purchases, the audit demanded the fire department "verify and compare inventory purchases received from their supplier with the supplier's invoice."
The audit also required the fire department to schedule game management training with the Office of Charitable Gaming's training coordinator.