By Adam Pagnucco.
Sometimes, fixing one problem creates another. And sometimes, it takes a long time for the new problem to surface. So it is with the latest chapter in Montgomery County’s longstanding saga of ambulance fees.
Let’s roll back the clock to 2008. Facing revenue issues as the Great Recession approached, County Executive Ike Leggett called for the county to levy a fee on ambulance service. The fee, which was common in many other jurisdictions, would be paid by insurance companies and would be used to support the county’s fire and rescue service, thereby freeing up general fund money for other purposes. The volunteer fire fighters opposed the fee, and after the county council passed legislation approving it, the volunteers defeated it at the ballot box in 2010. Two years later, Leggett pushed another ambulance fee through the council and another ballot question campaign loomed. But this time, the fee stood as the volunteers’ fire departments were promised some of the revenue. Problem solved, right?
Not really.
Earlier this month, I revealed that the Montgomery County Volunteer Fire and Rescue Association (MCVFRA), the umbrella organization representing the county’s volunteer fire departments, has been suffering from financial problems. One of the reasons was that the association had been using the ambulance fees it was receiving from the county (now called emergency medical services transportation, or EMST fees) for general expenses when in fact they were restricted to specific uses. That created problems with the county, which according to the association, was withholding future fee revenues “until we clean up.”
Now the county’s Office of Inspector General (OIG) has issued a new report casting further light on the issue. It seems that problems lie not only with the volunteer association and the volunteers’ Local Fire Rescue Departments (LFRDs) but also with the county government itself.
The OIG report found that the county’s Emergency Medical Services (EMS) Billing office was not adequately tracking the ambulance money it sent to the volunteer fire entities. The OIG found:
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Our testing aimed to validate EMS Billing’s overall process for ensuring funds are spent according to agreements and within the stipulated timeframe. In the sample of 40 EMST projects (valued at $1,202,939) that we evaluated, eight did not contain evidence indicating EMS Billing completed the required review. Additionally, the majority of all sampled projects were also missing differing levels of support, leaving us to question how EMS Billing would have been able to monitor those projects without the documentation. Ultimately, we found that $380,709.32 (32%) of the $1,202,939 expended by LFRDs on the 40 EMST projects in our sample could not be fully reconciled with the documentation provided by EMS Billing.
With regard to EMS Billing’s oversight of compliance with spending timeframes, we identified that funds related to 32 of the 40 (80%) projects in our sample were not spent, encumbered, or returned within a calendar year as required by annual operating budget resolutions. EMS Billing explained that they permit LFRDs to choose how to reallocate their own unspent and unencumbered funds as long as they are transferred to approved projects. This practice is contrary to annual operating budget resolution mandates requiring that EMST funds be spent, encumbered or returned to MCFRS for reallocation.
Relatedly, we found that MCFRS [Montgomery County Fire and Rescue Service] lacked formal written policies and procedures to monitor how EMST funds are spent by LFRDs and whether funds are used within prescribed timeframes. Similarly, we observed that they lacked standard protocols for LFRDs to follow when submitting support to justify project expenditures. We noted that EMS Billing, recognizing the varied experience and staffing levels within LFRDs, attempts to be flexible when making demands of the LFRDs. Unfortunately, without standard protocols, this also results in them not always receiving the documentation needed to effectively monitor EMST funds allocated to LFRDs.
We also noted that LFRDs received multiple EMST distributions under the same project name (e.g., Administrative Support), making it difficult to distinguish what documents pertained to which project. Assigning unique identifiers to each project may have alleviated some of the associated confusion.
EMS Billing’s lack of oversight regarding spending and adherence to established timeframes increases the likelihood of EMST funds being fraudulently spent and hinders MCFRS’s ability to allocate resources to higher priority projects directed by the Fire Chief.
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Let’s contemplate the meaning of this: “EMS Billing’s lack of oversight regarding spending and adherence to established timeframes increases the likelihood of EMST funds being fraudulently spent…”
The OIG is saying that this system is vulnerable to fraud.
That’s not all. The OIG zeroed in on the issues I identified with the volunteer association. The report included this note.
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Auditor’s Note: At the conclusion of this audit, information was brought to light that the MCVFRA believed EMST funds awarded to the MCVFRA were used to cover general expenses not allowable under EMST agreements and the applicable law. This disclosure aligns with and further supports the results of this audit. During our testing, MCVFRA was one of the recipients of EMST funds for whom MCFRS could not provide supporting documentation showing how funds were used or whether the funds remained in their possession. Under Section 21-15 of the County Code, performance audits of any LFRD are permissible at the direction of the County Executive, Chief Administrative Officer, or Fire Chief, as well as the County Fire and Emergency Services Commission and County Council. Considering the breadth of deficiencies identified regarding MCFRS’s inability to account for EMST funds, as well as recent disclosures by MCVFRA, we strongly recommend the County audit all EMST awards to LFRDs and the MCVFRA to obtain a full accounting for those funds and ensure adherence to award agreements and County law.
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So it’s a big mess and it’s not exclusively the fault of the volunteers association or their fire departments. The fact is that the county seems to not possess a system enabling it to adequately monitor uses of millions of dollars in ambulance fee money and these distributions have been going on for more than a decade.
There is a lot more in the OIG’s report on issues with procurement, travel and use of county purchasing cards by the fire department. The whole thing is worth a read. But the ambulance fee system needs to be fixed. Because if it’s not, the prospect of fraud may someday rise from a hypothetical warning to a prosecutorial fact.