Mark Ouellette, Eastern Region Trustee
Tony Mejia, Western Region Trustee
Alex Forrest, Canadian Trustee
Pursuant to Article 6, Section 5, of the Constitution and By-Laws:
The Trustees are charged with overseeing that the IAFF has controls to ensure that its resources are used for its mission, that its financial reporting is accurate, and reporting the results of their oversight to the Board.
The Trustees are also charged with hiring independent auditors to conduct the audit under generally accepted auditing standards. The Board of Trustees then review the auditors’ findings, communicate any concerns to the auditors and supplement the independent audit with any other procedures the Trustees believe to be appropriate.
The Trustees performed their inspection and review of the financial records of our International Union and affiliated entities for the fiscal year ended September 30, 2019.
We traveled to IAFF headquarters on January 6, 2020, began our review on January 7 and concluded it on January 17, 2020.
The auditors conducted interviews with the General President, the General Secretary-Treasurer and other IAFF personnel. The Trustees interviewed approximately 25 assistants, managers and employees about the well-being and security of the organization. In addition, the Trustees accessed the Concur system and randomly tested the accuracy of vouchers. We also reviewed the Executive Board’s financial policies and, in our interviews, we randomly interviewed 10 District Vice Presidents about policies, as well as asking questions about pending or threatened litigation pertaining to locals or the International, fraudulent activity including theft or embezzlement and if they knew of any information security breaches at the International. These interviews are related to both the audit and to the operations within the IAFF and are necessary to satisfy our fiduciary responsibilities.
After being informed by the GST of the dismissal of the Comptroller, Warren May, the Trustees advised the auditors and directed them to examine any financial concerns in the context of their year-end audit. After conversations with the auditors and the Executive Board, we expanded our audit and directed the auditors to perform mid-year, agreed-upon procedures to examine selected items of financial information.
Throughout 2020, our auditors tried to complete their audits of IAFF’s financial statements and federal awards for the year ended September 30, 2019.
After a number of discussions between the auditors and the Trustees about audit matters, it became apparent that the 2019 audit was likely to end with a disclaimer of opinion.
Some of the reasons leading to the disclaimer are:
- The ongoing federal Grand Jury investigation into matters related to the IAFF’s Staff Representatives Pension Plan
- The ongoing activities of the Ethical Practices Committee
- Turnover in IAFF’s attorneys and staff from whom written representations would be required
- Possible other ongoing inquiries of which we have not been informed
These conditions create a material weakness in the IAFF’s control over the completeness of financial reporting and disclosure for 2019. The pervasive nature of this weakness has led the auditors to disclaim an opinion on IAFF’s 2019 financial statements and reports on federal awards.
While the Trustees are not currently investigating any matters of gross negligence or fraud, we understand the auditors’ conclusion that they must disclaim an opinion on the 2019 financial statements. In the interest of moving forward, the Trustees agreed that the auditors should draw the 2019 audits to a close.
The Trustees want to thank all the staff of the offices of the General President and General Secretary Treasurer and, in particular, Ryan Weber and Katy Fisher for all their hard work and assistance in helping us in this most difficult year.