4.2. SR 07-26-1993 - Laserfiche WebLink

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GENERAL COUNSEL .CLERK ALERT Municipal financial responsibility related to fire relief associations There are 694 volunteer fire relief asso- ciations in Minnesota. The majority of these associations are non-profit corporations that pay pensions to volunteers in the form oflump sum payments rather than monthly payments. The associations annually receive state aid to partially, and in some cases fully, cover the cost of pension benefits. These associations are subject to financial reporting requirements to both the municipality and our office. A failure to properly make reports and comply with various state law requirements can cause. _ a relief association to lose state fire aid, thus _ potentially increasing the municipal cost to fund the association. We have noted an alarming error rate in the financial reports filed with municipal clerks on or before August 1 of each year. This report is used by the clerk and council to budget for and pay the municipal contribution to the asso- ciation. Errors have resulted in excess certifi- cation for municipal funds when no municipal contribution was due. More problematic are the errors that result in the under-certification for funding which must then be paid by the municipality when our office reviews the forms the following year as part of the certification process for state aid payments. More than 50 percent of the reports filed with municipal clerks have contained errors which impact the municipal contribution. (The report filed is commonly known as Schedule I, II & III.) Beginning in 1993, our office has re- turned the reports to the association with in- structions to correct the errors and refile with the municipal clerk. State aid certification is withheld until the association has refiled. If _ additional funding is due, the deficiency is _ certified to the county auditor for a property tax levy. A copy of the official notice of error from our office is sent to the municipal clerk. During the course of discussion with sev- eral clerks, it became apparent that a number of relief associations either do not file Sched- ule I, II & III at all or file well past the deadline of August I of each year. To remedy the obvious municipal budgeting problems that are created by late ornon-filing, we redesigned the forms to include a Clerk's Certification, effecti ve for forms to be filed with clerks on or before August I of this year. The clerk must certify that the form was filed on time. In addition, the clerk must certify that if a contribution is due, the contri- bution requirement is brought to the municipal governing body for inclusion in the budget and levy, if required. This new certification places affirmative duties on the clerk to insure both that the form is properly filed and that the contribution due is paid prior to the end of the following year. The requirement to file with the clerk is mandatory in all cases, even if a municipal contribution has never been due in past filings. The requirement that the municipality must pay tR.e full amount certified is also manda- tory.~ municipality may pay an additional 'amount beyond the mandatory contribution, . but may not contribute less than the amount '''certified. If the relief association affiliated with your fire department pays lump sum benefits and the association does not file Schedule I & II (formerly Schedule I, II & III) by August I, please contact the treasurer of the association regarding the late filing. If you are unable to obtain the schedules from the association, please contact Ben Pearce at (612) 297-3685 or Krista Boston at (612) 296-5985 for assis- tance. Our office annually provides detailed in- structions for the completion of these sched- ules. Please review the schedules thoroughly prior to certifying them. Errors have, in some cases, resulted in over or under payment in five-figure amounts. These schedules deserve a high level of scrutiny. Our office will con- tinue to review these forms in a detailed man- ner the following year and advise the associa- tion and the clerk if errors which affect the municipal contribution are discovered. State Auditor's Report Summer 1993