Greenwood Hose Company 1 is vowing more financial oversight and transparency in the wake of its former president's arrest on charges of stealing nearly $400,000 from the volunteer fire department.
With new details emerging about William Sweeney's alleged plundering of Greenwood Hose's finances, the fire company is working with an accountant to establish a system of checks and balances "so nothing like this can ever happen again," its attorney, Christopher Powell, said Friday.
Greenwood Hose President Jason Mills said it may take months to resolve all of the issues, including the department's tax-exempt status, which he acknowledged is in question.
"We are taking little steps at a time to get everything back in order at the firehouse," Mr. Mills said.
Mr. Sweeney, 36, was arrested April 19 on felony charges of theft by unlawful taking and forgery. He is accused of diverting $395,811.11 in fire company funds for his personal use between Sept. 19, 2006, and last Jan. 13.
His preliminary hearing is scheduled Monday at 10:30 a.m. in Central Court.
According to the arrest affidavit prepared by state police, Mr. Sweeney wrote an unspecified number of checks from the department's checking account payable to himself, cash or his Moosic ice cream shop, Bitty Bill's. Mr. Sweeney was authorized to sign the checks but forged the second required signature of the hose company treasurer, police said.
He also ran up a balance of $7,718.62 on a credit account in the hose company's name, police said.
Mr. Mills said while the Greenwood Hose board met monthly to approve the payment of bills, the bank statements went to Mr. Sweeney and no one else saw them. There were no routine audits of the department's general account, he said.
At the same time, nothing suggested Mr. Sweeney might be stealing money, he said.
"He was a 17-year member of the department. He is a (Moosic) borough councilman. ... He comes from a good family; college-educated. We trusted him. There was no reason to believe he would do something like this," he said.
The theft was discovered when other hose company officials examined bank statements after a vendor complained about nonpayment of a bill and noticed checks written to Mr. Sweeney, Mr. Mills said.
He said the department has already instituted some changes.
In addition to continuing to require two signatures on checks, the hose company will conduct audits of its finances twice a year, he said. Its books also will be open for inspection by any member of the department,
"It's more like an open forum from the business aspect of the department," he said.
Greenwood Hose officials became aware the department's tax-exempt status might be in jeopardy only after the financial discrepancies were discovered early this year, Mr. Mills said.
As president, Mr. Sweeney had responsibility for filing the department's annual Form 990, he said. Form 990 is a reporting return tax-exempt organizations file with the Internal Revenue Service that provides information about, among other things, the organization's finances, including details of receipts and expenditures.
Mr. Mills said the hose company apparently last filed a Form 990 in 2007. That would roughly coincide with the period when state police say the thefts began.
IRS records show Greenwood Hose's exemption was automatically revoked in May 2011 after the department failed to file a Form 990 for three consecutive years. Mr. Mills said no one at the hose company recalls receiving notification of the revocation, which would have implications for the department's fundraising.
Mr. Powell said while he had no knowledge of the 2011 revocation, the department will look at the status of the exemption and take steps to restore it if necessary.
"I'm sure we'll get it back," he said, "I'm sure they qualify for it."
Both he and Mr. Mills said the hose company also is reviewing its insurance policy to see if it can recoup some of the money Mr. Sweeney is accused of stealing.
Contact the writer: dsingleton@timesshamrock.com