COMMISSIONER ALPHONSE PETRACCO, THE DIRECTOR OF PUBLIC SAFETY OF THE NUTLEY BOARD OF COMMISSIONERS STATEMENT ON FINANCIAL REVIEW OF NUTLEY VOLUNTEER EMERGENCY & RESCUE SQUAD
The Nutley Volunteer Emergency & Rescue Squad (NVERS) operates under the designation of a 501(C)(3) non-profit, that by ordinance dates back to 1953, and is to operate under the control and direction of the Director of Public Safety of the Township of Nutley. In addition to the authority granted to the Public Safety Director by the Township ordinance (60-1 et. Sq.), the Township owns and maintains the building in which NVERS operates and pays for the organization's insurance. Further, the Township ordinance requires the Director of Public Safety approve operations of NVERS and requires NVERS to provide certain reports and financial information to the Township. In recent years, however, those documents have not been provided. As a result, this week the Township authorized the NVERS’ prior auditors Geltrude & Company, to conduct certain agreed upon procedures related to the organization’s finances and to report the findings. This was not an audit of the organization’s previous financial statements. This action was necessitated by certain unusual financial trends reported on the 2019 tax return prepared by a new accountant hired by the executive committee of the NVERS without Commissioner’s knowledge or authority. For example, a loss of $8,200 in investment income after 2 years of gains, and an overall loss of $230,000 on the 2019 tax return, to name a few. In addition there have been several legal matters involving the squad including a lawsuit and internal harassment claims that have called into question the overall operation of the squad.
"We have an obligation to our residents to ensure that NVERS can continue to operate as a qualified non-profit organization that provides great service to the community," said Commissioner Al Petracco. "We are concerned, however, that in the last year, there has been an increase in employees (17-27) and salaries, the purchase of three Tahoe trucks, and an operating loss of $230,000 - all without the required approval of the Township or providing the required audit documentation. Other legal issues have also concerned me as Commissioner. However, we have the utmost respect for the hard work of both the volunteer and paid members of NVERS. However, we need to re-establish the control and financial reporting relationship between NVERS and the Township to ensure that it does not risk losing its non-profit status with the IRS and continues to serve our community for years to come."
In June, Commissioner Petracco met with members of the Squad along with Mayor Tucci and Township counsel to discuss their concerns and to request that the financial records be produced to Township officials. On June 18th, Township attorney Genitempo sent a request for certain documents of which only a limited amount were provided, On July 6, Genitempo sent a demand for the balance of the documents so that the transparency of the NVERS could be maintained particularly because of their non-profit status and the statutory obligation of the Director of Public Safety, Commissioner Petracco, to oversee the operations of the NVERS.
On July 9th, by way of a public communication by the NVERS President Jonathon Arrendondo, a member of the squad and not a Nutley resident, stated that he would not cooperate or provide any of the financial documents requested by the Township. This was posted on the internet in the middle of the Commissioners’ public meeting. Since that post, the executive committee, in an effort to cooperate, have reconsidered and agreed to provide all of the requested documents to Township officials to avoid any potential litigation.
On July 9, 2020, the Board of Commissioners authorized the retention of the Geltrude & Company accounting firm to conduct an agreed upon procedures engagement of the NVERS. This was done because of its founder Daniel J. Geltrude’s sterling reputation and professional integrity and because of his familiarity with the squad’s finances and having prepared their prior tax returns. In addition, Mr. Geltrude is a professor at Montclair State University where he teaches graduate level courses on financial fraud and non-profit and governmental accounting. The belief was that Geltrude could review the current financial documents quickly and inexpensively.
During and following the Commission meeting, members of the NVERS made complaints publicly that they objected to having Mr. Geltrude’s firm reviewing certain financial transactions of the squad and made representations that they would not give credibility to any finding his firm might make. This was despite their own admission as to the integrity and skill of the Geltrude firm. Mr. Geltrude subsequently rescinded his proposal in the spirit of amicable compromise. Commissioner Petracco in conjunction with the Township Attorney decided that in order to avoid an appearance of a conflict of interest, and to appease the members of the NVERS, the Township will retain a different accounting firm to conduct certain agreed upon procedures of the organization’s financial transactions and to report their findings. As a result, the Township Attorney is recommending that at its next meeting, the Board retain a different accounting firm.
While Commissioner Petracco appreciates that the NVERS’ executive board has finally agreed to be cooperative with the production of the financial documents he will not abrogate his statutory obligation to maintain and operate the Nutley Volunteer Emergency Squad.
This action does not in any way detract from the tremendous work of the NVERS and the lives they save every day.