NEWS

Marcum Report: Firefighters paid excess, but was it legal?

Posted 9/2/21

By JOHN HOWELL The big reveal is happening. More than three years after being commissioned by the Warwick City Council, the audit of firefighter sick pay and claims firefighters were using it to defraud the city of thousands of dollars is being made

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NEWS

Marcum Report: Firefighters paid excess, but was it legal?

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The big reveal is happening. More than three years after being commissioned by the Warwick City Council, the audit of firefighter sick pay and claims firefighters were using it to defraud the city of thousands of dollars is being made public. Depending on the calculation used, it finds firefighters were paid in excess of more than $300,000. But even those who have scanned the more than 250-page report can’t say it proves more than manipulation of the system. After reading the 10-page executive summary, City Council President Steve McAllister can’t say there’s a smoking gun, although it finds several firefighters benefited from “errors,” as the audit calls them. “Is it an error or is it something else?” he asked Wednesday in a call. McAllister said he doesn’t know if firefighters were entitled to the extra pay or not since there were different systems for calculating unused sick pay and when it was paid. “It’s important to find out. We need to keep track of every dollar,” he said. Tim Howe, chair of the council’s Finance Committee, likewise read the summary but hadn’t gotten down to analyzing the columns of figures detailing what firefighters were paid in unused pay for the period from February 2013 to June 30, 2018.  From what’s he’s read, Howe doesn’t believe there’s cause to bring criminal charges. Ward 5 Councilman Ed Ladouceur, who with former Ward 9 Councilman Steve Merolla and then City Council President Joseph Solomon pushed for the audit, said Tuesday he hadn’t read enough of the report to reach a conclusion. Releasing the report, which was prepared by the accounting firm Marcum, is proving to be problematic. The city received two copies of the report, one with the redaction of names that was provided to the state Ethics Commission for its investigation of a complaint filed by Rob Cote. Cote charged that as a member of the City Council, Steve Merolla acted to award the audit contract to the accounting firm of YKSM, which was later acquired by Marcum. Cote alleged Thomas Lisi, a YKSM partner, served as Merolla’s campaign manager as well as his personal accountant. In its report, the Ethics Commission found probable cause Merolla violated the ethics code and that he pushed for payment of outstanding invoices amounting to about $27,000 from YKSM so as to gain a copy of the report. The invoices were not paid and Marcum only made the report available to the city – at no cost – after the Ethics Commission finding. McAllister said the full report, not the redacted version, would be publicly released. He explained that scanning the report’s spreadsheets is proving difficult and online access may not be possible. A copy of Marcum’s accompanying 10-page summary, dated Aug. 18, 2021, was provided to the Beacon. The summary cites the sick leave provisions contained in the contract for the period of the study, concluding, “This section appears to be contradictory. The wording indicates that the entitlement is paid at the end of each year, which would infer that use of sick leave during the entire year would be deducted prior to making any payment for unused sick leave over the maximum entitlement. It also states, however, that payments should be made by the last day of each month. Additionally, Section I indicates ‘During the month of February in each year, the City of Warwick shall cause to be calculated’ ‘each member’s present entitlement.’” It goes on to say that under the monthly payout scenario, the total excess payouts calculated for the 65-month period under a monthly payout scenario is $385,875.20 and that under the annual payout scenario excess payments totaled $308,042.77. Cote feels vindicated for his prolonged efforts to get the report released and claims that firefighters were gaming the system. However, he maintained Wednesday that the report uncovers only a portion of what was happening at the time and according to his calculations of vacation pay and other benefits, the actual amount “is well over a million dollars.” “What’s Picozzi going to do about it? Is he going to seek restitution?” Cote asked. Conclusions reached in the summary provided by Marcum are: l The Warwick Fire Department’s practice of allowing for carry forward of the unpaid portion of Warwick firefighter monthly sick leave entitlements in excess of the 140 hours allowable under the contract and errors in these calculations resulted excess payments of $385,875.20, when recalculated by us under a monthly payout scenario February 2013 to June 30, 2018. l The Warwick Fire Department’s practice of allowing for carry forward of the unpaid portion of Warwick firefighter monthly sick leave entitlements in excess of the 140 hours allowable under the contract and errors in these calculations resulted in excess payments of $308,042.77, when recalculated by us under an annual payout scenario for the period from February 2013 to June 30, 2018. l Errors in the process for recording the usage of sick leave benefits resulted in excess unused sick time benefit payouts to two firefighters on retirement totaling $3,210.07. l The City should seek to modify inconsistent contractual wording as it relates to monthly vs. annual payout scenarios for unused sick leave benefits. l The City should seek to modify its policies and procedures for maintenance of sick leave benefits to better control and more accurately account for this benefit. l The City should seek to establish written policies regarding accrual and maintenance of sick leave benefits for the Warwick Fire Chief and its Assistant Chiefs. In closing, the letter reads, “It should be noted that during the period of our investigation, one of the Partners of our Firm was the Treasurer of now former Councilman Steven Merolla’s Campaign. We did not deem this fact to impair our objectivity in performance of these investigative services, as Councilman Merolla was not the subject of this investigation nor was he responsible for maintaining the sick leave accruals and payments for the Warwick Fire Department.”

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