Several recent situations have embarrassed the management of fire agencies. In one instance, a civilian employee of a major fire department had made a deal with medical-supply vendors to process fake invoices and split the $300,000 in proceeds with them.

In another case, a chief officer in charge of apparatus purchases was forced to retire after an internal investigation revealed he accepted sizable gifts from suppliers. The conflicts of interest board fined him $6,000 and made him forego $93,000 worth of accrued leave.

A Florida fire chief made a big mistake when he accepted golfing accommodations for his friends in return for providing paramedic service without cost to a golf tournament. Finally, the fire commissioner of a major city committed the error of sending his daughter to her out-of-state college in his official car.

The services of your personnel aren't yours to give away, and there's always someone who'll be delighted to call the local paper.

I graduated from Manhattan College in 1938 with a bachelor's in business administration and a major in auditing. I was hired as an internal auditor by a well-known department store. Charlie Neale, the controller, told me, "We aren't happy about finding that some poor little shop girl had her finger in the till and having to fire and blacklist her. We would rather scare her off." (In those years of the Depression, she might have been the only one working in her family.)

With the motto "Lead us not into temptation," my job was to set up systems and to be such a presence that the staff would be convinced that stealing was hopeless. Chief officers must have the same objective.

Cash and credit One constant problem is cash. Cash may be handled for charity drives, for permits, for ambulance fees or any of a multitude of reasons.

First, don't let it lie around. The problem starts when someone borrows a few dollars "till payday" or for a good weekend, puts an iou in the box and pays it back on Monday morning with no one the wiser.

Inevitably, on one particular morning, it can't be paid back, and the deficit is covered up. The situation then grows. It may or may not be discovered. Then, when we hear of thousands of dollars embezzled in small bites over a period of years, we're amazed.

The rule should be that all cash must be deposited daily. Make a deal with a local bank to accept night deposits, and ask your city or county auditor for help in setting up a system.

A former Washington, D.C., high school principal was severely criticized for errors in using student activity funds for other purposes, such as paying substitute teachers. She contends that the school board refused her request for a business manager, so the work was done by a teacher in training, who had no knowledge of accounting. If she's correct, I hope she has her requests for competent assistance documented, because it's in the nature of institutions to hang anybody available rather than admit a mistake on the part of management.

Credit cards, which are sometimes issued to employees for official purchases, can also be tempting. It's easy to slip into using the card "inadvertently" or for an "emergency" for personal purposes, thus forcing management to either take action or ignore the offense. The way to discourage such use, without the pain of disciplinary action, is to apply a 20% fee for any personal purchases. There will be very few.

Purchasing People in your department who are involved in purchasing should be warned that there are people out there, friendly as can be, who are planning to get your people just slightly involved so they can then be blackmailed. Educate the innocent, though some are too stupid to learn.

The purchasing director of the New York office of the Atomic Energy Commission personally warned all her staff that she alone was to handle all contacts with "Sid Sleazeball," who had just managed to win a government contract. One idiot, thoroughly annoyed by being bossed by a woman, accepted a small "loan" that Sid offered him in "friendship." Sid, however, was under surveillance, and the idiot lost his job.

I know it's hard to accept, but you might have a "They can't tell me what I can't do" idiot on your staff, so do your best so that the idiot, when finally caught, is isolated from the organization. Make it plain that any employee who's offered an inappropriate gift should not only refuse it, but must report it, even if the approach was very indirect, like "How would you and your wife like a week at a condo in...?"

Department members should be made aware that all such expenses will be reported on the giver's income tax return as necessary to obtain business. Sid Sleazeball is also not above telling his employer that he gave you money which he actually kept. Your after-the-fact denials are balanced equally against his assertions, but if you reported the incident when it occurred, you win.

Another proactive precaution is to periodically send to all suppliers a letter like the following, which goes out over the signature of George Miller, the president of the nfpa. (It's condensed to save space.)

Dear Chief Executive:

... Often vendors seek some way to express these feelings, traditionally through giving gifts. While we certainly appreciate the sentiment that would lie behind any gift to an nfpa employee, I would ask that you limit the expression to a card or a note, particularly at the level at which our employees work together, rather than through a gift. This would be in compliance with nfpa's Statement of Ethical Principles and Conduct.

George D. Miller, President and ceo

In addition, require all employees to report meals provided by a supplier. A meal may well be justified as a business meeting, but the employee shouldn't be allowed to claim a meal allowance for the same meal. If the employee is on a daily allowance, an appropriate amount should be deducted. The free meal thus redounds to the taxpayer's benefit.

Some trips to manufacturers' plants are rigorous working sessions reviewing every aspect of the work - and others are simply a blast. (Jealous desk-bound administrators consider all travel to be a licentious waste.) It would be a good idea to document work schedules and so forth. If a scandal erupts in another town, wannabe Woodwards and Bernsteins will be all over you looking to get a Pulitzer Prize.

Payroll Many years ago, the payroll was quite simple. Firefighters were paid a yearly salary in periodic payments, and their time belonged to the fire department, but even then a smartie could beat the system. One New York firefighter was of the type described by one of my great mentors, Capt. Thomas P. O'Brien, this way: "He will never be a fireman. He is just a member of the uniformed force."

Any time the firefighter's company officer was called to provide a detail to another company, this individual would be detailed. The offender would call his company during the day platoon and, representing himself as the deputy's aide, order a firefighter detailed to Engine 49 on Welfare Island for the night platoon. (Because they were island bound, this company had very few runs.)

When this firefighter reported for his night tour, he would be told of the "detail." He would take his turnouts and leave, but never go to 49. There was no system for confirming that the detailed firefighter ever reported to the company to which he was detailed.

Today, with firefighters being worked overtime to maintain unit strengths, there would appear to be opportunities for fraud, which when discovered could seriously damage the fire department's reputation and might cost the chief his or her job. Ask your city auditor for assistance in developing a system to prevent fraud. If somebody beats the system, at least you can point out that the system was designed by the auditor. At the very least, shift commanders should from time to time conduct a roll call when visiting a station and compare the results with time reports.

No secrets A big part of keeping department members safe from financial temptation is to let it be known that competent auditors will be looking at everything. An example will prove my point.

Navy regulations require an audit board of officers for such operations as Ship Service Stores. Nobody wants to serve, so at the Naval Operating Base at Balboa, Panama Canal Zone, the board typically consisted of three warrant officers, former enlisted men, experts in their fields and of exemplary record, but totally incompetent as auditors. If two columns of figures were equal, they were satisfied.

The captain wanted profits for the ball team, but they were minuscule. For instance, on a base with over a thousand men, the cash income for 5-cent deposits on returned Coca-Cola bottles was about $40 a month, or only about 800 bottles.

A new audit board of officers was appointed, chaired by a bank examiner, with three cpas, an internal auditor, a state police detective and three others who could do drudge work under direct supervision. The results were astounding. The Ships Service was running for the benefit of a ring of several employees, both civilian and enlisted.

Crooks are ingenious, and theft schemes circulate in the underworld. The discrepancy in the Coca-Cola returns, an immediate red flag to experienced auditors, had gone undetected for years and unnoticed by the managing officer, who was interested only in gross sales.

Using thorough internal controls to keep financial temptation away from your people winds up protecting them, you and the department as a whole. It's a good investment.