Fire Department Checking Accounts

The OSA has seen some confusion over the differences between fire department checking accounts and relief association accounts. According to statute, a city council must control its city’s finances; a town board must control its town’s finances. City and town fire departments cannot maintain separate checking accounts that are outside the control of the city or town. All city and town checks must be signed by the appropriate municipal officials, and expenditures generally must be approved in advance by the governing body.

All city and town funds must be controlled by the municipality and not by the fire department. Some fire departments have maintained their own checking accounts for a long time (sometimes since the inception of the department). Oftentimes, these accounts are used for fundraising activities and to pay for expenses such as meals for meetings, annual holiday or retirement parties, and miscellaneous expenses of the fire department. Fire department checking accounts must be closed and these types of expenses generally cannot be paid by a city or town.  

A relief association, however, can pay for fundraising events and the types of expenses described above through its general fund. A relief association may disburse funds from its general fund for any purpose authorized by the relief association’s bylaws or articles of incorporation. 

Please view the Statement of Position that provides additional information on the prohibition of checking accounts for fire departments, donations and fundraisers, and relief association special and general funds. 

Published last in the February 2016 Pension Newsletter