> a 5 gallon 10% formalin carboy to an off-campus surgicenter ...
> They insist that this carboy needs to be kept in a small 
> countertop flammable cabinet. 

According the good old Merck Index, formalin (i.e. 37% formaldehyde)
has a flash point of 60C. This means you have to heat the liquid
to 60C in order to ignite the evolved formaldehyde gas with a
spark over the surface of the liquid. For comparison, the flash
point of 100% ethyl alcohol is 9C.

Merck doesn't give a figure for 10% formalin (3.7% formaldehyde), 
but it's got to be even more difficult to ignite than the 
full-strength stuff. Formalin bottles are not marked "flammable."
 
I hope this helps to dispel a bit of misinformation on the
part of someone's safety officials.
----------------------------------------
John A. Kiernan
Department of Anatomy & Cell Biology
The University of Western Ontario
London,  Canada   N6A 5C1
   kiernan@uwo.ca
   http://publish.uwo.ca/~jkiernan