PARKERSBURG, W.Va. — Mayor Jimmy Colombo is hitting reset on the city’s purchasing card program after a state review requested by his predecessor showed noncompliance with state law over the last three years.
“I’m recalling all the P-cards,” Colombo said Wednesday afternoon.
Eighteen cards had been issued to the city clerk, police chief and code enforcement, development, finance, personnel and public works directors, along with one Fire Department employee, three Finance Department employees and seven police officers. Most had been turned back in as of Wednesday afternoon, the mayor said.
Colombo said he and Finance Director Eric Jiles will examine recommendations in the review by the West Virginia Auditor’s Office and revise city policy before reissuing the cards.
“This report represents an opportunity to review our current policies and procedures and implement new policies and procedures that will ensure the city’s ability to control and contain costs,” said Jiles, who took over as city finance director on Aug. 3.
In the future, P-card purchases “should be preceded by a fully executed requisition and purchase order,” Jiles said.
A letter with the review says a copy was sent to Wood County Prosecutor Jason Wharton as required by state law. The city has 60 days to notify his office of plans to remedy the noncompliance instances; if not, the prosecutor can proceed with civil and/or criminal action to resolve the issues.
The review is a service offered by the Auditor’s Office, which administers the state P-card program. Former Mayor Bob Newell requested it amid calls for a forensic audit and allegations of misuse of city money following the revelation of a reported affair between him and then-Finance Director Ashley Flowers.
Newell resigned as mayor to retire on June 3, the day before the start of a hearing before a three-judge panel to determine whether he could remain in office in light of the alleged affair and misuse of funds.
He said Wednesday he asked for the P-card review after he was “advised of some irregularities.”
“Overall, I’m pleased by the audit,” Newell said after being told of its findings. “I expected recommendations; otherwise I wouldn’t have requested it.”
Newell said the main reason he sought the P-card review was to show that no money was missing.
The review covered fiscal years 2012-13 and 2013-14 and the 2014-15 fiscal year up to Feb. 6, 2015.
The review made no mention of any missing funds, but for each of the years, it notes instances of noncompliance in the form of authorization for improper purchases; a lack of required documentation for some purchases; failure to ensure each cardholder reconciled their monthly account statements; a lack of segregation of duties in some cases; and no requirement of dual-signature approval for transactions.
It did not specify whether violations were frequent, sporadic or otherwise.
For the most recent fiscal year, the review noted violations of city travel policies and procedures.
“Specifically, per diem was paid to the employees for travel expenses, and some of these expenses were also charged to the P-card for the same trip,” the review said.
While the documents did reference some employees by job title, they did not detail specific violations by anyone. However, documents provided by the city from Flowers’ personnel file in the wake of her termination following Colombo’s appointment noted she had received a per diem of $172.48 for mileage for a trip to Washington, Pa., but also bought $55.45 worth of gasoline on a city card for the same trip.
Flowers, who had been on paid leave since her Feb. 11 arrest on two felony charges of child endangerment, was fired by Colombo on June 22 for issues related to her job performance. Her former attorney claimed her termination was retaliation for publicly admitting to the affair with Newell.
For each of the three fiscal years covered, the review says, “Municipal Officials authorized payments for an unauthorized purpose. Specifically, a gift card and charges that appear personal in nature were made using the P-card.”
Newell, Colombo, Jiles and Personnel Director Pam Salvage, who handled many duties of the finance director during Flowers’ absence, all said Wednesday they did not know to what the gift card line referred.
“I’m sure it’s not somebody going out here and buying gift cards to give to somebody,” Newell said.
Newell said there are circumstances where an unauthorized expense isn’t necessarily a violation, although it’s not encouraged. For example, if an official takes a spouse to an event like a National League of Cities function, it may be more expedient to pay the spouse’s fees with the official’s on the P-card, as long as it’s reimbursed by the official.
“Then what you do is you write a personal check to the city,” Newell said. “Technically the expense is approved. (But) it’s paid by the cardholder.”
He said such incidents were explained by a representative of the auditor’s department when they set up the P-card system.
Flowers’ personnel file also included documentation showing she’d used a P-card for nearly $300 in personal purchases and reimbursed the city the next week. Flowers said it was an accident because her own card and the city’s looked similar.
For all three years, the review says the P-card coordinator for the city (Finance Department employee Sarah Goff, Salvage said) reconciled monthly account statements for cardholders. However, cardholders are supposed to do their own reconciliations, it says.
“That should not have happened,” Newell said of a cardholder not doing their own reconciliation. “I never got by with it. If there was a receipt missing, I got a call about it.”
The review also noted the P-card coordinator has her own card and recommended she not have access to its online administration. Goff could not immediately be reached for comment Wednesday afternoon.
The review recommends double-signature approval for transactions, one by the direct supervisor of the cardholder and one by a representative of city officials. Newell said all transactions were reviewed by the Finance Department, even if there was not a second signature. Because of that, he said he thinks the review did not take into account all of the city’s procedures, although he does not dispute its findings.
“We have more eyes on it than they think we do,” he said.
The review notes that in all three years, including prior to Flowers’ appointment as finance director in December 2013, “charges made using the finance director’s card were approved only by the finance director.” Newell noted the mayor does not have a supervisor from whom to get approval.
Colombo and Jiles said that going forward, purchases by the mayor would have to be signed off on by the finance director and vice versa.
Contacted Wednesday, Flowers said by email that she and others in Finance had been working on the city’s general procedures and wanted to update the employee handbook.
“It appears to me that there was no fraud, nor intentional misuse, but simply a need for more training, accountability and control among department heads, and for everyone to be accountable for their cards and reconciliation before being turned in to the P-card administrator,” she said.
Multiple City Council members praised Colombo’s decision to recall the P-cards and adjust the processes.
“I appreciate the mayor’s quick response toward controlling the P-cards and working toward a system of better controls,” Finance Committee Chairwoman Kim Coram said.
She said the findings of the audit validate the concerns some council members have had about the city’s financial practices.
Councilman John Rockhold said he saw no indications of any significant loss of funds, but takes the review as a call for better oversight.
“We made the assumption that everything was OK, and in actuality it needed improvement, and he’s (Colombo) making improvements,” he said.
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