A new audit has found that employees of the Richmond Department of Parks, Recreation and Community Facilities used city-issued credit cards to make more than $200,000 in purchases at Sam's Club over four years — including more than $6,100 in undocumented gifts for employees and residents and $13,000 for items that are apparently missing.
The audit by the city's Office of the Inspector General found "very weak" controls over use of the Sam's Club credit cards, issued to 31 employees in the parks department, as well as poor records that make it difficult to determine whether the purchases were authorized or necessary.
"The cardholders were allowed to make purchases at Sam's Club as they deem fit," said the report, which was obtained by the Richmond Times-Dispatch.
The five-page report was prepared for City Auditor Umesh Dalal, who oversees the Office of the Inspector General. The auditor has not yet released and published the official report on his office's website.
"We will comment once we have seen the final and official report and it has actually been released by the auditor," said Tammy D. Hawley, press secretary for Mayor Dwight C. Jones, on Friday.
The findings come right after another audit that found a former employee of the Richmond Department of Social Services had used a city-issued credit card to make $2,810 in personal purchases at Walmart. The former employee has pleaded guilty to embezzlement.
The new audit does not allege criminal behavior, but it raises concerns about lack of accountability for use of city credit cards, inadequate record keeping, and lack of a reliable inventory to determine whether purchased items were missing or stolen.
The audit also questions the necessity of some purchases and adequacy of tracking for others, and it cites the payment of $19 for two pairs of sandals for someone's personal use.
One of the big mysteries remaining from the investigation is the purchase of 84 gift cards and 38 pieces of electronic equipment as gifts for employees or residents.
"There was no documentation indicating appropriate authorization or distribution of all these gifts," Dalal states in a two-page letter to Carolyn Graham, deputy chief administrative officer for human services, and Norman Merrifield, director of the parks department.
The report said the lack of supervisory approval of the card use "could result in unnecessary purchases and increases the risk of misappropriation." However, Dalal said in the letter that all department employees had returned their Sam's Club credit cards to the department's finance office as a result of the investigation.
"Currently, employees must check out a card and request approval to make a purchase," he wrote.
Most of the purchases made with Sam's Club cards were for food and beverages, but investigators said they did not have enough information to determine whether those purchases were appropriate. They said department management would have to make that determination.
The investigation attempted to track 492 items, such as digital cameras and other electronic equipment, purchased for $44,595 from fiscal 2008 through the budget year that ended June 30. The audit identified 157 items valued at $13,366 as "potentially missing."
"The nature of the ... items can lead to personal use," the report explained. "Therefore, these items are vulnerable to the risk of misuse or misappropriation."
A narrower search for items purchased in the past two years found 45 missing. Of those, 16 were purchased by one recreation programs supervisor, who said they were for two community centers and that he was accompanied by supervisors from the centers when he bought the items. The center supervisors denied they were with him.
"Therefore, either the recreation programs supervisor or the two community center supervisors were not truthful," the audit states. "(The department) must investigate this issue further and take disciplinary action(s)."
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