AUDIT: County Administrator and Three County Commissioners / Misuse of County Purchasing Cards

 

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Sometimes top County officials buy stolen County iphones.  And sometimes, after they get caught with the iphones and the scapegoat has gone off to jail, they take County issued credit cards and pay for personal items and entertainment and … well, they get caught again.

Let us explain.

Monroe County issues Purchasing Cards [P-Cards] to its top officials.  County Commissioners have them. County Administrator, Roman Gastesi has had 6 of them, sometimes three at a time with a total of $ 75,000 in credit capacity per month.  He also has a tendency to lose them.

This week we got our hands on a 730-page audit of County employees’ P-Card usage.  Of the five County Commissioners, only Sylvia Murphy and Danny Kolhage came out squeaky clean.  Gastesi and all of the other Commissioners are listed multiple times as having used their P-Cards for disallowed personal expenses ranging from entertainment, dinners, rental cars, bar tabs, to hotel rooms…

Is this becoming a theme in Mr. Gastesi’s administration?  It was only a little over a year ago that a Grand Jury was convened to decide whether or not to bring a criminal indictment against Gastesi, Monroe County’s chief executive, in the sordid affair of stolen iphones and ipads.

Those items had been sold, mostly for cash, by Lisa Druckemiller, a 31-year employee who headed the Technical Services Department.  Druckemiller was subsequently convicted of grand theft and dealing in stolen property.  She‘s still in prison finishing her 18-month sentence.  Her defense however rattled the County. Gastesi, she claimed, made her do it.

Druckemiller said it all started with Gastesi throwing two one-hundred dollar bills on her desk and ordering her to get him two County iphones for his sons. She pointed out that Gastesi was the first buyer, that he bought more of those iphones and ipads than anyone else, and that certainly he was well aware that the County’s policies made the transactions illegal.

The Grand Jurors however were torn by the fact that they were unable to obtain phone records that would verify whether Gastesi was indeed the first purchaser of stolen iphones, which would have lent credence to Druckemiller’s claim that “he started it.” Consequently, the Grand Jury concluded it could not recommend indictment.

However, they found that the County Administrator had fostered a “culture of entitlement” and recommended that Gastesi,, who they said, as the top administrator should have been the shining example of probity for County employees, should be fired.

It should be noted that attorney Robert Cintron, who defended Druckemiller “the thief,” later managed to get AT&T’s phone records. He told The Blue Paper, they clearly show that indeed the first stolen iphone had been sold to Gastesi.

There was an emotional County Commission meeting where Gastesi shed tears pleading for his job and the Commissioners [one had purchased a stolen iphone herself] took the controversial decision not to fire Gastesi, but rather to put him on notice that “any further incidents of this nature or others causing disrepute to the County will not be tolerated.”

So here we are a year later: same people, same situation.  Gastesi and some Commissioners are again caught violating policy and misusing County property. This time it’s P-cards.  But there’s a difference.  This time nobody heard about it.  The whole thing flew under the radar.

Let’s look at just how the Commission does “not tolerate any further incidents”.  Well, apparently they’ve chosen to simply ignore the P-Card issue.  The Clerk of Court, Amy Heavilin, released the Purchasing Card Audit on July 7, 2014, sending a copy to each Commissioner.  During the audit, the Clerk asked Gastesi to answer a number of questions.  He responded much like a lawyer [he answered 50% of the questions with “N/A”] and the auditor noted, “documentation in the files directly contradicts the County Administrator’s response.” In other words, he lied.

From the Clerk's audit report:

“During the audit period, Internal Audit found numerous acts by Cardholders which violate the BOCC Purchasing Card Policy and Procedures…  Some Cardholders are repeatedly violating the policy and procedures by purchasing disallowed products and services.  The Purchasing Card Policy and Procedure defines what purchases are disallowed; the list below are specific examples:

  • entertainment
  • meals
  • personal use
  • alcoholic beverages and
  • non-work or personal use items and services

Some of these disallowed purchases have not been reimbursed by the Cardholders.  Even when these disallowed charges are reimbursed, it is still a violation of the BOCC Purchasing Card Policy and Procedure as well as the Cardholder Agreement and State of Florida Purchasing Card Guidelines."

It is in fact unclear as to what extent County Commissioners took action in response to the audit.  The only reference we’ve found so far is an item on the July 16th agenda about amending the County’s Purchasing Card Policy.  The agenda item was placed on the ‘Bulk Approval’ list, which means that it’s meant to be passed without discussion.  The agenda item and back-up documents made no mention of the Clerk’s audit and the audit itself was not attached as an exhibit.

Interestingly enough, if you review the audit report, the names of the Cardholders involved are not identified on the list of disallowed expenditures.  Instead Cardholders in violation are referenced by the P-Card number. Only after digging deeper into the supporting documents can the audit be decoded into names such as:  Commissioners Neugent, Rice, and Carruthers, and County Administrator Roman Gastesi.

State of Florida guidelines and the County’s policy regarding P-Cards both state that misuse of P-Cards may result in disciplinary action up to and including termination and prosecution.

Certain officials, like Monroe County Growth Management Director Christine Hurley, who is authorized for up to $ 10,000 worth of purchases per month, were not cited in the Clerk’s audit for personal use of a P-Card, so apparently it can be done.

The entire affair does resemble the iphone scandal in some ways.  The same administrator, perhaps only as a result of sloppiness, is again projecting the impression of a general attitude of "laisser faire."  What the Grand Jury called a "culture of entitlement."  It's as though he's saying, 'I can use the P-Card wherever and whenever.  I am the King.'  If you catch any mistakes, then when I have a minute, I'll reimburse the County."  Maybe that's all it is, and it's just not a great example to give your subordinates; but maybe there's more to it.  There are 700 pages including attachments in this audit alone.  We'll let you know what else we find.

~~~~~~~~~

County Commissioner Heather Carruthers was unhappy with our preview of this article on US 1 Radio yesterday morning.  The following is an email from the Commissioner followed by a portion of the County Clerk and Comptroller’s report that speaks, in part, to the Commissioner’s explanation of this issue.

Dear Naja -

I listened to your spiel on US1 this morning and I must say that any idea I may have had about your journalistic integrity has been erased. Your insinuation that these clerical errors are some kind of "scheme" is irresponsible and slanderous. Perhaps you should have thoroughly read the report and interviewed me and my colleagues before throwing around your accusations -- less than a day after you stated you received the 700-page audit report. Incidentally, the report has been posted on the Clerk's website for review since July.

Let me explain how these mistakes were made. When I check into a hotel for County business, I provide the PCard for my accommodations only. I provide my personal credit card for all "incidentals" such as food and, yes, maybe an in-room movie. I usually get two receipts at the end of my stay, one for the PCard (accommodations) and one for my personal card for incidentals. Often these bills are slipped under my door and I slip them into my folder on my way out, without wasting time at the front desk to officially check out. Once in a while, THE HOTEL MAKES A MISTAKE and puts all of the expenses on one card or the other. As soon as I learn that an expense has been incorrectly attributed to the PCard, I write a personal check to cover that expense.

In the case of the car rental, I made a reservation online for a vacation. I have an Avis "Wizard" number that I use whether traveling for personal reasons or on County business so that I can get the best rate.  Apparently Avis has more than one of my credit cards on file associated with that Wizard number. Their system automatically accessed the last card that was used, which was the PCard for a County business trip. This was a MISTAKE OF THE RENTAL CARD COMPANY and as soon as I realized it, I wrote a check to the PCard.

All of the errors cited in the report except one were found, corrected and paid for before they reached the Clerk's office for processing, and the one that was not was originally missed by the Clerk's office as well. In fact, because the County originally found these problems, the County requested the audit as a way to improve our procedures, which we have done.

There is no scheme to defraud the County. There is no "story" here. You will note from the report that the total amount of inconsistencies over three years is about $1,360, and ALL of it has been reimbursed. I dare say that the Clerk spent more than $1,360 in taxpayer dollars preparing this report.

Feel free to print this email in your paper but, if you do so, please print it in its entirety.

Heather

Commissioner Heather Carruthers

Monroe County District 3

500 Whitehead Street, Suite 102

Key West, Florida 33040

(305) 292-3430

~~~~~~~~~~~~~~~

From the Clerk of Court’s Audit Report:

“Payments to the P-card vendor are made electronically.  It is not an appropriate use of County resources for Finance Staff to be the personal accountants for the Cardholder’s who routinely violate the County’s policy.  Those Cardholder’s need to expend their own efforts and resource to immediately remedy improper charges at the time they occur NOT at the end of the monthly billing cycle.”

Auditor’s Comment:

"Documentation in the files directly contradicts the County Administrator’s Response.

All items on Finding B’s Table on page 11 are outstanding unless otherwise noted. All items that have been paid/reimbursed/resolved are noted as such and said resolution occurred after the Draft Audit Report.

As of the date of the County Administrator’s response, there are still two (2) Cardholders who owe funds to the County for personal item charges outstanding since September 2012."

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Reader Comment:  by (jw)

From Commissioner Carruthers: “Perhaps you should have thoroughly read the report and interviewed me and my colleagues before throwing around your accusations — less than a day after you stated you received the 700-page audit report.”

Compare this to the way the commissioner and her colleagues and the mainstream press treated Linda Gottwald and SUFA.   Linda got stink-bombed by the improper release of the audit, was not permitted to clear up any questioned matters, was subjected to a lawsuit, smeared by negative print articles and radio news, subjected to efforts to prosecute criminally while the commissioner has her explanation printed in full incorporated right into the article. SUFA’s 49 page response to accusations can be viewed at www.petfriendmagazine.com/SUFAFINALAUDITRESPONSE.doc. That’s right, you have to hunt for it in a pet magazine. The refusal to permit Linda to respond to the claims underscores the position that any clearing up was unwelcome since it would interfere with the pre-planned move to end the contract with SUFA. Whether you hold office or are a county employee, the purpose of government is to serve, not ruin and destroy.

As for the commissioner, the P-cards are the property/financial obligation of the people of Monroe County. As a taxpayer, I do not choose to make a loan to you, which is what happens when you front a purchase on one of these cards, accidentally or otherwise for an unauthorized purpose.   You have made a mistake, you have not committed a crime, you did not intend to defraud, and the article does not accuse you of that. I don’t know what was said on the radio, but now you’ve had a microscopic taste of what you and your colleagues put SUFA through.   This is not the Soviet Union, and Key West the Newspaper is to be appreciated, so hold the umbrage for something more appropriate, and pay attention to how you use the card in the future.

The commission, despite the recommendation of the grand jury, has made the county manager indispensable, and he knows it.   So we just have to wait, the pattern of his behavior is what this article was all about and will come up again. The shame of it is that he’s actually an exceptional manager.

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  8 Responses to “AUDIT: County Administrator and Three County Commissioners / Misuse of County Purchasing Cards”

  1. I think you should post a link to the audit. It’s unclear what was the total for all and who were the worst offenders. The story seems well researched and who is surprised after seeing some of the other things going on?
    Ms Carruthers makes a credible explanation, and given that she insisted paying by check for the I Pad back then, I would give her the benefit of the doubt. That would not be my feeling toward Mr. Gastesi who should have been fired for his role in that sleazy business and seems not to have yet learned his lesson. Here we have a County Administrator, making what, $200 K a year who was apparently hired mainly because he had worked in the sewer industry, ( and look at the mess that has become) and he is suspected of petty theft at the least.. Additionally, hiding the agenda item dealing with this reflects badly on ALL of the commissioners , including Danny Kohlage who has always been thought a model of fiscal rectitide.

    • Commissioner Kolhage was absent from the July 16th BOCC meeting when an amendment to the existing P-Card policy (relaxing safeguards) was “bulk” approved without discussion. Keep in mind that the agenda and back-up made no mention of the audit. The audit can be found on the County Clerk’s website. There are issues with linking the file to our website because of the size of the file. See my comment below regarding the Clerk’s audit.

  2. If I were State Attorney Catherine Vogel, or the Florida Ethics Commission, or just me, I’d want to see in this article a spread sheet, or a link to a spread sheet, itemizing all personal purchases on county credit cards, by date, amount and what was purchased, made by County Administrator Roman Gastesi and County Commissioners Heather Carruthers, George Neugent and David Rice; and I would like to see highlighted in red the personal purchases which were not reimbursed to the county government by those four county officials.

    Given that George Neugent is up for reelection on November 4, it is incumbent on the blue paper to inform the public ASAP what personal purchases Neugent made on county government credits cards, and which of those personal purchases he reimbursed the county government, and which of those personal purchases he did not reimburse the county government. Even if George reimbursed all of the personal purchases, it will be interesting for the voters to see what he purchased for himself with county credit cards.

    The blue paper should obtain from the county sheriff and state highway patrol and KWPD an itemized list of all traffic citations (speeding tickets) Roman Gastesi incurred since he became County Administrator, and the disposition of those various citations. I am pretty sure it’s a pretty long list of traffic citations. I also am pretty sure the county commissioners are generally aware of Gastesi’s driving record.

    If the Statue of Limitations has not run, the Drukemiller case needs to be revisited by the State Attorney’s Office and by a Grand Jury, with respect to Roman Gastesi’s role in inducing Drukemiller.

    This is not entirely alien terrain for me. I ran against George Neugent in 2006 and 2010, and I ran against Heather Carruthers in 2008.

  3. Heather, like George, responds to factual reporting of official documentation with personal attacks on the bearer of bad news. She calls Naja’s story a “spiel.” Her factual description of what the commissioners and Gastesi did a “scheme to defraud,” her words, not Naja’s.

    Worst of all, she questions he integrity of the person who does more without regard to and even against her own self-interest to better our community, overseeing our police and public officials when nobody else has the balls. Naja is president of Last Stand and publisher of the best investigative journalism in Florida. No public official in the Keys has standing to do anything but respect and admire her.

    Note that by the Audit’s explicit statements, Heather’s after-the-fact corrections are legally insufficient.

    And Heather offers no defense for the further illegalities of the administrator she voted to retain, despite the Grand Jury’s explicit recommendation to fire.

  4. To be fair I did use the unfortunate term “scheme” when speaking with Ezra on the radio Thursday morning. I did not say “scheme to defraud”. By “scheme” I meant “process.” The Clerk’s audit characterizes the actions of the various public officials and employees as “violations” of the State guidelines and BOCC policies for use of P-cards. The issues brought up by the Clerk are not about whether or not Commissioner Carruthers or any particular County employee is dishonest or whether they simply made a few mistakes. Nor is it about the total amount in dollars of those violations made during this particular audit period. The Clerk’s audit points out flaws in the oversight process being administered by the County Administrator. The audit points out how these violations of deliberate safeguard procedures leaves the County open to misuse and abuse of the P-Cards. The County Administrator (and the Commissioners) have chosen to avoid discussion and ignore some of the very specific recommendations made by the County Clerk that call for adherence to and strengthening of the existing policies that safeguard the taxpayers when it comes to P-Cards. Ignoring the recommendations of the County Clerk about tightening up safeguards is exactly what the Administrator did prior to the iPhone scandal when the previous Clerk recommended tightening up safeguards around purchases of small electronics like iPhones. We all know what happened next. It is unfortunate that this has been turned into a story about how innocent it is that one Commissioner prefers not to take the time to go to the Front Desk to check out in person before leaving her hotel in the morning and what kind of mistakes a car rental company is capable of making. The issue is policy and oversight and how well this Commission is keeping tabs on this particular Administrstor who they put “on notice” due to previous very serious indiscretions.

    • Agreed. Even so, as i said in my first comment under this article, I would like to know what personal charges the county administrator and three county commissioners made on county government-issued credit cards, and I would like to know if those personal charges were reimbursed to the county government. Saying it another way, I would like to know whether we already have theft of county government money going on?

      Perhaps also needing attention here, based on past news reports I heard and general grumblings I heard, Amy Heavlin’s office seemed to be in disarray, if not shambles, for a while, and I wonder if that will influence how some people view her audit?

      During State Attorney Dennis Ward’s tenure, 2008-2012, the County Commission strongly resisted Dennis and County Commissioner Kim Wigington’s attempts to get the County Commission to pass stronger ethics rules, which applied to the county commissioners.

      Commissioners George Neugent, Sylvia Murphy and Heather Carruthers did not care for Dennis and Kim’s efforts. Then, those three commissioners, and Commissioner Mario Di Gennaro, as I recall, backed a ridiculous ethics ordinance of their own design, to give an impression they were tightening county ethics rules against themselves. I attended the county commission meeting where that ordinance was up for passage, and during citizen comments I said the ordinance was a joke and entreated Kim Wigington not to vote for it, and she did not vote for it. I think it passed, 4-1.

      At Hometown PAC’s recent candidate forum, Rick Boettger told me that he’d filed a 3rd ethics complaint against George Neugent, in which he asked the Florida Ethics Commission to investigate whether or not Sombrero County Club in Marathon is comping George’s membership there. Maybe three months ago, someone called me to say he had a friend who worked at Sombrero County Club, who had access to their books, and the club was comping George Neugent’s membership. I then told you, Naja, what I’d heard, and you said you and Rick both had heard it, too. I said George could dispel the rumor by furnishing copies of payment of his Sombrero Country Club dues. I told Rick that at Hometown’s forum.

  5. Gosh I wish Commissioner Carruthers would try to address the other expenses by the other people, esp County Admin Gastesi for whom she is nominally ” the boss”. I can accept her explanations , but how about the others, please – instead of complaining about her hurt feelings. Or maybe Danny Kohlage could bring this up, but I have little trust for the rest of those involved since they have not uttered a peep about it as of Monday am. I think the blue paper is the best news outlet in the Keys and generally does the best investigative reporting – period.

  6. I don’t accept Commissioner Carruthers explanation, sounds more like a teenagers excuse. Seeing it in print and hearing it on the radio over and over only makes me more upset. It is her responsibility to check the receipts for purchases on the county card and causes me question her abilities to manage the many millions of taxpayers dollars she watches over. If she can’t unfold a piece of paper, the hotel receipt that is slid under her door, in my experience, very early in the morning, before leaving the hotel, she has time management issues. I check reciepts for all my purchases before leaving the establishment, that way if there is something wrong it can be corrected immediately. Even if she doesn’t realize until later, all it would take is a phone call to the hotel to have them fix it and send her a new receipt. She should take responsibility for herself and could have said something like, ‘I made a mistake and it won’t happen again’. That I could respect, we all make mistakes, but, it’s important to be able to admit it.

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