Reno Mayor Hillary Schieve and City Councilmembers were not provided details of audit findings that showed improper expenses made through the City Manager’s office from July 1, 2015, to June 30, 2017.
The audit found 49 violations of purchase card expenditures. Many appeared to be simple oversights, such as forms for purchases not completely filled out. Other findings show unauthorized expenditures and expenses that violated city policies.
But the very people for whom purchases were made – the mayor and councilmembers – were not informed that it was expenses made at their behest that were called out in the audit.
Councilmember Naomi Duerr raised this issue at last week’s city council meeting when the audit report was approved.
“As general as the findings are, it’s very hard for me to grasp what the specific issues are,” she said. “It alludes to council donations and, yet … we don’t know if we did something wrong. If we did, I would hope that you would get with us and tell us.”
City Auditor Emily Kidd refused to provide details of the findings.
“I feel like that’s not the point of the (audit),” she told ThisisReno.
I filed a public records request through the City Clerk’s Office to get those answers.
“Business Class” Flights Called Out
Four “business select” flights were cited as violations of city policy. Those flights were purchased by the mayor’s previous assistant for the both of them to attend U.S. Conference of Mayors meetings, including a flight to Washington, D.C. with mayor and previous city manager, Andrew Clinger.
Business select, which is often about $100 to $300 more than the cheapest fares on Southwest Airlines, allows for flexibility if flights need to be canceled and could be cheaper in those instances, Schieve said.
According to Southwest’s website, business select flights are refundable, earn more rewards points, allow for priority boarding and security lane entry, and include a “complimentary premium drink.” Southwest does not charge flight-change fees at any ticket level, but only “anytime” and “business select” tickets are refundable.
The audit, however, recommended “airfare be purchased in compliance with established policies” meaning that anything above “coach class or its equivalent” be used “except in exigent circumstances approved by the city manager.”
Schieve said she was unaware that it was her flights that were highlighted in the audit.
“We pushed for the audit,” she said, adding that she’s had concerns about staff and council liaison purchases for some time.
City staff, she explained, were not trained on policies even when purchases were approved by the previous city manager.
Charity Event Purchases Get Scrutiny
The audit also showed thousands in purchases for tables at charitable events, including tables purchased at fundraisers for the Desert Research Institute Foundation ($2,000), Ronald McDonald House ($1,500), American Heart Association ($2,500), WIN (Western Industrial Nevada) ($1,500), and Awaken ($1,200).
Awaken is anti-sex-trafficking nonprofit pushing to remove strip clubs downtown. According to city records, Councilmember McKenzie’s liaison purchased a table for 10 to celebrate the organization’s five-year anniversary.
McKenzie explained that purchasing is made through their liaisons, and city staff and members of the Reno Police Department can attend those events.
“Councilmembers get money from travel and training and discretionary funds,” he said. “Discretionary fund spending is approved at council meetings, but travel and education funds can be spent through councilmember liaisons. When we purchase these tables it comes out of our travel and training funds.”
Auditor Kidd said that documentation for charity events were not completed properly, and that “vendors were not vetted at the time or purchase as required.” In addition, “purchasing card expenditures were made by staff other than the cardholder…”
City records show that the purchase of $1,500 for the Ronald McDonald House Charities of Northern Nevada’s annual “Red Shoe Gala” was made by the mayor’s assistant. The justification for the expense was not completed on the purchasing form.
Kidd said there was a lack of awareness about purchasing processes, something the mayor and councilmembers agreed with.
Schieve and councilmembers said that the audit accomplished what it was designed to do: tighten up purchasing processes.
McKenzie said that the council and mayor tend to focus on high-level expenses.
“The only person we have control over in the city is the city manager and city clerk,” he said. “Those are all city manager policies. The council looks at the high level of spending. The briefing we got is that we are looking at policies to address these issues.”
Schieve said changes have already been made, but she continues to have concerns.
“Liaisons don’t need credit cards,” she maintained. “I’m highly against that. It should go through a central person. We had a procedure that wasn’t exactly correct, so (the new city manager) is looking to clean that process up. I was … surprised how many people have credit cards. We’re not seeing (the details of) those individual expenditures. That to me is a concern.”
It’s a practice that needs improving, she added.
Records show staff making purchases at Raley’s, Walmart, Michael’s Deli, Paisans Deli, SaveMart, Great Full Gardens, the Nevada Museum of Art, and others. Another expense was for $144 worth of yoga blocks from LuLuLemon Athletica from the city’s wellness account.
“The idea that we have staff members buying stuff like this on credit cards is a concern to me,” she added.
“My main concern was that if we found an issue … we figure out how to fix it,” he said.
The City Manager’s office said that new purchasing procedures are already in place.
“Changes have already been made based on the finding of this audit,” Kidd explained. Those changes include ensuring only cardholders make purchases on their cards, reviewing purchasing policies and communicating changes to staff, increased training, and making sure expenditures have proper documentation.
“We were aggressive in addressing these findings,” said city spokesperson Jon Humbert.
Read the audit report and the expense documents from our public records request below. Note: the records request was for selected findings, not the entire audit.