Review of city's credit card program shows apparent violations, misuse (2024)

A review of Richmond’s city-issued purchasing card program by the Richmond Times-Dispatch has identified multiple apparent violations of city policy, including transactions made in excess of preestablished spending limits and potential split purchases.

After digging through over 23,000 separate transactions made by 336 different city employees, here’s what we found.

Spending limits routinely exceeded

The purchasing card policy, obtained by The Times-Dispatch, establishes two standard spending limits for the cards.

The first limit — a single-transaction cap — forbids cardholders from spending more than $5,000 on any one purchase. The second limit — a monthly cap — prohibits cardholders from charging more than $10,000 to their cards in a single month.

A transaction log for the purchasing cards contains 345 purchases that exceeded the single-transaction limit of $5,000. Those purchases were distributed across 96 cardholders.

Among the largest single purchases were a $64,267 charge at the Virginia Municipal League made June 15, 2023, by Lisa Braxton, a management analyst in the city clerk’s office; a $28,000 charge at SafetyCulture (a safety inspections and training company) made Oct. 2 by Ashley Hill, a city program and operations supervisor in the Department of Public Utilities; and a $14,030.87 charge at Mosaic Catering made Nov. 1 by Caitlin Sedano, an executive assistant to Chief Administrative Officer Lincoln Saunders.

The transaction log also shows that 15 cardholders exceeded the monthly limit of $10,000.

The cardholders who charged the highest overall dollar amount in 2023 were Reginald Thomas, a Richmond Fire Department management analyst ($523,550, or roughly $44,000 per month); Caitlin Stallings, an animal control supervisor ($482,435, or roughly $40,000 per month); and Glenn Lewis, a program operations manager for the Department of Parks and Recreation ($369,903, or roughly $30,000 per month).

Altogether, the 336 cardholders accounted for almost $12 million of city spending in 2023.

The purchasing card policy indicates that the single-transaction and monthly spending limits can be increased upon request.

Such an increase is “allowable for special circ*mstances,” the policy says, and requires advanced approval from procurement officials. In a request for a limit increase, a cardholder must provide confirmation of a supervisor’s approval, the last four digits of the card to be used, the amount and timeframe of the increase, the reason for the increase and proof of sufficiently available funds.

A Times-Dispatch reporter on July 9 asked officials whether the city had documented approval for each case in which the single-purchase and monthly transaction limits were exceeded. The reporter initially gave the city a July 12 deadline. That deadline was then extended to Tuesday.

On July 11, a city spokesperson reached out to a second Times-Dispatch reporter, offering to arrange for a meeting with procurement officials to discuss the story. Times-Dispatch editors advised the city to work with the original reporter who first broke the story and was most familiar with the issue.

Officials have still not responded to those July 9 questions.

After a first edition of this report was published online Friday morning, Margaret Ekam, a city spokesperson, released a statement in which she said “when Richmond began using p-cards, we put in place clear processes, and required every employee to go through training before they are issued a p-card. We still follow this process.”

“If procedures are not followed, then steps are taken — first with dialogue with the cardholder, additional training, and then compliance measures such as suspension of the individual’s p-card,” Ekam said.

Apparent transaction splitting

Transaction splitting — the practice of dividing charges for a large purchase into smaller amounts to skirt the established spending limits — is explicitly forbidden, the purchasing card policy says.

The policy defines splitting as “the placement of multiple orders within other than a reasonable time period (120 days) to one or more vendors for the same, like or related goods.”

The Times-Dispatch only reviewed purchases made by cardholders at the same vendor on the same day. The Times-Dispatch did not expand the review to include purchases made at multiple, similar vendors in a 120-day span.

That narrow review turned up dozens of instances of apparent transaction splitting.

For example, Patra Brodie at the Richmond Department of Public Utilities on June 4, 2023, charged $5,271.68 to her purchasing card at Caribe Royale Resort in Orlando, but that total was distributed across five separate purchases.

Neither Brodie nor Alexander ever exceeded the $5,000 limit on a single charge.

Former city spokesperson Petula Burks, who procurement officials previously said had been given clearance to exceed the spending limits, also appears to have engaged in transaction splitting.

The Times-Dispatch’s review also showed multiple instances in which cardholders in the same office collectively spent more than $5,000 at the same vendor on the same day.

The penalties for splitting purchases are a written warning and 30-day suspension after a first offense and purchasing card termination for the second offense, according to the purchasing card policy.

Asked on July 9 for clarification on numerous examples of apparent transaction splitting, officials did not respond.

Contract rules questioned

Richmond code on public procurement requires a competitive negotiation process for purchases in which the cost of “all phases of a contract or project” is expected to exceed $80,000.

The transaction log shows that eight separate vendors received amounts greater than $80,000 across all purchasing cards in 2023.

The car rental company Enterprise received over $284,000 from 22 different cardholders in 2023, the transaction log shows. 4imprint, a marketing firm, received more than $178,000 from 53 different cardholders. The BW Wilson Paper Company received over $158,000 from eight different cardholders, ULINE Shipping Supplies received over $138,000 from 15 different cardholders and Guernsey Office Products received almost $140,000 from 35 different cardholders.

Two vendors received more than $80,000 from a single cardholder: Patterson Veterinary Hospital received more than $141,000 from Caitlin Sedano, and Davey Tree Company received more than $88,000 from cemeteries manager James Laidler.

City officials said most of the charges at Enterprise occurred after two attempts to solicit bids for a food delivery program were unsuccessful. But questions about whether contracts had been arranged with the other companies, asked July 9, were not answered.

The purchasing card policy stipulates that “an annual contract should be coordinated with DPS for goods and/or services that will be ordered on a regular basis with the same supplier in an amount to exceed $5,000.”

A total of 486 vendors received amounts greater than $5,000 from all cardholders combined in 2023, the transaction log shows. Again, it is not clear whether the cards were used to pay for existing contracts, or whether the payments occurred outside the bounds of required contracts.

Asked on July 9 whether the purchasing cards could be or had been used to circumvent contracting and competitive bidding requirements, officials did not respond. Officials also did not respond when asked what safeguards would prevent a cardholder from engaging the services of a friend or business partner.

Records previously obtained by the Times-Dispatch show Burks used her purchasing card to obtain nearly $100,000 worth of services from firms operated by her former business partner. Officials have not commented on the relationship between Burks and that individual.

Meal purchase questions still unanswered

The purchasing card policy mandates that meal purchases are “accompanied by the City of Richmond P-Card Meal Documentation Form” to indicate the business purpose of each meal purchase. Rene Almaraz, the director of Richmond’s Department of Procurement Services, previously confirmed the existence and use of the forms.

But a public records request seeking meal purchase forms and receipts for 19 different meal purchases returned only one such form. The request was completed past the deadline established by the Freedom of Information Act after the Times-Dispatch’s attorneys contacted city officials.

The Times-Dispatch on Monday reached out to a city spokesperson to ask about the remaining meal forms, and was told they would be “pull(ed)” and turned over. But the forms still have not been produced. It is not clear whether the forms are being withheld or if they exist.

‘P-cards aren’t a blank check’

Bill Leighty — former chief of staff to Virginia Govs. Mark Warner and Tim Kaine and current advisor to the dean at VCU’s L. Douglas Wilder School of Government and Public Affairs — told The Times-Dispatch that purchasing card programs are susceptible to abuse and must be closely monitored to prevent it.

Purchasing cards “are very helpful, particularly in local government,” Leighty said. “But they are also vulnerable. You are giving someone a charge card with, in many cases, a fairly high dollar limit on what they can charge, and therefore you need to make sure you have great safeguards in place.”

Leighty gave several examples of such safeguards. Cardholders must never be permitted to review their own purchases, he said, and card misuse must result in either immediate suspension or robust training.

“P-cards aren’t a blank (check) to buy anything,” Leighty said. “The advantages are gone if you don’t have good oversight of the use of the cards.”

It is not clear whether Richmond’s purchasing cardholders oversee their own purchases. Snidle previously told the Times-Dispatch that department directors are responsible for approving card use, but did not respond when asked directly if Burks, who was a department head, reviewed her own transactions.

Internal emails obtained by the Times-Dispatch also show that Burks was repeatedly warned about issues with her purchasing card over a period of two months before it was ultimately suspended.

5 cards suspended since January 2023

Analysis of the purchasing card program comes as five cards have been disabled by procurement officials since January 2023, the Times-Dispatch previously reported.

The total cost of the overdue balances is not clear. A 2019 audit of the purchasing card program identified overdue balances as a potential source of financial loss to the city, as missed payments can disqualify the city from receiving rebates from Bank of America.

The interest rate on overdue balances is not outlined in the purchasing card policy.

The purchasing cards assigned to Richmond General Registrar Keith Balmer and Deputy Registrar Jerry Richardson were revoked in May as the Richmond Office of the Inspector General investigated claims of financial improprieties and nepotism in the local Office of Elections.

The purchasing card assigned to Adrienne Davis, a third employee in the elections office, was suspended after Davis lost the card, officials previously told the Times-Dispatch.