(Toledo News Now) - A WTOL 11 investigation uncovered theft and some costly mistakes from the city of Toledo. Amanda St. Hilaire looked through thousands of pages of expense reports; the results brought about some big changes to how your taxpayer dollars will be monitored going forward.
City policy forbids employees from expensing alcohol. It also sets a limit on how much employees can expense (for example, Toledo will only reimburse you for $8.00 worth of lunch if you stay in the state of Ohio).
In order to expense anything at all, city employees are required to present itemized receipts. That way, the city knows how much people are spending, what people are spending on, and where they're spending it. It also means the city has proof the employee actually incurred the cost.
This investigation shows key parts of these rules were violated and overlooked.
WTOL looked through every expense report for every city employee in 2012 and 2013. Part of the process involved checking receipts to make sure the numbers matched those on the expense reports.
Most of the expense reports were for conferences and city business trips that involved meals, travel costs, and lodging. While the majority of them were within the state of Ohio (destinations like Cleveland and Columbus), several trips went to bigger areas like Chicago and Washington, D.C.
Receipts show that a few city employees were buying alcohol and expensing it. Sometimes, the city would reject the expense and eliminate it from the check to the employee; other times, the employee got the full reimbursement.
Some employees were also getting reimbursed for meals that most more than their maximum allowances. We saw receipts for meals that cost more than $50.00 for one person. The typical procedure is supposed to be for the city to only reimburse up to $17.00 (the maximum amount allowed for dinner). However, there were several cases in which the entire expense went through.
"Outraged," Director of Finance George Sarantou said when we showed him what was happening. He has only been in his position since January 2014, so he says he was not aware of the problem. "Simply outraged. This is something that has to be fixed. We owe that to the taxpayers."
The city also cut some emplyees checks for costs that did not have proper documentation. For example, a hotel confirmation page would be attached to the expense report, but there would be nothing to prove the employee actually stayed there. This brings the investigation to the most common problem found – or rather, not found – in the expense reports: No receipts. Additionally, many of the receipts that were present were not itemized, meaning the city has no way of knowing how that money was spent.
"That's simply unacceptable," Sarantou said. "The city policy is very clear. You MUST have a receipt, or you will not be reimbursed."
Toledo has $10,248.99 in missing taxpayer dollars for the year 2012. That means the city shelled out money when it shouldn't have for expenses that had issues like missing receipts and improper documentation. The number for 2013 is $9,844.67. Those numbers add up to a total of $20,093.66 in improper expenses, just over two years. What's more, 40.6% of reports had numbers that didn't match up and expenses that, per city policy, should not have been approved.
How Did This Happen?
With multiple people signing off on expense reports, and everything going through the Department of Finance, our question for George Sarantou was, "How does this happen?"
He says that's a good question.
His opinion is that the previous administration had a lax outlook on the city policy for expensing items. Since Sarantou wasn't the Finance Director when these reports were expensed, we called the former finance director, Patrick McLean, to see if he would give us answers. He never returned our calls.
The city of Toledo goes through an audit each year. But it does not cover everything. Sarantou says the auditors pick certain areas of focus each time, and instead of going through each individual document, they do spot checks. He says he is confident in the procedures that are already in place, but would like to make a few changes in how strictly those procedures are enforced.
More than a mistake
Some of the expense report numbers weren't adding up. WTOL discovered some employees were fabricating them.
An employe would buy a lunch that cost $3.00, according to the receipt. But in the expense report, the lunch would be listed as $8.00. The employee would then get the $8.00 check and pocket the remaining money he or she didn't spend.
"In essence, the employee is making money by accepting more than he or she spent," reporter Amanda St. Hilaire said to George Sarantou in a sit-down interview. "That sounds a lot like theft."
"It is," Sarantou responded. "And we're going to put a stop to that."
After we showed Sarantou the inconsistencies and issues in the employee expense reports, he issued a new directive. You can click here to read it. In the directive, he reminds city employees of the policy requiring receipts. He says he'll also be spot checking expense reports to make sure people are following the correct procedures.
"Ultimately, it could lead to very, very serious actions," Sarantou said, "And theft in office is certainly something, you could lose your job. No question."
Sarantou invited us to come back next year to look at how his numbers match up. We're looking forward to it.
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