Forensic audit calls out Richmond County CAO, some councillors

A forensic auditof the credit card and expense claims ofRichmond County councillors and senior staff has found few detailed receipts,money spent on alcohol, and singles out theCAO for chargingthe municipality$582 at twoadult entertainment clubs in Texas.

The reportwas released Tuesday. It confirmsconcerns raised in an review by Nova Scotia's ombudsman and provides even more detail.

The accounting firm Grant Thornton was asked to delve into five years of financial records, from April 1, 2011, to March 31, 2016. Auditors were tasked with determining ifexpenses complied with the municipality's policies and procedures.

• Nova Scotia ombudsman slams Richmond County officials for 'self-serving' expenses

No receipts

During the timeperiod in question,more than $800,000 in claims were filedabout $470,000 of them on credit cards and about$335,000in expenses.

Time and timeagain, the report says auditorswere unable to determinewhether claims violated the existing policies "because therewas no supporting documentation."

The auditors questioned a total charge of $582 for back-to-back nights atadult entertainment clubs in Houston.An expense claim filed by Warren Olsen, the municipality'schief administrative officer, listed one evening as areception/meal.

The report says thatbased on its interviews, "the explanation attached was prepared by the CAO in advance of andin anticipation of the forensic audit."

However, the audit report says the current travel expense policy and employee policy are "unclear regarding acceptable meals and entertainmentpractices."

Claiming twice

As in the ombudsman's report, which was made public earlier this month,the forensic audit describes "double dipping."

It says two councillors and the CAO claimed a per diem ormeal allowancewhile filing expense claims for the same meals charged tomunicipal credit cards.In total, the auditidentified $3,871 in credit card meal claims on the same daywhen three meal allowances were also claimed.

The audit says 73 per cent, or 440 of 603 transactions, were not supported by detailed receipts.

It says the employee policyrequires that meal expenses onlybe reimbursed whenthe nameof the attendee appears on the expense claimand the business purpose of the meal is justified.

Liquor charges

Alcohol purchases were also singled out in the forensic audit, which noted 26 alcohol purchases from liquor and beer stores during the five-year period, totaling$7,959.In addition, more than $75,000 inmeals and entertainment claims included drinks charges.

The report sayswhile alcohol charges are prohibited as a reimbursable expense in the employee policy, the travel expense policy is unclear.

Auditors interviewed five councillors and three employees who described alcohol as a "natural part" of entertainment.

The forensic audit also describes seven claims totaling $300 in which councillors claimed reimbursement for expenses "perceived to bepolitical donations or fees for attending a political party event."

The auditors found the travel and employee policies are both unclear regarding that practice.

Going forward

The audit's summary of recommendations made four suggestions:

• Meal expenses should be limited to either a daily meal allowance or the actual expense incurred.If a meal expense is claimed,it should include a detailed receipt including who attended and the business purpose.
• The employee policy should include a limit onmeal expenses.
• A log of actual mileage incurred by councillors should be maintained, including the originating address and the address of the destination, and the kilometrestravelled.
• Any expenses incurred on behalf of family members should be paid personally.

As for councillors and the CAO, the report recommends they receive training regarding arevisedexpense process and policy.