Richmond’s new CAO says city needs ‘overhaul’ of some spending policies

As he started his second week on the job, Richmond Chief Administrative Officer Odie Donald II sat in on a meeting Tuesday where officials heard details on several recent audits finding widespread irregularities with city purchasing and fuel cards.

In some of his first in-person public remarks since assuming the top administrative role at City Hall, Donald said he doesn’t want to “gloss over” the problems identified by City Auditor Riad Ali and his team.

“These findings from both audits are concerning enough that we’ve got to make a sea change,” Donald said. “I know we talk about a reset. But I think we’ve kind of changed our terminology to an overhaul.”

At Tuesday’s quarterly meeting of the city’s Audit Committee, Ali and his staff formally presented the results of two high-profile audits that found oversight of how city funds and resources are being used sorely lacking.

One of the audits found at least $5 million in “questionable expenses” discovered through a review of the city’s purchasing card program. That initiative — meant to streamline city officials’ ability to buy goods and services in small amounts — has already been drastically scaled back by Mayor Danny Avula after auditors found numerous examples of potentially unnecessary or excessive spending on food, travel and other expenses that weren’t tracked closely enough to determine whether they were valid or not.

A second audit found at least $44,000 in questionable expenses related to the city’s fuel card program, which allows employees to gas up public vehicles at designated fueling stations around the city. The fuel audit found strong evidence the cards were being abused, such as cards being used after an employee’s work hours and widespread sharing of PIN information that made it difficult to track who made a particular purchase.

“This is serious. This is stealing,” said former City Council member Kristen Nye, who was appointed to serve on the committee as a private citizen after leaving office at the end of last year.

There was little pushback from city officials at the meeting, who said they have already taken immediate steps to fix the problems and have started the work of larger system improvements to make things work better in the future.

Rene Almarez, the city’s procurement director who is also serving as acting deputy chief administrative officer for finance and administration, said the purchasing card audit revealed "failures at all levels.”

“I totally understand the gravity of the audit report and we’re striving to make some changes here,” Almarez said.

Though internal audits have repeatedly found loose oversight of city resources and lax rules for spending public funds, Richmond officials have portrayed the city’s budget as painfully tight.

Even modest attempts at lowering the tax burden on residents or cutting spending, administration officials have argued, would throw the budget out of whack and jeopardize city services.

Ali said his audit team has been getting “great cooperation” from city departments when it reviews their operations. The cooperation has been so good, he said, that some department heads are reaching out to him to ask for assistance identifying areas for improvement.

“That’s what we want, honestly,” Ali said.

Audit Committee Chairman Sam Bemiss struck a similarly optimistic tone, saying he’s sensing new seriousness about tackling problems within City Hall.

“I think broadly, Richmond is on kind of an amazing roll right now and I’m excited about what we’re seeing here,” Bemiss said. “There are a lot of things that need to be fixed. But there’s an opportunity to fix them in a way that sets a whole new tone.”

Donald, the new CAO, started in Richmond last week after Avula hired him away from Atlanta, where he had been serving as chief of staff to Mayor Andre Dickens.

Bemiss told Donald “it’s a complicated beast that you have to run now,” adding it’s clear the city needs stronger policies and to send a signal to employees that policies “are there to be obeyed.”

Donald said the new leadership team is “starting to plug the holes and set those lines of demarcation and build on what has been found.”

“I think our team is ready to do so,” Donald said. “And if not, then buckle up and get ready.”

Contact Reporter Graham Moomaw at gmoomaw@richmonder.org