An audit of the Lexington Parks and Recreation Department’s concessions and catering operation found that an employee falsified receipts for six events; failed to track sales of soda, candy bars and other items; and circumvented the city’s purchasing policies on multiple occasions.
The audit, released Tuesday, said instead of depositing cash from concession stand sales at special events, such as Kite Fest at Jacobson Park, the employee would deposit a check for a prior catering event. In four other instances, the employee, whose name was not disclosed in the audit or released by the city, deposited a combination of checks from previous events and some cash.
The employee has retired and the city stopped providing concessions and catering at special events in May. The audit has been turned over to Lexington police, said Geoff Reed, the city’s general services commissioner and Mayor Jim Gray’s acting chief of staff.
As General Services commissioner, Reed oversees parks and was acting parks director at the time of the audit. The audit covers Jan. 1, 2013 through Dec. 31, 2015. Reed asked the city’s internal audit division to conduct the inquiry after several employees and some vendors had raised questions about how the parks and recreation catering services were run.
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The Lexington police have an open investigation. But let me be clear: I am not accusing her of taking any money.
Geoff Reed, general services commissioner and Mayor Jim Gray’s acting chief of staff
“The Lexington police have an open investigation,” Reed said. “But let me be clear: I am not accusing her of taking any money.”
Brenna Angel, a spokeswoman for Lexington police, confirmed the investigation is still open.
Selling drinks, candy, hot dogs, sandwiches and other items at city events was a cash operation, making it hard to know if money went missing. The revenue tracking sheets that would show how much of each item was sold were fabricated, the audit found.
“They were all inaccurate reflections of the amounts purchased,” Reed said.
Moreover, the audit found that there was no inventory tracking. If the inventory was accurately tracked, the city could determine how much was sold. Auditors also found the food was kept in an unsecured location, that some items were outdated and meat was stored incorrectly.
The employee told auditors she had been told more than 30 years ago by supervisors to turn in checks for catered events at the same time she deposited cash for concession events. Reed said the employee had been told to change the way she tracks sales several times.
“We found corrective action plans in her personnel file going back 10 to 15 years,” Reed said. “But no one ever followed up.”
The audit also found additional problems:
▪ Auditors found 48 different purchases on the employee’s city credit card that were charged to accounts unrelated to catering. For example, the purchase of a washer and dryer was charged to the volleyball budget.
▪ The employee split charges on her city credit card so the purchases were under $1,000. City policy requires an employee to get quotes from several vendors if the purchase is over $1,000. For example, the employee had purchased a high-end washer and dryer. Auditors found one charge on her credit card to HH Gregg for $999.99 on Feb. 26, 2015. There was a second charge on Feb. 27 to HH Gregg for $999.99.
▪ The employee had a city-owned van that she used to drive to and from work. When she was on medical leave, the van was parked for nearly four months and other city employees could not drive it.
▪ The employee required sub-vendors — such as people or businesses who operate concession stands for the city’s baseball leagues — to purchase all of their food from Lexington Foods, the parks and recreation food vendor. However, the city’s contract with Lexington Foods did not require its sub-vendors to use Lexington Foods. The employee often bought food from other vendors besides Lexington Foods, the audit found.
Reed said the employee was allowed to drive the van to and from work because she often picked up bulk food items.
“My concern is that it was parked for nearly five months and other city employees could not use it,” Reed said.
The concession and catering arm of Parks and Recreation has been in existence for decades but has gotten smaller over the years as the city has moved to private vendors.
“We aren’t sure but it was likely a less than $40,000-a-year operation,” Reed said. The city’s parks would provide concessions at special events throughout the year, including October’s Thriller parade and Friday Night Flicks at Jacobson Park.
The concessions and catering division was not focused on efficiency, the audit found.
“We found no evidence that the catering and food service function has a focus on cost savings,” the audit found.
Reed said parks and recreation’s other cash operations — such as the pools and golf courses — have much more oversight and controls. They also have cash registers, which track sales. Concession stands had only a cash drawer.
Although the audit uncovered a problem with only one employee, Reed said he was concerned that the problem had continued for decades without correction.
“We are looking at whether we need to do other audits in other areas,” Reed said.