Policies violated with company hired to service vehicles

An internal review conducted by the city of Greensboro to look into work performed by a company owned by the wife of a city employee to service city vehicles has revealed that city procurement cards were used to evade financial oversight in a violation of city policy.

A city press release (after the jump) runs down the findings of the investigation into Mel’s Pressure Washing, owned by the wife of city employee Melvin Dick:

GREENSBORO, NC (May 2, 2014) – The City of Greensboro has determined that there were violations of its policies after reviewing an issue involving a company hired to perform pressure washing and vehicle lubrication services. The business, Mel’s Pressure Washing, is owned by the wife of City employee Melvin Dick.

Once the City learned of the allegations involving a potential conflict of interest with a City employee, City Manager Jim Westmoreland charged an internal team with reviewing the issues to identify any potential missteps taken by the City or the vendor. “We are concerned anytime we identify policy violations and we are working to correct those issues immediately,” says Westmoreland. “Over the last several weeks our team has taken the necessary time to conduct a comprehensive and thorough review of our internal policies and practices to identify any violations. Based on the initial findings I received today, I am very concerned about some of our financial polices and have implemented a series of follow-up actions to insure we obtain a complete picture on these issues and ways to improve.”

The initial review identified possible personnel policy violations in the equipment services division regarding the City’s secondary employment and gift policies. The City’s secondary employment policy requires that employees disclose their outside employment with their supervisors and do not work during time they are employed by the City. The gift and conflict of interest policies discourage employees from taking financial contributions for personal interests and gain.

The review identified specific policy violations with the vendor being paid primarily through the use of City procurement cards and without a qualified City service contact. The payments often exceeded the daily limit of the cards and included the use of two cards to make the payments, which violates the procurement card policy. In addition, two City procurement card numbers were provided to the vendor to charge for services rendered without any direct City oversight.

“With this news, it’s vitally important to me that we immediately gain a better understanding of how our polices failed and our work processes allowed these issues to occur and to identify improvements to ensure we do have not these kinds of issues in the future,” says Westmoreland. Westmoreland says the City is working to further understand the full scope of violations and today is taking the following actions:

·         Suspending the use of procurement cards within the equipment services division;

·         Implementing personnel changes and actions within the division (Due to the constraints of North Carolina personnel law, the personnel actions are not being disclosed at this time.);

·         Continuing to identify and discontinue instances where the City’s procurement card and service contract polices and processes have been violated;

·         Immediately retaining the assistance of an outside forensic audit consultant to assist with the further review of the procurement card policy violations, examine the organization-wide use of procurement cards, and provide recommendations on system improvements;

·         Identifying and correcting policy deficiencies and enhancing internal controls within the financial and equipment services functions;

·         Reinforcing to the City’s department directors and employees the importance of adhering to the City’s procurement card policy,  sound financial and business practices, and core values.

Between 2005 and 2014, the City paid Mel’s Pressure Washing approximately $577,000 (over nine year period, includes all services for both equipment services division and engineering and inspections department), including checks and card payments, to clean the City truck wash bays, clean and detail City-owned vehicles and buildings, and to provide hydraulic equipment lubrication services. The vendor relationship pre-dates Melvin Dick’s employment with the City, which started in 2007.

In mid-April, the City suspended the use of Mel’s Pressure Washing and issued a request for bids from area businesses for both the pressure washing/cleaning and the lubrication services. A new business has been retained to provide lubrication services and the City is finalizing its decision regarding the washing services. The City has ceased all operations with Mel’s Pressure Washing.