ST. LOUIS TREASURER TISHAURA JONES asked internal city auditors for help in 2019 to counter fraudulent activity in the city’s Parking Division, which Jones supervises, according to newly disclosed city records.
The fraud involved cash collected for public parking at the city’s downtown garages and lots during sports and entertainment events such as Blues hockey games at the Enterprise Center. The records indicate that on some occasions, cash went missing.
The scale of the fraud is not clear. Nor is it clear how many employees may have been involved or how widely its existence was known among members of Jones’s staff.
Overall, the treasurer’s office projected cash revenue from downtown events parking would be almost $3.5 million during the 2019-20 financial year, before the COVID-19 pandemic, according to a report produced by the auditors.
“Currently, we staff garage attendants to sell parking passes for cash at our facilities,” Jones wrote to Comptroller Darlene Green on Aug. 7, 2019, in a letter requesting spot audits from the city’s Internal Audit team. The team is part of Green’s office.
“We have internal controls in our Fiscal and Parking Operations departments that focus on reconciling the sale of passes to cash collected,” Jones wrote. “However, we would like to institute an additional level of internal controls to mitigate fraudulent activity.”
In response, Green’s staff conducted onsite spot audits at three events in late 2019, including observing the cash collected by garage attendants during two Blues games. They submitted their final audit report last summer, almost 11 months after Jones first asked for help.
The report did not document any instances of fraud or misbehavior during the spot audits, although the auditors suggested that the Parking Division improve its controls for handling cash. In particular, they recommended that Jones’s team establish written procedures for all aspects of garage parking related to downtown events.
In a response included in the audit report, Jones’s office said it had undertaken this step.
The audit offers a fresh glimpse into the workings of the Parking Division, a major component of city government that as recently as 2018 had $22 million of cash reserves. Control of the division and the money it generates has long been a source of contention between Jones and other city officials. A legal case involving the city’s Parking Commission, originally filed in 2017, now looks to be headed back to the Missouri Supreme Court.
Jones has not discussed the audit at any meetings of the Parking Commission, and there is no mention of the fraud in the Parking Division’s latest annual report. The fraud also went unmentioned in a separate, broader audit of Jones’s office released in September by Missouri State Auditor Nicole Galloway.
Responding to McPherson’s questions about the spot audit report by Green’s team, Felice McClendon, a spokeswoman for Jones, said in an e-mail: “We are always willing to work with authorities as it’s our standing policy to implement immediate termination for criminal activity.”
McClendon also noted there was no single “precipitating event” that led to Green’s audit, and that Jones’s office reports theft if and when it occurs.
“We proactively initiated the effort to reach out and tighten our policies as a measure of best practice,” McClendon said. She did not provide further details, and did not respond to McPherson’s follow-up inquiry asking whether any employees of the Parking Division have faced legal charges in connection with theft.
Let the Sunshine in
The report from Green’s auditors, titled “Garage Events Parking Cash Sale Spot Audit,” was only disclosed publicly in January, following a records request under Missouri’s Sunshine Law from McPherson to the comptroller’s office. The report is now available on the comptroller’s section of the city’s website.
The audit report is dated June 30, 2020. Normally such reports from the Internal Audit team are posted on the website soon after they become final. But personnel changes in the comptroller’s office led to the garage events audit being inadvertently left off, said Tyson Pruitt, a spokesman for Green.
“It was an oversight,” Pruitt said. “It just slipped through the cracks.”
Jones, a candidate for mayor in the March primary, has routinely promoted herself as a champion of government transparency. In this case, however, her office sought to keep records secret.
Last month McPherson made a Sunshine inquiry to the treasurer’s office regarding the 2019 request for help that Jones sent to the comptroller’s office, to learn more about the context for the audit. But Shirley Rukcic, director of administration and counsel on the treasurer’s team who handles Sunshine inquiries for Jones, denied McPherson’s request.
“Responsive documents would be closed records,” Rukcic wrote in an e-mail to McPherson on Jan. 8, citing state statutes which she said justified withholding the documents.
McClendon, in her e-mail, took issue with the wording of McPherson’s Sunshine inquiry to the treasurer’s office, although it’s not clear how this would have changed Rukcic’s response.
McPherson made a similar Sunshine request last month to the comptroller’s office. Green’s staff responded differently: They concluded that Jones’s letter was in fact a public document, and provided it to McPherson on Jan. 22. (Green’s staff declined to provide documents generated during the audit process itself, in line with state statutes.)
The state auditor’s team
Jones sent her August 2019 letter to Green mentioning “fraudulent activity” while a different team of auditors was already onsite at Jones’s office. That team was Galloway’s. The state auditor is releasing audits of individual city department on a rolling basis, as part of an ongoing, comprehensive audit of the city requested by the Board of Aldermen.
Galloway’s team spent about nine months in the treasurer’s office during 2019 as part of their fieldwork for the audit.
Galloway released her audit of the treasurer’s office on Sept. 30. Despite the fact that Jones acts as the city’s Supervisor of Parking, and the Parking Division is a major component of the treasurer’s portfolio, the audit report did not address the division’s operations in any detail. It gave Jones’s office an overall rating of “Good.”
Alderman Jeffrey Boyd, who represents the 22nd Ward on the North Side, told McPherson he was “very disappointed” in the final report from Galloway’s team.
“Why would they audit the treasurer’s office and not audit the Parking Division as well?”
Boyd chairs the streets committee at the Board of Aldermen and is a member of the Parking Commission. He said that early in the audit process he met with Tina Disney, a member of Galloway’s staff who is listed as “In-Charge Auditor” in the audit report.
Boyd claimed the treasurer’s office was not being transparent about the Parking Division’s operations. He said he outlined a number of concerns to Disney about transactions such as the division’s transfer of $2 million in reserve funds in 2016 to pay for an updated study of a new Metrolink line.
Boyd, a fierce critic of Jones who ran unsuccessfully against her for treasurer last year, said the Metrolink study was a prime example of government waste.
“Why would they audit the treasurer’s office and not audit the Parking Division as well?” Boyd said. About Galloway, he said: “She failed.”
Galloway’s team has declined to discuss its fieldwork on the audit, citing state statutes which prevent the disclosure of information other than what is contained in the auditor’s public reports.
“There are legal limitations on what I can discuss related to the specifics of audit work,” Galloway’s press secretary, Steph Deidrick, wrote in an e-mail to McPherson in January. Deidrick did not respond specifically to questions about whether Disney and her colleagues were aware of the concerns over cash parking sales that the comptroller’s audit addressed.
As well as garages and lots, the Parking Division also oversees the city’s on-street parking operations, which include 7,700 metered parking spaces. In December McPherson reported that federal investigators have made inquiries into the activities of Jones’s office, including contracts with external vendors. Jones has not been accused of wrongdoing, and there is no indication the inquiries will lead to formal legal action.
The Parking Division has been making headlines for the questionable activities of some of its employees and contractors since long before Jones first took office as treasurer in 2013.
In 2012, for example, executives at two private companies that cheated the city out of $224,000 related to parking meter operations were sentenced to jail time for wire fraud, following an investigation by federal prosecutors. –McP–
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This story is quite misleading. It refers to “the fraud” in the Treasurer’s office when no fraud is actually documented. The letter you post does not say that fraud has actually occurred, and and nothing in the story does either, except for your imprecise reporting.
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