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2017-09-13 / Front Page

Accounting firm to review watchdog’s complaint

BY JIM McCONNELL STAFF WRITER

Brenda Stewart ASH DANIELBrenda Stewart ASH DANIELThe county has hired an accounting firm to conduct an independent investigation into the Internal Audit Department’s handling of a citizen’s Fraud, Waste and Abuse complaint.

Under the terms of a purchase order filed last week, a copy of which was provided to the Observer, PBMares LLP will be paid $9,500 to review internal auditor Greg Akers’ investigation of Matoaca resident Brenda Stewart’s February 2017 complaint regarding the school system’s supplemental retirement plan.

The county is asking the accounting firm to determine whether Akers erred in concluding that Stewart’s allegations were unfounded.

PBMares LLP, an accounting and business consulting firm with offices in several Virginia cities, is expected to submit a report of its findings by no later than Oct. 6.

Susan Pollard, director of communications and media for the county, confirmed the company’s hiring via email last week.

“The county takes Fraud, Waste and Abuse complaints seriously,” said Steve Elswick, who represents the Matoaca District on the Board of Supervisors. “After hearing concerns that this specific complaint was not thoroughly investigated, we asked the county administrator to look into this further to ensure that our audit department is following proper protocol and thoroughly investigating complaints.” Elswick declined to comment further. Stewart submitted her complaint via the county’s Fraud, Waste and Abuse hotline, claiming that former Chesterfield County Public Schools administrator Sharon Thomas should not have been permitted to participate in the school system’s supplemental retirement plan and collect a payout in excess of $300,000. The hotline was created to give county/school employees and citizens a confidential means for reporting suspected fraud, waste or abuse of county and school resources.

Thomas worked until May 2016 as chief executive to the superintendent under former Superintendent Marcus Newsome.

The School Board approved Thomas’ participation in the supplemental retirement plan at its meeting on May 24, 2016, even though she hadn’t satisfied all of the plan’s eligibility requirements – specifically, she hadn’t completed at least 10 years of full-time employment with the school system.

Thomas qualified under a clause that reduced the minimum service requirement to five years for any employee participating in the plan “as a direct result of a termination due to a reorganization that was approved by the School Board.”

The School Board contends that because Thomas’ position as chief executive to the superintendent was eliminated, she was eligible to participate in the supplemental retirement plan.

Stewart claims the School Board erroneously applied that clause because Thomas’ position wasn’t terminated; instead, Stewart says, it was merely revised and given a new title, chief of staff.

The School Board approved that change and several others in May 2016 as part of a revision of the school system’s executive staff organization chart.

Donald Fairheart subsequently was hired to fill the chief of staff position under current Superintendent James Lane.

In an October 2016 letter to Lane, Stewart alleged that Newsome “failed to act in compliance with existing policies and created a special situation that resulted in preferential treatment for Dr. Thomas.”

Under Chesterfield County Public Schools’ supplemental retirement plan, eligible employees work one additional year in a temporary assignment after retiring from full-time service. In exchange, they receive 175 percent of their final salary, paid out over a minimum of seven years.

Thomas was the third-highest paid employee in the school system. Her final salary as chief executive to the superintendent was $172,332, meaning she will receive a total of $301,581 in supplemental retirement payments.

Thomas left the school system June 30 after completing her supplemental retirement assignment as a paralegal for the School Board attorney.

Stewart noted that assignment in her letter to Lane.

The supplemental retirement plan specifies that each participant will provide temporary, part-time services “in the same or equivalent assignment” that the employee held prior to retiring.

Thomas’ supplemental retirement assignment, which had a salary range of $41,731 to $71,263, was several grades below her last full-time position on the school system’s salary scale.

Stewart also contends that the School Board’s vote to approve Thomas’ participation in the supplemental retirement plan was “legally defective” because the board failed to publicly disclose the subject of its action prior to voting.

Her argument is based on reports from citizens who attended the May 24, 2016, School Board meeting and claimed they were unable to open an addendum to the board’s agenda that contained a list of recommended personnel actions.

The citizens informed board members that they had tried to open the addendum and view its contents, but were unable to because the file was locked and required a username and password to open.

Despite complaints about the inaccessible file, the School Board voted to approve the agenda addendum with no discussion.

Only after the meeting did the citizens learn that the locked addendum contained a recommendation to approve Thomas’ participation in the supplemental retirement plan.

In her letter to Lane, Stewart cited a 2014 opinion from Virginia Attorney General Mark Herring that “in order for a public vote to be valid, the subject of the vote must be publicly disclosed.”

Lane directed School Board Attorney Wendell Roberts to review Stewart’s claims.

Roberts wrote to Stewart, noting that he had reviewed Thomas’ employment record and concluded that Thomas met the eligibility requirements for participation in the supplemental retirement plan.

Stewart subsequently filed a formal complaint through the Fraud, Waste and Abuse hotline in February.

After Akers investigated and dismissed her allegations, Stewart questioned his actions during a public comment period at the Board of Supervisors’ June 28 meeting.

“I consider it unacceptable for the county’s Internal Audit director to be allowed to dismiss a well-documented complaint without preparing a formal report to justify his decision, especially when the complaint involves actions of the School Board and superintendent,” she said.

“Not only does the citizen not get a reasoned explanation for rejection of the complaint when no report is made, the audit director does not refer anything to the Audit and Finance Committee for review. It is left to the complainant to review the audit file, document the inadequate investigation and seek the committee’s review as I had to do in this case.”

In an Aug. 17 email to Elswick and Clover Hill Supervisor Chris Winslow, both of whom represent the Board of Supervisors on the Audit and Finance Committee, Stewart called on the board to request Akers’ resignation.

“It appears that there is a lack of adequate intent and will to deal with this issue that, left unresolved, seriously wounds the reputation of this county as a ‘First Choice’ community and the School Division as a ‘#oneCCPS.’ Tolerating corrupt practices of this nature should certainly not be a characteristic of top local governments and school divisions,” she wrote.

“Such practices call into question the entire basis on which the programs and budgets of our county and school division are based. Those responsible for oversight through their authority to fund the schools and through committees such as the Audit and Finance Committee must act to protect the citizens’ interest and the taxpayers’ money.”

As part of its independent review of Stewart’s Fraud, Waste and Abuse complaint, PBMares LLP will investigate both Thomas’ eligibility for the supplemental retirement plan and the process by which she was approved to participate.

Tim Bullis, a spokesman for Chesterfield County Public Schools, noted in an email last week that both Roberts and Akers have found no wrongdoing related to Thomas’ supplemental retirement plan participation.

“In the event that this additional audit produces a different result, we are more than prepared to comply with the recommendations,” he wrote. “However, if the auditor affirms the original opinions of the county internal auditor, then we suggest that this complaint be closed permanently.”

Stewart declined to comment last week.

As the outside firm reviews his investigation of Stewart’s complaint, Akers and his Internal Audit staff are preparing to conduct a broader audit of the school system’s supplemental retirement plan, which has a $99 million unfunded liability.

One of the objectives of the audit is to determine whether improper changes to the plan allowed school employees to become eligible and collect benefits.

The School Board has made several changes to the plan since 1997 – the last time it was approved by the Board of Supervisors – but there is a question whether any of those actions were valid under Virginia law.

According to state law, the ultimate authority for changing the terms of the school system’s supplemental retirement plan rests with the Board of Supervisors. ¦

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