PETERSBURG, Va. -- Auditors say Petersburg city treasurer Kevin Brown admitted to stealing more than $2,300 in petty cash from his office, according to a 115-page forensic audit report released Wednesday.
“On June 26, 2017, we interviewed the Treasurer about the petty cash thefts and other issues, including his waivers of tax penalties, interest, and principal. During that interview, the Treasurer admitted that he had stolen the petty cash,” a portion of the report read.
The report showed that Brown was having personal financial problems and auditors discovered emails indicating he may have been waiving fees on tax collections on unauthorized transactions.
Auditors released examples of Brown’s misconduct including an email that appears to show Brown waiving fees on tax collections from a taxpayer.
“I will waive the fees and hope I don’t lose my job,” Brown wrote. “You need to send the payment directly to me.”
Brown denied that he was compensated for his actions in this particular case.
Petersburg Mayor Sam Parham said after months of speculation, he is happy they made the necessary adjustments to move forward and be more transparent and accountable the city’s taxpayers.
“We got ahead of this storm a few months ago when we heard of these possible allegations coming out and we just want our constituents to know it’s a new era of leadership and we will be holding people accountable,” said Petersburg Mayor Sam Parham. “We’ve taken the necessary steps to have our hands in their office to make sure it’s operating efficiently and honorably so the citizens will be proud.”
Parham said as of right now, Brown is still an employee of the city of Petersburg.
“It’s under investigation and right now you are innocent until proven guilty so we’ll see how everything plays out the next few months,” he said.
Auditors also determined that allegations raised in a parks report of misappropriations of more than $200,000 between 1999 and 2007 did merit a criminal investigation, but after meeting with the FBI, they determined the statute of limitations had expired.
Auditors said city employees also reported abuse of overtime and recording time off.
In the report, auditors said they applied the “Fraud Triangle” to assess the city’s risk for misconduct, fraud, waste or abuse.
After their investigation, they concluded that the city’s risk of internal misconduct, fraud, waste or abuse in Petersburg is very high and severe.
In fact, auditors said investigating the water and waste water billings and collections was difficult because they were unable to conduct key interviews.
They said most of the Petersburg employees involved in the water contract were no longer employed so they could only interview current employees.
Auditors recommended a number of changes that could help the city prevent and detect errors, misconduct, and fraud, waste and abuse in the future.
Some of those recommendations include establishing a formal City Compliance and Ethics Program and hiring a Chief Compliance and Ethics Officer.
Here is the full 115-page forensic audit report: