Three city of Akron workers have resigned and a fourth was demoted following a probe into financial mismanagement at the city’s recreation centers.
The audit also found a pattern of unaccounted expenditures, poor or nonexistent record keeping in some instances and a number of rec center supervisors hiring family members without approval.
In the wake of the ongoing audit, a rec center supervisor and her daughter were terminated for collecting and pocketing about $6,000 in fees paid for Zumba instructions at the Ellet Community Center over a two-year period.
Another rec center worker was terminated after she used $800 in city money to make her mortgage payment.
All three have agreed to make restitution and not contest the city’s actions. In exchange, the city will not seek criminal charges, a move that Mayor Don Plusquellic said is financially prudent.
Plusquellic held a news conference Friday to announce the preliminary findings of a report by the Summit County Internal Audit Department. The audit, as well as a criminal investigation by Akron police, is ongoing.
In addition to the terminations, Greg Kalail, the recreation bureau manager, was demoted and transferred to another city department. He was also suspended for 20 days. He now works in Lock 3 operations.
Slush funds at rec centers
Aside from the stolen money, the audit uncovered financial mismanagement in which rec center workers collected and stored money at the facility to later use to purchase incidentals.
Plusquellic said the slush funds were created around 2009, when the city was facing large-scale budget cuts. He said no money was misused or stolen as a result. However, the practice violates city policy requiring workers to deposit the money in city bank accounts, he said.
The city said auditors found that Kim Huskey, a 12-year city employee, collected the $6,000 from Zumba exercise participants and gave the money to her daughter, Nicki Taylor, a season summer recreation specialist, who taught the class.
Plusquellic said the investigation showed that Huskey gave the money to her daughter believing she was underpaid.
Restitution more beneficial
Theft of something worth more than $5,000 is considered a felony. Plusquellic, however, said he determined it was more beneficial and less costly to the city to allow Huskey to resign and make restitution. Huskey repaid the city the money owed her in accrued benefits, he said.
She also agreed to drop her civil service grievance and a potential arbitration hearing over her discipline. Huskey, in a letter to civil service officials, wrote that if “the grievance is not withdrawn and the arbitration cancelled both I and my daughter will be arrested for second degree felonies, and we will be convicted of same since we both spoke openly to the investigating officers.
“I do not wish to be arrested nor convicted, and I certainly do not wish my daughter to be dragged into this…”
Taylor said she did nothing wrong.
“Multiple supervisors gave me permission to keep the earnings from my classes,” she said. “I would have never agreed to teach the classes if this weren’t the case. It would have been a waste of my time.
“I do not appreciate my character and integrity being questioned.”
$800 to pay mortgage
Joanne Breiding, a recreation supervisor at Northwest Community Center, was terminated, but not arrested, after it was learned she used $800 in city money to pay her mortgage, the city said.
When questioned about the decision to bypass felony charges against Huskey, Plusquellic defended the actions, and took special note of this week’s court sentencing of probation for a former Cuyahoga Falls library worker who stole in excess of $300,000.
“If anybody out there thinks, well that mayor, he’s really turning around, he actually seems like a nice guy and is maybe too easy on these people… by the time we pursued them… thousands of dollars in court costs and attorneys in doing all these things for what I said was approximately $7,000 in total for three people, it seemed the appropriate measure to take.
“But relatively speaking, this isn’t tens of thousands of dollars. This is $7,000. We’re getting 100 percent of it paid back, and we’ve taken the action we needed to take when we find there’s something wrong and we’ll continue to monitor and take appropriate actions.”
Money not deposited
The probe focused on 13 city rec centers and community events and their financial accounting from January 2010 through July 2013. It was during the audit that the city learned that workers at eight rec centers were storing cash at their centers instead of depositing the money in city accounts.
While the audit failed to uncover any additional evidence of thefts, numerous examples of funds being spent without proper documentation were found at the rec centers. There was one instance where a rec center failed to document credit card transactions of $17,669 and checks written for more than $61,000. Another center could not account for more than $21,000 in check and credit card uses.
The audit also uncovered instances at three centers where a rec center supervisor’s relative, who were associated with an independent organization “operated out of the center, had been selected as treasurer for the center, and activities and funds were comingled.”
Also, several relatives of rec center staff were hired as contractors without first obtaining quotes or approval, auditors found.
$50,000 stored in safe
Elsewhere, the audit found that city workers failed to deposit nearly $50,000 from the Akron Arts Expo in 2011 and 2012 for more than a year. Those funds were, instead, stored in a safe and not deposited until last April.
“It was noted that proper receipt and deposit controls were not in place, leading to funds not being deposited into the city for over one year, as well as improper tracking of cash transactions, for a potential misappropriation of funds,” auditors wrote.
County auditors also looked at Arts Expo records for its four-day community events in 2011-12 and found that money collected was not counted daily “and several records were non-existent, inconsistent and/or illegible, making it difficult to perform a complete and accurate reconciliation.”
Plusquellic said the audit uncovered the theft of a relatively low amount of cash and that policies are place to ensure the problems do not resurface.
He also cautioned that the audit is ongoing and remains under investigation by Akron police.
“I guess in a way this is a good news story,” Plusquellic said. “This could’ve been a much bigger problem that we had, where there were multiple sites taking in money and stealing and fortunately we only had three individuals.”