Fairfield Credit Card Probe Finds ‘Loose’ Policy, But No Fraud

Fairfield's Director of Human Resources Cathleen Simpson, right, presented the findings of an internal investigation into town employee credit card purchases at an Aug. 7, 2023, Board of Selectmen meeting.

Share

TwitterFacebookCopy LinkPrintEmail

FAIRFIELD – An internal investigation into town employee credit card purchases found no evidence of fraud, but uncovered several policy violations that officials blamed on “loose” and long-standing spending policies.

The findings, which were released ahead of a Monday Board of Selectmen meeting, determined that town-issued credit card holders did not purchase items to “defraud the public.” However, investigators found instances of employees breaking town credit card policies through daily food purchases, paying sales tax, and having work-related items shipped to their home addresses. 

The probe was sparked by a complaint from Dana Kery – a former Representative Town Meeting and Ethics Commission member – who alleged fraudulent purchases were made by town employees after requesting credit card statements from Fairfield.

The investigation, conducted by the town’s human resources Director Cathleen Simpson and Chief Financial Officer Jared Schmitt, included a review of credit card expense reports from 2018 to 2022 and a timeline of town credit card and travel policies. 

While they found no evidence of fraud, Kery and the Board of Selectmen said the report points to larger issues with Fairfield’s policies and financial controls.

“I think this is the very tip of the iceberg, and that credit cards and usage of credit cards is a very small slice of the financial controls that need to be looked at in the town of Fairfield,” Kery told CT Examiner on Tuesday.

Kery said that she first became wary of town employee credit card spending when Connie Saxl – Fairfield’s internal auditor – presented a 2020 employee credit card expenditures audit to the Board of Finance.

While finance board meeting documents did not name specific issues found in the 2020 audit, they outlined recommendations from Saxl to improve compliance with town credit card policies, such an annual training for all cardholders and improved policies. 

The next year, Saxl made similar recommendations to improve credit card policy compliance in a 2021 audit. At this time, Kery said she began to wonder whether Fairfield had followed through on the earlier recommendations.

“She spoke about the credit cards, and I thought, ‘Hmm, well I wonder how that last credit card audit was implemented,” Kery said.

Kery filed a Freedom of Information request in September for town employee credit card statements from June, July and August 2022, and later alleged excessive spending by several town employees. 

Violating ‘loose’ policies

In her complaint to the town, Kery pointed to credit card purchases made by Water Pollution Control Facility superintendent John Bodie in May and June 2022.

According to the investigation’s findings, about 90 Fairfield employees currently hold town-issued credit cards. At the Monday meeting, Simpson said Bodie’s spending stood out from the other 89 cardholders, prompting the town to launch a separate investigation into the superintendent.

“The appearance of what his spending was, on its face, looked so egregious as compared to other credit card holders for that time period that we thought immediate action should be taken based on the seriousness of the allegation,” Simpson said.

A town employee since 1985, Bodie worked his way through the ranks of the wastewater treatment plant before being promoted to superintendent in October 2021. As superintendent, Simpson said, Bodie purchased food for his employees “almost on a daily basis” and spent a “seemingly large” amount on travel expenses.

During its investigation, the town interviewed Bodie and his predecessor, William Norton, about the spending. Bodie told investigators that as superintendent, he tried to uphold Norton’s tradition of purchasing food and beverages for his employees as a reward for “performing a difficult job,” according to the investigation report.

Norton confirmed Bodie’s statement, explaining that the work environment was “very hostile” when he took over as superintendent in 2014, and that he purchased food to boost morale.

After the town placed Bodie on leave in January, Fairfield police officers reviewed his expenditures and narrowed their focus to six purchases totalling $1,370 at restaurants in Connecticut and New Hampshire. According to the report, Bodie explained that some of the charges were for meals town employees had while at a work conference in New Hampshire, and others he purchased to raise morale – just as Norton did.

Fairfield police concluded no crime had been committed, and that they had no reason to believe any of Bodie’s purchases were for personal gain. 

The town investigators also said they found no evidence of fraud, but identified $845.14 worth of purchases Bodie made for personal use – such as registering his wife for work conferences. The report said Bodie again blamed the charges on past practices and later reimbursed the town for the expense.

The investigators also reported other less egregious instances of town credit card policy violations, including a Department of Engineering employee purchasing over-the-counter cold medicine for about $14, and a former building official having an Apple Pencil shipped to his home address. Other than Bodie, no employees who violated policy paid restitution.

At the Monday meeting, Simpson told officials the policy violations were not entirely the employees’ fault. Rather, she said, it was an issue of misdirection and unclear policies. 

“This is not about people or pointing blame,” Simpson said. “It’s about systems.”

While employee credit card policies prohibiting personal use have been in place since 2000, the investigation found there was no formal training offered to employees to ensure policy compliance until last month.

First Selectwoman Brenda Kupchick and Selectman Thomas Flynn agreed that the key issue is lacking town policies, not the employees.

“There was loose policies in place before I came in. … There was no training,” said Kupchick, who assumed office in 2019. “And so this actually was a good thing because we were able to write more stringent policies.”

Following Kery’s complaint, the town issued new procedures for credit card holders, requiring department heads to forward monthly reports to the CFO for approval and requiring employees to get approval from their department head and the CFO before making a purchase over $1,000.

Unchecked audits

Flynn, who works in financial management and previously served on the town finance board, said the lack of follow-up on important audits was another issue discovered in the investigation that needs to be addressed. 

In response to Kery’s complaint, the investigation found that the town auditor had not shared its findings and recommendations from the 2020 and 2021 credit card expenditures audit with Kupchick, her staff or the Department of Human Resources. 

“What failed here, by everybody’s own admission, is in 2020 the audit was issued – regardless of whether it was detailed enough or in a format that you would like – but for whatever reason, it wasn’t acted upon, followed up on or reported on,” Flynn said.

In addition to sharing audits with Kupchick, Flynn recommended that the town send audits to the finance board for review to encourage follow-up on issues like town employee credit card expenditures.

“I don’t know what’s going on, but these things typically don’t just sit in a drawer and get missed,” Flynn said. “So, I would strongly encourage the town to look at making sure that the Board of Finance gets these internal audit reports on a timely basis.”

To improve policy compliance and ensure thorough audit reviews, Flynn said the administration needs to set clear expectations with town auditors and department heads.

“That’s a cultural thing,” Flynn said. “That’s something that actually the administration has to sit back and say, ‘This is the expectation of my finance department [and] that you’re going to fulfill that function.’ And that wasn’t happening here.”

‘Our hands were a bit full’

The report also prompted partisan debate among board members, as Democratic Selectwoman Nancy Lefkowitz released a statement ahead of the Monday meeting questioning the investigation’s objectivity and the timing of the release.

Lefkowitz clarified she’s not suggesting the investigation lacked integrity, but that the administration should have commissioned an independent firm to investigate the credit card issue.

“If policies were violated, senior members of the administration responsible for their oversight and enforcement may be implicated. For this reason, best practice would have been for the Administration to employ an independent audit firm, one free from bias,” Lefkowitz wrote. “Instead, the investigation was led by the Town’s Director of Human Resources, who reports directly to the First Selectwoman and is a contributor to her re-election campaign.”

She also questioned why the investigation took almost eight months to complete, and pointed to broken promises of improved oversight made by Kupchick’s administration.

“We were assured that lax oversight and abuse of policies without consequence were things of the past,” Lefkowitz said of Kupchick. “Alas, from where I sit — that is to say, as the Minority Selectman — it appears the Administration has fallen short on those promises again and again.”

At the board meeting, Kupchick said she was “extraordinarily disappointed” in Leftkowitz’s statement. She said that when she took office, her attention was on the worst corruption scandal in town history – the fill pile scandal.

In addition to firing the former CFO and human resources director for their involvement in spreading contaminated materials around town, Kupchick said, Fairfield was also dealing with a global pandemic when she took office.

“Our hands were a bit full around here trying to clean up that mess, the Penfield mess, and then the complete and utter lack of oversight or management of any kind of this town,” she said.

But Lefkowitz argued that Kupchick has had four years to address ongoing issues with town employee credit cards.

“This administration has been in office for almost four years now,” Lefkowitz said. “So while we can all appreciate history and what has been inherited, I find the excuse of having inherited these problems, at this point, really unfair to the citizens of Fairfield.”

Given that the report – which includes the investigation findings and supporting material like emails between employees, credit card statements and audits – is more than 1,000 pages long, Lefkowitz requested a short summary of its findings for residents, and a deeper analysis on the financial implications of the policy violations.

Lori Charlton, Democratic chair of the finance board, also asked the administration for additional information and questioned the findings of the investigation at the Monday meeting.

Charlton noted most of the supporting documentation presented by the investigators were emails in which Simpson asked department heads to explain certain purchases, and the department heads provided their justification. Based on those responses alone, Charlton said, it is difficult to determine there were no fraudulent purchases.

“I would say it’d be pretty hard to conclude that there was no fraud here,” she said. “… The conclusion would be that we just don’t know because there wasn’t contemporaneous documentation.”

Charlton told Simpson that, in order for officials and residents to have confidence in the investigation, they need to see her scope of work and the basis for her findings.