What Hampton Roads cities allow council members to expense to taxpayers – The Virginian-Pilot

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An internal city review of Newport News City Council members’ expenses led to an overhaul in policy after four elected officials were found to have used city-issued credit cards for inappropriate charges.

Members were required to pay back charges that violated state code and the city’s travel policy, including airline travel to a basketball game and meals. The city revoked the credit cards for all council members except for the mayor, and switched to purchase cards, or P-cards, in July. Afterward, some Newport News council members claimed they were not given specific enough instructions on what expenses are allowed.

Newport News isn’t the only Hampton Roads city that issued credit cards to council members. The Virginian-Pilot and Daily Press reviewed the travel, meal and credit card policies of five other Hampton Roads cities to find out what checks they have in place to prevent misuse of taxpayer money.

Hampton and Portsmouth provide credit cards for council members. Chesapeake does for two members. Norfolk and Virginia Beach do not provide credit cards. Most city policies include guidelines stating expenses are allowed only for city business and that personal expenses, traffic or parking violations, gifts, alcohol or other non-city matters are not allowed.

Regulating how council members or staff spend taxpayer dollars is a struggle for most local governments, according to Frank Shafroth, who has worked for the National League of Cities, National Governors’ Association and most recently as director of the Center for State and Local Leadership at George Mason University. He said it’s often difficult for localities to “draw really fine lines” when determining whether using city funds is appropriate.

Expenses for business trips and meals are two of the areas most ripe for abuse, Shafroth said. But he said he was “pretty impressed ” with the cities’ travel policies.

Travel expenses

Portsmouth City Council members are issued credit cards for travel expenses (along with “limited miscellaneous” expenses for the mayor). Cards are kept in the finance department and checked out beforehand.

Council members are not allowed to expense travel in Hampton Roads. But allowable expenses include annual attendance at Virginia Municipal League and National League of Cities meetings, as well as conferences, educational and training courses, and other city-related business. The Portsmouth city manager submits quarterly reports about the council’s travel expenditures to the entire City Council for review.

City Clerk Debra White said when council members travel, they must submit a voucher detailing all aspects of the trip. All receipts must be turned in and validated by her and the finance department.

“If a receipt is lost or misplaced, the council member must sign a statement,” she said in an email. “This very rarely has to happen.”

In Hampton, council members have city-issued credit cards, and each new member has an orientation with the finance department to review policies. Credit card use is restricted to acquiring goods and services and providing payment for travel-related expenses to conduct city business. City policy states “excessive costs, circuitous routing, delays, or luxury accommodations unnecessary or unjustified in the performance of assigned travel are not considered examples of prudent behavior.”

“Council members’ expenses are collected, along with documentation, by the City Council staff,” said city spokesperson Robin McCormick. “They are the first review and are well-trained on the policies. They catch any mistakes and reject any expenses that are not allowed.

“The finance staff also reviews all credit card statements from staff and from City Council. They will question any submission that has missing documentation or does not appear meet the policy.”

In Chesapeake, only Mayor Rick West and council member Robert Ike have cards issued in their names. Those are kept locked in a file until travel, where they can use them for meals, parking fees or a room security deposit that must be paid upfront, though members normally pay upfront and get reimbursed, according to City Clerk Sandy Madison. A travel request must be submitted two weeks before departure. Reimbursement requests must be submitted within 10 days of returning.

According to Chesapeake spokesperson Heath Covey, the use of city-issued credit cards by members of the City Council is reviewed each month within the Office of the City Clerk.

Neither Norfolk nor Virginia Beach issue credit cards to council members. Instead, the cities have travel policies that cover members and city staff.

In Norfolk, travelers are not allowed to make their own travel plans or approve their own vouchers, according to the 14-page travel policy. Chris Jones, a spokesperson for Norfolk, said in an email that the department of finance and the city auditor’s office periodically review travel-related reimbursements and charges for compliance. Any non-compliance identified is subsequently addressed.

Additionally, Jones noted the city clerk’s office is responsible for working with City Council members to book city-related travel on their behalf. All payment documents require multiple approvals in the city’s financial system. Furthermore, Jones said council members are made aware of the policy before they travel. The city clerk also verifies that all necessary receipts and documentation are sent to the finance department for approval and/or reimbursement.

“The city manager considers this to be a sufficient internal control, and the city clerk concurs,” he said.

The Virginia Beach City Council travel policy outlines eligible travel expenses as: reimbursement for all regular and special council meetings, hearings and workshops, and for attendance at meetings or events “necessary to the conduct of the office of the council member within a defined local travel area.” If council members want to be reimbursed for an expense, they notify the city clerk, who reaches out to the finance department to follow the steps required for reimbursement.

Shafroth said he’s heard of cases in which officials would arrange vacations around what were supposed to be business trips to skirt around the issue of using taxpayer dollars for personal use, which he described as “the biggest area of potential abuse.”

Some situations, however, are more complicated.  For example, he said there could be a situation when an official travels to a city for business purposes before learning the only hotel rooms available exceed the guidelines within the travel policy.

“So you’re in this moral dilemma. Do you need to go someplace else that’s within the guidelines?” Shafroth said. “It’s 3 o’clock in the morning, are you going to be able to find a place?  Are you going to be accused of violating the guidelines? So what happens is it really depends heavily on each individual, demonstrating that she or he is judicious and careful not to abuse guidelines.”

Meals

Shafroth said meals are an area in which there can be “significant abuse.” He said “the average person should know” what is an acceptable amount to charge to the city. If someone orders three alcoholic drinks, a steak and desserts, it’s “clearly outside the bounds.” However, he noted staff members who advise government leadership may be reluctant to call out misuse of taxpayer dollars for fear of retaliation.

“I had a couple of bosses who really came down hard on you,” Shafroth said. “And even though you were doing the right thing, and they were proposing to do the wrong thing, you could get fired.”

Hampton Roads cities vary when it comes to what a council member can expense for a meal. The maximum amount Portsmouth reimburses for food is $20 per meal unless receipts are provided and covering meals for local travel is discouraged. All meals must be for official business. Chesapeake uses the standard IRS per diem rate for meal coverage according to the Virginia Per Diem Calculator. That rate ranges from $59 to $64 a day in Hampton Roads.

Norfolk does not allow meal reimbursement on trips of less than 12 hours or do not require an overnight stay. During out-of-town travel, Norfolk staff may be reimbursed for two meals a day during travel days, while three meals on days at the destination may be reimbursed.

Shafroth said receipts should be provided for the use of taxpayer dollars.

“I think as long as you’re showing the receipt, because then if it gets back, and it was dinner for two, it was $200,” Shafroth said. “That’s going to raise questions in anybody’s mind. That’s not reasonable, right? So you bring the receipt and then someone in the city or the county, or the state can say, ‘$200, for dinner for two, and the taxpayers are going to cover that? And do we have a really good explanation for why that’s justifiable?’”

Hampton may revoke credit cards if they are used for personal or unauthorized reasons, alcoholic beverages, used by another individual, or if the user fails to provide required receipts. Card revocation may also subject the cardholder to disciplinary action.

Those who violate Norfolk’s policy may be barred from traveling for the city or disciplined. Failure to meet Chesapeake’s policy is considered “unsatisfactory work performance” and can lead to disciplinary action.

Newport News changes

Following the credit card review in Newport News, the city is taking action to ensure more accountability.

The mayor is the only council member to retain a credit card, as the other six council members were required to switch to P-cards.

The primary difference between a P-card and a credit card is that charges to a P-card must be paid in full each month while credit cards allow cardholders to make partial payments and carry a revolving balance, according to city spokesperson Sarah Bowman.

“As it is not the City’s practice to carry a revolving balance, but rather pay credit card charges in full each month, transitioning all City cardholders to P-cards promotes uniformity, enhances reporting capabilities, and reduces the administrative burden of maintaining separate charge card programs with no negative financial impacts,” she wrote in an email.

Since the switch, two council members said they did not need a P-card. Four council members, Tina Vick, Pat Woodbury, Cleon Long and Curtis Bethany, have P-cards. According to Bowman, both P-cards and credit cards can be used for small purchases.

The council is also considering creating an official policy handbook to guide council behavior — including allowable credit card usage — and to codify roles and responsibilities.

Staff writers Stacy Parker, Natalie Anderson, and Ian Munro contributed to this report. 

Josh Janney, [email protected]

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