Beach officials looking at $52,000 charged to city credit card

VIRGINIA BEACH

A $250 dinner for two in Washington, D.C., on New Year's Eve. Grocery store bills. Liquor tabs that sometimes outpaced the cost of the food. A former city tourism official charged those expenses on a city credit card.

Reggie Stevenson ranked among the top 10 credit card spenders in Virginia Beach over the past year and a half, charging nearly $52,000 on his city Visa.

Officials at the Virginia Beach Convention & Visitors Bureau signed off on most of his expenses.

The Virginian-Pilot reviewed his receipts this month through a Freedom of Information Act request. That led CVB officials to examine the charges. They found several expenses that indicated "impropriety," said Jim Ricketts, the city's CVB director, adding that now, they are considering new spending rules.

Ricketts further asked the city auditor and police to investigate the charges last week.

Investigators are trying to verify whether Stevenson met with clients he listed in justifying the expenses, Ricketts said.

City officials also are scrutinizing Stevenson's bills at restaurants when he was supposed to be off and on New Year's Eve 2008, and are reviewing all CVB sales staff credit cards for potential misuse, said Lyndon Remias, the city's auditor.

It is unclear how many of Stevenson's expenses are questionable. Remias is reviewing about $100,000 in charges going back to 2007.

Stevenson resigned from the city on April 15 because of a personnel issue unrelated to the use of the city credit card, Ricketts said.

Stevenson declined to comment when reached by phone Tuesday. He said he was unaware of the investigations.

"I would defer back to the city on this," Stevenson said.

Stevenson started working for the Virginia Beach CVB in 2003 and earned a salary of $59,639 last year. He was a national sales representative who focused on booking minority conferences.

Stevenson's receipts indicate that he met with clients including the Teachers of English to Speakers of Other Languages Inc., the National Real Estate Investors Association, and the National Association of Workforce Development.

In August 2008, Stevenson charged a $95 floral arrangement to the city. According to the bill, he requested that the card be anonymous but include the message: "Thinking of you, a special friend." Stevenson said in the explanation to the receipt that the flowers were for Lisa Dy-son, with the Teachers of English to Speakers of Other Languages, a client who was in a car accident.

Reached this week, Dy-son said she was in a major car accident that August, but couldn't remember whether she received flowers from Virginia Beach. TE-SOL has not considered Virginia Beach as a convention venue, Dyson said.

She said she was not in the city later that August when Stevenson expensed a $49 meal at Croc's 19th Street Bistro and charged $141 at Harris Teeter, including packs of Coors Light and Michelob Ultra, to entertain TESOL representatives, including Dyson.

On Dec. 8, 2009, according to his receipts, Stevenson charged a meal at a Ruby Tuesday in Suffolk and bought a $26 cake from the Sugar Plum Bakery in Virginia Beach for client Shirley Ferebee's 75th birthday. Ferebee said she did not dine at Ruby Tuesday with Stevenson. She said she met with him in October and they ate at restaurants in Virginia Beach, which Stevenson expensed.

Ferebee, who was the local chapter president of Las Amigas and had been working with Stevenson to book a conference in Virginia Beach, said she also didn't receive a cake and is several years shy of her 75th birthday.

"It must have been somebody else," Ferebee said.

Some of Stevenson's credit card charges were for recruiting events attended by other city tourism officials and were verified by clients interviewed by The Virginian-Pilot.

Beach officials acknowledge that Stevenson's credit card use raises questions about the safeguards the city has in place.

"I know there are some holes, obviously, in the system," Ricketts said. "It's not like we didn't ask any questions. We did. But it wasn't what it should have been."

The city has 415 active credit cards, and employees charge about $3.3 million annually.

"We've been doing this for a while, and I think this is probably the most unusual one we've run into," said Patricia Phillips, the city's finance director.

The city prohibits employees from using their credit card at health and beauty spas and to purchase alcohol. But employees at the CVB and Economic Development Department, whose job it is to recruit business to Virginia Beach and wine and dine clients, are given more flexibility.

Stevenson ran up a $136 bill at Guadalajara's at Town Center on the city's card. The food was $35.50, but the six jumbo margaritas cost $72. He said he was entertaining two clients.

In March 2009, Stevenson submitted a bill for a $180 massage for Troy Miller of the real estate investors association and his wife at the Hilton Hotel. Miller said he received the massage while scouting Virginia Beach for a convention.

City officials didn't question either bill.

The city's policy requires that employees with credit cards submit monthly logs of their transactions and receipts along with an explanation of the expense. A program manager in each department reviews the expenses, signs off on them and submits them to the city's finance department, where the bills are spot-checked.

"The program manager is our defense against potential fraud," Phillips said.

In Stevenson's case, about three people in the CVB saw the monthly statements and receipts, including the department's program manager, Karen Ovalle, who is an administrative employee. Stevenson's monthly statements also indicate that his boss, Al Hutchinson, vice president of convention sales and marketing, initialed the credit card statements, although the city's policy does not require a supervisor's approval.

The CVB reviews of credit card expenses have not been focused on whether the charges were appropriate, Ricketts acknowledged, but instead concentrating on whether the receipts matched the credit card bills.

"If that's all they're doing, they're not doing enough," Phillips said.

The city's finance department did flag Stevenson's purchases twice last year, when he charged a lunch with another city employee and bought more than $77 worth of groceries at Food Lion.

Stevenson reimbursed the city for both those items. Still, two months after the Food Lion incident, the city temporarily increased Stevenson's monthly credit limit from $5,000 to $10,000.

Decisions about whether to revoke a credit card because of misuse is up to the department directors, Phillips said. The city revokes or temporarily suspends about five credit cards a year, she said.

The CVB is considering new internal policies, including requiring supervisors to do more spot-checks of credit card receipts and requiring the full signature of reviewers acknowledging that they scrutinized the bill, Ricketts said.

Officials are discussing whether to put limits on how much alcohol can be purchased at events, he said.

Finance officials also will be conducting refresher courses on credit card use and will talk with department directors about ways to improve oversight.

City officials are debating whether to conduct credit checks on employees before they are issued cards.

According to court records, Stevenson filed for bankruptcy a few weeks after he started working for the city of Virginia Beach. It was his second bankruptcy in two years. He completed his payment plan in 2005.

Phillips said she is not convinced that using a credit score is effective. "Does that mean that if you make a mistake you can't ever have a job that requires the expenditures of public funds?"

Remias, the auditor, said the credit cards put Virginia Beach at risk. He will likely recommend some sort of financial background check in his report on the case.

"If we're entrusting employees with credit cards," Remias said, "we need to ensure they're creditworthy of having a credit card."

Deirdre Fernandes, (757) 222-5121, deirdre.fernandes@

pilotonline.com