PORT ORANGE — Deputy Public Works Director Brett Matter and Public Works Administrative Supervisor Denyce Frey have resigned their positions with the city following an investigation into employee purchase card use, spending patterns, vendor relationships with their city department and policy violations.
“It is concluded that you violated the city purchasing policy and failed to uphold leadership duties and obligations in your capacity as deputy director,” stated the Feb. 26 Notice of Intent to Terminate letter from the city’s Human Resources Department that was sent to Matter. “You are hereby notified of the city’s intention to terminate your employment.”
Frey’s letter from Human Resources was nearly identical, and was also dated Feb. 26.
“It is concluded that you violated the city purchasing policy and failed to uphold your responsibilities as an administrative supervisor,” the letter to Frey stated. “You are hereby notified of the city’s intention to terminate your employment.”
Under the city’s discharge procedures, Matter and Frey each had three days from their Feb. 26 letters to respond to the charges before their dismissals could have become effective at the end of the day on March 3.
City spokesman Mike Springer said both employees opted to resign.
“Once the potential violations were identified, the city took action in accordance with its established policies and procedures,” Springer wrote in a statement. “The city takes fiscal stewardship and adherence to internal financial controls very seriously. The purchasing card program includes clear guidelines, and monitoring and oversight measures have been strengthened to ensure accountability.”
The investigation didn’t find that Frey or Matter derived any personal benefit from the purchases.
Exceeded spending limits, failure to report violations lead to Port Orange p-card investigation
On Nov. 20, a written complaint about Frey was sent to the city’s Human Resources Department. The complaint focused on employee purchase card use, spending patterns, vendor relationships and policy violations, and an investigation was led by the Human Resource director and city engineer.
The final investigation report indicates Frey knew the city had spending limits of $5,000 per individual purchase and $10,000 per month. She also knew that anything above $5,000 triggers an obligation for the city to obtain quotes if there is no contract.
The investigation found she made four online payments of $2,545 in rapid succession on Sept. 15 to a business without a city contract. She said the department head told her “to just do it” and she had to do what she was told.
She said she asked the department head “what the hell?” a couple of times and was “met with a stern response.” Frey said she also questioned food purchases for city employees, but was told it was approved.
She acknowledged awareness that cumulative charges exceeded the $25,000 spending cap that triggers City Council approval for a purchase, and that multiple transactions were intentionally divided into amounts under $5,000 specifically to allow processing through p-cards, according to the final investigation report.
She never reported the spending anomalies. She also never reported bypassing an approved city vendor to city leadership, saying she didn’t think her complaints would be supported.
“Her actions reflected a willingness to proceed with improper transactions despite acknowledged awareness of policy requirements” and “exposed the city to financial and compliance risks,” the report concluded.
Port Orange employee accused of ‘a substantial lapse in judgement’
A complaint about Matter was also leveled on Nov. 20. The investigation report said he acknowledged that his signed p-card form clearly established the spending limit on the p-card for him and the department head at $5,000 per individual purchase and $10,000 per month.
He also knew that the city manager’s spending threshold was $25,000 and purchases in excess of $25,000 can only be approved by the City Council.
Despite that, Matter acknowledged that his six p-card transactions of $2,545 each on Sept. 18 for a business that was not a registered vendor with the city greatly exceeded the p-card spending threshold. The total payments to that same businesses in a three-day period also exceeded the city manager’s spending authority.
“Employee was unable to provide any justification for exceeding purchasing thresholds,” the report said.
The report noted that Matter failed to use the supplier who is contracted with the city to provide the materials procured, and no other quotes were obtained prior to making the purchases.
Matter told city officials that his department head made the decision and ordered it, but city officials say Matter had a duty to follow the rules and report misconduct.
“The findings indicate a pattern of complacency, an unwarranted reliance on a department director whose actions demonstrably deviated from established procedures, and a substantial lapse in judgment by permitting irregular transactions to proceed despite their clear misalignment with organizational standards, including violations of the Purchasing Policy which outline required approval thresholds and compliance protocols,” the report concluded.
You can reach Eileen at Eileen.Zaffiro@news-jrnl.com
This article originally appeared on The Daytona Beach News-Journal: Port Orange city workers resign over p-card spending violations
Reporting by Eileen Zaffiro-Kean, Daytona Beach News-Journal / The Daytona Beach News-Journal
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