A revised auditor’s letter to the city of Ann Arbor was attached to the city council’s Feb. 4, 2013 agenda, and has been formally received by the council as a written communication from the city administrator.
The original version of the letter had indicated three instances of an employee with a vehicle allowance also being reimbursed for mileage, and characterized those reimbursements as a “violation of city policy.” It was subsequently revealed that it was the mileage reimbursements of city attorney Stephen Postema that had caused the auditor to flag the issue.
But after further review – pushed by Postema and chief financial officer Tom Crawford – auditor Mark Kettner agreed that there was no written policy per se that disallowed the dual claims. Kettner is a principal at Rehmann, the city’s auditor, which is in the first year of a five-year contract.
But Kettner also noted that his original conclusion of inappropriateness was based on his view that the dual claims would be “illogical” whether a policy existed or not. Kettner also indicated in reaching his conclusion of inappropriateness that he had not reviewed Postema’s employment contract, which Postema and Crawford contend would have permitted Postema to claim mileage reimbursements in addition to the vehicle allowance.
Postema’s contract was altered last year, chronologically after the contested mileage reimbursements, so that his vehicle allowance was eliminated.
The new wording of Kettner’s letter omits the characterization of the mileage claims as a “violation” but still calls attention to the issue, and adds language to highlight the problematic character of the reimbursements – that “… in each instance the expense report was not subject to independent review and approval.”
Postema’s contract stipulates that his reimbursements for travel are to be made according to standard city procedures. And one new procedure recommended by Crawford in his written response to the auditor’s report would address the lack of independent review. The recommendation is to require that reimbursements claimed by the city attorney or the city administrator – who are the city council’s two direct reports – be approved by the chair of the council’s administration committee.
This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron. A more detailed report will follow: [link]