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Outside auditor to scrutinize Ken Johnson’s expense reports and those of his colleagues

November 29, 2018

Outside auditor to scrutinize Ken Johnson’s expense reports and those of his colleagues

CLEVELAND, Ohio – City Council President Kevin Kelley vowed Wednesday to hire an accounting firm to audit the expense reports of Councilman Ken Johnson -- and those of his colleagues -- and to evaluate council’s protocols for reviewing and approving reimbursement requests.

Kelley, in an interview with cleveland.com, said that the audit will not be a cursory review, but one that looks deep into the entire expense system to “flag things that need to be flagged.”

He said he plans to complete the details and scope of the proposed contract in the coming week. He said the contract would cost about $50,000 and likely will need approval of council, which holds its last meeting of the year on Monday.

Kelley’s decision to seek an audit was triggered by the recent discovery that Johnson had claimed and received $1,200 a month – the maximum reimbursement allowed by council – every month for at least 11 years. During that period, no one questioned the reimbursement requests though Johnson provided no itemized accounting of the expenses. Johnson only reported paying a man identified as Robert Fitzpatrick for “ward services.”

Many private-sector employers track expenses with software and analyze expense reports for patterns that might suggest potential abuse. Many companies also require their employees to detail expenses that exceed $5. By comparison, council’s expense forms are filed in paper form and require little itemization of expenses.

Kelley ordered council staff to stop reimbursing Johnson in September, after cleveland.com requested expense reports showing the councilman had collected $168,000 in reimbursements between January 2007 September 2018.

A review of expense-related documents by cleveland.com found that timesheets signed by Fitzpatrick stated that he performed unspecified ward services for 20 hours a week, 52 weeks a year, for more than 11 years. Cleveland.com also disclosed that Fitzpatrick works fulltime for the city’s Recreation Department and once lived in Johnson’s home.

Fitzpatrick has not responded to multiple requests for comment on his moonlighting work or about the period in which he shared the same address as the councilman. Johnson has refused to discuss Fitzpatrick and did not return a call for comment Wednesday about the upcoming audit.

Kelley has been unable to explain why no one on his staff had questioned the reoccurring expense or the lack of detail on Johnson’s reports. But he asked the city’s Law Department to review Johnson’s expenses.

Kelley said the city did not interview Fitzpatrick as part of the review or check whether the timesheets Fitzpatrick submitted for his Recreation Department job could be reconciled with the timesheets for his moonlighting work.

The Law Department did determine, however, that Johnson’s payments to Fitzpatrick run counter to a 1991 informal opinion by the Ohio Ethics Commission, according to Law Director Barbara Langhenry. That opinion says a public employee can’t typically receive a second paycheck from the same public employer. Langhenry told cleveland.com that the opinion allows for exemptions in very limited cases involving a contract with the public employer, but that Johnson’s arrangement with Fitzpatrick does not qualify for one.

Despite ongoing scrutiny of his expense account, Johnson recently sought $1,200 reimbursement for money he said he paid to Fitzpatrick in October. Kelley said council has rejected the request, citing the Ohio Ethics Commission opinion.

“This practice is no longer accepted,” Kelley said. “A city employee can no longer work in this manner. Do I wish I knew sooner? Sure. But we reacted as soon as we knew about it.”

Cleveland.com has questioned whether Johnson paid Fitzpatrick by check or in cash, and whether the required federal tax forms were submitted related to the work.

Kelley said others are welcome to investigate these issues.

“The state auditor and those with badges don’t need our invitation to come in,” Kelley said. “It’s been pretty well screamed to the world that there are questions.”

Cleveland.com reported last week that the FBI is investigating Johnson’s expense reports.

Two people familiar with the probe said agents also have been asking about a son of the councilman having lived rent-free in a house owned a neighborhood redevelopment organization that Johnson has helped fund with hundreds of thousands of tax dollars.

This is not the first time a council leader has called for an outside review of member expenses. In 1992, then-council President Jay Westbrook hired Coopers & Lybrand, a local accounting firm at the time, to review of expense account guidelines after a Plain Dealer investigation showed that many council members supplied no receipts for expenses and that some council members – including Johnson -- claimed utility expenses they never incurred. (Johnson insisted at the time that the expenses were justified and related to his multiple ward offices.)

On Wednesday, Kelley said he welcomes this latest audit and any recommendations on how to best track future council member expenses and how to establish better checks and balances.

“We will take this seriously and hope we will end up in a better place,” he said.

Typical Ken Johnson expense report (PDF) Typical Ken Johnson expense report (Text)

1991 INF 0909 (PDF) 1991 INF 0909 (Text)

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