The two employees agreed to restitution totaling more than $58,000, city manager Bruno Rumbelow said at a special City Council meeting on March 15.
But the mayor and council members called for further investigation into more than $198,000 flagged by auditors that was not part of what the two employees agreed to repay the city. The audit stated documentation was missing on some expenses or auditors could not determine whether certain expenses were for a legitimate business purpose.
On March 16, the Tarrant County Criminal District Attorney announced in a news release that its White Collar Crime and Public Integrity Team “has asked the grand jury to open an investigation into the alleged theft of funds from the city.”
Mayor William Tate, along with several council members, raised concerns about the amount of expenses deemed inconclusive. The city and its residents cannot tell how bad this is, he said.
“[An] audit report is supposed to answer questions,” Tate said. “This audit report creates more questions than it answers.”
Rumbelow, however, said during the meeting he is confident in the audit and the work that the city’s finance department has done to verify the amounts presented for restitution.
“We had to make a judgment call,” he said. “We have insurance if we’re wrong...The day they signed the restitution agreements, the insurance company was notified.”
In response to council’s concerns, Rumbelow said he would have the city’s finance department do further research.
The independent audit was conducted by Weaver and Tidwell LLP, a tax and advisory firm. Auditors examined transactions from purchase cards for all city of Grapevine employees between October 2018 and November 2021.
The audit report, dated Jan. 17, 2022, identified misuse of funds by two city employees. Kevin Mitchell, who started working for the city in 1999, was the director of the Parks and Recreation Department, the report stated. Ruth Chiego, who was hired in February 2019, was the city’s library director, according to the audit.
Mitchell and Chiego could not be reached for comment.
The audit looked at 341 purchases of $250 or more that Mitchell made totaling $255,813 during the three-year period. It found $69,222 to be for business purposes.
The audit identified $33,359 spent that had no business purpose. There were more than $118,000 in purchases where auditors did not have enough information to determine whether they were for a legitimate purpose, the report stated. The report also identified $35,459 in purchases with no documentation.
Purchases by Mitchell that appeared to be for personal use, according to the audit, included restaurant gift cards, patio furniture, electronics and travel expenses, such as airfare and hotel stays, including a 2018 trip to Canada. The audit includes photos from Mitchell’s Facebook account that shows outdoor furniture that appears to be the same as furniture on a receipt from purchases on his city purchase card.
For Chiego, auditors looked at 354 transactions where the total was $100 or more. The audit determined that $7,643 worth of expenses had no business purpose and found another $17,273 where documentation of purchases appeared to have been tampered with. Purchases identified by the audit included those on groceries, gift cards, clothing and pool equipment, according to the audit report.
In addition, the audit stated Chiego had nearly $2,000 in expenses that had no documentation and nearly $23,000 in expenses where there was not enough information to determine whether they were for a business purpose. The audit also found nearly $26,000 in legitimate business expenses.
Rumbelow said at the March 15 meeting that Mitchell had retired from his position and that Chiego had resigned. Mitchell was required to pay back $33,359 in purchases that the audit found had no business purpose. He has already done so, according to Rumbelow. Chiego must pay back a total of $24,916 – transactions identified in the audit without business purposes or with tampered documentation – by October 2022.
During the special meeting, Rumbelow detailed the city’s new payment approval process, which includes requiring employees to fill out forms describing the purchase. They must also justify that purchase, upload a receipt and have it routed through supervisors and the city’s finance department, he said.
The mayor and council also heard at the meeting from Todd Pruitt of Patillo, Brown and Hill, the city’s audit firm. Pruitt explained that the amount of money in fraudulent transactions was too small to have shown up on the city’s annual independent audit of its general fund.
Rumbelow told the council that the audit did not find any issues with employee purchases beyond those from Mitchell and Chiego.
City Council member Leon Leal said during the meeting he understands that people want more answers about what happened.
“The reality is we’ve got to figure out a way to come together and move forward because this is not Grapevine,” he said. “It happened and [Rumbelow] is taking care of the problem, but we've got to figure out a way to move forward and get past this.”
