Calling in the General
City Controller Alan Butkovitz calls on Pennsylvania Attorney General to investigate questionable fund transactions for city-run nonprofit.
On Tuesday, September 26th, City Controller Alan Butkovitz held a press conference to call on Pennsylvania Attorney General Josh Shapiro to take action on the Mayor’s Fund for Philadelphia, otherwise referred to as the Mayor’s Fund.
The Mayor’s Fund is a 501(c)(3) nonprofit, which manages around $12 to $15 million dollars a year, according to their website, that works with the City of Philadelphia and the private sector to improve the quality of life for residents of the city. Amongst those millions of dollars handled by the organization, more than $800,000 in expenditures were requested by Butkovitz that needed to be reviewed because they are considered questionable charges.
The initial investigation into the Mayor’s Fund finances began back in January of 2016, with first reports on the Mayor’s Fund being issued in August of 2016. From their investigation, the Controller’s office stated that the former chairperson for the Mayor’s Fund, Desiree Peterkin Bell, operated without full consent from the rest of the board in awarding funds and charging expenses to the fund’s accounts, according to a press release issued by the Controller’s office on August 16th, 2016.
The findings from this investigation prompted Butkovitz to conduct a follow-up investigation into the Mayor’s Fund expenditures. In a press release issued on March 29th, 2017, the Controller’s office stated that city employees charged $550,000 to two separate credit cards linked to the Mayor’s Fund accounts, with much of that amount spent considered “questionable” due to lack of documentation to support the charges over a five-month period. The questionable expenses charged included: $11,010 for restaurants and meals, $677 for Amazon purchases, and $8,738 spent on 458 Uber rides throughout 2015.
On that same day, Butkovitz called on the Mayor’s Fund in a separate statement to reimburse over $240,000 of questionable charges that were not properly justified, stating that “Without any receipts or signed approval forms, it is unknown how these charges, if any, benefited the mission of the Mayor’s Fund.” Butkovitz also recommended that the Mayor’s Fund take action to make sure this sort of matter no longer continue.
Three months after the Controller’s follow-up report, The Mayor’s Fund announced they had made several changes to the way their organization operates. In a press release issued on June 28th, 2017, changes made to the organization were released and included the elimination of Mayor’s Fund credit cards and new grant application and approval procedures, both of which were recommended by Butkovitz.
“As a nonprofit, the Mayor’s Fund fills a vital need as the only practical way to administer private funds to City projects,” said Ashley Del Bianco, who was acting director at the time. “We have to have the public’s confidence in the way the fund is being managed. These changes will bring a new level of transparency and professionalism.”
Although the Mayor’s Fund made several changes to the way they operate and run the nonprofit, Butkovitz continued to investigate the Mayor’s Fund.
In early August of this year, auditors from the Controller's office began requesting very specific items from the Mayor’s Fund, such as financial records and support documents that would shed some light on where some of the questionable money went or how it was spent.
What Butkovitz received in response was nothing.
The press release issued on the same day as the press conference stated that several attempts were made by the Controller’s office to request any and all information regarding the questionable funds, but all were met with failure. This lack of communication was what drove Bukovitz to look towards the Attorney General for assistance.
“The Mayor’s Fund has become unresponsive and uncooperative after repeated requests for financial records, prompting the immediate attention of the Attorney General,” said Butkovitz in the press release. “The ongoing refusal to provide documents and assist with auditors signals that millions of dollars could potentially be susceptible to fraud and misuse.”
The most recent information requested by the Controller’s office included the sources for various expenditures. The funds in question are the request for two $25,000 grants that were denied, the source of $198,000 fund transfer for the Philly Champions, a youth sports league in the city, and records that relate to the Hepatitis C Account, which provides medical funding for first responders.
Butkovitz stated that the lack of transparency with the Mayor’s Fund was unfortunate, especially after they had announced all the changes they had made to reform and improve their organization.
“The unsupported transactions and the obstinate behavior by the Mayor’s Fund to provide essential records have raised several red flags and warrant the review of the State Attorney General,” said Butkovitz.
In his letter to the Attorney General, Butkovitz laid out in great detail all of the funds in question.
Amongst the various other already mentioned transactions, many charges during the Papal visit in September of 2015 were on the list. At first, reports from the Controller’s office noted that around $75,000 was spent on travel and hotel accommodations. However, the most recent reports from the Controller’s office stated that $311,000 was spent on these arrangements. That means about $230,000 is undocumented, and Butkovitz wants answers.
“An extensive review of the various accounts would also allow us to gain a better understanding of how individual accounts were accessed,” said Controller Butkovitz.
In response to Butkovitz’s accusations towards the Mayor’s Fund, stating a lack of communication between the two, and his request from the Attorney General asking to investigate this matter, Bianco, now acting secretary on the Board of Directors for the Mayor’s Fund, issued the following statement:
“We have responded fully and promptly within the scope of the investigation as laid out in the letter of engagement between the Fund and the Controller in 2016. We have been in regular, ongoing communication with the staff of the Controller’s Office ever since, and so it is surprising and disheartening that concerns about the promptness of our replies are communicated to us only through a press conference. The Controller has my phone number.”
This matter is now out of the hands of City Controller Butkovitz and into those of Pennsylvania Attorney General Shapiro. Butkovitz, in his letter to Shapiro, offered to provide assistance as the investigation into the Mayor’s Fund continues.