Audit: Controls insufficient to stop reckless Atlanta City Hall spending

Jim Beard, former Atlanta chief financial officer, spent tens of thousands of dollars on pricey airfare, hotels and restaurants during the last three years of Mayor Kasim Reed’s administration. (Photo: LEON STAFFORD/LSTAFFORD@AJC.COM)

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Jim Beard, former Atlanta chief financial officer, spent tens of thousands of dollars on pricey airfare, hotels and restaurants during the last three years of Mayor Kasim Reed’s administration. (Photo: LEON STAFFORD/LSTAFFORD@AJC.COM)

A forensic audit of spending and actions taken by former Atlanta Chief Financial Officer Jim Beard found the city had insufficient policies to control spending of top-level executives. It also says Beard could easily side step the internal controls that were in place because of a “wild west” culture among managers in Mayor Kasim Reed’s administration.

City Auditor Amanda Noble hired the Atlanta-based Windham Brannon accounting firm to review transactions authorized by Beard after a series of articles by The Atlanta Journal-Constitution and Channel 2 Action News found lavish spending on his city-issued credit card, a purchase of machine guns with taxpayer funds, and $800,000 in bonuses handed out at the end of Reed’s second term in 2017.

“Employees perceived that executives were not required to comply with rules and procedures imposed upon lower-level employees, especially regarding travel expenses and reimbursements,” the audit found.

City Council President Felicia Moore requested the audit in August 2019; it was released June 3.

“The findings are unsettling, to say the least,” Moore said. “There was a permissive environment from the mayor Kasim Reed to the CFO and other people in his administration to do as they please.”

Beard is under federal indictment for fraud and weapons charges, and has pleaded not guilty.

Moore and Reed are among a handful of candidates who have entered the wide-open mayor’s race, and it is unclear how the audit’s findings might impact their campaigns.

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The 62-page audit says that Beard in 2015 and 2016 used Atlanta Police Department officers on Reed’s executive protection detail to help him obtain a Glock 43 handgun, a Glock 19 handgun, a rifle sight, and two military-grade fully automatic Daniel Defense rifles — also known as machine guns. The weapons cost taxpayers $4,100 and remained in Beard’s possession during his time in office.

The audit also says Beard never explained more than $94,600 in charges to his city-issued credit card from 2010 to 2018. Most of those were for food and travel, including a $10,277 stay at the exclusive Shangri-La Hotel in Paris in 2017.

Beard repaid the city for the hotel charge after the AJC requested his credit card statements two years later.

The audit found the hotel bill and the firearm purchases a “flagrant” abuse, and recommended several changes to city policy — including having the auditor routinely review the chief financial officer’s credit card use.

But many of the problems could be traced to an improper “tone at the top” by executive-level managers in Reed’s administration, according to the audit.

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“As was stated during one of our interviews, the control atmosphere existing during this timeframe could be described as akin to “the wild west,” i.e., controls were routinely overridden by management,” the audit says.

Councilman Howard Shook called the audit “a rehash” of what’s already been covered by the media. He said the council already passed an ordinance to crack down on credit card misuse in 2019, but he said Atlanta’s “age old problem” is “the mayor is the kingpin” over the city’s decisions.

Beard’s attorney, Scott Grubman, questioned the audit’s accuracy because the city “destroyed Mr. Beard’s [computer] hard drive during a pending criminal investigation.”

“That hard drive almost certainly contained evidence relevant to these issues and, therefore, its unlawful destruction by the City of Atlanta leaves us with only those documents that supports the City’s narrative,” Grubman’s statement says. “To make matters worse, nobody from or on behalf of Windham Brannon even attempted to reach out to Mr. Beard or his representatives to understand his side of the story, which strongly suggests that objective truth was not the goal of this review.”

The audit found the guns were earmarked exclusively for the Atlanta Police Department in tax exemptions and signed statements, but they were never listed in police inventory. Beard returned the weapons to the police by the time he left city employment.

The bonuses handed out at the end of Reed’s second term have already been investigated by the city auditor and ethics officer. Both of those investigations found them to be an abuse of authority.

The audit didn’t recreate those probes, but accepted their findings and said: “This type of abuse is inherently difficult to prevent because it was perpetrated by stakeholders at the very top of city government. The city must be constantly vigilant about setting the tone from the top and developing a strong ethical culture.”

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ORIGINAL DOCUMENT: READ THE COMPLETE AUDIT HERE


Our reporting:

The Atlanta Journal-Constitution and Channel 2 Action News published stories about each of the issues investigated in the forensic audit — credit card abuses by CFO Jim Beard and other members of Mayor Kasim Reed’s administration; two machine guns purchased with city money by Beard and retained in his possession; and massive bonuses handed out to top officials at the end of Reed’s second term.