A state audit that found the Atlanta Regional Commission engaged in sloppy spending practices, kept poor financial records and misused purchasing cards is proving costly to the planning agency.
The state budget for the upcoming fiscal year, which gained final approval on the last day of the 2018 General Assembly session, cuts by two-thirds the money the ARC says it receives to work with local governments to develop and review comprehensive plans and other work associated with major local projects.
The spending cut — $150,000 out of $225,000 the ARC was expected to receive for that work — was barely discussed during the session and is a single line in a massive $26.2 billion state budget.
House Appropriations Chairman Terry England, R-Auburn, in his budget presentation to his committee, cited the audit as the reason for the cut, saying "there were some unacceptable expenses charged" by the agency.
Expenses by ARC Executive Director Doug Hooker, which included thousands of dollars spent on food, alcohol and other personal items, garnered particular scrutiny — and Georgia's attorney general was sent the audit for his review.
The state audit came out a few days after Christmas. Typically, audits that come out just before the opening of the General Assembly session bring a reaction from lawmakers, often meaning more or less money for the agencies under review, or attempts to change state law.
They are often requested by the Senate or House budget committees, although the ARC audit was part of a regular review process.
For instance, the day after the ARC report came out, another state audit found that the workers' compensation program that covers about 122,000 state workers and University System of Georgia employees had run a deficit in seven of the past 10 years and had depleted its reserves.
A few weeks later, Gov. Nathan Deal presented a budget with a $4.9 million increase for the program.
The Atlanta Regional Commission is a quasi-governmental agency that describes itself as helping "focus the region's leadership, attention and resources on critical issues." Its policies and recommendations on issues such as transportation are often heeded by the local governments within its sphere of influence.
Those include the city of Atlanta and Cherokee, Clayton, Cobb, DeKalb, Douglas, Fayette, Fulton, Gwinnett, Henry and Rockdale counties. Those local governments pay dues to the ARC. The agency also receives state and federal funds.
The ARC will now have to figure out how to make up for the loss of state funds.
“This represents a significant reduction in the state funding that ARC receives to help local governments develop their comprehensive plans,” said Kerry Armstrong, the ARC’s board chairman. “We also use the funds to review the regional impact of large proposed developments. The agency is evaluating how to continue to provide these important services to our communities.”
State auditors did not provide an estimate for the full amount of money it believed may have been mismanaged by the ARC. But specific examples included in the audit's final report alone totaled more than $10,000.
The report, part of a series of scheduled probes into each of the state’s 12 regional commissions, found that the ARC did not keep “adequate documentation” of purchases made with employee fuel cards and raised questions about the lack of a formal dollar limit for meals expensed by employees.
The audit said the ARC approved multiple employee meal reimbursements without the necessary itemized receipts (or receipts at all) and, in some cases, improperly reimbursed employees for alcohol purchases.
“In calendar year 2016, the executive director submitted 55 non-itemized or illegible meal receipts totaling over $5,600,” the audit report said. “Eight other meals totaling $943 were purchased, and receipts were not submitted.”
The state obtained detailed receipts of some of those meals and found that Hooker “charged alcohol on at least four occasions without paying it back.” Those included alcohol purchased during a $560 dinner at Empire State South in Atlanta and as part of a $106 room service bill in Salt Lake City, according to documents.
Hooker made multiple “personal purchases” on his ARC purchasing card, auditors said — paying back the charges in some cases and not doing so in others.
Hooker is also accused of improperly spending more than $900 on multiple “in-region” meals that involved only staff members, a violation of ARC policy.
In its response to the audit, the organization disagreed with many of the state’s finding and maintained that its allegations against Hooker reflected “a fundamental misunderstanding of what merits further investigation under Georgia’s financial transaction card law.”
Still, Armstrong, the ARC’s board chairman, said the agency “has taken steps to address the state performance audit findings and make the needed corrections and revisions to our policies.”
“Among others,” he said, “we are changing to a per diem system for our business- and travel-related expenditures to be more aligned with state travel polices.”
About the Author
