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JAUNT: Former CEO’s ‘numerous expenses’ violated policies

JAUNT now says former CEO Brad Sheffield made, “numerous expenses for goods, services, and travel which violated internal control policies of the corporation.”
Updated: Mar. 11, 2021 at 9:18 AM EST
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CHARLOTTESVILLE, Va. (WVIR) - JAUNT now says former CEO Brad Sheffield made, “numerous expenses for goods, services, and travel which violated internal control policies of the corporation.”

JAUNT made its announcement in a statement released Thursday, March 11. It says irregularities were found during a random sampling of cash disbursements while auditing FY20.

“The sample that they got this time around alarmed them a little bit. They had some concerns about what they found,” JAUNT Spokesperson Jody Saunders explained. “It really just boiled down to expenses that the auditors and ultimately our Board of Directors felt like were beyond would have normally would have been expected for a normal business expense.”

The initial discovery triggered a larger investigation that lasted six months. A final audit was received yesterday, which reportedly found Sheffield violated policies. It also stated, “the total amount of questioned costs could not be determined because program income was pooled with other local revenues.” However, Saunders explained that the money was not spent on personal items and did not rise to the level of illegality.

Sheffield tendered his resignation December 7, 2020 at the request of JAUNT’s Board of Directors. In a statement, he says his term as executive director has been misinterpreted.

“I ran it efficiently, and no JAUNT policies were violated,” Sheffield said in Thursday’s statement. “All expenses during my tenure, including travel, adhered to JAUNT’s policies, and all expenses were reviewed prior to authorization.”

Saunders disagrees and says the findings of the audit prove otherwise.

“The findings of our auditors in the in the final audit that was adopted yesterday by the Board (of Directors) disagree with the with the idea that none of our policies were violated,” she said.

Charlottesville radio host Rob Schilling first reported potential improper spending in December. Since then, he has been fighting the company in court to gain access to its financial records related to Sheffield’s spending.

“When we asked JAUNT for information on some of the things I heard about Brad Sheffield and some of the spending that was going on there, they flat out refused and said they were not subject to FOIA laws in Virginia,” Schilling said. “Our lawsuit proved otherwise.”

Schilling says transparency must be at the forefront as Jaunt works to rebuild trust.

“The first thing they should be putting at the top of this press release is ‘We’re going to be transparent with the public and if the public wants to look into our books and see what expenses are being incurred on behalf of JAUNT they have every right to do that,’” he explained.

JAUNT says it is putting steps in place to strengthen financial oversight. The new company structure will institute more frequent financial reviews and a stricter expense approval process. All employees will undergo ethics training and a new ethics officer will be hired. It hopes that anonymous reporting will encourage future whistleblowers to come forward.

“I hope that the the years of experience and services community, along with the steps that we’ve already taken to sort of correct this issue will put us on the right path to community trust,” Saunders said.

03/11/2021 Official Statement Regarding JAUNT, INC. FY20 Audit:

Because Jaunt is funded in part by state and federal monies, the organization undergoes a financial audit every year, as outlined in Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. The audit involves an evaluation of financial statements and federal awards. It reviews grant management and ensures we follow the rules for funds associated with the grant or award.

On August 31, 2020, Jaunt began our typical audit process for FY20 (for year ending June 30, 2020) with Robinson, Farmer, Cox (RFC). RFC has been assisting Jaunt for over a decade. During a random sampling of cash disbursements, they came across some irregularities which they found questionable. They brought their concerns to Jaunt’s Board of Directors and executive leadership and a deeper audit was initiated.

On Wednesday, March 10, 2021 we received the final audit. RFC’s findings specify:

  • The findings of the audits of both Jaunt’s Financial Statement and Federal Awards concluded that the CEO purchased numerous expenses for goods, services, and travel which violated internal control policies of the corporation.
  • The finding of the audit of Jaunt’s Program Income concluded that the total amount of questioned costs could not be determined because program income was pooled with other local revenues.

While not unlawful, nor a prohibited use of government funds, the auditors determined that the expenditures were beyond what would have normally been expected for reasonable business expenses. A full version of the final audit can be found on our website at ridejaunt.org/news.

What did we do about it?

As RFC’s audit progressed, and more information came to light, Jaunt’s Board felt that they were no longer comfortable with the business judgment of then-CEO Brad Sheffield. On December 5, 2020, with the audit findings still months away, the Board made the difficult decision to request Mr. Sheffield’s resignation as CEO, demonstrating tremendous leadership and integrity. Mr. Sheffield tendered his resignation on December 7, 2020.

The Board appointed then-Chief Operating Officer Karen Davis as the interim CEO, ensuring effective, knowledgeable, and experienced leadership of the agency. As Ms. Davis took on the expanded responsibilities of CEO, she began to identify and develop the internal controls necessary to ensure that Jaunt will have strict financial oversight going forward. New measures, now in place, include:

  • The Chief Financial Officer (CFO) reporting structure now includes a direct line to the chair of the finance committee
  • The CEO and CFO meet quarterly to review organization’s finances and accounting
  • The Board of Directors must pre-approve executive expenses for training, conferences, and travel prior to the date of travel and payment

Moving forward:

The Jaunt Board of Directors is presently undergoing visioning work to further define the organization’s vision, mission, and direction, led by facilitators from Insight Strategies, Inc. In the coming months they will engage with an executive search firm as it looks for a new CEO.

Jaunt is firmly committed to operating from a place of honesty, openness, and transparency. We are creating a new role of ethics officer, who will have a direct line of communication to the Board president and the CEO. This will be an additional avenue of anonymous reporting for ethical concerns, ensuring that never again will there be any hierarchical barriers to integrity or whistleblowing at Jaunt. Additionally, business ethics education and training will be conducted at all levels of the organization to codify a culture of integrity and transparency. Training will include a review of revised policies and procedures such as employee reporting requirements for violations of Jaunt’s policies, as well as information about all available reporting resources.

In conclusion:

Jaunt has been a committed and steadfast pillar in our community for 45 years. We provide vital service to the most vulnerable and marginalized in our community, removing barriers to employment and job skills training; providing critical access to healthcare; and paving the path towards more socially connected, and thereby more mentally healthy, communities. We deeply regret the loss of confidence that these audit findings have created. We hope that the steps we have already taken, along with the future plans we have shared, will help restore community trust.

03/11/2021 Statement from Brad Sheffield, former CEO of JAUNT:

“It’s unfortunate that my tenure as executive director of JAUNT has been misinterpreted. As JAUNT’s board will confirm, I left the company with a surplus of $1.2 million and an operating profit of $200,000. JAUNT competitively procures funding by providing a range of public and private transportation services, which means the company must be run efficiently to turn a profit. I ran it efficiently, and no JAUNT policies were violated. I’ve heard some criticism of my tenure from radio hosts with no business experience, and I think that rather than listening to shock jocks who’ve never had to meet a payroll, our citizens should look at the facts. All expenses during my tenure, including travel, adhered to JAUNT’s policies, and all expenses were reviewed prior to authorization. I took the job at JAUNT to contribute to the community that we all love and to improve transportation services for its most vulnerable members. It’s no secret that some of those criticizing me would love to see JAUNT abolished entirely. We’re better than that.”

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