Area paratransit agency Jaunt is now saying its board requested the former CEO’s resignation late last year after it was “no longer comfortable” with his “business judgment.”
On Thursday, the agency released a statement along with its fiscal year 2020 audit saying that former CEO Brad Sheffield “purchased numerous expenses for goods, services and travel which violated internal control policies of the corporation.”
Sheffield resigned in December, and at the time, Jaunt board members declined to comment on his resignation.
In a statement Thursday, Sheffield said no Jaunt policies were violated.
“All expenses during my tenure, including travel, adhered to Jaunt’s policies, and all expenses were reviewed prior to authorization,” said Sheffield, a former Albemarle County supervisor. “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.”
Jody Saunders, director of public relations for Jaunt, declined to elaborate on the specifics of the “numerous expenses for goods, services and travel. ”
When asked for a copy of the “internal control policies of the corporation” that were violated, Jaunt provided a 43-page document titled “Financial and Grants Management Policies and Procedures” and, more specifically, pointed to four pages around determination of allowable costs and expenses, and travel policies/procedures.
Sheffield said the funds used for his expenses came from private contracts, “which are not part of the federal awards per 2 CFR 200.502 (i) and not subject to that policy,” referring to federal code.
In addition to expenses, the audit from Robinson, Farmer, Cox also noted that Jaunt ”did not properly segregate program income from local revenue sources.”
“The commingling of funds resulted in the inability to determine if program income was expended in compliance with program income requirements set by the Department of Transportation,” the audit said.
Some of the expenses in question were reimbursed by Sheffield, Saunders said, and what the auditors found was “not unlawful or necessarily a prohibited use of government funds” and there will not be legal action taken.
“They just felt like the expenditures were beyond what would have been normally expected for reasonable business expenses,” she said. “So the question here is less to do with any sort of legality or unlawfulness and more to do with just a lack of confidence by the board.”
While looking at a “random sampling of cash disbursements” during the annual audit, auditors “came across some irregularities which they found questionable” and told Jaunt’s Board of Directors and executive leadership, according to the statement. A deeper audit was then initiated.
In addition to asking for Sheffield’s resignation, Jaunt says the board appointed Karen Davis as interim CEO. According to a statement, she has implemented new policies, including that the CEO reporting structure now includes a direct line to the chair of the finance committee; the CEO and CFO meet quarterly to review the organization’s finances and accounting; and that the Board of Directors must pre-approve executive expenses for training, conferences and travel prior to the date of travel and payment.
“We’ve appointed one of our employees, our human resources generalist, as what we’re calling an ethics officer, and this person will have a direct line of communication to the board president, as well as the CEO,” Saunders said. “It’s just a little bit of an insurance to make sure that there’s no hierarchical barriers to integrity or ethical business practices or whistleblowing.”
Jaunt’s statement says that business ethics education and training will be conducted “at all levels of the organization to codify a culture of integrity and transparency.”
Jaunt is currently involved in a Freedom of Information lawsuit with local radio show host Rob Schilling. In December, he posted an article to his website claiming an anonymous internal source told him that the agency was under investigation for “spending irregularities.”
After filing a request for documents under Virginia’s Freedom of Information Act, according to court documents, Schilling’s requests were denied by Jaunt, which claimed the organization was not subject to FOIA.
In February, Charlottesville General District Judge Matt Quatrara ruled that Jaunt is primarily supported by public funds and he issued an order allowing the lawsuit to continue.