remains at odds over a review of last year's spending by new Treasurer Judy Knapton, which alleges that more than $10,000 in funds were spent without the council's knowledge.
Council member Joseph Riser and Treasurer Mark Legassie have disputed Knapton's findings, saying that a majority of the funds identified in the report do not need to be authorized by the council, as they fall under the broad banners of outreach and operations.
Knapton's report was discussed by the council during a to respond to an ongoing Department of Neighborhood Empowerment (DONE) audit of the ASNC's 2010/2011 finances.
Knapton's report attempted to square ASNC's purchase card expenditures as listed on the DONE website with board authorizations from meeting minutes.
Knapton's report can be downloaded from the media box on the right.
Riser called Knapton's report "misleading," arguing that it missed at least one $1,500 animal welfare expenditure that was approved by the board in April.
A copy of the April minutes which show the authorization of the funds can be downloaded from the box on the right.
Riser also argued that many of the expenditures listed in Knapton's report—such as food for public meetings, postage to mail outreach materials and office supplies--did not actually require board authorizations.
DONE General Manager Bonghwan Kim agreed with Riser's assessment, saying that treasurer's are allowed to use city issued purchase cards to make expenditures within the realm of operations and outreach, as long as they do not overspend approved budgets
“It would be improbable for the board to authorize every single transaction,” Kim said. “As long as board's are not overspending line items, they are within the law.”
However, Kim also told Patch that councils should reconcile those expenditures on a monthly basis--a practice Legassie admits the ASNC has not followed.
He said DONE's treasurer's handbook calls for quarterly reconciliations, though he also admitted that Fiscal Year 2010/2011's 4th quarter expenditures have never been reconciled due to the fact that he was on vacation during June's meeting.
Outreach Expenditures Questioned
Since Saturday's meeting, board President Martha Benedict has notified Patch of three expenditures made by Legassie in May of 2011 without council authorization totaling more than $1,500, which she believes fall out of the purview of day to day operations.
Those expenditures include $589.54 to U.S. Impressions on May 25 for sticky notes, $367.05 to U.S. Impressions on May 26 for green key-chains and $551.05 to Keychains.biz on May 27 for more green key-chains.
Kim—who admitted he had only be briefed on the ASNC audit—told Patch that the types of expenditures made by Legassie in May likely should have been authorized by the council first.
“It's hard to say without looking at the document; I don't want to say they are incorrect or outside the bounds, but those kinds of expenditure probably fall under the purview of needing to be authorized by the board,” Kim said.
Further, Benedict argued that the keychains—which were emblazoned with the logo for a disaster training group called LASurvival.org and distributed by Legassie during June's Lummis Day Festival—were not legitimate outreach expenditures, as they did not promote the board.
“Mark was not registering new ASNC members at his disaster booth at the Lummis Festival. He was signing people up for his disaster project,” Benedict said. “...I don’t believe these were ASNC outreach expenses and we did not approve $1508.19 to be spent for such items that I can find in the minutes. And they do not strike me as “ordinary expenditures.”
She also alleged noted that the purchases came after a May 23 meeting, during which Legassie told the board that DONE had frozen neighborhood councils' rollover funds, leaving them with only $85.
“Given that Mark had stated days before in a public meeting May 23 that the ASNC had no money to spend and had to cancel existing projects, it seems unlikely he can make a persuasive argument that it was OK for him to spend yet more money on something new,” Benedict said. “Money was approved for the Lummis Day event, which came a few days later, but the money allocated for it was spent elsewhere. Mark’s spending was not an ASNC outreach expenditure because what he purchased did not promote the ASNC.”
Legassie, though, argued that L.A. Survival was a project of the ASNC's Public Safety Committee, and was designed to spur interest in the neighborhood council.
“The whistle and flashlight gave credit and acknowledgement indirectly to ASNC through [L.A. Survival], a new website put together by the ASNC Public Safety Committee's Disaster Survival Task Force,” Legassie said. “The purpose of this website is to create a one-stop place for neighborhood councils and communities in Los Angeles to get sample emergency templates and other useful items. It was part of the proposal we sent to the city's Emergency Management Division which and a vendor to develop a generic disaster preparedness template for the city.”
Legassie said Benedict also misinterpreted his comments, saying he told the board that their accounts would be drawn down to $85 only after all approved funds were expended.
He said there was also a looming June 15 deadline to make expenditures with the city's purchase card before the money would be taken back by the city. Legassie said that's what prompted him to purchase the outreach items shortly after the May 23 meeting.
“The next day [after the May meeting] I started calling up the people who still had approved but unspent funds to check if the funds would be used before losing them. I learned after speaking with fellow board member Meredith McKenzie that she would not have time to use the $2000 allocated for community outreach materials such as tri-folds,” Legassie said. “Our next board meeting was not until the end of June, and there was no way to schedule a special meeting in time with quorum before June 15, so I purchased outreach items at the end of May for use at Lummis Day, upcoming CERT drills, and exercises. They included post-it notes, rechargeable flashlights, and safety whistles.”
McKenzie, who no longer sits on the board, could not be reached to confirm her conversation with Legassie.
McKenzie told Patch that she never gave Legassie the go-ahed to expend outreach funds.
"Mark never called me after the May 23 meeting and said we don't have enough money, what do you want to do?" McKenzie said.
Instead, McKenzie said that after the May 23 meeting, she conferred with Benedict about expending the outreach funds on advertising in local publications before the P-Card accounts were frozen.
"In order to spend what we had to spend, we decided to advertise in some local publications. We wanted to get them booked and placed before June 1, so they could be paid for before P-card deadline," McKenzie said. "Only conversation [Mr. Legassie and I] had was to communicate how much had to be spent.
Legassie had “no history of impropriety”
Riser said that Legassie's history should have negated the need for DONE's audit. Legassie had served as DONE's treasurer for two-and-a-half years, Riser said.
“There has never been any question of impropriety with Mark,” Riser said. “He had a great relationship with DONE--they held him up as a "prize" treasurer and invited him to join a special task force of a half dozen or so-- just a year go. They called his budget survey a neighborhood council 'best practice' and sent copies to all 95 neighborhood councils across the city, saying 'this is how to involve stakeholders in the process.' So if they had questions, why didn't they call him, and just say, "Hey Mark, we found some problems... maybe you got some things confused. Let's talk! Instead they invited people who were not aware of the specifics, who then made some very bad guesses, missed some things, and set a neighborhood council ablaze."
But Benedict said that DONE's audit was spurred by Legassie's unwillingness to cooperate by failing to hand over financial records to Knapton.
“When it became apparent that the previous Treasurer would not comply with requests to convey his records to the new Treasurer, DONE staff suggested Judy Knapton and I visit their office and pick up copies of theirs,” Benedict said. “We went to the DONE office on October 20. The DONE staff members told us they had already determined there were 'irregularities' and advised us to not act on any spending requests in the areas of animal welfare, public safety and outreach.”