State Auditor Nicole Galloway has delivered a scathing audit of St. Louis Recorder of Deeds Sharon Carpenter, contending that the citywide official failed to keep adequate bookkeeping and improperly executed construction contracts to a former employee’s relative.
It’s the latest salvo against Carpenter, a longtime Democratic political figure who has been under intense scrutiny for how she’s run her office over the past couple of years.
“This audit confirms mismanagement of public resources that many of you have reported on in the past," said Galloway during a press conference in Downtown St. Louis. "Throughout this report, you will find examples of a lack of transparency, accountability and responsiveness that citizens expect from their elected leaders. Public officials must expect independent review and to be held accountable for making improvements that better serve citizens."
Back in 2014, it was revealed that Carpenter had hired her great nephew to do office work – which ran afoul of state laws regarding nepotism. She resigned on July 11, 2014 – and in September 2014 Gov. Jay Nixon asked then-state Auditor Tom Schweich to perform an audit of Carpenter’s office.
(Carpenter, however, wasn’t prohibited from running for recorder of deeds again. She was already on the August primary Democratic ballot before she resigned and subsequently swept the city's 28 wards against two opponents. She then went on to soundly defeat her interim replacement, Jennifer Florida, in the general election.)
In the audit that was released on Tuesday, Galloway portrayed Carpenter’s office as profoundly disorganized.
In addition to reiterating how Carpenter violated state nepotism laws, Galloway highlighted the following issues:
- Galloway noted that renovations to Carpenter’s office were performed by a company that either employed or was owned by former Deputy Recorder Peggy Meeker’s son. She went onto say that Carpenter “did not properly solicit bids for at least one project and there is no indication the office compared pricing for a number of smaller projects. ... The former deputy recorder's conflict of interest, along with her level of responsibility for and involvement in some projects were not consistent with good management practices,” Galloway wrote.
- Carpenter “failed to comply with numerous legal requirements related to a Records Preservation Account.” Galloway said the account should have been under the control of the city treasurer’s office. And she added that Carpenter made a number of impermissible expenditures, “including $2,378 for rugs for the private offices of the recorder and deputy recorder and $687 for furniture, decorating items, and cleaning supplies.” Galloway also wrote that Carpenter authorized "travel and conference expenditures for attendance at Missouri and international recorder association meetings without sufficient documentation to determine compliance."
- Carpenter’s office “lacked sufficient procedures to transmit money timely to the city treasurer.” Mail receipts are received and processed by the same staff members in three of the office's departments, and no independent review of receipt logs is conducted, increasing the risk of theft or loss,” Galloway said. Supervisory approval is not required for voided transactions, and documentation of the reasons for voiding transactions is inconsistent.”
- Carpenter failed to maintain “a usage log for a city-assigned vehicle she used through July 14, 2014, although she responded to a prior audit recommendation that a usage log had been implemented.” Galloway also said Carpenter’s office “provided fueling documents and other information showing that the vehicle was driven 5,460 miles during an 18-month period, although Recorder Carpenter reported personal and commuting miles approximately 10,000 more than those 5,460 miles.” (Carpenter gave up her city-issued car last year.)
- Carpenter’s office “has significant gaps in its procedures for vacation and medical leave.”
Several points in Galloway’s audit have been documented in the press before. But it could provide fuel to her political adversaries (including St. Louis Mayor Francis Slay, a former political ally) that Carpenter isn’t fit anymore to run her office.
"In total, Recorder Carpenter spent more than $300,000 from the recorder's preservation account inappropriately or without proper transparency," Galloway said. "Some of these expenses did not appear to be in regards to records preservation, including food, entertainment, furniture, office decorations. The recorder also used the account to pay for travel and conference expenses that were not documented as being related to records preservation. Also part of that $300,000 required bidding processes that were not followed for construction contracts paid out of the account."
In a written response contained within Galloway’s audit, Carpenter said many of the contentions were instructive – and provided her office with some suggestions for improvement.
“It has always been my view that audits are not simply necessary but a positive influence on a public office,” Carpenter said. “While this audit is quite different in some respects from audits performed during my 35 years as ROD, it has provided many recommendations that will provide for greater accountability for the ROD office. Many of these recommendations are already implemented while other recommendations are in process. This audit proved illuminating by clarifying state statute requirements. This information provides a greater understanding for the ROD and staff.”
But Carpenter also vigorously defended her office against Galloway's findings. In a statement posted on her office web site after the audit was release, Carpenter said it "appears that the findings were developed to meet preconceived determinations."
Her response within the audit said that the Board of Public Service was responsible for soliciting bids for the construction project, adding that if that entity “did not follow their established procedures, how can this reflect on the Recorder?” Carpenter said she told Meeker to instruct companies to go to BPS to be put on the BPS bidders list and that ROD has no knowledge of BPS requirements to become a bidder.”
“The Recorder chose the low bid,” Carpenter wrote. “The Recorder, at the time, the bid was accepted, was under the impression that the [request for proposals] and bid process had been handled by BPS. The Recorder was never advised by BPS of any requirements by phone, memo, or e-mail. The Recorder would ask for BPS to provide documentation of these statements. At no point did the Recorder decline any recommendation made by BPS.”
(Galloway said that BPS is "not responsible for the city recorder to follow purchasing laws -- that's fiduciary responsibility of the recorder.")
Additionally, Carpenter acknowledged she should not have used the Preservation Fund to pay a $132 membership to a notary association. But she defended using roughly $3,600 for rugs, furniture, legislative meetings and food -- and also contended that $6,094 for travel expenses was appropriate.
“The Recorder authorized these expenses because sufficient travel has not been provided in general revenue,” Carpenter said. “It is impossible to keep up with either best practices and preservation of records or the ever evolving technological advances by never participating in conferences, training seminars, etc. In the future, greater documentation will be required in order to receive reimbursement.”
In regard to Galloway’s findings about her vehicle use, Carpenter replied that she “overestimated thereby paying more federal, state and local taxes than was required. The Recorder is no longer provided a city vehicle.” She also said “a vacation policy in regard to mid-year termination has been implemented effective October 9, 2015, adding that all other medical and vacation policies are being reviewed to develop a clear and consistently applied policy.”
Galloway said she was frustrated Carpenter "continues to defend past actions, despite repeated findings of mismanagement, adding it's "a disservice to the citizens of St. Louis when these opportunities for necessary change are dismissed." Galloway said that since Carpenter's office received a "poor" rating, her office will perform a follow up audit in the coming months.
"When I look at audits, I look at them as an opportunity," Galloway said. "There are concrete things that can be done to better serve the public. And look, when you are a public official, you should expect independent review. But you should also be accountable for implementing improvements that will help you better serve your citizens. And this audit is an opportunity for her to do that."