Auditor: Crutchfield's assistant should resign one position - | Chattanooga News, Weather & Sports

Auditor: Crutchfield's assistant should resign one position

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CHATTANOOGA (WRCB) - The City of Chattanooga's internal auditor has found an arrangement between city employees and a for-profit LLC had the "appearance of impropriety."

The audit review followed stories first reported by WRCB's partners at the Chattanooga Times Free press. The for-profit group was created by Missy Crutchfield, who runs the city's Department of Education, Art and Culture. It found that "Be Communication" was for the city's benefit and not for personal gain.

Crutchfield had been instructed by Mayor Ron Littlefield to stop working on Be Communication LLC at city offices and on city time.

The auditor, Stan Sewell, recommended that Crutchfield's assistant, Melissa Turner, either resign her position with "Be Communication" or with the EAC department. He says by having an outside business partnership with her boss could create a conflict of interest.


The full report, obtained Wednesday morning by Channel 3 Eyewitness News, is listed here:


To: Mayor Ron Littlefield
From: Stan Sewell, Director of Internal Audit
Date: October 8, 2010
Re: Be Communications

On October 1, 2010 Internal Audit began an investigation into allegations that Education, Arts and Culture (EAC) employees Missy Crutchfield, Administrator and Melissa Turner, Communications Director were operating a for-profit online magazine (Be Communications, LLC) using City of Chattanooga offices, equipment and supplies during office hours.

Employees of EAC are charged with promotion of art, cultural events and educational programs, as well as the operation of the Tivoli Theatre and the Soldiers and Sailors Memorial auditorium.

Melissa Turner and Missy Crutchfield met when Ms. Turner came to EAC as a part-time volunteer, a position she held for approximately one year. She was hired by the City as a temporary employee in September, 2008, and became a permanent employee in December, 2008. Be Communications, LLC filed Tennessee Articles of Incorporation in June, 2008 with two members (Ms. Crutchfield and Ms. Turner). The Be Magazine website was brought online November, 2009.

In separate interviews, Missy Crutchfield and Melissa Turner said formation of the LLC was driven by a need to protect themselves from lawsuits in the event of misstatements or copyright issues. Both employees also stated the purpose of the online magazine was not to generate profits, but to promote the City of Chattanooga and events happening here. Ms. Crutchfield stated she did not discuss the startup with the City Attorneys' Office nor the Mayor, as she saw no downside to the website. Melissa Turner stated they explored the possibility of using City resources to develop and host the website, but found problems developing a "top notch, user-friendly, interactive webpage within the current City infrastructure". Both employees indicated the timing of the website startup was driven by the perceived need for a methodology to promote the kickoff of a fund drive related to the renovation of Soldiers and Sailors Memorial Auditorium.

The personnel records of Missy Crutchfield and Melissa Turner were reviewed and no outside employment forms related to Be Communications were found in their files as required by Executive Order 2007-001. Further noted that section 3 (g) of the related policy specifically indicates a need to consider "Whether the outside employment may appear improper to the public." Both employees stated they knew of, and understood the policy. Ms. Turner stated she considered Be Communications more of a hobby than employment, and Ms. Crutchfield said she didn't expect to generate any revenue, and therefore felt it was not necessary to complete the form. The policy states a violation could subject employees to disciplinary action, including dismissal.

Although there was no written contract between the City of Chattanooga and Be Communications, LLC, it is apparent that the LLC provided marketing, promotion, and/or advertising services for the City in exchange for the use of City resources. Therefore, it appears that an unwritten or implied contract existed between the two entities. Ms. Crutchfield, and possibly Ms. Turner, had a duty to "overlook" and/or "superintend" this contract or work. Tenn. Code Ann. Sections 12-4-101 states it is unlawful for any officer…or any other person whose duty it is to…overlook, or in any manner to superintend any work or any contract in which any municipal corporation…shall or may be interested, to be directly interested in any such contract.

City code 2-756 states: (1) an official or employee shall not use or authorize the use of municipal time, facilities, equipment, or supplies for private gain or advantage to himself. (2) An official or employee shall not use or authorize the use of municipal time, facilities, equipment, or supplies for private gain or advantage to any private person or entity, except as authorized by legitimate contract or lease that is determined by the governing body to be in the best interests of the municipality. While reviewing this code section, we noted that lack of revenue does not guarantee there is no private gain or advantage. Work performed on City time, with City resources, is an expense avoidance that can be construed as a benefit. Further, section 4 of Executive Order 2007-0001 specifically prohibits the use of City assets for outside employment.

Both Ms. Turner and Ms. Crutchfield stated no expenses related to Be Communications were paid by the City, nor had any amounts been reimbursed to them for such expenses. We were provided the records, bank statements and paid invoices of Be Communications, LLC. The deposits and disbursements from bank statements and Be Communications invoices were visually compared with EAC expenses in the City accounting records, searching for similar vendors or amounts. Particular attention was given to the detail of City payments to Ms. Crutchfield and Ms. Turner. Additionally, records related to the City purchasing card used by Ms. Crutchfield since the beginning of operation of Be Communications were reviewed in detail. In addition, expense reports filed by Ms. Crutchfield, Ms. Turner and selected reports of their administrative assistant, Carla Johnson, were inspected for purchases related to Be Communications. City records of the applicable EAC cost centers were also checked for purchases related to internet related software/ hardware purchases that could be used for Be Communications purposes. No suspicious items were found in any of the documents inspected.

Missy Crutchfield and Melissa Turner have spent time during City work hours on matters related to Be Communications. Ms. Turner stated her time at work related to Be Communications primarily consisted of adding electronic visual media to City press releases in preparation for uploading to the online magazine, while Ms. Crutchfield said she mainly spent time discussing which City press releases to include on the website. Ms. Turner said the majority of time spent on Be Communications work was after hours, primarily on weekends. Ms. Turner said City computers were sometimes used for Be Communication purposes, adding electronic visual media to City press releases and uploading data to the website. She stated she preferred to use her personal Apple MacBook due its enhanced graphical capabilities. Both Melissa Turner and Missy Crutchfield stated no City office supplies were used for the operation of Be Communications.

The City Code prohibits nepotism (Section 2-195) stating no person shall be employed in a position where a family member would serve in a supervisory position. While Ms. Crutchfield and Ms. Turner are not related as family members, business partners that are also in an employer/employee relationship could cause problems similar to those that nepotism policies seek to avoid.

If the statements of Ms Crutchfield and Ms. Turner are relied upon, it appears their intent was not personal gain. Rather, their intention in creating Be Communications seems to have been to further the purposes of the City and EAC. Regardless of whether the statements of Ms. Crutchfield and Ms. Turner are accurate, there remains an appearance of impropriety. This problem with public perception, along with a limited ability to make accurate determinations about such issues as the amount of time spent working on Be Communications "on the City clock" is precisely the reason laws and policies exist to prevent such conflicts of interest. Ultimately, these policies were violated.

It is our understanding Ms. Crutchfield has been instructed to cease performing any functions associated with Be Communications at City of Chattanooga offices. We further recommend Ms. Turner relinquish her position in the LLC or resign her position within EAC, due to the potential conflict, (or appearance thereof) that could occur as both a subordinate and business partner.

The issue(s) discussed in this memo are not the result of an audit performed in accordance with generally accepted government auditing standards. Had we performed such an audit, additional issues may have been reported. The purpose of this memo is to summarize limited procedures performed related to an issue or issues that have come to our attention.

cc: Dan Johnson, Chief of Staff

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