Assistant city manager to head HR department in midst of fraud investigation

In the midst of an ongoing investigation into possible fraud in the the city of Asheville’s flexible-spending program, Assistant City Manager Jeff Richardson is taking over the Human Resources Department, and will audit the program monthly until it can find a third-party administrator.

A memorandum released this morning, from City Manager Gary Jackson, who’s so far remained silent about the investigation, announced that Richardson will immediately assume the role of director of Human Resources. Lisa Roth, the previous director, was named by other employees in police search warrants as possibly being involved in practices that included over-reimbursing for items employees had purchased, allowing them to exceed their flexible-spending limits. However, no one named in those warrants, Roth included, has yet been arrested or charged with any crime.

In addition to Richardson’s appointment, the city is looking for a third-party administrator to handle the program. Until one can be found, Jackson states that it will conduct monthly audits.

“By taking these steps, we will strengthen the program’s checks and balances while providing employees with sound direction and support within the program,” Jackson says in the memo.

The full text of the memo is below.

— David Forbes, staff writer


Mayor and City Council, Department Directors
Gary W. Jackson, City Manager
Administrative announcement regarding Human Resources management

As you know, the City of Asheville has been cooperating with the Asheville Police Department, the District Attorney’s Office and other law enforcement agencies in an investigation into allegations of questionable practices by certain employees in the Human Resources Department.

Information the city has been able to share regarding this matter has been limited in order to protect the integrity of the investigation, which is still ongoing. In cases like this, withholding comment is difficult for the organization and for our community because our core values are in question and the public’s trust is at stake. However difficult this might be, until the time is appropriate for us to make further comment and answer critical questions, ensuring the integrity of the criminal justice process must be the top priority while the matter is under review.

In the meantime, in an effort to provide additional oversight and supervision of the Human Resources Department, Assistant City Manager Jeff Richardson will assume the director’s role for the department, effective immediately. I am fully confident that Mr. Richardson will manage the department to the highest standards of accountability while the investigation moves forward.

At the same time, we are taking specific steps to improve the management of the city’s Healthcare Flexible Savings Account Program. The city will contract with a third party to administer the program on the city’s behalf to ensure policies and procedures are followed and the plan is administered correctly. Until we are able to secure the services of a third-party administrator, we will audit the flexible spending program every 30 days. By taking these steps, we will strengthen the program’s checks and balances while providing employees with sound direction and support within the program.

In closing, I want to emphasize that Asheville is a city that is dedicated to integrity and honesty as part of our core values. Asheville employees are expected to handle the public’s business with the highest expectations of ethical conduct, and these allegations are in no way reflective of the moral code that guides public service. If there are actions by city employees that are not consistent with our core values, we want to know so we can correct it. The City of Asheville will continue to fully cooperate with law enforcement agencies throughout this investigation as part of our commitment to the community and the core values of the men and women who serve in the organization.


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