The hits just keep on coming…

It’s not been an easy week for the city of Asheville on the financial front. First, news broke of a fraud investigation into the city’s Human Resources department, then it turns out that Chief Financial Officer Ben Durant, in the middle of the city’s struggle with a looming $3 to 5 million deficit, is leaving for a post at Elizabeth City State University.

On Tuesday, warrants stretching back three months were made public, revealing that Asheville Police Department, the State Bureau of Investigation and the District Attorney’s office were all investigating possible fraud in the city’s flexible spending program, meant to cover medical and child costs that don’t come under an employee’s insurance plan. According to the warrants, some officials, including Assistant HR Director Robin Nix (annual salary $95,859), used the city’s flexible spending program to get thousands of dollars more back than they actually spent on items like mattresses and hot tubs, among other violations.

It’s important to note that no one’s been formally charged or arrested yet in the investigation, and city officials, backed by federal HIPAA statutes, are refusing to reveal the extent of the program. However, if the accounts in the warrants are true, it’s clear that there was a major oversight failure in a city program tied to one of its biggest expenditures: health care.

The police released a brief statement Wednesday, March 17, saying they’d reviewed 113 employees’ flexible spending accounts and found no criminal wrongdoing. However, law enforcement’s being extremely tight-lipped about the investigation’s progress and has repeatedly said the investigation is “ongoing.” Translation: anything could happen.

Meanwhile, Durant had become a familiar point person for the city’s marathon struggle to balance its books. A 12-year veteran of the city staff, he recently broached a long taboo-measure as one possible solution: raising property taxes. He had repeatedly said that reduced revenues were the new norm, and the city would have to adapt with both cuts and increased revenue.

Now, however, Durant’s leaving for the coastal regions, specifically a vice chancellor’s spot in his home town. During one of the hardest budget cycles in memory, the city’s just lost an experienced financial official familiar with the ins and outs of its budgeting process and Asheville’s unique challenges (hello, Sullivan Acts). Lauren Bradley, already directing the city’s administration, now faces overseeing the budget wrangles while Asheville launches a nationwide search for Durant’s replacement (it’s worth noting that some other cities, such as Wilmington, are facing an even worse financial situation than Asheville).

The two matters aren’t directly related, of course, but nonetheless, both hits falling in the same week has to cause considerable distress over at City Hall.

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