Following the release of the state auditor’s preliminary year-end review of Metro government’s finances, Mayor Jerry Abramson has accepted the resignations of two veteran city officials who violated the city’s purchasing rules.
Longtime employees Melissa Mershon, former director of the Department of Neighborhoods, and Carol Butler, a special assistant in the department, submitted their resignations to the mayor last Friday after questions were raised about their roles in producing a book about the history of Louisville’s neighborhoods.
“I sought and accepted the resignation of two people who have devoted decades to public service in this community. Two people who I have called friends for many, many years,” Abramson said during a press conference. “They made mistakes that violated my trust and more importantly they violated the trust of the citizens of this community. I cannot accept such lapses of judgment and violations of the city’s rules.”
During a review of the department’s finances, it was learned that Mershon had approved three pre-payments to Butler Books over the past two and a half years totaling $14,900 for the book. The publishing company was owned by Butler, with her husband, until his death last summer. The city’s personnel policy explicitly prohibits Metro employees from doing business over $25 with the city without competitive bidding.
The information was discovered by city’s Internal Auditor Mike Norman, who began the investigation after receiving a tip that some invoices paid to vendors by the neighborhoods department had been created by the department rather than submitted directly by the companies.
During the investigation Mershon acknowledged she had created invoices for numerous vendors as a matter of practice, including Butler Books, rather than require the companies to submit invoices on their own.
Norman forwarded that information to the police department’s Public Integrity Unit and also shared the information with State Auditor Crit Luallen’s office, which is currently completing a broad financial audit of the city’s finances that is expected to be released later this week.
Abramson was first made aware of the investigation earlier this month in a draft audit finding released by the state auditor’s office.
“It disturbs me, but it doesn’t surprise me. I’ve been saying for years the quality of accounting in all the departments is woefully lacking,” says Metro Councilman Kelly Downard, R-16, adding that these resignations could be the tip of the iceberg. “The financial infrastructure in our city is broke. In fact, it never worked. You get promoted for being there long enough and that’s inappropriate.”
The Courier-Journal reported this past weekend that the state auditor’s office identified more than 30 serious problems with the city’s financial reporting practices, however, that preliminary management letter only outlines half of the audits findings. The final audit reportedly has more egregious violations and findings that include federal grants used by various departments.
In addition to requesting the resignations, the mayor says he will ask the state auditor and internal auditor to complete their reviews of the department and to make recommendations for improvements in financial practices.
Abramson says he will also require directors and business managers to attend additional training sessions on procurement, personnel and ethics rules.