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Time for change? Embattled treasurer seeks re-election in face of critical audits, slew of citizen complaints

Story by Chris Graham

Three years of audit reports have suggested that her office is in disarray – with bank deposits made late, cash and checks left sitting in envelopes on desks and counters unsecured, wire transfers being handled improperly, tax records making it hard to tell what had been collected and what hadn’t been.

And still Sandee Dixon tries to see the bright side of things.

“The next audit is going to be my best one yet. I just have a good feeling. I know we’re making improvements,” said Dixon, who was elected the treasurer of Waynesboro in 2005 after working in the office under long-time city treasurer Nancy Beverage for five years.

Ostensibly her experience in the office was what she rode to victory in her political race with Beverage’s daughter, Stephanie Beverage, who also had to overcome negative press about a messy divorce that forced her to declare bankruptcy several years ago, but Dixon played the part of bumbling rookie in 2006, her first year as the head person in the office, which ended with one of her employees charged with embezzlement and a local auditor telling the city that the thefts totaling more than $25,000 all told were enabled by “poor physical controls” in the office.

Even before things had gotten to that point it had become obvious to people who were dealing with Dixon on a regular basis that she was in over her head. State Auditor of Public Accounts Walter Kucharski told me about an effort to get a team of local treasurers together to give Dixon some direct aid early in her first year in office in 2006, “and some of them spent a significant amount of time in her office, and yet it didn’t seem to have fixed the problem.” Even the then-recently retired treasurer Beverage offered to come in as an unpaid consultant, “but she turned down the help,” one frustrated city-management official told me.

The frustrations were not limited to those with offices in City Hall. A Freedom of Information Act request for files related to the city’s dealings with Dixon’s office yielded among the mound of paperwork several pages of complaints from city residents who had paid water and tax bills that were marked past due on their next payments and others who had paid bills with checks that didn’t clear the bank for several weeks. The complaints usually ended up in the hands of members of Waynesboro City Council and employees in the city manager’s office, who had an understandably difficult time explaining to city residents that in Virginia’s system an elected treasurer doesn’t answer to City Hall, but ultimately answers only to the voters. Things got to the point where then-City Manager Doug Walker shared at the end of one memo to members of City Council the process spelled out in the State Code regarding the removal of an elected official from office.

Walker noted in another memo that the city had lost more than $22,000 in interest income midway through fiscal-year 2007 from late deposits of tax payments and another $30,000-plus in interest income from other funds that were mismanaged by the treasurer’s office. “While I am not immediately concerned about cash flow, I am very concerned about lost interest earnings on money paid that has not been deposited in the City’s bank account,” Walker wrote in a third memo.
So it wasn’t just having to deal with complaints that was at issue. It was complaints; it was loss of interest income; it was also staffing issues in Dixon’s office. The position left open after former deputy treasurer Jennifer C. Kennedy was charged in the embezzlement matter stayed open for six weeks at the height of the winter 2006-2007 tax season before Dixon hired a replacement. Dixon even failed to file a budget request with the city that winter, saying the late-December deadline came at a tough time for her given the workload associated with processing tax payments, and let then-Budget Director Pat Nicosia fill her budget request out for her.

Dixon has since resolved that issue with budget requests. Staffing continues to be a problem – Dixon often has to fill in up front in a clerk’s role due to manpower limitations that are pronounced in December at the busiest time for tax collections. The audit reports are still an issue, with matters involving the security of mailed-in payments, the proper classification of penalty and interest, the proper documentation and security of receipts and the proper procedure on the reconciliation of tax accounts red-flagged in the most recent state report, for fiscal-year 2008.

“The audit findings are essentially the same over the last three audits, and coupled with the material weakness findings reported by the City’s independent auditors, we have concerns over the Treasurer’s failure to correct these matters and those in the City’s annual audit report,” Kucharski wrote in a letter to Mayor Tim Williams dated Aug. 27, 2008, regarding the 2008 state audit.

“Many of the findings duplicate findings in the City’s annual audit report and represent fundamental basic internal controls necessary to prevent accounting and posting errors, loss, and misuse of fund entrusted to the Treasurer,” Kucharski wrote. “These fundamental basic internal controls are also the means for providing accurate and timely information to taxpayers, city financial decisionmakers, and other governments. Having these internal controls demonstrates accountability, and when properly applied increases efficient and effective service to the public.”

Dixon attributes her rocky start in the treasurer’s job to simple lack of experience – in the face of the fact that she had worked in the office for five years prior to her election. “There are a lot of things that the treasurer is responsible for that is not seen by the deputies. My experience was just basically with payments and things of that nature. And then I see as we go along that there are budgets that need to be handled by myself for the city to know what to budget for the next year and needs that we have,” Dixon said.

“Not knowing that when I came into office, I didn’t even have an idea,” Dixon said. “There wasn’t a list of things that the treasurer has to do, responsibilities. But being in the office and having the experience and seeing the day-to-day of what goes on as far as collections, I’ve had a lot of issues struggling to get to – improvement-wise, I know they want everything to get running quite smoothly.

“All of them have to still be lots of improvement, I would say, on.”

The sense that I’ve gotten hanging around City Hall the past few weeks is that Dixon instead of being an independent treasurer who answers to and looks out for the interests of the residents of Waynesboro is in practice so dependent on Nicosia, now the city finance director, for guidance on the day-to-day administration of her treasurer’s office that she has been marginalized from her constitutional role into being effectively little more than a glorified office manager.

“We have to do that. If we don’t, the city’s cash flow is impacted,” one City Council member told me. “It’s time for a change,” another Council member said. “I just think she lacks a basic understanding of what she’s supposed to be doing, and it’s hurting the city.”

Stephanie Beverage is back on the city ballot challenging Dixon again for the treasurer’s job. Beverage, a warranty administrator at Jim Snead Ford and a city 911 dispatcher, doesn’t think she’ll need to “go in and clean house” to get the office back on the right track.

“The first thing I’d do is sit down, talk to the girls, tell them what I expect and look and see where to start with getting the office back on track,” Beverage said. “I intend to get the money in the bank beginning the Third of January every morning, I can say that much. I intend to take a look at seeing what’s wrong and making it right.

“I don’t know everything,” Beverage said. “I’m the type of person who welcomes all the help I can get. You’re going to run into things where you need help getting through a particular situation. I’m OK asking for help.”

Dixon, for her part, feels that she’s made great strides in the past two years – and deserves another four in office.

“The audits started out not very appealing, I’m sure. But each time the auditors would be here, they would take me back into the room and discuss the improvements I could make, and I would immediately come down and try to tell the girls what to change, how to change it, you know. And each year, it got a little bit better,” she said.

Her message to the voters – well, it’s not “Yes, We Can!” or “It’s morning in America.”

“I hope that they realize that the experience I do have in this office and the improvements that have been made – surely I’m still going to do the best I can to run this office,” Dixon said.


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