The only thing surprising to me about City Controller Rebecca Rhynhart’s recent report detailing mismanagement at the city’s animal shelter was that it took so long to arrive.

Accusations of mismanagement and bad bookkeeping at ACCT Philly were aired in my Feb. 14, 2018, column.

Animal advocate and certified public accountant Doug Ross listed apparent irregularities and questionable entries on ACCT’s financial disclosure IRS Form 990. He raised questions about how taxpayer funds were being used.

Vincent Medley, ACCT executive director at the time, did not answer detailed questions about the financial irregularities.

That’s when the board of directors sprang into action, launched an investigation, and demanded answers from Medley.

Wait. Just kidding. I heard not a peep from the board.

I was not the only one disappointed in the board, which earlier barred the public from its formerly open meetings. The board didn’t do its job very well, Rhynhart’s report, released Jan. 9, said.

She directed sharper criticism at the Managing Director’s Office, which oversees the Animal Care and Control Team, the city animal shelter known as ACCT Philly. As overseer, the managing director names a person to chair the ACCT board, currently Assistant Managing Director Joanna Otero-Cruz.

Essentially, Otero-Cruz was oblivious to the shenanigans in the shelter’s headquarters in Feltonville, the report said. Worse, she was an enabler. Some of the mismanagement, which did not rise to criminal levels, was known to and approved by the Managing Director’s Office, the controller said.

A key issue was misuse of a $1 million grant from the Petco Foundation, awarded in March 2015. Of the $1 million, $750,000 was earmarked for an adoption center at the shelter.

“It’s clear that ACCT is not meeting the standards of its contract with [the Managing Director’s Office] or its requirements for the Petco Foundation grant,” wrote Rhynhart. ACCT commingled Petco funds with general operating money and used it for “operating expenses, including payroll.”

Otero-Cruz said in a statement Jan. 11 that she would “begin an immediate assessment of each of the controllers' concerns,” but added, “The Petco grant does not require a segregation of funds.”

To the contrary, the grant agreement says the funds must “deposited in a separate account” and “will not be used for the general account.”

Petco Foundation executive director Susanne Kogut told me she knew ACCT had dipped into the funds, but as long as the funds are there for the adoption center, she’s OK with that. The long-awaited adoption center is scheduled to be built this spring.

Rhynhart found other irregularities in ACCT’s operations:

  • Cash donations are not tracked and recorded properly.
  • ACCT does not have a petty cash account, yet staffers wrote checks to “petty cash” out of the operating budget.
  • Despite regular cash shortfalls, employees often were given cash advances on their salary. In two cases, the person approving the cash advance was the one receiving it.
  • Nearly $20,000 was spent on moving expenses for new hires, including $4,000 for a person who never reported to work.
  • Reimbursement was made for expenses without receipts.  

The controller made numerous recommendations, including: better financial controls; an overhaul of the grant management process; establishing policies on hiring, petty cash and cash donations; reassessing the roles of the managing director and the board of directors; and removing the assistant managing director as board chair.

The board has eight members, although ACCT’s bylaws call for 12. The city gives the animal shelter $4.2 million annually, which has been called inadequate by many animal-care advocates. The controller reported that both ACCT and the Managing Director’s Office said some of the shelter’s financial difficulties flowed from the city’s funding structure.

ACCT executive director Susan Russell, who started last October, said the shelter "has over the past year put policies, processes, and controls in place as recommended by our independent internal controller.”

The city controller’s report is an important wake-up call. But will it have any bite?