Sunday, August 06, 2017

Former Newport News/Williamsburg International Airport (KPHF) director didn't track airport gasoline usage, charged gas on credit cards

Patrick Kerstiens, an airport operations intern, unlocks the gas station pump at Newport News/Williamsburg International Airport on July 26th. 

NEWPORT NEWS — The gasoline tank inside the gates at Newport News/Williamsburg International Airport has pumped more than 36,000 gallons of fuel for the airport's fleet of cars, trucks and vans since early 2015.

For about 10 percent of that usage, the airport has no records of who used the gas or what vehicle they filled up.

A Daily Press examination of the monthly meter reading sheets show that 36,197 gallons flowed out of the tank for the airport's vehicles between January 2015 and July 2017. But the related usage logs add up to only 32,658 gallons.

That means 3,539 gallons — about 122 a month on average — are unaccounted for. (These calculations exclude two and a half months when the meters were out of service.)

The airport's interim executive director and fire chief say former Executive Director Ken Spirito accounted for some of that difference. Spirito's contract with the Peninsula Airport Commission entitled him to free gas from the airport's supply on top of his $810 per month car allowance and $223,939 annual salary.

But Spirito did not record his gas usage on the handwritten log sheets, with no one being able to explain why he was exempt from a rule that other airport employees had to follow.

The Peninsula Airport Commission fired Spirito in May after state auditors discovered he had been using airport money for personal expenses, including paint and body work on his and other vehicles after accidents.

"Ken was an authority unto himself," said Sandy Wanner, the former James City County administrator now serving as the airport's interim executive director. "He was in charge, and he had the decision-making power to decide what would and wouldn't apply to that office. ... He was executive director, and he had a far-ranging authority."

Airport Fire Chief Dewain Starks said he and other airport firefighters saw Spirito filling up two different vehicles at the airport pump in the same week — the 2014 Jeep Grand Cherokee he drove home to James City County and another unidentified private car. "He has been seen at that ... pump with two different vehicles getting gas within one week," Starks said, adding that he witnessed it personally "three or four times."

A small aircraft passes behind the gas station pump at Newport News/Williamsburg International Airport on July 26. The pump station is designated for all airport fleet and grounds vehicles, with meters and a handwritten log is used to help keep track of the fill-ups.

Spirito declined to comment for this story. Former Newport News City Manager Jim Bourey, who was a member of the airport commission beginning in 2013, including a term as chairman in 2014, did not return a call seeking comment. Bourey resigned from his seat on the commission and then as city manager in the wake of the People Express loan controversy.

The recent state audit — which began in January after the Daily Press reported that the airport commission had guaranteed a $5 million line of credit for the short-lived People Express Airlines — found that Spirito "bypassed the log when he filled his personal vehicle with fuel." It also said the gas was not counted as taxable income.

Some airport firefighters noticed Spirito wasn't logging his gas usage, and thought "it's not right," Starks said.

Two airport employees are allowed to use free airport gas for airport take-home vehicles: Airport Police Chief Todd Rittenhouse drives a 2016 Ford Explorer back and forth to his home in Suffolk, and maintenance supervisor Tommy Moore drives a 2006 Ford 250 pickup truck back and forth to his home in the Williamsburg area.

Unlike Spirito, both men log their fill-ups, Starks said. Spirito "had his own key" for the airport's gas pump, he added. "I've tried to find out where that key came from," Starks said. "I can only assume that it was passed on from the prior administration," when Spirito took the airport's helm in January 2009.

This is a clipboard near the gasoline tank on the grounds of Newport News/Williamsburg International Airport that employees use to log their gas usage.

Starks said he never mentioned his concerns to Spirito's boss, the six-member Peninsula Airport Commission.

"I didn't feel that was my responsibility," Starks said. "It wasn't my responsibility to understand his contract. That was their responsibility. I took the (meter) readings every month and turned in the sheets as they were filled out." As long as Spirito wasn't doing "anything unsafe," Starks said, he wasn't going to step in. "Who am I to question his actions? I didn't know if he was authorized to or not authorized to, and I wasn't going to challenge it."

Wanner said the commission was in the dark about the details of Spirito's gas usage — aside from the fact that his contract allowed him to fuel up at the airport for free. "Whether they were aware that he was or wasn't logging in and out — or what vehicles he was gassing up — they would not have known that on a daily, weekly or monthly basis," Wanner said. "That just never would have been brought to their attention."

The Daily Press analysis shows the disparity between the handwritten logs and actual gas metered usage continued after Spirito was put on paid administrative leave in early March — and after he was fired in May. There were 114 gallons of gasoline unaccounted for in March, followed by 104 gallons in April, 93 gallons in May, 14 gallons in June and 32 gallons in July.

There are other problems with the logs — illegible numbers, sometimes lacking decimals, and some lines not filled out — that could account for some of the disparity. Starks, at Wanner's urging, recently posted a sign reminding employees to "print legibly." He also said an airport shuttle bus driver apparently filled up a bus tank in May without logging 40 gallons.

But Starks said he couldn't explain why a significant disparity continued after Spirito's departure. "I don't know, because I've never been told that we've got that many gallons of gas not being accounted for," Starks said. "No one has ever brought it to my attention."

Though there's a surveillance camera near the gas pump, it focuses on a nearby airport gate, with Wanner saying there are no plans to shift that camera to more closely monitor the tank.

"I will take whatever rational steps are available to assure that the logs are being maintained and that the security of the pump is enhanced," Wanner said. "But the current camera has a very specific mission. I can't use that. And that has far more serious consequences if we don't monitor (the gate)."

Double dipping with credit cards?

In addition to Spirito's failure to log his gasoline usage, there are separate questions of whether he was "double dipping" on his gasoline reimbursements.

In a memo written in early 2013, Spirito gave five airport staffers — including himself — an allowance of up to $200 a month to be charged on their airport credit cards for gasoline at private stations such as Exxon, Shell and Wawa, the state audit found. The audit noted that the allowance was not reported to the IRS as income. It also noted that Spirito was getting free gas from two different places.

"We ... noted numerous receipts in which (Spirito) was reimbursed for gas obtained from various gas stations and question why he was being reimbursed for gas when his employment agreement states that he was to use the (airport-) supplied fuel facility," the audit said.

A spreadsheet created by the airport's finance office shows Spirito charged $5,328 in gasoline on his airport credit card — or about $100 a month — since January 2013. (The four other employees in the plan charged a bit more in gas, averaging about $145 a month.)

In his March 2013 memo, Spirito told employees that the "purpose for the allowance is to off-set your fuel costs for various business travel in Hampton Roads and other local areas." The memo said employees must submit receipts for their fuel purchases, that they can't exceed the monthly limit, and that they would be reimbursed separately for approved travel "beyond the immediate Hampton Roads area."

But Spirito didn't explicitly bar those employees from charging the airport for personal gas usage.

That wasn't good enough for the commission. In its May 15 letter of termination, the airport commission took Spirito to task for the monthly gas allowances — which amounted to up to $2,400 a year for each of the five employees — "with no requirement that it be tied to business travel."

"You have hidden employee compensation in the fuel expense account, also exposing these employees and the (Peninsula Airport Commission) to back taxes, additional filing obligations and possible interest and penalties," the board wrote to Spirito.

On April 24, Wanner suspended the program, "pending review of its purpose and tax implications." He told the four other employees that past airport W-2 forms were being reissued and they would have to submit amended tax returns for 2013 through 2016.

The IRS' criminal investigative division is one of three agencies — along with the Virginia State Police and the U.S. Department of Transportation Inspector General's Office — looking into "past business operations" at the airport. The IRS would not say whether the gas use is included in its investigation.

How the system works

The airport's gasoline tank, which sits next to the fire station west of the old terminal building, holds 1,300 gallons of unleaded fuel. It services a fleet of more than 30 airport vehicles — including vans, shuttle buses, pickup trucks and cars — as well as lawn mowers and power equipment. It also services cars and trucks owned by outside vendors, including Rick Aviation, Atlantic Aviation, American Airlines, Delta Airlines and Flight International, with each entity having a separate key for the pump.

Between Jan. 1, 2015 and July 31, 2017, the airport gas tank has pumped more than 56,000 gallons, the meter records show. More than 36,000 gallons — or 64 percent of the total — was used for the airport fleet and equipment; the rest went to the outside firms.

At the end of each month, Starks reads the meters and changes out the log sheets, then hangs them back on clipboards just inside the fire station's doorway. For the private companies, an airport finance official compares the logs and meters to ensure they match up. Starks said they typically line up pretty well, with slight discrepancies for rounding errors. "There has been the occasion where the employees aren't paying attention and have grabbed the wrong clipboard," he said. But that doesn't happen too often, he said, because "I run a pretty tight ship."

But the finance office doesn't compare the meters and log sheets for the airport's own gas usage, even though that accounts for nearly two-thirds of the tank's gasoline usage. "We did it for (the vendors) because they are being invoiced," Wanner said. "Since we are not invoicing ourselves, that's the reason they don't do the same for the (airport) meters."

Hugh Barlow, with the Peninsula Airport Commission's annual auditor, Dixon Hughes Goodman LLP, did not return phone calls seeking comment on whether this process was adequate to ensure the gas usage was being properly tracked and controlled.

It would be nice, Wanner said, if the airport could buy a newer system used by many cities and counties. Instead of depending on handwritten logs, the data — such as the vehicle, mileage and amount of gas pumped — is entered electronically at the pump. "Then there's no question of who pumps what," Starks said.

"I don't have the resources to install a new system at this time," Wanner said. But, he added: "We will improve our record keeping on gasoline."

Original article can be found here ➤

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