For Immediate Release:                                                      

August 27, 2020                                                                    

Greater Cleveland Regional Transit Authority Audit Issues Findings for Recovery

Columbus – Auditor of State Keith Faber’s Office today released the 2018-2019 Greater Cleveland Regional Transit Authority (Cuyahoga County) financial audit, which contained two Findings for Recovery totaling $189,200.

“This is an extraordinarily large amount of taxpayer dollars that the Authority should have had a better handle on,” said Auditor Faber. “I trust the management and the Board will be more diligent to avoid these inappropriate fiscal missteps in the future.”

The Greater Cleveland Regional Transit Authority Bylaws, Section 220.02(b) states, in part, that annual compensation for board members is $4,800 or $400 per month.

The City of Cleveland appointed Valarie McCall, Chief of Government Affairs, to serve as the City’s appointee on the Greater Cleveland Regional Transit Authority Board on July 12, 2006 and has subsequently reappointed her after the expiration of each term. In her initial appointment letter, it stated, “In this capacity, she will not receive any compensation, including but not limited to PERS.” PERS stands for Public Employees Retirement System. Her subsequent appointment letters were silent to the matter of compensation. ORC 2921.43 (A)(1) disallowed a salary for Ms. McCall.

Ms. McCall served on the Board without pay until 2014, at which time she requested to start receiving her monthly Board pay and requested retroactive payment to her initial appointment date, July 12, 2006.

The Authority’s Secretary/Treasurer and Board President, at the time, approved the request and Ms. McCall received back pay totaling $35,600 on March 15, 2014 for August 2006 through December 2013. She received monthly compensation of $400 beginning January 2014 through June 2018 totaling $21,600. However, Ms. McCall should not have been compensated for serving on the Board, since she was appointed to serve in this capacity based on her employment with the City of Cleveland.

A Finding for Recovery for public monies illegally expended was issued against Valarie McCall in the amount of $57,200, in favor of the Greater Cleveland Regional Transit Authority.

Under Ohio law, any public official who either authorizes an illegal expenditure of public funds or supervises the accounts of a public office from which an illegal expenditure is discovered, is strictly liable for the amount of the expenditure. Joseph Calabrese, former Secretary/Treasurer and George Dixon III, former Board President approved Ms. McCall’s request for back-pay, while Mr. Calabrese, as designated Fiscal Officer, had ultimate responsibility over the improper monthly board payments. Joseph Calabrese and his bonding company, Western Surety Company, and George Dixon III will be jointly and severally liable in the amounts of $57,200, $57,200, and $35,600, respectively, in favor of the Greater Cleveland Regional Transit Authority.

“Ms.McCall was appointed as an employee of the city and in seeking payment, she was effectively receiving double compensation,” added Auditor Faber.

On February 15, 1994, the Authority passed resolution 1994-35, which allowed Board members to be covered under the Authority’s healthcare plan.

As Board President of the Greater Cleveland Regional Transit Authority, George Dixon, III was eligible to elect medical, dental and vision insurance through the Authority's healthcare plan. Per the Policies and Procedure of the Board of Trustees of the Greater Cleveland Regional Transit Authority Chapter 220.05, any member of the Board of Trustees receiving health care coverage must reimburse the Authority for the cost of any premium or other charges for said health care coverage on a prospective basis.

Mr. Dixon began his term as President of the Board in 1994 and elected coverage through the Authority from 1994 through March 6, 2018. In order to reimburse the Authority, Mr. Dixon would use his board stipend to cover a portion of the reimbursement and was supposed to write a check monthly for the balance. However, Mr. Dixon did not consistently remit the correct amount of reimbursement to the Authority and on some occasions didn’t remit payment at all, for a total underpayment of $132,000 owed to the Authority, as determined by an investigation conducted by the Authority’s Internal Audit Department.

Mr. Dixon was charged with theft in office, pursuant to Ohio Rev. Code Section 2921.41(A)(1), in Cuyahoga County Common Pleas Court, before Judge Shirley Strickland Saffold. On August 20, 2019, Mr. Dixon waived his right to proceed by grand jury indictment and entered a plea of not guilty to a bill of information. However, on December 3, 2019, he changed his plea to a guilty plea to one count of theft in office, a felony of the third degree. On January 8, 2020, Mr. Dixon was sentenced to one year of community control/probation and ordered to pay restitution of $132,000 through the probation department to the Authority.

A Finding for Recovery for public property converted or misappropriated was issued against George Dixon, III in the amount of $132,000 in favor of the Greater Cleveland Regional Transit Authority.

“Public trust is priceless and should be protected at all costs; this type of corruption with tax payer dollars creates long lasting damage to a community,” Auditor Faber said. “I’m glad that the Board has taken steps to increase checks and balances to prevent an abuse like this from happening again.”

 The GCRTA Board of Trustees took steps to avoid the re-occurrence of any similar incidents. On June 19, 2018, the GCRTA Board of Trustees adopted Resolution No. 2018-50, which prevents members of the Board of Trustees from obtaining health insurance coverage through the Authority's providers, by rescinding Resolution No. 1994-35 and repealing Section 220.05, "Health Care Coverage" of the Codified Rules and Regulations of the Greater Cleveland Regional Transit Authority.

The Authority has agreed to make all appropriate efforts to recover these funds.

A full copy of this report is available online.

###

The Auditor of State’s office, one of five independently elected statewide offices in Ohio is responsible for auditing more than 6,000 state and local government agencies. Under the direction of Auditor Keith Faber, the office also provides financial services to local governments, investigates and prevents fraud in public agencies, and promotes transparency in government.