City music manager resigned after failure to report ‘committed fraud’

Don Pitts, ATX Music division manager (City of Austin Website Photo)
Don Pitts, ATX Music division manager (City of Austin Website Photo)

AUSTIN (KXAN) — An auditor investigation has revealed Austin’s music program manager knew of, but didn’t properly report, an employee’s potentially fraudulent plan to reimburse herself $2,500 for a work trip to Europe.

Don Pitts, music program manager in the city’s Economic Development Department, resigned his post with the city in early February. He had worked with the city since 2010.

“We found evidence indicating that Don Pitts was aware that his direct report appeared to have planned and committed fraud and Pitts did not report this employee to the appropriate authority,” auditors said in the investigative report.

Investigators found Pitts’ employee sought reimbursement for a work trip to Europe that was approved as a “zero cost to the city” excursion. In her effort to be repaid, the employee submitted a purchase request that resulted in her boyfriend being paid $2,500 by the city for sound engineering work that was not performed.

In a letter to city auditors, Pitts acknowledged his mistake of not alerting the proper authorities, but he strongly defended his actions and categorically denied approving the “scheme.”

“When I discovered the invoice, I verbally reprimanded her, took action to correct the matter, and got all the money her boyfriend was paid returned to the City within three business days.”

“When I discovered the invoice, I verbally reprimanded her, took action to correct the matter, and got all the money her boyfriend was paid returned to the City within three business days,” Pitts said in a letter the city auditor. “I realize now that the policy does not leave it up to me to decide whether to report this wrongdoing. This is the part of the investigation that has caused me the most soul-searching.”

The coordinator that submitted the purchase request has resigned.

The junket

The issue started when Pitts’ employee, a music program coordinator, took a trip with a city vendor to Europe to “expand the reach of the city’s partnership with the vendor” and strengthen trade relationships with international cities and businesses, according to the audit.

The coordinator’s trip was approved “at zero cost to the city.” But after the coordinator returned, Pitts said, she asked multiple times for reimbursement.

In January 2015, the coordinator emailed Pitts saying she could be reimbursed by submitting a fake invoice to the city for $3,000 in advertising expenditures. In the email, the coordinator said the invoice could “sneak through without getting noticed because it is ‘advertising’ and doesn’t need a [purchase order number],” according to the audit.

In a response email, Pitts told the employee he would discuss the issue, and he reiterated that the city did not approve costs for the trip. The advertising expense invoice was not ultimately submitted, according to the audit.

  • You can read the full audit report here

However, the coordinator did ultimately create and send a purchase authorization for her boyfriend to be paid $2,500 for sound engineering work, auditors said.

Though Pitts was listed as the originator of the document, he did not sign it. Pitts also emailed the coordinator to say the Economic Development Department did not want to hire her boyfriend as a sound engineer, according to the investigation report.

In his response to auditors, Pitts said he never approved the expenditure, and he directed the review that discovered the issue.

 

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