News Nanaimo has also learned that city manager Tracy Samra approved a loan to Mr. Mema from the city when he couldn’t repay the municipality for his personal spending.
He has been repaying the loan — believed to be interest free — in installments, reliable sources said. The most recently available figures show Mr. Mema was paid a $162,000 salary in 2016.
The use of city purchase cards for personal expenses is expressly prohibited by city policies and cardholder agreements, which say employees may be terminated if they do so.
Excusing Mr. Mema’s policy breaches and granting him a loan is what accountants call a “management override of internal controls” — overruling prescribed policies or procedures meant to protect the city from financial abuses.
Staff complaints ignored
When managers in the city’s finance department raised red flags about Mr. Mema’s breaches of the city’s policies their complaints were dismissed, it was alleged.
Complaints to the city’s auditors KPMG also went nowhere, it was claimed.
KPMG spokesperson Lisa Papas said the auditing firm was “unable to comment on our audit work due to professional standards relating to client confidentiality.”
Sources said that former deputy director of financial services Deborah Duncan, the city’s second most senior finance official, was pressed into early retirement after she blew the whistle on Mr. Mema’s troubling transactions. She left the city last October.
Ms. Duncan’s treatment left other managers fearful for their jobs and feeling they had nowhere to turn, sources said. Two managers in the department went on leave as a result of the anxiety and stress caused by the upheaval over Mr. Mema’s flouting of the rules. Union members in the department were also impacted.
Amid tensions between him and department staff, Mr. Mema brought in a former colleague from Alberta, Nick Mloyi, to “temporarily” fill Ms. Duncan’s post, elevating him above long-time managers.
He also hired a second staff member from the Regional Municipality of Wood Buffalo where he previously worked. That new employee has yet to start work.
Council finally told last Thursday
It is understood that city council was officially informed about Mr. Mema’s personal transactions and the problems in the city’s finance department at a closed meeting last Thursday.
This was done by one of the city’s managers on behalf of a union member.
According to sources, council suspended Mr. Mema, but in a statement the next day, council said only that it had launched an investigation after hearing an “allegation of significant concern.”
The city continues to block News Nanaimo’s freedom of information request to access Mr. Mema’s and Ms. Samra’s city credit card statements, which were refused even though the city furnished statements for three other senior managers.
That request, which is currently in mediation with BC’s Office of the Information and Privacy Commissioner (OIPC), was originally made on October 13 last year.
One source said Mr. Mema strongly advocated for the city to block the request and demanded that the city use its lawyers to fight it “under any and all circumstances.”
News Nanaimo is asking the OIPC to order the city to disclose the documents.
Allowed to keep card
Mr. Mema’s personal spending on the city’s credit card first became an issue early last year, sources said.
It is understood that he incurred expenses related to a personal vacation around the same time he is known to have attended a relative’s wedding.
However, when the city received the credit card bill Mr. Mema was unable to repay the personal expenses he had incurred. The issue was referred to the city’s HR department and Ms. Samra.
Ms. Samra arranged for Mr. Mema to pay off the personal expenses through regular payroll deductions. He was allowed to keep his city purchasing card.
At the time, Mr. Mema was an important member of the team working on council majority leader Bill Bestwick’s plan to build a $100-million hockey arena on Nanaimo’s waterfront. It is unclear if any council members were aware of Mr. Mema’s purchasing card problems.
Subsequent management expense reports made public on the city’s website failed to show that Mr. Mema had incurred the personal expenses and was paying back the money.
Flights to Mexico
After receiving information last September News Nanaimo began requesting records of Mr. Mema’s and Ms. Samra’s expenses, including receipts.
Later that same month, media reported that Mr. Mema’s previous employer, the District of Sechelt, was suing him in small claims court for almost $10,000 in allegedly personal expenses he had incurred on a district credit card. He has not formally replied to the allegations in court.
It was after this that Ms. Samra reviewed Mr. Mema’s credit card spending for any new personal charges.
She allegedly found that two personal air tickets to Mexico had been billed to his purchase card earlier that month. There was also a personal vehicle repair bill charged to the card, sources said.
In comments to the media after the Sechelt lawsuit was made known, Ms. Samra defended Mr. Mema saying he had “demonstrated outstanding leadership throughout his tenure at the City of Nanaimo and we are proud that he continues to serve as our chief financial officer.”
Meanwhile, News Nanaimo requested copies of Mr. Mema’s and Ms. Samra’s credit card statements and published a widely-read article based on expense receipts received from the city.
After publishing an article on Dec. 3 saying the city was refusing access to Ms. Samra and Mr. Mema’s credit card statements, Ms. Samra announced that the city was reviewing its expense policies with council’s support.
A Dec. 8 release about the review said that Mr. Mema had “moved to make council and city staff expense reporting more transparent” and that “allegations that city staff have overspent or charged taxpayers for non-eligible expenses are unfounded.”
However, as part of the review and instead of directly investigating Mr. Mema’s spending, Ms. Samra ordered the city’s auditors KPMG to review the expenses of former senior managers going back more than 10 years.
Said a source of KPMG’s review: “The idea was to find examples of personal expenses by past managers to whitewash the current personal expenses. She [Ms. Samra] wanted to show it wasn’t unusual.”
It’s understood that Mr. Mema’s credit card was revoked and Ms. Samra also turned in her card during KPMG’s review.
Sources say council has now been provided with a copy of the 10-year review, but it doesn’t find any egregious examples of personal spending by former managers. Violations were mostly where personal expenses and business expenses couldn’t be separated. All were repaid immediately.
News release to “take heat off”
Ms. Samra was arrested late on the evening of Jan. 31 on allegations of uttering threats during an incident earlier in the day at City Hall. She has not been formally charged.
Three days later, on Saturday Feb. 03, a news release was published on the city’s website announcing that the review of staff expenses policies was complete. It is unusual for the city to issue news releases on Saturdays.
Acknowledging for the first time that KPMG had been tasked to conduct a review, the release claimed that for more than a decade the city had “in practice” allowed personal expenses on city purchase cards and credit cards and there “has been no defalcation, fraud or misappropriation of city funds.”
Issuing the news release was approved by council, but one source said councillor Gord Fuller wanted it issued to “take the heat off of Victor Mema” caused by News Nanaimo’s continuing coverage.
Mr. Fuller declined comment when asked about this yesterday.
However, city staff removed the news release later in the day Saturday saying it had been issued prematurely due to a glitch in the city’s web publishing software. However, later that night after 11:00pm it was posted again, this time at the behest of Mr. Mema, a source claimed.
This week, however, the release was removed from the city’s website. There has been no official word on why it was taken down, but it is understood that city staff believe it is misleading.
Mr. Mema declined all comment to News Nanaimo yesterday.