Richmond, VA – The City of Richmond has terminated its streetlight maintenance contract and is considering disbarring the contractor after an audit revealed over $1.2 million in questionable charges. The audit, conducted by the Office of the City Auditor (OCA), uncovered unallowable costs, overbilling, and potential fraud related to two projects: a streetlight count initiative and ongoing streetlight maintenance.
According to Phase 1 of the audit, presented to the Richmond City Council on December 3, the discrepancies were partly due to failures in contract management by city staff, who approved the contractor’s invoices without sufficient oversight. The OCA found that, in many cases, city employees “essentially paid whatever the contractor billed” without verifying the accuracy of charges.
The audit identified several areas of concern, including:
- $754,614 in unallowable costs, such as payments for an assistant project manager and consulting services that were not covered by the contract.
- $161,272 in overbilled charges, including costs for vehicles, equipment, and labor that were not actually purchased or completed.
- $289,405 in questionable equipment costs, which further raised doubts about the contractor’s billing practices.
The audit also revealed that the Streetlight Division, responsible for maintaining approximately 37,000 streetlights in Richmond, had been operating with a significant staffing shortfall. As of November 7, the division had 18 vacancies and has not been fully staffed since 2014. The city has relied on a combination of internal staff and contractors to meet its operational needs.
In response to the findings, the city has taken immediate action. The contract with the involved contractor will be terminated on December 16, allowing for a transition of work to other service providers. Additionally, the city is considering the disbarment of the contractor, though no final decision has been made. Disciplinary actions have been implemented for city employees identified in the audit, and the city is exploring options for recouping overpaid funds with the help of the City Attorney’s Office.
The audit has prompted the city to review and strengthen its internal controls and contract management processes. In particular, the city has committed to bolstering training for staff involved in contract administration. Ongoing training sessions are already underway, and additional classes are scheduled for 2025. The city also plans to assign full-time inspectors to oversee contracts and ensure better management moving forward.
Moreover, the city is taking steps to address long-standing staffing issues within the Streetlight Division. Efforts are underway to offer more competitive pay to attract qualified workers, especially for hard-to-fill positions like powerline specialists. By reducing the reliance on contractors for these roles, the city hopes to enhance both staffing stability and oversight capabilities.
The City of Richmond has expressed its appreciation for the OCA’s work in uncovering the discrepancies, acknowledging that the audit has played a crucial role in identifying the extent of the billing irregularities. A city spokesperson emphasized that the situation is being treated with the utmost seriousness, and the city will continue to collaborate with auditors, legal authorities, and other agencies to pursue the repayment of fraudulent charges.
In a statement, the city affirmed its commitment to improving internal controls and ensuring accountability at all levels of city operations. “We will continue to strengthen our contract oversight process to reduce the possibility of such issues arising in the future,” the spokesperson said.
