RICHMOND, Va. — An audit conducted by Richmond’s Office of the City Auditor (OCA) has uncovered significant issues with inventory management at two key Department of Utilities (DPU) warehouses, raising concerns over potential risks to the city’s resources and financial stability.
The audit, which took place in late 2024, focused on the Main Warehouse and the Wastewater Treatment Plant Warehouse, both of which house materials critical to maintaining Richmond’s water system. These warehouses store essential maintenance supplies and emergency replacement parts, but the audit found a disturbing lack of proper inventory management practices, putting millions of dollars in materials at risk.
According to the OCA, the warehouses were poorly managed, with inaccurate inventory records and a lack of standardized procedures to track supplies. This resulted in significant discrepancies in inventory counts, including $955,000 worth of overstated inventory at the Main Warehouse and $404,265 worth of missing products at the Wastewater Treatment Plant Warehouse. Among the missing items were CAN-AM chains, which were reportedly not tracked properly and were left unsecured in outside storage areas.
Additionally, the audit revealed that some materials were stored in unsafe conditions. At the Main Warehouse, inventory was found in “Building 20,” a structure that had been partially demolished, exposing materials to potential damage from weather, pests, and falling debris. Despite these hazardous conditions, nearly $250,000 worth of items remained in the building. Rust and deterioration were noted on several of these items during the physical inventory count.
While security measures at the warehouses were deemed adequate, the audit raised concerns that items stored outside or in dilapidated buildings were vulnerable to theft, loss, or damage. Further complicating the issue, the Wastewater Treatment Plant Warehouse had over 7,000 feet of unverified Amwell chains, valued at $390,825. Auditors found that multiple types of unmarked chains were stored in the same area, making it difficult to confirm the presence of the specific Amwell chains listed in inventory records.
Despite these findings, the city of Richmond has made little progress in addressing the audit’s recommendations. As of January 2025, the OCA reported that the majority of suggested improvements had not been implemented. Of the 46 active recommendations for the DPU, 32 remain overdue, including six high-priority recommendations related to critical inventory management issues.
Some of the key overdue recommendations include the development and implementation of standardized inventory tracking policies and the proper handling of inventory used on work orders. Additionally, concerns about the storage conditions at Building 20 have yet to be fully addressed.
The OCA’s audit raises a crucial question about the city’s commitment to improving oversight and minimizing risks to public resources. If the current inventory management methods remain unchanged, the OCA estimates that millions of dollars’ worth of materials could continue to be inaccurately tracked or unaccounted for, exposing the city to further financial and operational risks.
With critical recommendations still unaddressed, the city’s failure to follow through on audit findings could result in continued inefficiencies, losses, and potential fraud. As the city works to address these issues, officials will need to act quickly to implement the necessary reforms and safeguard valuable resources for the future.
