By Taylor Boyd and Jessica Dillon
After months of pressure and waiting from residents, the Martinsville City Council unanimously approved releasing the Brown Edwards forensic audit in a redacted form at its April 14 meeting.
Following its release, City Attorney Steve Durbin, of Sands Anderson, provided a summary of the more than 40-page forensic audit.
“The purpose of the audit was to advise and assist Sands Anderson in the financial aspects of the employment investigation because there were some questions that had arisen regarding compliance with city policies, use of city charge cards, travel expenses, handling of ARPA (American Rescue Plan Act) funds, and proper documentation of those matters. So Brown Edwards looked at those and a number of other issues to assist us in making our assessment and advising council,” he said.
Durbin said the released audit is a slightly redacted version of the report received from Brown Edwards.
“You’ll see there are three are four sentences redacted – these are not not material to the conclusion of the auditors, but they were redacted because these specific statements are protected under Garrity vs. New Jersey, and frankly we can’t disclose those. But again, they’re very minor and not material to the overall findings of the auditors,” he said.
Durbin said there also are blanks in other table portions of the audit, “but those blacked out bars do not indicate redactions. There was just no data obtained in that area. (I) didn’t want people to see that and have a misapprehension as to what is taking place,” he said.
Vice-Mayor Kathy Lawson said there’s also an alleged disputed charge in the audit and asked Durbin to address it.
“There is the word ‘alleged fraud’ in the report, but my understanding is that was actually where the city staff identified a potentially fraudulent transaction that a third-party had put on a city charge card, addressed it with the bank, and they had that rectified. It’s not a fraudulent act by anyone in the city,” Durbin said.
Council member Julian Mei said the appendices section has a bunch of black texts.
“It’s not something germane to this audit. It’s not something relevant to the purpose of the audit,” Mei said.
Mei said the “nature of the audit” section also has references to ‘reported as fraud.’ However, “that doesn’t mean this has been reported by the council as fraud. It was reported internally by whomever had the card at the time,” Mei said.
City Manager Rob Fincher said those charges in particular were disputed charges that city employees saw on their statements and questioned.
“They followed” proper procedure in questioning the charges, Fincher said.
Gene Teague, interim council member, said about 99.9 percent of the forensic audit was released unredacted.
“It’s a very small number of sentences that are redacted. It’s materially a fully released report,” Teague said.
The city released a press release that included a copy of the audit later that night. The report is available on the transparency page of the city’s website and a link to it is available on the city’s Facebook page.
Fincher also discussed the efforts city staff have taken since July 2025, such as a comprehensive effort to strengthen accountability, enhance financial controls, and restore confidence in how taxpayer resources are managed.
“These efforts have been both necessary and urgent, particularly in light of the findings highlighted in the recent forensic audit,” he said.
Fincher said the document that will be attached with the forensic audit details the actions taken to restore accountability and financial integrity. It also provides a summary of the significant reforms implemented across the city’s financial, human resources, administrative practices.
“These improvements include strengthening policies, multi-layered approvement processes, clear oversight mechanisms, and reinstatement or creation of procedures designed to prevent waste, fraud, and abuse,” he said.
“Our travel policy was not being followed,” said Fincher, who confirmed policies around it had been strengthened. Council will now oversee grants for appropriation. Purchase thresholds and limits are reduced, and ‘wet’ signatures are required.
“No stamped signatures,” said Fincher. “All potential employees are properly vetted, and background checks are required.” Additionally, all city employees will use the time clock software.
“We continually strive to do the best that we possibly can for the City of Martinsville,” Fincher said, and noted that while progress has been made, the work is still ongoing.
“The City of Martinsville remains committed to continuous improvement and to implementing additional safeguards to ensure responsible, transparent governance. We will continue working diligently to protect the public trust and to ensure that your tax dollars are managed with the highest level of integrity,” he said, and noted that the audit only covered a certain period of time.
“It is a sampling, so they will give a specified date before and after,” he said. The auditors were “only looking at instances that occur within that time frame. They don’t go and do everything.”
Audit Breakdown
According to the forensic audit, former City Manager Aretha Ferrell-Benavides spent $96,613.88 in 307 charges from the period of February 2024 through June 2025.
“The evidence indicates that of the 307 transactions tested, 68 did not have a documented review by anyone other than the cardholder. The review and approval of the remaining transactions was completed by an employee in a subordinate position,” the audit states.
The audit notes the city’s travel policy indicates a $45 per limit for meals or incidental expenses or an amount not to exceed the United States Government General Service Administration (GSA) per diem rate for the locality in which the lodgings in located.
“Charges for meals and incidental expenses exceeded the GSA per meal limits by a total of $1,730.62 and lodging expenses exceeded GSA limits by $18,409.59 during this period. The charges included a three-night stay in Pittsburgh from September 21, 2024 through September 24, 2024, totaling $1,613.10 for a room in the names of Aretha Ferrell-Benavides and Ted Benavides,” the report states.
The audit states 37 transactions during the period totaling $8,142 were not supported by a receipt or invoice, and that in the case of a missing receipt, city policy requires the employee to submit an affidavit.
“Most of these transactions did not have an affidavit filed. Based on the documentation provided, Brown Edwards was unable to determine the business purpose of 99 transactions totaling $14,632.80,” the report states.
Brown Edwards also examined statements from January 2024 through June 2025 for city employee credit card expenditures. It extracted 247 charges during this time totaling $65,490.16 that met the company’s criteria for testing.
According to the report, the nature of Martinsville’s records required Brown Edwards to perform a manual extraction of individual transactions for testing and analysis.
“The only documentation provided to support the above transitions consisted of invoices. In some instances, the receipts or invoices included handwritten notes indicating the business purpose of the transaction, however the majority of the tested transactions only had a receipt. Brown Edwards noted 16 transactions totaling $4,978.24 that were missing a receipt or invoice altogether, two of which had an affidavit filed in place of the missing receipt,” the audit stated.
Because of the lack of evidence, the report states Brown Edwards was unable to determine if the business transactions tested, whether they were reviewed and approved, nor the reasonableness of the expenses.
“Transactions of note include $3,492.10 of charges to Apple.com for iCloud storage and other digital subscriptions, including, Amazon Prime, Google – YouTube TV, AT&T phone bills, and Grammarly, $2,149.99 to purchase an Angler’s Choice EcoMap, and purchases at the Virginia ABC Store totaling $115.82,” the report states.
Exclusive of Ferrell-Benavides, the report states no expense reports, reimbursement requests, or any other support showing that the transactions were valid expenses for the benefit of the city of Martinsville were provided.
“Additionally, no backup was provided to indicate that the transactions were reviewed and approved by an individual in a supervisory role. The lack of evidence makes it impossible for us to conclude whether the transactions tested have a legitimate business purpose. Also, the pervasive absence of evidence demonstrates a significant shortfall in oversight from management and inadequate or non-existent internal controls. Additionally, there are transactions that are in direct violation of the City’s purchasing card policy that was in place at the time the transactions occurred,” the report states.
Regarding budget amendments, Brown Edwards reportedly tested 30 budget amendments that were effective for fiscal year 2024 totaling $22,109,033. Between January 28, 2025 and January 30, 2025, five amendments were entered by Sita Conde, who was an employee in Ferrell-Benavides’ office, and posted by then Chief Operating Officer Edena Reese Atmore, totaling $10,083,166.
“These amendments, Journal Numbers 731, 981, 982, 988, and 989, were not approved by city council until February 25, 2025, almost a month after they were entered and effective. We further noted that the city advertised the required public hearing and noted it on the agenda. We examined city council minutes from February 25, 2025, and noted that the public hearing was scheduled after the council vote, however no public hearing was held,” the report states, adding that of the remaining 26 budget amendments, 24 were entered into the accounting system three or more months after they were voted on and approved by city council.
In the testing of 28 budget amendments from fiscal year 2025 totaling $10,996,237.28, 10 entries were made three or more months after the amendment was approved by city council.
“On April 24, 2025, two amendments totaling $218,960 were entered by Sita Conde and posted by Edena Reese-Atmore, employees of the Former City Manager’s office without review from any other department, nor the approval of city council. The amendments reallocated $169,180 from the Economic Development Authority (EDA) to the Former City Manager and $49,780 from the EDA to the city council.
“Notably, the transfers increased the Former City Manager’s salary budget by $100,000, travel budget by $25,000, office supplies by $13,000, dues and association memberships by $11,500, and expense reimbursements by $5,000 and increased city council’s travel budget by $15,000,” the audit report states.
On May 13, 2025, the report notes a $500,000 appropriation to the EDA was entered and an amendment increasing the Human Resources budget by $104,461.75 while reducing the Employee Services budget was entered on May 7, 2025.
Both amendments were entered by Conda and posted by Reese-Atmore. Two days later, Conde entered and Reese-Atmore posted another amendment to increase the travel budget for Community Engagement by $7,175.28 “with no oversight or review from an outside department or Council.”
The report recommends that while not required by current policy, amendments of this nature be reviewed by an appropriate level of management or governance outside of the city manager’s office.
As of a result of the budget increases, the audit report states Ferrell-Benavides’ budget expenses for fiscal year 2025 were $740,557. By comparison, it notes the City Manager of Harrisonburg, which is approximately four items the size of Martinsville, had a budget expenditure of $885,902 for fiscal year 2025.
Hiring Practices
The report states Brown Edwards chose 12 employee files to review for appropriate authorizations related to hiring and the awarding of raises, promotions, and bonuses. Ferrell-Benavides was included amongst the employee files.
“We noted that of the 12 employees tested, we could not determine whether or not the City’s hiring practices were followed….an internal control narrative detailing the process of interviewing, hiring, setting salary, and other tasks associated with the hiring of employees was not provided,” the report states.
Of the 36 employee raises tested by Brown Edwards, the audit report notes that 21 were related to Cost-of-Living Adjustments (COLA).
“We noted that Edena Reese-Atmore, COO, received a raise of $5,800 per year with no documented business purpose listed on the change of status form. We noted that Aretha Ferrell-Benavides received an increase in total compensation of 15 percent effective April 1, 2025. The documented business purpose of this increase was Ms. Benavides’ evaluation which took place in October 2024,” the report states.
The audit also notes that Shasta Carmichael received a raise of $15,698.67, or 35.4 percent, on August 1, 2024 for transitioning from a Community Engagement Specialist to a Community Engagement Specialist/Executive Assistant.
The report also states that Carmichael received a total of four raises between her hiring date of November 1, 2023 and August 1, 2024 including a $672 COLA, $8,711.46 for a promotion, a $1,290 COLA, and $15,698 for the additional duties for an approximate total of $24,000, or 44 percent.
Fincher noted that Carmichael was hired to work in the utility billing department, “and then she changed jobs. She went to work for community engagement, because she’s got degrees.
“She changed jobs within the city, and that is one of the changes in pay,” Fincher said. “Then while she was working on that,” Carmichael became the city manager’s executive assistant, “and that was the second change.”
The report also states that Former Human Resources Director Travis Hodge received five raises from December 1, 2023 through August 2024 including a $2,052 COLA, $5,234 for interim duties, $2,198 from an evaluation, a $3,363 COLA, and $9,506 for a promotion. These raises total $22,000, or a 21.5 percent pay increase.
“Anthony Wood was hired as a part-time business analyst at a rate of $95 per hour with no documentation of his qualifications in the personnel file provided. Mr. Wood was paid approximately $100,000 from August 12, 2024 (his date of hire), through May 16, 2025,” the report states.
The report also states that nine out of the 10 tested employees hired after Ferrell-Benavides did not have a resume or other new hire documentation in their employee personnel files.
The board also unanimously approved directing Sands Anderson to prepare a public statement regarding the city’s workplace investigations with recommendations as advised by the city attorney by its April 28 meeting.
In other matters, the council:
*Appointed Carrie Bradley to the Architectural Review Board.
*Appointed Robert Lyles to the Transportation Safety Commission.
*Appointed James Johnston to the Transportation Safety Commission and to the Southern Area Agency on Aging Board of Directors.
*Appointed Jennifer Higgins to the Arts & Culture Commission.
*Appointed Michael Kirby to the Henry County-Martinsville joint Social Services Board.
*Approved the appropriations ordinance 2026-6, the reappropriation of prior-year funds, on second reading.
*Approved the appropriations ordinance 2026-7, fire programs, on second reading.
*Approved the appropriations ordinance 2026-8, on second reading.
*Approved a resolution approving the city’s participation in the proposed combined settlement agreement resolving opioid-related claims against Associated Pharmacies, Inc.
*Heard about upcoming events in Martinsville.
*Heard comments by the other members of city council.
*Heard comments from Fincher.
*Approved the Jan. 8 meeting minutes.
*Approved the March 24 meeting minutes.
*Proclaimed honoring April as Sexual Assault Awareness Month.
*Proclaimed honoring April as Autism Awareness Month.
*Proclaimed honoring April 24 as Arbor Day.
