Centro employee Sonya Green stands near the Alamo to answer questions before the 2018 NCAA Final Four.
Centro employee Sonya Green stands near the Alamo to answer questions before the 2018 NCAA Final Four. Credit: Bonnie Arbittier / San Antonio Report

City Council on Thursday approved changes to the 10-year contract with Centro San Antonio that address shortcomings in the organization that played a part in an alleged fraud uncovered last year.

The City’s Chief Financial Officer, Ben Gorzell, and Centro interim executive director Warren Wilkinson detailed the changes Tuesday to the Council’s Audit and Accountability Committee.

Centro, the nonprofit focused on downtown beautification and advocacy, discovered last year that its former office manager and staff accountant, Alicia Padilla (known as Alicia Henderson before a recent divorce), had allegedly embezzled $291,000.

Centro fired the accountant and the scandal led to the resignation of former CEO Pat DiGiovanni, who was not implicated in any wrongdoing. He was replaced by Wilkinson, a longtime local business executive. Centro and the City both hired third-party audit firms that later confirmed no taxpayer money was involved in the alleged fraud.

Those firms also suggested changes that Centro and the City have worked to institute.

“Some of the fundamental things that were not in place are now in place,” Wilkinson said. “Everybody has different jobs. So there are three different people within Centro that do things that make sure one person is not doing all three functions that would allow someone to basically cut themselves a check.”

Wilkinson also said the organization’s monthly and quarterly financial reports are reviewed by the Centro Financial Audit committee, which includes an attorney, a CPA, and Wilkinson, among others.

The contract changes do not affect the duration of Centro’s contract with the City, which began Oct. 1, 2013, and will expire Sept. 30, 2023. They do formalize improvements in accounting procedures and oversight that have already been instituted by the organization.

Those changes include:

  • Collapsing 13 categories in which Centro used to submit invoices for reimbursement down to five categories, two of which are considered core categories and three non-core.
  • Requiring all employees whose salaries are funded through Public Improvement District (PID) funds to go through a background check at the time they’re hired.
  • Changing wording in the contract that called for Centro to have a fidelity bond insurance policy to language that allows a standard commercial crime policy covering up to $5 million.
  • Separating payroll processing from processing reimbursements for expenses and processing payroll twice monthly instead of only once a month.
  • Submitting reimbursement requests and supporting documentation must be done electronically. Previously it was done manually.

“At the end of the day, I think our processes weren’t at the level we expect them to be in terms of … how we review information that we’re going to be reimbursing from,” Gorzell said. “It didn’t meet our standard due diligence … and we needed to make improvements to that process.”

After the discovery of the embezzlement, the San Antonio Express-News reported that Padilla had a criminal record and had pleaded guilty to bank fraud prior to being hired by Centro.

A San Antonio Police spokeswoman said no arrests had been made or charges filed against Padilla or anyone else as of Wednesday, and police have no timetable for any possible arrests. Detectives are still actively working the case.

The Express-News reported that Padilla met with Centro attorneys and accountants in January and admitted to the crime and promised to repay the organization. That conversation was reportedly recorded by a court reporter although Padilla was not under oath.

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Kyle Ringo

Kyle Ringo is a freelance journalist based in San Antonio. He has covered business, college athletics, the NBA, NFL and Major League Baseball for numerous publications and websites.