The administrator of Arlington County's retirement fund was placed on indefinite leave yesterday, after a county audit found "irregularities" in his expense reports, including unauthorized trips to Delaware and a $200 charge for a spa day at an Arizona resort, county officials said.
The trustees of the $1.1 billion fund placed Executive Director Bruce O. Kallos on leave with pay after an audit found that Kallos had used the board's American Express card improperly.
He required his staff to attach receipts for expenses but did not do so himself. The improper accounting may have gone on for as long as seven years, officials said.
"The audit is not yet complete, but we have learned enough to conclude that the executive director acted improperly," said Steven Ivins, president of the Board of Trustees of the Arlington Employees' Supplemental Retirement System, which oversees pensions for 7,000 current and former county employees.
Kallos, who has won praise for improving the fund's performance in recent years, said yesterday that most of his travel and expenses were approved by the fund's treasurer, and that for seven years the American Express bill had served as a sufficient receipt.
"We've got an issue where the board has questioned some expenditures they've previously signed off on, and we're trying to resolve it," Kallos said.
He said he had "screwed up" when he charged an estimated $200 on his hotel bill for an afternoon of massage and yoga at the Centre for Well-Being spa at the Phoenician, a luxury resort at the base of Camelback Mountain in Scottsdale. Kallos attended an investment conference there in January and said he charged the $200 spa afternoon to his room rather than have one of the fund managers hosting the event pick up the tab.
"There's one where I clearly screwed up," Kallos said. "There are some things I need to repay the county for."
Kallos also said he would stop billing the county for one-way portions of weekend trips to Wilmington, where he has his primary residence. He frequently travels to Wilmington on Fridays to meet with the fund's investment consultant, but would stay the weekend at his residence, billing the county for half his train ticket.
"I've agreed not to do that anymore, but this was a practice that was in place and agreed upon for a number of years," Kallos said.
Kallos has been the fund's administrator since 1995, and under his stewardship, the fund has consistently done well, performing in the top 25 percent of public funds for the past five years, Ivins said.
"You don't get those types of results in a period that includes a bear market without doing a few things right," Ivins said. "This is a disappointing and painful decision for us. We are all so sorry."
Arlington Comptroller Barbara Liechti will continue with her audit of 12 months of credit card statements, and a full report to the board is expected next month.