An investigation by the Office of the Inspector General showed that a former Parks & Recreation director intentionally circumvented the state’s procurement laws by arranging a “handshake agreement” with a local food truck vendor, the OIG announced Monday in a statement.

Jay Guelfi, who served as the department director from 2015 until his retirement in May 2023, was found to have violated state procurement laws and town policies related to handling cash. The OIG found that the Parks & Recreation Department lacked internal controls to prevent fraud, waste and abuse of revenues from a town concession stand. It determined that Guelfi did not turn over the cash generated from the concession stand to the town’s treasurer, as required by law.

“Rather, he purportedly kept some of the cash in his desk and used at least some of it to reimburse employees for purchases made for the department, in violation of the town’s cash handling policies,” according to the release. “A full accounting of all money received by Guelfi and where it went could never be reconstructed due to insufficient records.”

The OIG “is an independent, non-partisan oversight agency mandated to prevent and detect fraud, waste and abuse of public resources at the state and municipal level across the Commonwealth of Massachusetts,” according to its website.

A letter from Inspector General Jeffrey S. Shapiro to Town Manager Elaine Lazarus, Select Board Chair Joe Clark and Parks & Recreation Commission chair Dan Terry dated Sept. 22 was attached to the release. It stated that the calls were made in March, July and September 2023 to the OIG’s fraud hotline concerning cash handling practices within the department. These calls prompted the investigation into Guelfi’s conduct.

“The commonwealth’s governmental bodies must act as good stewards of public assets in conducting procurements and accounting for cash revenues,” stated Shapiro in the letter.

“Handshake deals and desk drawers full of cash are not only clear violations of state law and local policies but also are an abuse of public resources,” continued Shapiro in the statement. “Those conducting the public’s business must proceed fairly, openly, and in accordance with the law. Failure to do so erodes the public’s confidence and significantly increases the likelihood of fraud, waste and abuse.”

Violations of state law outlined

The letter noted that Chapter 30B of Massachusetts General Law requires that municipalities seek written quotations from at least three companies for supplies or services valued between $10,000 and $50,000. For contracts valued at more than $50,000, cities or towns must procure the services through competitive sealed bids. All contracts valued at $10,000 or more must be in writing, and municipalities may not make payment for a supply or service prior to the execution of a contract.

According to Shapiro’s letter, an unnamed local food truck vendor approached Guelfi in approximately 2019 with the idea of opening a concession stand at the Fruit Street athletic fields.

“The vendor stated he did not enter into a formal contract with the department to operate the concession stand and described the arrangement as a handshake deal,” the letter stated. “The vendor told OIG investigators that he verbally offered the town 15 percent of his sales, with a minimum payment of $250 per season to operate out of the concession stand; however, another witness told OIG investigators that they believed the department and the vendor agreed to split the sales ‘fifty-fifty.’

“A November 2019 email sent by the vendor to the department stated, ‘it’s 20% and yes I will square up the minute I’m done,’” the letter continued. “The department apparently did not memorialize its agreement with the vendor in writing and did not maintain any records of payments.”

The vendor stopped operating the concession stand after the fall 2022 season. Since that time, the department has not selected another vendor to operate it.

The OIG found that Guelfi did not solicit quotes from other vendors “[d]espite the value of the multi-year agreement being over $10,000 given the amount of sales,” the letter noted. The department also did not  attempt to assess the concession stand’s value.

“Significantly, the OIG discovered evidence indicating that this failure to comply with Chapter 30B was intentional,” according to the letter. “The OIG’s investigation confirmed that Guelfi was conscious of the Chapter 30B thresholds, and it was common practice for him to discuss avoiding them.”

The letter also noted that the vendor knew about Chapter 30B thresholds.

“One witness recalled Guelfi stating that he did not want to involve the town accountant, who had given Guelfi pushback on previous purchases,” according to the letter. “The agreement with the vendor restricted the town’s oversight of concession revenues and the cash handled by Guelfi.”

The department was found not to have entered into a formal written contract with the vendor and failed to document an oral agreement. Emails provided by the vendor to the OIG showed the percentages to the department were “inconsistent” from year to year.

The OIG provided recommendations to the town to prevent this situation from happening again. They included evaluating the towns cash-handling policies and ensuring that there are “multiple layers of review.”

It also recommended that an assessment be conducted to identify the town’s other elected or appointed independent boards or commissions. These entities should be required to execute memorandums of understanding “recognizing that all townwide policies, including those on procurements, written contracts, and cash handling, apply to employees of their respective departments.”

Town officials respond

In an interview with the Independent on Monday afternoon, Select Board chair Joe Clark said he received the letter from the OIG earlier in the day.

“Obviously this is something the town knew about,” said Clark. “My understanding is that the town cooperated immensely during this investigation. The town has taken measures and will continue to take measures to prevent something like this from happening again.”

“It was great to have that type of feedback,” he added regarding the OIG’s recommendations.

“A lot of times, people want to look back to figure out what happened,” stressed Clark. “I want to focus on what we can do moving forward. Hopefully stuff like this will never happen again.”

Clark also praised Jon Lewitus, the current Parks & Rec director, for his hard work and professionalism.

“The Town of Hopkinton has received the Office of the Inspector General’s report regarding past practices within the Parks and Recreation Department,” stated Town Manager Elaine Lazarus in an email to the Independent. “The town takes these findings seriously. We are reviewing the Inspector General’s recommendations and will move forward with implementing the necessary policy and oversight changes to ensure full compliance with state law and to safeguard public funds.”

Terry, the Parks & Rec Commission chair, declined comment.

When reached Tuesday morning by phone by the Independent, Guelfi declined comment.