Department of Education, Arts & Culture Administrator Missy Crutchfield is dissolving her online publication Be Magazine.
Department spokeswoman Melissa Turner, who helped Crutchfield with the magazine, also is being shifted under the umbrella of a new boss.
The measures were disclosed Tuesday as a second audit report came out concerning whether Crutchfield violated city code by using city resources and time to run the for-profit online publication.
City Council Auditor Randy Burns released his audit report Tuesday to the council's Budget, Personnel and Finance Committee, saying he concurred with a report released last week by City Auditor Stan Sewell.
Sewell's audit showed four possible violations of city policy by Crutchfield and Turner, but he said Be Magazine did not appear to be operated for personal gain.
"There was no wrong done," Burns wrote in his audit. "However, by getting proper approvals and making the right people aware on the front end, the perceptions of wrongdoing could have been prevented."
Crutchfield declined to comment Tuesday.
Councilwoman Carol Berz, chairwoman of the Budget, Personnel and Finance Committee, said the council will discuss the reports next week in case any council members want further action or want to comment on the substance of the reports.
"There has to be public closure, I think," she said.
Richard Beeland, spokesman for Mayor Ron Littlefield, said Tuesday that the city welcomed any feedback from the council.
He also said Crutchfield removed Turner from under her direct control.
Three weeks ago, Littlefield told Crutchfield to remove all city references from the magazine's website. Beeland said he was not sure if any other action would be merited.
"I think the mayor's already addressed this issue," he said.
Crutchfield was named administrator for the Department of Education, Arts and Culture in 2005 when Littlefield created the department.
Sewell said in his audit that Be Magazine could create problems with perceived nepotism and also with the implication that there was a contract between the city and the publication.
Crutchfield also did not fill out a city form showing that she was engaged in outside work, Sewell said, and she should not have used city resources for personal venture.
Burns wrote that he spoke with Crutchfield about why she formed the magazine as a for-profit venture. Crutchfield told him they wanted to establish a limited liability corporation and the for-profit method seemed the easiest way, Burns said.
He said he was also told that Crutchfield was dissolving the limited liability corporation.
In other news, at committee meetings earlier in the day, the City Council talked extensively about the possible donation of property on 11th Street near the old Farmer's Market.
The site was used for years by Chattanooga Gas Co. for gasification of coal. Its current owners, J.H. Holding Co., have offered it to the city, Littlefield said.
The mayor told the council Tuesday the city could use the site as an impound lot if a new police precinct is built at the old Farmer's Market in coming years.
The council is expected to vote on the measure next week.
Contact Cliff Hightower at chightower@timesfree press.com or 423-757-6480. Follow him on Twitter at twitter.com/CliffHightower.