The suspension of a second Valley Metro employee was confirmed Wednesday, as an investigation continues into possible bid-rigging in the agency that manages Roanoke's bus system.

Police seized a dozen computers along with journal entries, documents, invoices and files on Tuesday from searches conducted at Valley Metro's maintenance garage and the Roanoke County home of Diane Holdren, the president and owner of Holdren's Interiors.

At issue is $223,301 for furnishing and decorating the offices on Campbell Avenue Southeast of the Greater Roanoke Transit Co., which operates Valley Metro, and the involvement of Holdren's Interiors, according to search warrants and a memo issued to the Roanoke City Council by Municipal Auditor Drew Harmon. The owner and operator of Holdren's Interiors is the wife of the transit company's assistant general manager, William "Chip" Holdren.

The investigation is focusing on whether proposals were fabricated from other companies to make it appear as if the funds were awarded after what's supposed to be a competitive bidding process. No charges have been filed.

First Transit, the Cincinnati company that manages the nonprofit Greater Roanoke Transit Co., has suspended both Chip Holdren and GRTC procurement officer Matt Wynn pending the outcome of the investigation, said First Transit spokeswoman Nicole Jones.

Greater Roanoke Transit Co. uses city-owned buses and property, and the Roanoke City Council approved the contribution of $1.4 million into the company's $7.8 million budget last year. The majority of the budget came from federal funding, fares and other sources.

The company's records are scrutinized each year by Roanoke's municipal auditor and KPMG, an international auditing company. Most of the time the audits are routine: The January 2008 meeting of the audit committee dealing with GRTC lasted only seven minutes.

But according to the search warrant, auditors recently became suspicious of the bidding process for renovation of Valley Metro's Campbell Avenue offices after noticing Diane Holdren was winning most of the contracts for furniture and "decorative art-type items."

Auditors began to examine quotes that supposedly came from other companies, including Harris Office Furniture of Roanoke, Sheaves Floors of Verona, and three out-of-state businesses. They found that the quotes looked remarkably similar, with "the same format and font lettering for each company as well as the same typo errors in the lettering," according to the search warrants, which were filed in Roanoke and Roanoke County circuit courts.

The officer filing the search warrant wrote that "it appears that the offenders in this offense have prepared fake bid proposals and had these fraudulent proposals delivered to the city of Roanoke in order to win the bids for these contracts."

It's unclear whether Greater Roanoke Transit Co. placed advertisements for any of the renovations, which is a regular part of the procurement process. Much of the renovation work was carried out during 2007, but that year the agency placed no legal ads seeking furniture quotes in either The Roanoke Times or Valley Construction News, according to representatives of those publications.

Jeff Sheaves, owner of Sheaves Floors, said he wasn't even aware of the transit company's renovation until he received a call from a Roanoke auditor.

"We were asked if we'd done a carpet quote, which we did not," Sheaves said. "I'm guessing they pulled this off of our Web site. ... They'd used our logo, address, store hours and phone number on this quote."

Sheaves, who said he believes he's a victim of a form of identity theft, said he has turned the information over to his company's lawyer.

Diane Holdren has declined to comment, citing her lawyer's instructions. Neither Chip Holdren nor Wynn could be reached for comment.

Holdren's Interiors is run out of the Holdrens' home according to a search warrant, and the company is listed in good standing with the State Corporation Commission.

Roanoke's elected officials continued to express concern over the situation Wednesday and called for greater oversight of the city's procurement. The Roanoke City Council serves as Greater Roanoke Transit Co.'s board of directors. Mayor David Bowers said the board needs to meet more often.

Vice Mayor Sherman Lea, who is chairman of the city's audit committee, called for more money and staffing to be directed toward the municipal auditor's office, which has long uncovered suspicious, ineffective and unlawful activities throughout city government.

"Do we have in place the management controls, the financial oversight, the auditing -- internal and external -- that catches these things? Apparently we do," Bowers said. "I don't feel like I can stand up to the public and say, honestly, this will never happen again. We're dealing with millions of dollars, hundreds of projects and thousands of people ... [but] anybody that steals from the city of Roanoke, we'll catch you."

Staff researcher Belinda Harris and staff writers Mike Allen and Cody Lowe contributed to this report.