A legislative audit on the
Department of Agriculture found extensive problems with financial controls
within the agency. Agriculture Commissioner Walt Helmick sought to
audit soon after taking the position which had been held for decades
by Gus Douglass.
The preliminary report spotlighted
shortcomings in the Rural Rehabilitation Loan Program, but the full audit
report found other significant problems within the agency. House Speaker Tim
Miley and Senate President Jeff Kessler, after getting the first look at the
report before it was made public, forwarded the information to the U.S.
Attorney for further investigation.
Auditors found problems with the
loan program were largely a lack of internal control. There were no systems in
place to reconcile payments made on the loans and a severe lack of
documentation throughout the program. The loans were also made, according to
auditors without sufficient appraisal or collateral. The report
also found in some instances a conflict of interest in the loan approval and in
some cases the money was not being used for agriculture purposes.
Auditors examined other areas of
the Department of Agriculture which also showed problems. Areas of travel
expense reimbursement, hospitality expenses, leasing programs, and the
classification of one employee all had glaring errors.
The report claimed there were
instances in which receipts for reimbursement of travel and lodging expenses
had been fabricated. One instance was a campsite at the State Fair. The
audit found Douglass sought reimbursement at 106.72 per night while another
employee with a campsite next to Douglass’ sought reimbursement for 30 dollars
a night.
“Upon contacting the Chief
Executive Officer (CEO) over the State Fair of West Virginia, we found the
former Commissioner was not charged for his campsite during the 2012 State Fair
and that it was the policy of the State Fair to provide one free campsite to
the Commissioner of the Department of Agriculture. Additionally,” the
audit stated. “The CEO provided us with a copy of a page from the receipt book
used by the State Fair and we determined the receipt accompanying the former
Commissioner’s travel form was not a receipt from the State Fair receipt book.”
Auditors added there was one incident
in which travel expenses were considered “extravagant.” The cost was
3,150 dollars to fly the commissioner from Charleston
to Ravenswood for an event and then to a vacation spot in North Carolina
Mileage reimbursements were another
area where the audit team explored.
“During our testing of travel
expenditure documents, we noted 215 instances on 44 different travel
reimbursement documents where employees claimed a mileage amount in excess of
the recalculated distance for one or more trips. The largest mileage difference
for one trip was 188 miles and the smallest was 11 miles. The total difference
was approximately 8,000 miles and $4,000.”
The audit team also concluded the
Department of Agriculture erred in the classification of the Department’s
General Counsel as a full time state employee, which qualified them for PEIA
insurance and state retirement.
“The WVDA improperly classified
their General Counsel as a full-time employee for 21 years. Whether or not the
individual was eligible to receive Public Employees Insurance Agency (PEIA)
insurance benefits, Public Employees Retirement System (PERS), annual or sick
leave and annual increment hinged on the individual’s classification as an
employee.”
There were other areas of
significant finding. The team explored allegations in the complaint of
finances at the farmers markets and the Gutherie office were out of compliance
with state spending rule.
“WVDA’s cash receipts were not
adequately safeguarded from unauthorized use or disposition. The total revenue
received during our audit period was approximately $23 million of which 4% was
received in the form of cash and 96% was either received directly by the State
Treasurer’s Office or was a non-cash transfer.”
The area of hospitality expenses
delved into the cost of a meeting of the state’s Fairs and Festivals. Auditors
said a deputy commissioner was improperly reimbursed 404 dollars for expenses
related to the meeting without an itemized receipt. The audit team then
obtained copies of the original itemized receipts, which showed several
alcoholic beverages were purchased, totaling $41. That purchase was not in
compliance with the department’s expenditure schedule. The beverage purchase
increased the restaurant’s 20 percent gratuity by $8.
According to the audit 90 percent
of hospitality charges were out of compliance with department policies and
procedures.
The audit covered a time frame from July 1, 2011 to December 31,
2012.
