Below is an example of an overview of internal audit reports by an Inspector General in Washington DC. Earlier, I have posted audit articles about Palm Beach and Miami Dade County scandals and audits. I include it because Lake County has a "County Auditor", but he has no authority to initiate audits like this of the County Commission operations (Fire, libraries, waste, etc), and he has no authority to initiate performance or operational audits of any of the County Constitutional Officers (Sheriff, Elections, Tax Collector, Assessor...). Each of these groups has a "financial audit" that verifies basic financial statements are accurate, but they don't have any of these audits (except some rare ones of the Commissioner operations) for performance, effectiveness, etc. AND there is no central, objective waste, fraud & abuse hotline for anyone to report any suspicious activities.
Recently, one of the rare audits of the County Employee Services Dept. was ready for an exit conference, but the interim County Manager canceled the meeting.
So, if you see a Lake County Board member or Constitution Officer, ask them why they are afraid to request performance audits or allow the County Auditor to initiate audits without requesting approval!! And ask County Clerk Neal Kelly why he doesn't lobby for his County Auditor to be given open access to initiate such audits. Don't accept the excuse that a court decision prevents such audits. It only says (I am told) that the elected officials must request such audits. Thus if all County elected officials named above submitted a letter to him allowing full audit access without delays and excuses, the County Auditor could initiate audits. Until that happens, I don't consider the operations of the County or the Constitutional Officers to have received adequate oversight on efficiency, effectiveness and economy of operations.
For example, the County recently constructed the 8+ level (I lost count) parking structure, and the County Auditor asked for approval to audit it during the construction phase. The County Manager never replied. Now, the County is planning a $55-million Judicial expansion project, and there are no plans to have the auditor follow the planning and construction process as it continues, not wait until the end, and then only have a CPA audit the financials after all the spending. It is common in many large firms to have internal auditors audit the entire process of a construction process from planning to final closeout, but the County has never had such an audit to identify problems early. Why wait until there is a million dollar problem when the internal auditors could catch the problem at the beginning of the building process? (Examples would be paying invoices for higher level materials than actually received.)
(Note: In Contrast, the Lake County School District Board has their own internal auditor who has open access to operations, and is encouraged to perform performance, efficiency, and effectiveness audits. They also have an independent audit committee of experienced business and audit leaders to support the internal auditor and make recommendations to the Board. None of the other County elected officials have such oversight except the County Clerk, because the "County Auditor" works for him.)
Of course, they could wait until a really big scandal, and then create a County wide Inspector General like Palm Beach County did recently.
PS: If any reader has more information on the above statement or corrections, or examples of local waste, fraud or inefficiency, send them to me.
vj
D.C. inspector general: $180M million in waste, fraud found in '09 fiscal year
By: Michael Neibauer
Examiner Staff Writer
December 7, 2009
The D.C. inspector general uncovered more than $50 million in waste and $125 million in fraud during the past fiscal year, waste and abuse that account for more than 3 percent of the city's annual budget.
The IG's audit division in fiscal 2009 issued 35 reports with hundreds of recommendations that if implemented would return $50.3 million to D.C. coffers, the office claims in a new report.
The investigations division of the IG during 2009 presented 37 cases of fraud to the U.S. Attorney's Office and eight to the D.C. Office of the Attorney General, resulting in 25 arrests, 17 indictments, 16 convictions and restitution orders totaling $127.2 million, according to the office. The Medicaid Fraud Control Unit garnered an additional $2.1 million from provider settlements.
Of the District's $5.4 billion budget, $180 million amounts to 3.3 percent lost through waste, fraud or abuse.
"Most D.C. residents, with money being tight these days, would be floored by a number like that," said Paul Craney, executive director of the D.C. Republican Party. "Imagine, if we put more money and people into the IG, what that would uncover."
D.C. spending by the numbers in fiscal 2009The figures were released as part of the IG's fiscal 2009 annual report, in which Inspector General Charles Willoughby urged all District residents to be "exceptionally vigilant in recognizing and reporting instances of fraud, waste, and abuse as a means to ensure the efficiency and integrity of the District government," especially "during these straitened financial times."» $3.7 billion on contracts
» $1.2 billion on public education » $900 million received through federal stimulus
The Fenty administration must adopt the IG's recommendations to achieve "potential monetary benefits," said Bill DiVello, assistant inspector general for audits. That means either recouping money owed to the city or putting in controls to prevent future losses.
"Some things we'd like to see more aggressive action on, certainly in the contracting area," DiVello said.
The use of purchase cards by the Office of Unified Communications, for example, was the subject of a February audit in which the IG discovered numerous questionable or unjustified purchases. Those included $15,000 to clean and maintain chairs and $59,365 for uniforms worn by employees who do not meet with the public.
Auditors issued myriad recommendations, such as establishing internal control procedures over purchase card transactions. But in November, the OUC charged $900 for staff massages, an expense deemed even by Mayor Adrian Fenty to be inappropriate.
"There's one it appears they didn't take any of our recommendations," DiVello said.