In Las Vegas, eyes roll after GSA scandal

Apr. 7, 2012
Christina Silva, Associated Press

LAS VEGAS — Some people think the government can’t get it right even when it’s doing wrong.

Take, for example, a group of federal employees encouraged to go “over the top” on a five-day conference in 2010 in Henderson. They blew $823,000 — in part on commemorative coins, $44 breakfasts, shrimp dinners and matching vests.

The expenditures, detailed recently in a General Services Administration report, prompted an outcry about irresponsible spending at a time when the nation is drowning in debt. The scandal was doubly insulting in Las Vegas, which endured some of the worst of the recession and where some still blame Democratic President Barack Obama for making it worse when he chastised bank employees for lavish Vegas vacations right after they were bailed out by the government.

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Former Lynwood school official charged with embezzlement

By Stephen Ceasar, Los Angeles Times
February 17, 2012

The Lynwood Unified School District’s former chief business officer was charged Thursday with embezzling more than $700,000 in public funds and filing false tax returns.

William Douglas Agopian, 60, of Santa Ana allegedly used the money from a district bank account to pay for tickets to professional baseball games, gas and his personal taxes over a four-year period, according to the Los Angeles County district attorney’s office.

“The allegations do involve a significant violation of public trust involving funds that are intended for the students of the Lynwood Unified School District,” said prosecutor Dana Aratani.

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Fillmore District Audit Shows Little Oversight

By MATT SMITH and ZUSHA ELINSON
Published: January 5, 2012
New York Times

Emmit Powell hesitated when he was asked to talk about the City of San Francisco ’s efforts to promote his popular barbecue restaurant as the anchor of a showcase redevelopment project in the Fillmore district. The venture led to his financial ruin.

“I went through a lot there, and I don’t really want to go back into that situation,” said Mr. Powell, a onetime gospel singer, real estate investor and restaurateur. “It was devastating for me. I lost my business. I lost my home. I lost my property. I don’t want to blame them, because I don’t think it would do any good.”

For 30 years, Mr. Powell ran the popular barbecue joint Powell’s Place in Hayes Valley. The Fillmore neighborhood redevelopment project was closed in 2009, and today Mr. Powell’s former restaurant — and $360,000 in San Francisco Redevelopment Agency loans that he could not repay — exist only as line items in a new city controller’s audit.

The agency is being criticized for handing out millions of dollars without proper controls or even standards for evaluating whether grants and loans did any good, and then making inadequate efforts to collect loan payments.

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Audit: $406M faulty Medicaid payouts

1/14/2012
By JIM DAVENPORT Associated Press

AIKEN — A federal audit released Friday said South Carolina may have spent more than $406 million on improper Medicaid payments and nearly 11 percent of payments were made in error.

The state’s error rate of nearly 19 percent was nearly triple the national rate of 3.6 percent.

State Department of Health and Human Services Executive Director Tony Keck said many of the people who received the improper benefits would have qualified for the money if procedures had been properly followed.

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Audit of Benton Harbor EM: ‘Financial controls missing’

Sun, Jan 15, 2012
By T. Kelly
The Michigan Citizen

DETROIT — While Benton Harbor Emergency Manager Joe Harris has been giving interviews in the last few weeks to Detroit-area media that paint the EM process as positive, an audit of Benton Harbor finances reveals continuing debt, a failure to follow basic accounting practices and undocumented spending of federal funds.

After nearly two years in charge, Harris did reduce the city’s cumulative fund deficit by $1.28 million, but overspent the city’s general fund revenues by more than $650,000 in fiscal year 2010-11, according to the Grand Rapids audit firm Rehmann Robson.

At a June town hall meeting, Harris incorrectly reported the city was out of debt and might have a surplus.

More importantly, the audit exposes the flaw of emergency management. The EM law empowers one person to operate outside the view of the public, sell public assets, dismiss elected officials and void contracts. The EM law eliminates the traditional American system of checks and balances that the split between legislative and executive branches provide.

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Mike Beebe Calls For Audit Of Forestry Commission

By The Associated Press
1/12/2012 2:33:40 PM

LITTLE ROCK (AP) – Arkansas Gov. Mike Beebe called on Thursday for legislative auditors to examine the Forestry Commission’s finances after a $4 million shortfall that prompted the layoff of 36 workers, and indicated that the audit’s findings may determine whether the agency’s director still has his support.

The governor said he hopes legislative auditors look at why the agency improperly used federal funds to prop up its budget over the years. He said last week he would ask the Legislature to use $2.7 million from the state’s surplus to pay back the grants and keep the agency solvent through the year.

Beebe’s office and finance officials have said the commission misled them on whether it had the authority to use the federal funds for its operations.

“The question is, why did they do that?” Beebe told reporters. “Was it a mistake? Was it intentional? Were they told to do that by somebody? Who knew about that? Those are the questions I want answered as fast as we can get them answered.”

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Charges filed in Valley Metro bus scandal

Saturday, January 14, 2012
By Laurence Hammack
The Roanoke Times

Three years after the start of an investigation into bid-rigging at Roanoke’s bus system, federal authorities have filed their first charges.

Court documents unsealed Friday named Diane Holdren, the owner of an interior design firm and the wife of William “Chip” Holdren, the former assistant general manager of Valley Metro.

Diane Holdren’s company, Holdren’s Interiors, was awarded contracts for an office renovation at the bus system’s headquarters that were the result of a bid-rigging scheme, federal authorities allege.

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Coliseum finance director earned Visa points on stadium upgrade

By Paul Pringle and Rong-Gong Lin II, Los Angeles Times
December 10, 2011, 5:15 p.m.

Last spring, the Los Angeles Memorial Coliseum set out to upgrade the sound system for its new video board. The equipment and shipping costs were steep — about $270,000.

Finance Director Ronald Lederkramer could have bought the gear the way other government agencies do, by issuing a check from the taxpayer-owned stadium.

Instead, he put the package of high-powered loudspeakers on his personal Chase Visa card, charging it in installments and paying those off with government checks that he and a lower-ranking employee signed, according to records and interviews.

In the process, depending on which Visa he used, Lederkramer earned roughly enough redeemable reward points for a week at the downtown Ritz-Carlton, two Bulova watches or even a pair of first-class round-trip United Airlines tickets to London or Tokyo worth as much as $24,000, award schedules show.

What Lederkramer did with all those points is unclear. But experts say his actions were a breach of duty, raising questions of whether a conflict of interest — his stake in the reward points — influenced his decisions as an official responsible for safeguarding the public’s money.

“This is absurd and appears to violate every procurement policy the city of Los Angeles has in place to protect taxpayers,” City Controller Wendy Greuel told The Times in an email.

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California questions $31 million in spending by Montebello

By Jessica Garrison and Abby Sewell, Los Angeles Times
September 23, 2011

State auditors found Montebello improperly handled $31 million, including instances in which officials used funds meant to improve blighted neighborhoods on fancy dinners in Las Vegas, golf, embroidered polo shirts and other “frivolous” items.

The two audits, released Thursday, mark more bad news for the city of 65,000 east of downtown Los Angeles. Montebello is seeking a private loan to avoid running out of cash this fall and is the subject of an FBI investigation into allegations that it misused federal housing money.

Officials from the state controller’s office spent months reviewing Montebello’s books dating back to 2005 and said they were troubled to learn that the city regularly used money designed for specific purposes to balance its budget — in apparent violation of the law.

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Audit results in temporary funds being cut off from regional transit agency

By: JOURNALNOW STAFF McClatchy-Tribune
September 02, 2011

GREENSBORO – The region’s mass transit agency, already confronting challenges this year with route cuts and fare increases, now faces a temporary cutoff of some federal funds because of concerns over its internal accounting practices.

The Piedmont Authority for Regional Transportation received a letter last month from the U.S. Federal Transit Administration suspending PART’s access to certain federal grant revenues until PART resolves the accounting concerns. The concerns were raised in a recent audit of PART’s financial procedures conducted on behalf of the Federal Transit Administration.

“Because of the seriousness of these material weaknesses in the review, FTA has suspended PART’s drawdown privileges. … Once the findings are corrected, FTA may lift the drawdown suspension,” states the letter to PART from the regional administrative office of the Federal Transit Administration in Atlanta.

PART Executive Director Brent McKinney said that the mass transit agency is addressing the audit recommendations and expects to have the suspension lifted in the next couple of weeks. The suspension of access to Federal Transit Administration money hasn’t affected PART’s day-to-day operations and bus service, McKinney said.

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