Audit on former WVDA Commissioner Gus Douglass released - WOWK 13 Charleston, Huntington WV News, Weather, Sports

Legislative audit on former WV Department of Agriculture Commissioner Gus Douglass released

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The West Virginia Legislative Auditor's Office discovered at least 18 loan violations as a result of an audit conducted on the previous administration in the West Virginia Department of Agriculture.

The audit was called for after misconduct by the administration, which included former commissioner Gus Douglass, was said to have included abuse of the Rural Rehabilitation Loan Program, misuse of the WVDA Travel Policy, as well as hospitality purchases and travel expenses.

There were accounts of extravagant spending on flights, travel expenses for the former commissioner's spouse, mileage amounts not in compliance with the travel policy, travel expenses given to non-employees, meal amounts not in compliance with the policy and lack of documentation over travel expenditures.

The audit included loans taken out by Douglass, which ranged from a $15,000 loan for a truck and camper that was accepted as collateral when they had a purchase value of only $6,200 to a $146,000 loan to the former Secretary of the Loan Committee and the secretary's spouse.

During the audit, travel expenses were considered in one transaction totaling $3,150 to be "extravagant" because the purchase was not a necessary business expenditure for the WVDA.

The $3,150 was spent on a state-chartered flight in order for Douglass to attend a ceremony where a gazebo was dedicated to him. The WVDA paid to fly the former commissioner from Yeager Airport in Charleston to Ravenswood and then back to Ocean Isle, N.C. The $3,150 charge included the return trip to Yeager Airport from Ocean Isle, NC even though the flight was empty. 

The WVDA paid only $94 to have the former commissioner flown from Ocean Isle, N.C. on a commercial plane to Yeager Airport earlier the same day. The audit was able to determine through conversations with WVDA employees that Douglass could have flown back to North Carolina for a rate close to the $94 rate, and that he was not in Ocean Isle on official state business, and he was aware of the gazebo dedication prior to his personal trip to North Carolina. 

The current Agriculture Commissioner, Walt Helmick, said he made the audit one of his first official acts after taking office last year.

"That audit has now been released by the Legislative Auditor's office and we have reviewed the results and have acknowledged those findings and recommendations," he said.

The audit released by the Legislature and management of WVDA is available to the public as a matter of public record, and is designed to assist the Post Audits Subcommittee in exercising legislative oversight and functions in improving state operations. The audit can be read HERE.

Many of the audit recommendations already have been addressed by our executive staff and division directors," Helmick said. "I want to assure all West Virginians that the Agriculture Department intends to operate with sound, proven business practices that includes an emphasis on accountability at all levels."

Most of the issues identified in the report resulted from inadequate record keeping, poor or nonexistent internal controls, a lack of segregation of duties, the appearance of an unethical tone of upper management and a lack of oversight and monitoring on the part of the WVDA.

The report included findings regarding significant instances of noncompliance with applicable law, rules and regulations as related to the objectives.

Many internal deficiencies were discovered as a result of the audit including loans that were untraceable.  

Included in the more than 130-page audit was the potential abuse claim about an improper hospitality purchase. The auditors concluded the WVDA "improperly reimbursed a former WVDA employee when the Employee Reimbursement Request form did not have an itemized invoice attached and the Request for Hospitality Service from was not approved." 

Alcoholic beverage reimbursements also were noted in the report to be an "unallowable expense according to the W.Va. Expenditure Schedule Instructions."

Based on review and auditor observations, they believe employees with the office, located in Guthrie, and state Farmers Markets did not comply with the West Virginia State Treasurer's Office Cash Receipt Handbook. The audit also noted a lack of documentation over the loan program.

According to the audit, office deposits were not made within 24 hours of having received them, as is the rule there also were possibly fictitious receipts for travel reimbursements.

"Opportunities for agriculture to provide West Virginia with a significant economic boost have never been greater than they are today," said Helmick. "In order for us to capitalize on these opportunities our department must function in the most efficient and effective manner as possible. That's what we are striving to accomplish and we will succeed.

"It's a new day for agriculture in West Virginia."

Attorney General Patrick Morrisey said the audit highlights the need for more regular and detailed audits as well as performance reviews of state agencies, departments and offices.

"West Virginians should not learn about mismanagement after an elected leader has left office, nor should audits only happen when a new leader is elected and requests a complete review of agency operations," Morrisey said. "Audits, while time consuming, help to serve as a check and balance on those in power and help to keep public servants honest."

Morrisey said he hopes all legislators will support bills that call for regular audits of state-funded entities every two years, or no later than every four years, calling it "no-brainer legislation."