Report Summaries

The following is a selection of case summaries for investigations completed 2006 – 2008. Complete reports of investigation and agency responses are available online.

GEORGIA DEPARTMENT OF TRANSPORTATION 07-011

Subject: Contract Steering, Conflict of Interest, Misuse of State Resources

In February 2007, OIG received an anonymous complaint alleging contract steering, acceptance of gratuities, and intimidation of employees by an employee of the Georgia Department of Transportation (GDOT). The complainant also alleged that this employee hired consultants to work in the Office of Traffic Operations (Traffic Ops) who were not performing “adequate work” for the pay received.

Shortly after receipt of the complaint, OIG learned that a similar complaint had been filed with the United States Department of Transportation’s Office of Inspector General (U.S. DOT OIG), Federal Highway Administration; GDOT’s Commissioner, and GDOT’s Board of Directors. Given that the complaint raised both state and federal issues, OIG, U.S. DOT OIG and GDOT’s Investigative Unit conducted a joint investigation of the allegations.

At OIG’s request, GDOT’s Office of Audits conducted an internal audit of all purchase orders and contracts created or enforced within Traffic Ops from 2004 to early 2007. We also requested a review of all consultant contracts for the same time period, focusing on contractual language and the existence of potential conflicts of interest.

Although OIG findings did not substantiate the allegations against the subject, other significant issues were discovered during the joint investigation and GDOT’s audit of Traffic Ops. The issues warranting serious managerial review included conflicts of interest, irregularities with routine division functions such as inventory control, warranty records for repairs, contract language, contract bids, sole source requirements, and documentation. OIG uncovered numerous instances of poor communications, inadequate liaison between major divisions within the agency, inadequate supervision, and an ever-present struggle between employees and consultants, as well as employees and management.

OIG offered the following recommendations.

Any GDOT employee who enters into negotiations or commences an arrangement for future employment with an active contractor/consultant shall disclose this information to his/her immediate supervisor. Once the disclosure is made, GDOT should ensure that the employee no longer participates in any matter involving the new or potential employee so as not to create a perception of conflict of interest.
GDOT should create a post employment policy which addresses employees who leave the department to work for contractors/consultants with whom the employee has participated in awarding, administering or supervising said consultant’s contract while in his or her official state capacity.
GDOT should take the appropriate corrective action to comply with their Office of Audits’ recommendations and correct the identified problem areas.
Consider increasing the frequency of internal audits agency-wide.
GDOT should explore the possibility of adding staff or realigning present staff within Office of Audits and/or General Support & Procurement for the purpose of increasing internal auditing capabilities.
Consider an evaluation of the use of consultants in the Office of Traffic Ops to ensure that there is no duplication of job responsibilities between state employees and consultants. GDOT should also ensure that the state is receiving the full benefit of the consultants’ services.
Consider conducting a Job Task Analysis to ensure that appropriate employee qualification levels exist so that the division/agency operates with efficiency and business acumen. The agency should also determine which positions and responsibilities need to be revamped for increased organizational efficiency.
Identify and pursue training needs for procurement staff and other officials agency-wide who hold responsibility for contract management and oversight of consultants.
Ensure employees receive adequate ethics training as it relates to their interaction with
entities doing, or seeking to do, business with the agency.
Ensure division directors, managers, and supervisors are mindful of evaluating business decisions so as not to create the appearance of a conflict of interest.

GDOT responded to OIG after reviewing the investigative report and recommendations. GDOT concurred with and agreed to implement all recommendations.

DEPARTMENT OF HUMAN RESOURCES 07-020

Subject: Improper hiring practices

On March 21, 2007, Governor Sonny Perdue asked OIG to determine if three employees at the Department of Human Resources (DHR) were hired absent competitive hiring practices. Specifically, whether these employees were hired by the DHR Commissioner based on “prior friendships” rather than professional qualifications. During the course of our investigation, OIG received various anonymous complaints and correspondence alleging fraud, waste and abuse which required us to expand our investigation.

Our investigation revealed that the three employees were hired at DHR competitively and were qualified for the positions for which they were hired. However, OIG found that one of the employees created a perception of impropriety by allowing another of the employees to telework for an extended period of time in violation of DHR’s teleworking policy.

OIG offered the following recommendations.

Require hiring mangers to provide the Office of Human Resources Management and Development (OHRMD) with thorough and complete documentation in support of an applicant’s qualifications before being hired. Documentation must be specific to the applicant’s demonstration of job related competencies and should include official copies of required educational credentials, licenses, and/or certifications. It is imperative that all new hires are fully qualified and certified to perform their job duties.
Require prospective employees, whether hourly or salaried, to provide official academic transcripts to OHRMD for inclusion into the employee’s Official Executive Summary Personnel File. This will confirm professional education as referenced on the applicant’s resume and/or state application. The agency should not accept copies of transcripts without official seals.
Ensure applicants selected for hiring possess the minimum qualifications advertised in the position description.
Develop a better system of communication between OHRMD and local HR Division offices regarding management and employment issues. Personnel files maintained at the local level should mirror the Official Personnel File maintained in OHRMD.
Develop a better system of checks and balances between OHRMD and hiring managers to ensure that hiring procedures are followed in a manner that does not create an impression of favoritism or preferential treatment. In addition, all new hires should be required to sign a sworn statement confirming that the new hire has received orientation regarding the Department’s extensive policies and procedures for use during the course of their employment. This statement should be included in the personnel file.
Improve internal communication at all levels to engender a clearer understanding of organizational changes. The agency should have open and consistent communication providing direction and clarification of what it is doing not only with managers but also with its employees. This may foster smoother transitions, encourage productive participation, and decrease perceptions of impropriety.
Ensure all managers and employees understand the importance of understanding and following the agency’s Teleworking Policy and Procedures. In any Teleworking Agreement between a manager and employee, the manager must ensure that the employee’s performance activity is supported by appropriate documentation.

DHR responded to OIG after reviewing the investigative report and recommendations. DHR concurred with and agreed to implement all recommendations.

GEORGIA BUILDING AUTHORITY 07-069

Subject: Contract Steering, Misuse of State Resources, Abuse of Authority

In September 2007, the Georgia Building Authority (GBA) Executive Director requested investigative assistance regarding alleged contract steering by an employee in the Food Services Division. Specifically, OIG was requested to determine whether a Director of Food Services for GBA’s Cafeteria and Stately Events operations steered a temporary labor contract to Payroll Services Management, Inc. because of a friendship with the Chief Executive Officer (CEO) of the company.

Our investigation revealed that the GBA employee failed to disclose his long-term friendship with Payroll Services Management, Inc.’s CEO during the bid process. He also requested a change to the vendor qualifications, which ultimately benefitted Payroll Services Management, Inc. In addition, the employee selected Payroll Services Management, Inc. even though they were not the lowest bidder. A number of other issues were revealed regarding the Cafeteria and Stately Events Banquet operation which required OIG to expand our investigation. These issues included a lack of consistency with contractually agreed upon rates, abuse of authority, conflicts of interest, misuse of time clocks and time cards, and the destruction of official documents.

OIG offered the following recommendations.

GBA should ensure that contract specialists, end users, and any employees involved in the bid solicitation and selection process are trained in the proper procedures for processing and awarding contracts. Training should include, but is not limited to:

a. Avoidance of conflict of interest

b. Contract documentation and record keeping

c. Vendor interaction

d. Vendor selection
If, during the bid process, there is a request to deviate from the original solicitation document, a written explanation should be made part of the contract file.
GBA should ensure that any amendments to the original contract(s) must be in writing and made part of the contract file. Affected parties should be notified immediately of all amendments or addendums.
Training should be provided to the end users in order to ensure compliance with contract specifications and proper and effective contract management. Training should include, but is not limited to:

a. Ensuring that the costs incurred match the costs agreed to in the original contract, or amendments.

b. Reviewing all billings to ensure that they are for work which has been satisfactorily performed.

c. Being alert to sudden and unexpected cost growth or over-runs.
GBA should consider including in their procurement manual a conflict of interest questionnaire to be used by all employees and vendors involved in the bid selection process. If a conflict of interest is identified, a descriptive statement of how the conflict of interest was resolved should be made part of the permanent contract file.
GBA should consider emphasizing the consequences of internal theft of state property by employees.
GBA should consider incorporating into their policy manual that the “end user”/Project Officer will not have final authority in the issuance of a contract.
GBA should consider verifying with the Georgia Department Revenue and the Georgia Department of Labor that prospective vendors are in good standing.
GBA should require adherence to state records retention policies. OIG reserves the right to re-open this matter should GBA fail to take corrective action regarding these findings and aforementioned acts.

GBA responded to OIG after reviewing the investigative report and recommendations.
GBA concurred with and agreed to implement all recommendations.

GEORGIA STATE FINANCING AND INVESTMENT COMMISSION 08-012

Subject: Fraudulent Travel Expense Statements

In February 2008, Georgia State Financing and Investment Commission (GSFIC) officials requested investigative assistance regarding fraudulent travel expense statements submitted by an employee in the Construction Division. Specifically, OIG investigated whether the employee falsified expense statements when filing for reimbursement.

OIG’s investigation confirmed that between February 2007 and February 2008, the employee submitted false information on Travel Expense Statements resulting in reimbursements for expenses not incurred in the amount of $4,210.00. During the course of our investigation, GSFIC terminated the employee. In addition, the agency recouped overpayment from the employee’s annual leave balance via withholdings from the final paycheck.

On March 18, 2008, OIG referred the matter to Georgia Bureau of Investigation for further criminal investigation. The subject of the investigation was prosecuted by the Attorney General's Office and pleaded guilty to 43 counts of false statements.

OIG offered the following recommendations.

Ensure the agency clearly articulates an understanding regarding an employee’s “special assignments” particularly when any type of agreement is made between the employee and the agency detailing lodging and reimbursement arrangements. Agreements such as these should be memorialized in the form of a Memorandum of Understanding or similar official document. The agency should ensure widest dissemination among supervisors, project managers, division directors, personnel, and the finance offices.
Consider establishing an agency specific policy for travel and reimbursement expenses
while adhering to Statewide Travel Regulations. A number of other agencies have elected
to do so in order to deal with their own unique travel circumstances.
Identify and pursue training needs for all employees in the area of State Travel Regulations. Persons approving expense statements for payment must become familiar with the provisions presented in procedures and apply them in the review and audit of each expense statement.
Consider conducting periodic reviews of processed expense statements and immediately address any identifiable weaknesses.

GSFIC responded to OIG after reviewing the investigative report and recommendations. GSFIC concurred with and agreed to implement all recommendations.