Last week when agents from the State Auditor’s office made six arrests in our Mississippi Department of Human Services (DHS) investigation, we put a stop to a multimillion-dollar public embezzlement scheme. We worked quickly and quietly over the last eight months to uncover this fraud. When we had proven the case against those six people, we brought the case to light immediately and put a stop to it before any additional money flowed to those individuals.
But now that this is done, it is time to marshal more resources to get to the bottom of any additional fraud that remains hidden. The Auditor’s office will be continuing our investigation, but we are also bringing in our partners at the FBI to review all our evidence and to help us uncover any additional schemes or losses.
In addition to that, we will be completing our routine audit of DHS in coming months. The work on that audit is not done, but I can tell you that the findings will be alarming.
We audit DHS regularly, including last year. That audit revealed serious potential problems, like the fact that DHS was not adequately monitoring the entities that were receiving big grants. As it turns out, those entities were at the very heart of the scheme we later uncovered.
These routine audits are limited in scope, though. We perform these audits under guidelines from the federal government. When we do so, we are required to focus on failures in the agency’s processes. For example, if an agency we are auditing has a monitoring process that fails, we would point that out. While we can also focus on their finances, we mainly look to see that their financial statements are reasonably accurate. Traditional audits like these do not trace the path of every dollar spent.
As a result of those limitations, these standard audits are not ideal for catching fraud. I am a Certified Fraud Examiner, and the Association of Certified Fraud Examiners will tell you that routine audits are responsible for catching just 15% of fraud cases around the world. Tips and whistleblowers, on the other hand, are responsible for revealing 40% of fraud cases.
Given the limitations of those routine audits, and given the massive amount of money at issue in the case, we need an additional dose of transparency here.
So here is the important next step: the state needs to hire a competent private CPA firm to do a full forensic audit of DHS. The audit should review every year that former DHS Director John Davis was in office.
By “forensic audit,” I mean an audit that will not merely look at processes, as we do, and not merely sample DHS’s expenditures. I mean an audit that will trace how each and every dollar was spent. This kind of audit often reveals evidence that is later used in court.
My office cannot perform a project of that magnitude any time soon and still perform all our normal audits. A full forensic audit will be a huge undertaking. My office needs to focus on finishing its current DHS audit and its investigation in coordination with the FBI.
When the private CPA firm finishes that forensic audit, the audit results—along with the findings of my routine DHS audit—need to be made public for all to see.
At the end of all this, we will have had a skilled team of investigators and auditors at the Auditor’s office, another skilled team at the FBI, and a private CPA firm look at how money was misspent at DHS.
In other words, we will have as comprehensive a look at a troubled agency as has ever happened in our state. Given the large misspending and fraud that has occurred, this is necessary to restore taxpayers’ faith in that agency and in state government more generally.
My priest reminded us this week that a “city built on a hill-top cannot be hidden.” If we want to be that shining city, a lot less of our spending needs to be hidden. And if we follow the path I have set out here, we can achieve that goal.
This column was written by Shad White. He is the 42nd State Auditor of Mississippi.
Sunday, March 1, 2020
Shad White: Bringing Sunshine to DHS
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28 comments:
Increasingly it looks like Stacey Pickering should have spent more time in the office and less time at Disney.
It’s gonna be funny when this blows up in Shad’s face. Ain’t no way these folks have done what they’re being accused of. The OSA is either covering for someone else or overshot here. Ole Shad’s ego may have gotten the best of him, and it may cost him.
Shad in his Shining Armor. How nice. How about using those resources to create press releases about yourself to root out even more corruption. Quit running for your next office on the taxpayers' dime. I know....everyone does it. How about really proving yourself to be different from the crowd. Keep your head down and focused on your work rather than political grandstanding.
Shad is a politician as well as a gold standard auditor. He has to make his case for hiring an outside firm, and he has made it well. He is smarter than the average bear, plus he has seen enough smoke to know that the fire has not been completely put out at DHS. I am eager to vote for him again, whatever office he seeks.
@12:57 PM and 1:35 PM => trolls.
There are some nervous criminals right now who are likely moving their ill gotten monies to new accounts. The rats be jumping ship.
Remember you criminals, he who sings first gets a pass.
You go Mr. Shad!
Mr Auditor, just don’t hire your friends or supporters to conduct this audit! Enough palms have been greased! Continue to do your job, forget the naysayers!
The people in need already did not trust DHS, now this shigity, the bald head man ( John Davis) sure put his former DHS employees in a bad situation. Trust is hard to earn. When the top is stealing benefits and making the wealthy wealthier! Bad boy John, you can misappropriate, I mean steal! But someone always gonna snitch!
Shad White is the guest speaker at the MC Republican Womens meeting Monday March 2 at 6PM at The Briar Patch in Livingston.
Ya'll come earlier !
12:57
What kind of BS statement are you making? If Shad has been covering up the why arrest 6 people?? Really?? Also show a lil proof of making a ridiculous statement like that, I am assuming you are a retired wanna be know-it all auditor whose boss wasn’t worth a damn!
Very curious why the Feds are not all over this...
Many anal sphincter muscles remain very tight within DHS.
This only round one.
Shad has more credentials as CFE than Pickering or the Deputy before him, but he is not a CPA. There is a difference, just the same a CFE is the last thing you want up your Cornhole.
12:57..1:35..Burke..and 2:33 are all ignoramuses. Who in his right mind would actually hope this level of law enforcement fails? Well, other than those four dunces just identified.
Reminds us all of a certain group in D.C. who regrets the fact that a kick-ass guy has arrived in town to drain the swamp.
Limp-Peckers all.
Glad that Shad has now "brought in his partners at the FBI". Too damn bad he didn't bring them in at the beginning, as they certainly have more 'resources' than the OSA ever thought about having.
But of course, the Fibbies wouldn't necessarily stop along the way of the investigation if it got too close to home; afraid that might be the final story, and the shine on the golden armor might get a little tarnished.
4:39 - true, but don't stop there. Those two had more ability (because it doesn't take much) than the one the deputy replaced - and on par with the two before him.
Let's face it - electing an auditor in this state has NEVER produced anyone that a private company would hire to do basic bookkeeping.
Is Shad White writing this article in reaction to the MS Today article regarding the News providing USM with $5 million dollars from the DHS funds received for a volleyball facility?
Hey 4:05. Not only are sphincters tightening at DHS but the prior administration is very concerned as they thought they were going to get away scot free! Phil and his Cabal friends are freaked out....take it from someone in state government that has seen how past governor and his family and friends have fleeced this state Any of us that are at a state level that knows the amount of money that has been STOLEN by the :Phil cronies are not shocked by this discovery. If the Feds will check in DEQ, DOC, etc. they will find HUGE amounts of money taken through FOP (friends of Phil) and we aren’t talking about pocket change. Stay tuned........
Who would think it, a good Christian like him and friends mixed up in thing like this.
Shad is doing a great job. But he needs to stop being a politician and focus all resources on busting these thugs and none on political BS.
I’m calling BS on the News taking or receiving anything for their own benefit. I’ve known these people for a long time....ain’t no way. They’ve done great things for students in MS for many years. You wont’t find better people. I’ve worked on programs with them over the years and have witnessed first hand how MDHS leadership dictates many of the non-traditional programs that would be funded. When all the facts come out, I think the News will be cleared and the OSA is going to look like an idiot. He’ll blame it on the DA though. I like the new DA and hope he’s smart enough to know he’s being used as a pawn.
Major issue is MDHS....it is terribly jacked up and politicians cherry pick their preferred programs to fund for sure. That’s what I’d like to see dug into.
There are definitely more shoes to fall here. Follow the money.
Those of you (democrats) who bemoan his plans are the same ones who cried foul when this state went to voter ID. You chirped that no voter fraud existed or ever had. Did you overlook the convictions in Canton or that of Ole Ike who went to jail? Or Banks?
All this thread is missing is the chirpy who always busts in saying "I'm glad I moved out of this third world shithole".
We need more 'balls to the wall' enforcement and investigation, not less. Those who believe otherwise are the same ones who loot shoe stores when a fire breaks out somewhere in town.
I’ll go with 9:33 in this one. I don’t know the News but am generally familiar with the schools they have built and the effort over decades that went into them. They are quality schools that have helped so many kids with disabilities and special needs. After building this operation and putting your life in it, I would find it hard to believed that they would put it all at risk to knowingly funnel illegal money to some wrestler’s rehab.
When there are mass indictments like this, usually there are one or two truly guilty parties and the others are bled for information before pleading guilty to a misdemeanor. I expect to see the News fall into the second category when the is all done.
I hope White will continue to use the tools he does have at his disposal to do the job that our past auditor appears to have missed and avoided. The MS State Veterans Board, where the past auditor landed, might be a good place to start. While Pickering performed his job at uncovering county and local embezzlement, his embarrassing failures to do so at state agencies until federal grand juries first acted at MDOC and MDHS, or worse, his legacy of contributing to such problems at MDMR was poor public service. It's encouraging to see our new state auditor start to his work.
9:33 sure some good is always done to showboat how the taxpayer money is spent. They have photo ops just for this in all walks of life. Politicians showboat their accomplishments to get re-elected and so on.
All we want to know, was the other monies In question spent according to Federal Policy? If not , how was it spent and/or what happened to the monies? And was there any misappropriation?
John Davis ,I never would have dreamed it!
Politicians Most famous phrase, we are good stewards of the Tax Payers dollars. I say, yea right! I do hope it’s all a misunderstanding!
Your priest spoke about a 'city built on a hilltop'. Madison County government is that city. The investigative clock has ticked for far too long.
If this makes no sense to you, the reader, go back and read the concluding remarks in Mr. White's letter.
9:33... you can't be serious?? Do you think they have a good explanation for all of these findings against them? Somebody just made all of this up? Perhaps you didn't know them as well as you thought.
6:02 -Agree with you
6:02- truth!
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