Audit: Millions in welfare money shoveled to Director's family & friends.
Press conference streamed below.
Press conference streamed below.
State Auditor Shadrick Blanc issued the following statement.
Millions of dollars of grants from the Mississippi Department of Human Services (DHS) were misspent, converted to personal use, spent on family members and friends of staffers and grantees, or wasted according to an audit released today by State Auditor Shad White.
“This completed audit of DHS for the previous year shows the most egregious misspending my staff have seen in their careers at the Office of the State Auditor,” said White. “When you read this one-hundred-plus page audit, you will see that, if there was a way to misspend money, it seems DHS leadership or their grantees thought of it and tried it.”
The audit of DHS came as a part of the Office of the State Auditor’s yearly Single Audit of federal money flowing through state agencies.
The audit of DHS showed massive sums were funneled to grantees like the Mississippi Community Education Center (MCEC) and the Family Resource Center of North Mississippi (FRC), two non-profits. Those grantees were given over $98 million in DHS grants over the last three years, mostly from the program Temporary Assistance for Needy Families (TANF).
The audit’s formal finding is that over $94 million of that grant money has been “questioned,” meaning auditors either saw clear misspending or could not verify the money had been lawfully spent. Examples of questioned spending included:
• MCEC and FRC used TANF money to hire lobbyists with TANF money, which is unallowable, often with no paperwork describing the work the lobbyists were hired to do.
• MCEC awarded contracts to and hired former DHS Director John Davis’s family members, sometimes paying them up front in lump sums.
• MCEC and FRC paid large sums to wrestlers Ted Dibiase, Ted Dibiase, Jr., and Brett Dibiase for work that was not performed, for unreasonable travel costs, or with little proof the programs helped the needy.
• MCEC and FRC used TANF money to fund religious concerts with no proof they benefitted the needy.
• MCEC made multiple donations with TANF money—like donations to the American Heart Association, the Mississippi Highway Patrol, booster clubs, pageants, universities—and provided no proof the donations were used to help the needy. FRC also made unallowable donations.
Among the grantees, MCEC was particularly dependent on TANF funding and engaged in extensive misspending. From 2016 to 2019, MCEC was given over $60 million in grants from DHS, while raising just under $1.6 million from other sources. Examples of questioned spending at MCEC included:
• MCEC paid Victory Sports Foundation TANF money for fitness programs for Mississippi legislators and other elected officials/staffers at no charge.
• MCEC purchased three vehicles with grant funds, each for over $50,000, for Nancy New (Director of MCEC), Zach New, and Jess New. MCEC also paid salaries, cell phone bills, and other costs for a variety of members of the New family.
• MCEC made many unallowable sports-related expenditures—like sponsoring a college baseball tournament—for services that could not be proven to benefit the needy. Some sports-related spending was for services that were not actually performed.
• MCEC transferred over $6 million to a private school and organization owned by Nancy New and also purchased curricula and supplies with TANF funds for the school.
• MCEC paid a speeding ticket for Nancy New with TANF funds.
• MCEC issued a $3,000 check to the bookkeeper of MCEC with a handwritten note saying the payment was actually for John Davis.
• MCEC paid a variety of consultants, including Jess New, for no clear deliverables or where there was no proof the spending met TANF requirements.
• Zach New took a loan out against his MCEC retirement plan and repaid the loan with TANF money.
• MCEC paid for extensive unallowable advertising, like using TANF money to advertise at the NCAA basketball tournament and a college football bowl game. TANF money was also used to purchase tickets to a college football game.
• MCEC paid excessive rent well above market value to a holding company owned by Zach and Nancy New. Sometimes the rent paid for spaces that were not used for TANF-related purposes.
The unallowable spending was achieved through a variety improper activities, like: DHS Director Davis limiting monitoring of subgrantees; forged documents; subgrantees providing summaries of expenditures that did not match actual expenditures; a limited or nonexistent RFP process for selecting subgrantees; fraudulent accounting entries that misstate actual payees; a failure by DHS staff to report obviously improper transactions to law enforcement; and others.
Auditors have recommended current DHS leadership take steps to remedy these problems. “DHS staff should immediately move to seize any property that was purchased by grantees with taxpayer money, as that property belongs to the taxpayers,” said White. “That property does not belong to the Auditor’s office, so we cannot do this for them, but it should be marked as DHS property, and DHS should use their legal authority and move quickly to seize it.”
The audit also suggested DHS conduct an internal investigation into current and former DHS staff who may have played a role in the fraud.
“Thank you to our team of professional auditors for their incredible work,” said White. “The doggedness and attention to detail shown by Stephanie Palmertree, Michael Torres, Jason Ashley, and their team of CPAs led to this critical report. Their work is the first step to restoring public trust in DHS.”
The Single Audit report is now forwarded to the federal government, who will determine the consequences for DHS. Those consequences could include cuts to future grants from the federal government or penalties.
While this Single Audit report concluded the Auditor’s office’s audit of DHS, the criminal investigation of this matter by the Auditor’s office and federal authorities continues.
“This audit should be a wake-up call to everyone in government. The old way of doing things, where you do whatever your boss or a person who controls a lot of money tells you to do, or you ignore the law around how to spend money because you think no one is looking—those days are over,” said White.
45 comments:
We don't have anywhere near enough buses to throw these folks under, but I'm sure we have plenty of Prison space.
Who appointed Davis to DHS?
Think of the good that the stolen money could have provided to those who qualified to receive it. The needy really need that money now.
John Davis was appointed director of DHS by former Gov. Phil Bryant in January 2016
How much was the speeding ticket?
This is what happens when the Conservatives are in charge!
Why is it that the worst of the biggest crimes in Jackson seem to be committed in the greatest numbers by powerful whites? Let's see some anti-white supremacy snark get approved by this blog owner for a change!
@1:21p- A quick Google search shows Bryant appointed Davis. More interesting, is he began as a social worker and worked his way through the ranks. He obviously learned how to cheat the system/deparment over his 28 years. He, the News, and the Dibiases should all rot in jail. An example MUST be made of them all. They should not be allowed to buy their way out of this fraud. They all knew EXACTLY what they were doing.
And everyone was worried about Pelahatchie where the funds were accounted for.
Lol. I would argue that it helps to staff welfare agencies with people that believe in the mission, instead of state government leeches that wouldn’t fit at other agencies. This is what the Republican Party did to DHS, turned it into a cesspool of backscratching and corruption. You have to staff DHS with folks of a more liberal persuasion, and then check them with intervention from the Gov or the legislature if you strongly disagree. You can’t staff DHS with a bunch of opportunistic, cynical folks and expect them to care enough to spend the money in the right way. The Party needs to reach across the aisle and find someone appropriate for leadership at DHS. Period. It’s a no-brainer.
State Auditor Shad White is the best thing to happen to Mississippi since it became a state.
Keep up the good work Shad than run for Governor! We need Tater Tot to Shelter in place I mean out of office.
@1:51p- The ONLY people worried about Pelahatchie were the "mayor" and the ignorant, ill-informed folks. Anyone with HALF a brain understood there was no money missing.
@1:32p- Your stupid is showing! Criminals exist on both sides of the aisle and ALL are disgusting!!
@1:53p- What the heck are you talking about?? Every single person I know personally that works for DHS is of the liberal persuasion.
Lewis was a freaking social worker that worked his way through the ranks. He likely started out as a bleeding heart liberal that wanted to make the world a better place for the children. He proved himself a bad seed that thought it was okay to cheat the system.
As for the News and Dibiases... they KNOWINGLY went in to deceive. There's NO WAY you innocently benefit off the state like they did and TRULY BELIEVE it is all above board. I'm so disgusted by their actions.
ZN and JN wives were getting paid salaries. Neither have ever worked there. Amazing.
They gotta get more than Epps, there is no way the Feds don't want a piece of them.
"[T]he most egregious misspending my staff have seen in their careers at the Office of the State Auditor."
Not a high bar when you consider who his staff worked for previously.
I wonder which legislatures participated in the free fitness programs?
Favre paid 1.1m but didn't speak or attend the events?
Deppity Pheel have any comment yet?
How much was funneled to SuperTalk Radio? Conservatives love them some gubmit cheese! Almost as much as all those bootstrappin' farmers!
Questions:
1. Was DHS not audited on a yearly basis?
2. If a forensic audit is the only way to uncover fraud and misspent funds, should the State of MS require a forensic audit each year of every state agency going forward?
I am convinced even more, Shad should have turned this matter over to the Feds. There are a lot more dominoes that should be falling in this case.
Good gibbily goo - did these people spend ANY money properly?
@3:03 That is why I support 103.9 WYAB. They do not take advertising from taxpayer funded agencies. They are supported by the listeners who support their advertisers.
Kim Wade and James Tulp are better than every "personality" on SuperTalk aka MSGOP radio.
The 94 Million Dollar Man and Sons
Have any of the other Dibiase’s been indicted?
Was John Davis diagnosed with a terminal illness with no cure, and just didn't think he'd live long enough to face the consequences of his actions? That's the only thing that makes this make any kind of sense to me.
" State Auditor Shad White is the best thing to happen to Mississippi since it became a state '.
That's an understatement.
At least Lamar Adams didn’t take down his whole family, Nancy has her sons and wives wrapped up in this!
One thread on this audit wasn't enough. If Kingfish follows his pattern, but the end of the week, there will be seven more.
"Was John Davis diagnosed with a terminal illness with no cure, and just didn't think he'd live long enough to face the consequences of his actions? That's the only thing that makes this make any kind of sense to me."
May 4, 2020 at 4:06 PM
Remember the Mississippi College President who blew millions of that institution's Dollars on prostitutes? Well, I know a famously wealthy family, based in a neighboring state, who, for GENERATIONS, have used starlets and models and PRO WRESTLERS as "toys". Exactly what kind of "toys", it wouldn't be Christian to say.
But ya know, as long as it's "just" taxpayer Dollars, and if a person controlling those Dollars is a hideous old troll too ugly to get any action without paying for it, why NOT throw millions at big, strappin' fellas, for some downlow action (or maybe just some voyeuristic thrills - or as finder's fees for who-knows-what) and then throw even more millions at anybody else who looks like "fun", or who needs to be kept quiet or made complicit?
Think of this as Mississippi's (backwoods: Deliverance-style) version of the Jeffrey Epstein Saga.
As they told me when I went through my army induction physical “Bend over and assume the position.”
Didn’t Chad White serve as former-Governor Phil as campaign manager. And you think Chad is gonna investigate the former governors connection to DHS, USM and the New’s. And remember, the Feds were cut out of the investigation.
" Ted Dibiase Jr. "
I used to hear him on Supertalk Radio about twice a month.
Not one peep . . . much less another thirty minute interview in quite a while.
I wonder why ?
Longwitz needs to answer some questions!!
Claw Back
Full speed ahead Shad!
Gov. Bryant appointed Shad White as Auditor on July 6, 2018 when the News and Davis were knee deep in their misappropriation of funds and embezzlement. The News and Davis were cozy with Bryant. Shad worked for Bryant in the Lt. Governor’s Office and was Co-Chairman of Bryant’s Election Team in 2015. Shad has stated that Bryant was the Whistleblower who told him about the misappropriation. According to Shad, an employee told Bryant about the misappropriation. With Shad’s history and relationship to Bryant, Shad should have either recused himself or turned this investigation over to the Feds.
This is so sad and wrong in every way. I attended a few events sponsored by FF at New Summit. Had no idea it was state funded - seemed to be a revenue based event. They took everyone for a ride. I never understood their purpose, but now it's obviously a grab for free money for a few to squander while those in need suffer. So incredibly selfish and shameful of all those involved, esp. the News. Just disgustingly selfish - wish it was not true, but have not
Yes 10:14! Too much loyalty to be beyond skepticism. Probably why it didn't get to Hurst (the TANF theft was from fed funds after all).
Related question--where was Stacey Pickering during all of this?
SuperTalk Radio got $250,000 to run ads for "Families First of Mississippi." That kind of money buys you plenty of interviews with Paul and J.T and the soccer boy.
Does SuperTalk take calls on the air? If so, call in and ask questions. I never listen because I find their personalities dull and discussions more bland than NPR. I either listen to AM620 WJDX or WYAB.
This all happened under the watch of a governor with no oversight and no one seems to see a problem with CARES Act funds now being under the sole control of another governor? MS seems to be a cesspool of corruption on all levels, but I'd much rather have more eyes on that money with Shad White also on the case!
Way to go Phil! Between this and the prisons he's the worst governor ever
@10:02- don't forget the DMR fiascos, not a few of which went down also on Phil's watch.
One poster mentioned the DMR...I’m still waiting on Shad to investigate the DOR and their ruthless tactics they try to use sort of like a particular Federal Agency thought they could get away with lying.
But, back on topic, Favre is in trouble this time. I really don’t know how he got out of the fiasco with the pharmacy deal that went down last year and him promoting the pain reliever cream. I don’t know if he was just a spokesman or what but I’m quite sure he knew these people in the circle he associates with. Money talks. Now, DiBiase is a whole other can of worms.
Find my sources, the News are expecting to beat this. Will their organization ever get federal or state funds again? Would they be prohibited from getting them after the misspending and corruption they have done?
I am behind reading this one. This is a travesty and one that has been going on for at least 25 years. I heard Nancy New had “stepped down” from New Summit School as the head of it but she still owns it. Hmmmm...Is that stepping down? I don’t think so as long as she still owns it.
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