Grand Jury: Money saving efforts backfired on county
The effort to save money during the Great Recession left Douglas County open to Tiregate, the grand jury report concluded.
Some of the positions eliminated by the county, like the purchasing department, could have prevented the embezzlements, grand jurors said.
“Internal audits were requested by more than one employee during the years in which the fraud and embezzlement occurred,” the grand jury said. “These internal audits did not happen, effectively allowing the alleged fraud and embezzlement to continue.”
Among the grand jury’s recommendations for the future are the consolidation of the county recorder with auditor.
“An advisory question should be submitted to the Douglas County voters in the 2020 election proposing to combine the county recorder and county finance into one elected county position, thus eliminating the chief financial officer position,” grand jurors wrote. “If this combined office had been in place when the whistleblower came forward and human resources wanted an audit conducted at vehicle maintenance, there is a strong possibility the theft would have been detected in 2012.”
Because both human resources and the finance department report to the county manager, the person in that office can stop any investigation.
“Having the position under the authority of an independently elected officer who reports to and is directly responsible to the citizens of Douglas County will make it more accountable and lessen the ability to be manipulated while granting more access for the general public, county commissioners and county departments.”
Grand jurors also recommended institution of an internal audit committee, which is one of the measures already being pursued by the county.
Grand jurors recommended establishing a policy and procedures resolution by the clerk-treasurer and the finance department to develop a system of checks and balances where no single department head or elected official can have complete authority over purchasing, receiving, preparing and submitting claims and invoices.
Grand jurors said they were disturbed by the lack of anonymity county employees perceived as part of the whistleblower program.
“Testimony was received that a Douglas County employee contacted the human resources department with concerns regarding the vehicle maintenance department years before the exposure of fraud and embezzlement was revealed,” grand jurors wrote. “Worry about safeguarding the employee’s confidentiality and position was expressed, so the report was never pursued.”
Establishing a hotline employees can call anonymously is another measure the county is implementing.
According to the grand jury report, Vehicle Maintenance Manager Chris Oakden received some of the highest evaluation marks in the county.
“These high scores continued even after he was issued a letter of reprimand for wrongdoing,” jurors wrote in their report. “Management is responsible for providing accurate and honest evaluations of their employees.”
Grand jurors said county commissioners have been walled off from critical information by top county management.
“The board, by law, is ultimately responsible for the county budget and expenditure of county funds,” grand jurors wrote. “We recommend the board of county commissioners develop and implement a more comprehensive and detailed budget process where county departments are required to provide comparisons of substantial line-item expense increases from previous years to their proposed current year budget requests.”
Grand jurors commended the new facility & fleet manager and the new public works director.
The grand jury concluded that the failure of four county managers, three financial officers and the public works director to prevent the thefts was inexcusable.
“A county employee and a human resources director did everything in their scope of authority to convince management to take action on valid red-flag concerns,” grand jurors wrote. “Management chose to ignore those requests.”