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Audit finds guitars, plane tickets among $255,000 of improper purchases on state credit cards

By Colin Campbell, The Baltimore Sun

11:38 PM EDT, April 1, 2014

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Four Maryland employees made about $255,000 in improper purchases — including guitars, plane tickets and toy soldiers — with state credit cards intended for business spending, a state audit of the program found.

The audit concluded that agencies could prevent workers from abusing the 17-year-old, $260 million credit card program by using more comprehensive data to better monitor the purchases. Rather than viewing only where purchases were made, like a bank statement, state officials should regularly monitor data that shows exactly what was bought, said Thomas Barnickel, the legislative auditor.

The auditors used the more detailed data to identify the illegal purchases in the report. They also recommended that state agencies better coordinate with banks to identify circumstances or trends that may indicate inappropriate use.

In one case, an employee at a local health department spent $45,640 over the course of four years for guitars, guitar accessories, watches, pellet guns, binoculars, knives, toy soldiers, books and other items online, according to the audit. The health worker then forged receipts and activity logs to make it seem as though the money went to ink cartridges and computer software, the audit said.

The employee was fired in May 2012, pleaded guilty to theft between $10,000 and $100,000 and was sentenced to serve six months in prison.

Auditors do not identify those involved in criminal activity, Barnickel said. A spokesperson for the Department of Health and Mental Hygiene said she didn't know the identity of the employee and referred questions to the state attorney general's office, which did not respond to requests for comment late Tuesday.

In another case, an administrative aide at the National Guard's Freestate Challenge Academy in Aberdeen made nearly $40,000 of personal purchases with state-purchased gift cards from 2008 to 2010, the audit said. In that time, the employee illegally spent $107,493 of taxpayer funds, the audit said.

According to court documents, the aide booked $600 plane tickets for her and a friend from Baltimore to Los Angeles with six gift cards she bought using her state credit card.

The state Military Department, which oversees the Freestate Challenge Academy, identified the employee as Lynn Williams, 57. She was terminated from the academy in February 2011, the audit said. She was convicted of federal wire fraud and sentenced to six months in prison followed by six months of home detention. She also was ordered to pay restitution of $107,493.

The audit also found that a University of Maryland, Baltimore County employee illegally bought $4,356 in gift cards with a state card, and made "additional questionable purchases," the audit said. The employee was terminated in March 2012, pleaded guilty to felony theft in January 2013 and was ordered to pay restitution of $6,693, according to the audit.

The audit said the UMBC supervisor who approved the purchases was issued a letter of reprimand. A university spokeswoman declined to identify the employees and said all purchasing card supervisors were retrained on policies and restrictions.

A former dietary manager at a state juvenile justice facility in Frederick County, was sentenced to a year in prison for theft after ordering more than $91,000 worth of kitchen equipment and food in 2010 and 2011 that was never delivered, the audit said.

A spokesman for the Department of Juvenile Services identified that employee as Douglas Allen Fairfax, 43.

The manager, who also was found to have bought gift cards against regulations, was terminated in May 2012 after an internal investigation by the Department of Juvenile Services and ordered to pay $94,868 in restitution to the state. He was also convicted and sentenced to a year in jail. The audit found that supervisors and management showed "lax attention," but no action was taken against them.

The state plans to require that agencies generate more detailed purchasing data in monthly reports, and "appropriate orientation and training programs will be developed" to ensure better screening by supervisors, the state comptroller said.

Baltimore Sun reporter Ian Duncan contributed to this article.

cmcampbell@baltsun.com

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