Two years after the Department of Health and Hospitals (DHH) eliminated its six internal audit positions, an employee of the Louisiana Department of Health and Hospitals (DHH) has been placed on leave and is expected to be fired and prosecuted for the misappropriation of more than $800,000 in state funds, LouisianaVoice has learned.
The employee, a woman, is accused of depositing checks made payable to DHH into a non-DHH account. She would then withdraw the funds from that account for personal use, investigators said. The internal investigation was conducted by DHH’s Bureau of Health Care Integrity.
In addition to conducting its own investigation, DHH notified the Louisiana Legislative Auditor’s Office and the office of East Baton Rouge District Attorney Hillar Moore. The district attorney’s office will be asked to conduct an external investigation and to prosecute the employee. Restitution also will be sought by DHH.
“In January of 2011, DHH eliminated all but one internal audit position and the following month the one remaining auditor retired, leaving no internal audit function at all at the end of Fiscal Year 2011,” Wes Gooch of the Legislative Auditor’s office told a meeting of the Legislative Audit Advisory Council just over a week ago, on Feb. 21.
He said a recent audit showed for the second year, there was “no effective internal audit function” at DHH.
“In December of 2011, DHH contracted with one auditor to perform internal audit services from December 2011 through December of 2012,” he said. “In May of 2012, this contractor submitted a proposed updated internal audit charter and one internal audit report. No other internal audit activity occurred that year,” Gooch said.
“In June of 2012, this contractor exercised the contract termination clause, leaving no internal audit function in place at the end of 2012.
Gooch told the seven legislators in attendance that each year in the Appropriations Act, “the Legislature requires agencies with budgets in excess of $30 million to use existing positions for internal audit services.
“Considering that DHH has over $650 million in assets and over $7 billion in annual revenue, an effective internal audit function is critical to safeguard state assets and operations,” he said in his testimony.
For his part, DHH Secretary Bruce Greenstein was appropriately outraged over the latest findings. We know this because he said so. “I am outraged that a member our staff would allegedly willfully misuse public funds that were intended for health care services,” he said in a prepared statement.