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Greenstein eliminates internal audit function at DHH; two years later, $800K misappropriated (privatization at work)

Posted in Auditor, Health Care, Layoffs, Legislature, Legislators, Privatization on March 1, 2013| 7 Comments »

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.

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$12 trillion NGO request to legislature from mythical Georgia applicant manages to sneak onto 2013 wish list

Posted in Budget, House, Senate, Legislature, Legislators, Revenue on March 1, 2013| 9 Comments »

Non-government organizations (NGOs) traditionally submit requests for funding each year before the legislature convenes but in recent years those projects have met with increasing difficulty obtaining needed revenue given the financial plight of the state.

NGOs include organizations like councils on aging, various foundations, the Louisiana State Fair in Shreveport, local tourism associations, and even the New Orleans Jazz & Heritage Festival and in the past, requests have numbered as many as 450 as recently as 2010 but that number has dropped off sharply to 170 in 2011, about 90 last year and just 81 so far this year.

Many of those that were approved by the legislature were subsequently vetoed by Gov. Bobby Jindal.

Among this year’s submissions are requests for:

• $3.25 million for the 2014 NBA All-Star Host Committee;

• $544,000 for the Greater New Orleans Sports Foundation;

• $280,577 for the New Orleans Bowl;

• $2.47 million for the Jazz Festival;

• $2.5 million for the Louisiana State Fair in Shreveport;

• $403,100 for the Washington Parish Fair;

• $12 trillion for the National Security Agency’s Leonard Cross Hendrickson, Jr.

Wait. What? How much and for whom?

That’s right: $12 trillion for something called the National Security Agency’s Leonard Cross Hendrickson, Jr.

Obviously, the request is someone’s (probably someone named Leonard Cross Hendrickson, Jr.) idea of a joke.

And the fact that the request actually got past whatever passes for the legislature’s screening process or committee indicates Hendrickson’s joke is an unqualified success.

To request NGO funding, entities must complete a detailed questionnaire, which Hendrickson did but some of the answers he provided should be a cause of some red faces somewhere in the state bureaucracy.

Let’s start with the requesting recipient entity’s mailing address: 7998 Hwy. 5, Douglasville, GA.

An out-of-state entity seeing a state appropriation of $12 trillion (the national budget is something in the neighborhood of $3.8 trillion) should have sent up sufficient red flags and triggered enough alarms to catch someone’s attention.

But wait. There’s more.

The request form asks applicants to provide the name of each member of the recipient entity’s governing board, to which Hendrickson obligingly listed the CIA, DEA, DNI (Director of National Intelligence) and the Bush administration.

“Provide a summary of the project or program,” the questionnaire instructed, to which Hendrickson responded: “Measure waste water from space and space-based earth assets control and code enforcements water cosmic ray shields.”

Had that nonsensical response appeared on a federal grant application, Hendrickson probably would have received the money.

“What is the budget relative to the project for which funding is requested?” was the next question on the application form. Hendrickson’s response was classic:

• Salaries—$75 million;

• Professional Services—$250 million;

• Contracts—$12 billion (with the Jindal administration, that’s entirely believable);

• Acquisitions—$9 billion;

• Major Repairs—$12 billion;

• Operating Services—$100 billion;

• Other Charges—$100 trillion.

If you did the math as you read this, you know that the last item, $100 trillion for “other charges” is more than eight times the total amount requested.

For his contact information, Hendrickson provided two telephone numbers, both in the Atlanta area code. One was a non-working number and a woman answered the second number only to say she had received several calls for Leonard Cross Hendrickson but that no such person lived at that number.

So we Googled Mr. Hendrickson and a web address appeared: http://www.lookwhogotbusted.com/douglas-county-ga/hendrickson-leonard-cross-2.

Against our every instinct, we clicked on the address and up popped a photo of a smiling man identified as “Hendrickson, Leonard Cross,” 35, who, according to the website, was booked into Douglas County, GA. Jail for probation violation.

We have no way of knowing why he was on probation or what he did to violate that probation but we have to give Mr. Hendrickson high marks for successfully sneaking in his request.

Now the big question remains: will it be approved by legislature and if so, will Jindal veto the appropriation?

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Radar to M*A*S*H compound: ‘Attention. Attention. Transparency arrives at long last to state government’

Posted in Business, Economy, Governor's Office, Jobs, Legislature, Legislators, Revenue, Taxes, Transparency on February 27, 2013| 7 Comments »

For five long years now we have patiently (or impatiently in some cases) awaited the arrival of all that transparency touted by Gov. Bobby Jindal upon his part time occupancy of the governor’s office.

Now it seems that heretofore elusive aspect of the Jindal administration has finally arrived.

No, it wasn’t Superintendent of Education John White telling News Corp. Senior Vice President Peter Gorman (aka “Dude”) that he is White’s “recharger.”

Nor is the LSU Board of Supervisors which has refused to release the names of applicants for LSU president on the grounds that the applications are conveniently (convenient for the board and the administration, that is) submitted to a Dallas consulting firm which, being a private entity, is not subject to the public records law.

It wouldn’t be the Louisiana Office of Economic Development either. LED a couple of years back refused to surrender records to the Legislative Auditor’s office so that the state auditors could perform the function with which they are charged—auditing the state’s books.

And, needless to say, it is not Attorney General Buddy Caldwell, who found a way to punt on our request for assistance in prevailing upon the Department of Education to comply with the Louisiana public records law (the law, the AG’s office informed us, says it can intervene on behalf of the public meetings law but there is no provision for it to assist with public records).

That’s a classic case of legal hair splitting, but hey, the attorney general’s office is the official legal counsel for state agencies (a veritable horde of state-contracted legal counsels notwithstanding), so who are we to argue? We’re just the low-lifes who work, pay taxes and vote in this state. Never mind some 80 or so (we finally quit counting when we reached that number) legal opinions by the AG issued to various state agencies which opine that public records must be surrendered.

But we digress (as we often do).

No, it’s none of those. The shocker here is that the transparency that has suddenly and without warning opened up before our very eyes originates in none other than the governor’s office.

Yep, chalk one up for Bobby, our part time, absentee governor who would rather run for president than run the state.

Don’t believe us? Still harboring some doubts as to the veracity of our claim?
Well, we have the proof.

Jindal is proposing scrapping the state personal and corporate income tax and replacing it with…well, something. He hasn’t the vaguest idea what (he said earlier this month that he’s still working on details of his plan).

In general terms, Jindal is talking about an increase in the state sales tax and a dollar increase in the cigarette tax (remember when he refused to sign the renewal of the 4-cent cigarette tax because, he said, he was opposed to “new” taxes?).

Never mind that a sales tax would hit the low- and middle-income taxpayers the very hardest https://louisianavoice.com/2013/01/16/par-lsu-economist-richardson-cast-doubts-on-%CF%80-yush-plan-to-replace-louisiana-income-tax-with-state-sales-tax-increase/, abolishment of state income taxes has become the mantra of Republican governors nationwide because it would represent the ultimate tax break (read: political reward) for corporate campaign donors.

But rather than rely on the lack of merits in a weak proposal, Jindal has enlisted his minions to launch a letter-writing campaign in support of his as yet incomplete tax plan.

That’s correct: the plan isn’t even completed, much less polished and officially presented to the legislature and the public, but the letter-writing campaign has already started. Never mind that the plan has as yet progressed no further than a two-page outline pretentiously entitled “A Framework for Comprehensive Tax Reform.” It apparently suffices for the purposes of initiating a well-orchestrated PR campaign from the governor’s office or perhaps from Timmy Teepell’s OnMessage (Oops, we forgot; they are one and the same).

It officially began on Feb. 20 with the publication in newspapers statewide of a letter by LED Secretary and presumed future LSU President/Chancellor/High Potentate Stephen Moret.

Boiled down to its essentials, Moret’s 12-paragraph letter claims that Jindal’s undefined, unreleased, still-in-the-works, everything-still-on-the-table plan would somehow magically bump Louisiana from No. 32 to No. 4 in something called the State Business Tax Climate.

Fine for business climate, yes, but Moret conveniently neglects how that plan, still being formulated somewhere out there in the fog-enshrouded concepts of the policy wonks, would affect the working stiffs. An addition 2 or 3 percent on the sales tax for the purchase of say, a package of toilet paper won’t be such a burden. But tack that same 2 or 3 percent onto the cost of a new refrigerator, central air and heating unit or a new automobile and suddenly, in the words of the late Illinois Sen. Everett Dirksen, you’re talking about real money.

But no matter; Moret obviously had his marching orders: write a glowing letter about how the Jindal Plan (not to be confused with the Stelly Plan that he repealed, at a cost to the state of about $300 million a year) would be great for business—and everyone knows, as President Calvin Coolidge said way back in 1925, “The chief business of the American people is business.” (The stock market crash, of course, was only four years away when he said that, which subsequently put a lot of American people out of business.)

Exactly a week after Moret’s letter, on Feb. 27, the Baton Rouge Advocate (and probably a few other papers across the state) published a second letter endorsing the still mythical tax plan. This one was written by someone named Matthew Glans, who identifies himself as senior policy analyst for The Heartland Institute in Chicago (described by The Economist last May as “The world’s most prominent think tank promoting skepticism about man-made climate change,” according to the institute’s own web page) and which also describes itself as an advocate of free market policies.

Probably its greatest claim to fame, however, came in the 1990s, when it worked with Philip Morris in attempts to debunk the science linking secondhand smoke to health issues and to lobby against government public-health reforms.

(The Heartland Institute bears an eerie resemblance to the fictional “myFACTS” currently being lampooned by Garry Trudeau in the comic strip Doonesbury.)

Glans calls Jindal’s plan “a strong step towards improving the state’s economic competitiveness and returning tax dollars to Louisiana citizens and businesses.”

At the same time he cautions against a system “that allows the government to choose winners and losers.”

“A tax system filled with tax increases on targeted items such as tobacco or subsidies for certain businesses (read: tobacco, in states like North Carolina), however, is not sound policy,” he says, adding, “A system that lowers rates across the board, like much of Jindal’s proposal, would spur economic growth.”

Strange how Glans, sitting in Chicago, could know so much about the part time, absentee governor’s tax plan when Jindal himself confesses that his “plan” is still evolving and stranger still that he would single out tobacco (and tobacco subsidies) as a potential victim of increased sales taxes.

Curious, too, that he is so knowledgeable when legislators remain in the dark.

But, hey, we wanted transparency from our governor.

And this “independent” letter-writing campaign is about as transparent as it gets.

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The Jindal paradox: he adores but would never work in the private sector (but he would make a splendid Sheldon sub)

Posted in ALEC, American Legislative Exchange Council, Campaign Contributions, Civil Service, Contract, Contracts, Education, Ethics, Governor's Office, Health Care, Higher Education, Layoffs, Legislature, Legislators, Privatization, State Agencies, Transparency on February 24, 2013| 12 Comments »

The burning paradox that is Gov. Bobby Jindal comes down to this: for someone who so obviously loves and embraces the private sector, it’s curious that he has never earned his livelihood in it.

Yes, we know that he “worked” for four whole months for McKinsey & Co. in 1994 but that could hardly be considered as the private sector since the firm primarily serves as a training ground for future bureaucrats and elected public servants.

To paraphrase a 1981 line from actor Burt Reynolds at his Friars Club roast, he’d probably like to thank the little people for putting him into office—but he’d never associate with them.

Of course, should he ever decide to re-enter the private sector and if Jim Parsons should decide to leave the CBS sitcom The Big Bang Theory, Jindal could step right into the role of Dr. Sheldon Cooper and never miss a beat.

Sheldon Cooper, in case you are not a regular viewer (you can catch the show on CBS at 7 p.m. Thursdays or reruns on Tuesdays at 7 p.m. on TBS), is the glue that holds the popular show together. He is academically brilliant (as most would concede Jindal to be) but completely unable to relate to mere mortals (as all would have to agree is a persona that fits Jindal like a glove).

Sheldon is a fount of book knowledge, possessed of an eidetic memory and able to spout figures, dates and statistics with the comparative ease of reciting one’s ABCs but is unable—or unwilling—to perform the simple task of driving a car.

Jindal is a fount of book knowledge, possessed of an eidetic memory and able to spout figures, dates and statistics with the comparative ease….well you get the picture.

Sheldon is completely and totally devoid of human emotion, is unfeeling and unable to communicate in a normal conversation because he has no empathy for his fellow human being. Even in casual conversation, it is impossible for him to avoid insulting the intelligence of those around him, be they peers or subordinates.

Jindal is similarly lacking in those same qualities and likewise cannot speak without offending—be it civil service employees, department heads or fellow Republicans whom he now publicly refers to as being stupid.

Sheldon, when playing board games or video games with his friends, is prone to make up his own rules as he goes along—much to the consternation of Leonard, Raj and Howard, his three friends on the show.

Jindal also is not above tweaking the rules to his advantage as in his exempting the governor’s office from the state’s public records laws—much to the consternation of the media.

But most striking of all the similarities between the two: Sheldon is stubborn and steadfastly refuses to admit to the prospect that he could ever be wrong—about anything.

Jindal, too, is mulishly stubborn and just as steadfastly refuses to entertain the thought that he might be wrong about anything—a trait that goes at least as far back as middle school, according to a former teacher who described him as unwilling to accept correction even then.

But back to Jindal’s undying devotion to the private sector:

His is a strange relationship indeed.

Visit the home a professor, and you’re likely to find shelves upon shelves of books. Visit a hunter and you will find hunting rifles and mounted deer, elk and moose heads. Same with fishermen and the mounted bass that adorn their den walls.

Visit an aficionado of the private sector like, say, the governor of Louisiana and you’re likely to find…photos of smiling campaign contributors.

But you would never find him putting in a typical 8 to 5 day in a cubicle or toiling away in the workaday world like the rest of us. That is so far beneath him as to be comical to even consider.

No, he would never stoop to such a low level. That is for people who can be manipulated, used and even fired at will—by people like him.

Instead, Jindal chooses to reciprocate the private sector’s political campaign contribution largesse by selling off the state, piece by piece, agency by agency to his corporate benefactors while at the same time, selling out hard-working, dedicated state workers without so much as a second thought or a thank you.

The private sector is Jindal’s benefactor, not his employer. Accordingly, he must pander to the corporate suits like Rupert Murdoch, K12, Dell Computers, Marathon Oil, Wireless Generation, Altria, Hospital Corp. of America, Magellan Health Services, Meridian, CNSI, Information Management Consultants, Innovative Emergency Management, Anheuser-Busch, Corrections Corp. of America, AT&T, Koch Industries, the entire membership of the American Legislative Exchange Council (ALEC), and most of his appointees to prestigious boards and commissions.

No, Bobby Jindal would never earn—has never earned—his living from the private sector.

But make no mistake about it: he owes his political existence to corporate America and the private sector.

And he believes with equal conviction that he owes nothing to state employees or the public sector.

Yes, he could step right in and fill Jim Parsons’ role as Sheldon and the difference would be negligible—except for the obvious cultural imbalance that would create.

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Kristy Nichols: ‘We didn’t present a truly balanced budget because we couldn’t’ (or ‘down the old rabbit hole’—again)

Posted in Budget, Governor's Office, Guest Columnist, House, Senate, Legislature, Legislators, Politicians, Revenue, Taxes, Transparency on February 23, 2013| 20 Comments »

Guest Column
By STEPHEN WINHAM

The long-awaited Jindal administration proposal to balance the Fiscal Year 2013-2014 budget was released yesterday (February 22). The most surprising thing about it was its almost complete lack of surprises. Once again, we were presented with a budget that uses one-time money, contingencies, and outright conjecture, along with increased college tuition, to create the illusion of a balanced budget that does little or no harm.

Perhaps the most surprising and indefensible part of the presentation was revealed in Melinda Deslatte’s AP wire story late yesterday. Deslatte reported that commissioner of administration Kristy Nichols defended the use of patchwork funding in the budget on the grounds that not doing so would result in “needless reductions to critical services.” Think long and hard about what that means.

The governor is happy to tout his refusal to increase state taxes. He is also happy to talk about his successes in reducing the size of government and refusal of additional federal support. He is very direct, if not necessarily consistent, when it comes to holding the line on these things. Although there is no second half to his current plan to eliminate income and franchise taxes, he assures us that, if he actually ever presents a proposal for the other side of the equation, it will be income neutral.

If Nichols’ testimony is to be taken at face value, we can only assume it is not possible to maintain critical services with our current level of recurring revenue. So far, the governor’s approach to reducing state government has been to gradually strangle it through continued submission of unrealistic budgets intended to give the impression everything is okay. The legislators adopt these proposals and congratulate themselves on another successful year.

In reality, everything is not okay. The governor knows it. Ms. Nichols knows it. The legislators interested enough to pay attention know it. As long as projected revenues from reliable, stable sources do not equal projected necessary expenditures, things will NEVER be okay. Governor Jindal has not submitted, nor has the legislature adopted, such a budget during his entire administration. This is proven by the mid-year cuts that are always necessary in adopted yearly budgets and the never-ending projections of deep holes for every future year.

Governor Jindal has been quoted repeatedly in the national press saying we all have to learn to live within our means. If he really believes this, why does he not present budgets that allow the state of Louisiana to do so? I think Ms. Nichols has made the answer quite clear – because we simply cannot live the way we want to within our present means. Presenting a truly balanced budget would result in an outcry from even the staunchest fiscal conservatives who would immediately begin to cry, “Why don’t you cut the fat, not the meat?” They would never accept there isn’t enough fat left to leave the meat alone.

A group of legislative “Fiscal Hawks” [a term coined by respected blogger C. B. Forgotston] has attempted to solve the perennial problem of unbalanced budgets by forcing the governor and the legislature to simply comply with the clear spirit of the state’s existing constitution and statutes as they apply to the budget.

Regardless of how complicated some might attempt to make these laws, their intent is plain common sense: we should do our best to project recurring revenues and adopt a budget that balances expenditures with them. If one-time revenues are used, they should only be used for clearly one-time expenses because doing otherwise automatically creates holes in future budgets. We shouldn’t budget on contingencies and conjecture because if the revenues fail to come in we will have significant trouble paying for or cutting the services they were supposed to fund.

Could anything be simpler or make more sense? If the governor and the legislature know we cannot live within our means why don’t they do something as simple as following the intent of existing law? The governor doesn’t propose budgets doing so because, like Ms. Nichols, he knows it is impossible without making unpopular cuts to essential services. Cutting taxes is popular. Cutting needed services, or raising taxes, is not.

The legislature doesn’t demand we live within our means for the same reason and also because of their collective belief that their constituents are only interested in the extent to which they bring home the bacon. Legislators believe not bringing home the bacon equals not getting re-elected. Although they already have a history of funding local services to the detriment of state programs in the past, we have now reached a critical stage.

If essential state services are cut at the same time purely local projects are funded, there might actually be a backlash for individual legislators. They might learn that their constituents benefit from the critical state services to which Ms. Nichols refers and actually care about the future of the state in which they live as much as their local neighborhoods.

Why can’t our state’s leaders just be honest about this and do the right thing? Understanding and dealing effectively with the budget dilemma requires a level of knowledge that can only be gained through fairly intimate involvement with, and knowledge of, the state’s budget and fiscal status. It is unreasonable to expect individual citizens to educate themselves at the detailed level necessary to make the right decisions about how to fix things even if they could. When we elect our governor and legislators, we do so with the reasonable expectation that they can and will take care of these things in our behalf.

It is certainly easy to understand why it is difficult to make hard cuts when cash is, or even may be, available to avoid them. But willfully allowing gross fiscal instability to continue indefinitely is a violation of the public trust. It serves no one well and doesn’t even allow the ability to isolate inefficiencies and make rational cuts in spending where they actually need to be made.

Only by facing reality can our state’s leaders make the necessary changes to move us forward. The administration has admitted the current gap cannot be closed by cuts alone. We should support those legislators and other elected officials who have the courage and conviction to make responsible decisions about our future even if they include additional taxes.

(Stephen Winham is the retired Louisiana State Budget Director)

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