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Archive for the ‘Waste’ Category

The most recent audit (August 2017) of the Foster Care Program of the Department of Children and Family Services (DCFS) found that:

  • DCFS did not conduct proper criminal background checks on non-certified foster care providers;
  • DCFS allowed nine certified providers with prior cases of abuse or neglect to care for foster children during fiscal years 2012-2016 without obtaining required waivers.
  • DCFS does not have a formal process to ensure that caseworkers actually assessed the safety of children placed with 68 non-certified providers.
  • DCFS did not always ensure that children in foster care received services to address physical and behavioral health needs.
  • State regulations require DCFS to expunge certain cases of abuse or neglect from the State Central Registry, which means those records are not available for caseworkers to consider prior to placing children with providers.

(See the DCFS audit summary HERE.)

So, the question now is this: What steps will the state take to protect these children now that the Legislative Auditor has pointed out these serious deficiencies?

If the results of a 2012 audit of the Louisiana Department of Economic Development’s Enterprise Zone Program is any indication, then the answer is nothing.

Under state statute, Louisiana’s Enterprise Zone (EZ) program is designed to award incentives to businesses and industries that locate in areas of high unemployment as a means of encouraging job growth. (The summary of that audit can be viewed HERE.)

That audit found that:

  • Approximately 68 percent of the 930 businesses that received EZ program incentives from the state were located outside of a designated enterprise zone. These businesses received nearly $124 million (61 percent) of the $203 million in total EZ program incentives during calendar years 2008 through 2010.
  • Approximately $3.9 billion (60 percent) of the $6.5 billion in capital investment by businesses receiving EZ incentives was located outside a designated enterprise zone.
  • Approximately 12,570 (75 percent) of the 16,760 net new jobs created by businesses granted EZ incentives were located outside an enterprise zone.
  • Four other states with which Louisiana was compared exclude retail businesses from EZ incentives. Louisiana does not, allowing such businesses as Walmart to take advantage of the incentives.
  • None of the four neighboring states allows businesses to count part-time employees among the new jobs created. Louisiana does.
  • Louisiana state law prohibits disclosure of the amount of incentives received by businesses.

Little, if anything, has been done to rectify these deficiencies in the oversight of the EZ program.

There has been precious little reaction from this year’s audit of the Louisiana Department of Wildlife and Fisheries which found that thousands of dollars in equipment had been stolen, a story LouisianaVoice called attention to last year. Go HERE for a summary of that audit report or HERE for our story.

Some remedial steps have been made in addressing a multitude of problems exposed in a 2016 audit of the Department of Veterans Affairs (See audit summary HERE).

Yet, we can’t help but wonder where the oversight was before a critical audit necessitated changes. Among those findings:

  • Payment of $44,000 to a company for improperly documented work without the required contract.
  • The use of $27,500 in federal funds specifically earmarked for the Southeast Louisiana Veterans Cemetery in Slidell for the purchase of a Ford Expedition for the exclusive use of headquarters staff.
  • The failure to disclose information of potential crimes involving veteran residents at several War Veteran homes.
  • The possible falsifying of former Secretary David Alan LaCerte’s military service as posted on the LDVA website.
  • LaCerte’s engaging in questionable organizational, hiring, and pay practices that led in turn to a lack of accountability.

Likewise, some positive steps have been taken in shaping up the Department of Corrections’ (DOC) trusty oversight programs but that resulted as much from a thorough investigative report by Baton Rouge Advocate reporters as a 2016 audit (see HERE) that found:

Because the Louisiana State Penitentiary at Angola’s trusty policy, 1,547 (an astounding 91 percent) trusties at Angola were not eligible for the program and even after the policy was revised, 400 (24 percent) of 1705 trusties were ineligible. All 400 were considered by DOC to be eligible as a result of having an undocumented, implicit waiver for a sex offense or time served less than 10 years.

Equally troubling, the audit found that 14 of 151 (9 percent) of trusties assigned to work in state buildings in Baton Rouge were not eligible because of crimes of violence, including aggravated battery, manslaughter, and aggravated assault with a firearm. The report further found that if those 151 were required to comply with the requirements in place for Level 1 trusties, 49 (32 percent) would be ineligible.

Indicative of the monumental waste brought about by the proliferation of boards and commissions in state government, a 2017 audit (see HERE) of “Boards, Commissions, and Like Entities) noted that the number of boards and commissions had been reduced from the 492 in 2012 to “only” 458 in 2016. Texas, by comparison, has 173, Mississippi about 200. The appointment of members of those boards and commissions take up a lot of time as the governor’s office supposedly vets each new member.

Four boards did not respond to the auditor’s request for data in 2017 and 2016.

There were 11 inactive boards which were not fulfilling established functions, five of which were also inactive the previous year.

Some of these boards, as illustrated on numerous occasions by LouisianaVoice, often go rogue and there seems to be no one to rein them in. These include the Louisiana State Police Commission, The Louisiana Board of Dentistry, the Auctioneer Licensing Board, the State Board of Cosmetology, and the State Board of Medical Examiners, to name but a few.

Take, for example, the 2016 audit of the Louisiana Motor Vehicle Commission (see HERE):

  • The commission did not have adequate controls over financial reporting to ensure accuracy.
  • The commission did not comply with state procurement laws requiring contracts for personal, professional and consulting services, failing to obtain approval for contracts for two vendors totaling $80,000.

The point of this exercise is to call attention to the one office in state government which, with little fanfare and even less credit, goes about its job each day in attempting to maintain some semblance of order in the manner in which the myriad of state agencies protects the public fisc.

The Legislative Auditor’s Office, headed by Daryl Purpera, performs a Herculean, but thankless job of poring over receipts, contracts, bids, and everything related to expenditures to ensure that the agencies are toeing the line and are in accordance with established requirements and laws regarding the expenditure of public funds.

Thousands of audits have been performed. We pulled up only a few random examples: there are others, like the Recovery School District, the Department of Education, Grambling State University (only because it has so many audits with repeated findings), levee districts and local school boards and parish governments. Untold numbers of irregularities have been uncovered—only to be largely ignored by those in positions to take action against agency heads, who, because of political ambitions, allow attention to be diverted from their responsibilities of running a tight ship.

In cases of egregious findings, the media will jump on the story, only to allow it to fade away and things soon return to normal with no disciplinary action taken against those responsible.

If all elected officials and members of the governor’s cabinet were held accountable for their sloppy work or the outright dishonesty of their agency heads, it would send a message throughout state government and this state might well save hundreds of millions of dollars in wasted expenditures and theft.

It calls to mind the lyrics of a 1958 Johnny Cash song, Big River, recorded when he was still with Sun Records:

“She raised a few eyebrows

And then she went on down alone”

Through it all, Purpera and his staff trudge ever-onward, raising a few eyebrows and then continuing (alone) to do their jobs even as those above them do not.

They—and the taxpayers of Louisiana—deserve better.

 

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Since our publication of those Crimson Tide pictures on a Terror-Bonne sheriff’s patrol vehicle, we have gotten all manner of pushback from supporters—and one apparent relative—of Sheriff Jerry Larpenter, one even suggesting we had libeled the good sheriff (we have not, by any definition of the term “libel”).

If those good people think we have been a little tough on Sheriff Larpenter, we have a few more surprises that are certain to get their blood boiling.

This is the sheriff, you recall, who had a search warrant executed against a blogger who had the temerity to criticize the man who holds what is arguably the most powerful elected office in the parish. The blogger’s home was raided in the early morning hours and his computers seized only to be sheepishly returned after a federal judge read the sheriff the riot act about a person’s First Amendment rights.

One who commented on our story said, “You guys do realize those letters are photo-shopped into that picture, right?”

Um, no.

Another well-meaning writer who works in graphic arts assured us she had no dog in the hunt but after examining the photos, she, too, was of the opinion they were photo-shopped.

Nope. Afraid not. It turns out they are produced specifically for Alabama fans. Subsequent photos put up by LouisianaVoice revealed that the tires had been turned around since our store so as to not be visible to the public.

But then the dealer who sold the tires to Larpenter’s department weighed in, saying that the tires cost no more than any other tire because they were on state contract and actually cost less than what they cost the dealer.

Okay, we concede that point but if the good sheriff had nothing to hide, why was he so quick in flipping them so that the lettering faced the undercarriage of the vehicle? Perhaps he did so to escape the wrath of LSU fans who can be every bit as rabid as ‘Bama faithful.

One writer, who identified himself as Joseph Larpenter, wrote, “If that’s all you people are bitching about is tires, then you are stupid. I know the reason behind the tires and it’s a great idea. I’m not saying this because of who I am. I’m not stupid to this approach. If you don’t get it, then you are stupid as well.”

He later emailed us to say, “Because of a set of tires really.” The lack of punctuation marks in the appropriate places sort of diluted his message, but we get it. He doesn’t like us and he thinks we’re picking on the sheriff as did the person who commented that we were treading dangerously close to libel. Our only response to that is that he’s obviously not an attorney.

Well, today we received a little tip about deputy overtime pay and, considering the financial plight of the sheriff’s department where employee benefits have been cut back to help the sheriff overcome a huge budgetary deficit, the numbers ain’t pretty.

Take Maj. Tommy Odom, for example.

Maj. Odom apparently is a workhorse of unlimited energy and a capacity for long hours.

Copies of time sheets from nine randomly selected two-week pay periods indicate Odom’s income may well surpass that Larpenter himself working as he does an average of 21 hours per week in overtime.

The man is dedicated, working Saturdays and Sundays and hardly, it seems, even taking time to go home for lunch, taking as he does only half-hour lunch breaks.

Why, in a single two-week pay period, he logged 88.5 hours over and above his regular 80 hours, good for an extra $5,100 in overtime in addition to his regular pay of $4,080. From September 15, 2014 through September 28, he worked 13 consecutive days, logging as many as 15 hour on several of those days, according to the time sheets obtained by LouisianaVoiceCLICK HER FOR TIME SHEETS

Using the nine pay periods as a base, it showed he worked an average of 21 hours per week overtime. At his base rate of $51 per hour, his regular salary is about $2,040, or around $106,000 per year. At the legal time and one-half overtime rate, he made $76.50 per hour for his overtime work, which, at an average of 21 hours per week, would be about $83,500 in addition to his regular salary.

These figures aren’t photo-shopped. They’re real. And it leads one to wonder just what it was that Odom did during all those overtime hours—or why he was allowed such latitude.

Odom, our source said, is the only one of his rank who is allowed to work overtime. In fact, our source said, “No one else at Terrebonne Parish Sheriff’s Office at the rank of captain or above is allowed to work overtime.” Only Odom, who also is charge of purchasing. When he previously worked patrol, our source says, “he used to dictate his reports to his wife and she would write his reports for him.”

So, while we had a little fun with our tire story, the manner in which Larpenter runs his office is serious business and remains a sticking point with many residents of Terrebonne Parish.

So, in response to Mr. Joseph Larpenter, who obviously has skin (or at least kindred blood) in the game: No, bitching about tires is not all we have to bitch about is tires—not by a long shot. And LouisianaVoice will keep poking and probing and prodding for answers and we will report our findings.

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I’ve got no quarrel with anyone who wants to display his loyalty to a particular college or professional sports team. As a Louisiana Tech graduate, I naturally pull for the Bulldogs and because I live in Denham Sprints, right next door to Baton Rouge, I’m an LSU baseball fan.

And I’ve been a Boston Red Sox fan all my life, dating back to the days of the greatest hitter of ‘em all, Ted Williams who also, incidentally, was very active in helping raise money for the Jimmy Fund, a benefit program for children suffering from cancer. He did so quietly and privately, regularly visiting sick children. There was one ground rule, however: no media were to know when he was there. On one occasion a sick child was holding Ted’s finger in his hand. As Ted tried to leave, the child wouldn’t let go. Williams had a nurse bring a chair to the child’s bedside and he sat there all night holding his hand.

I have LSU, Tech and Red Sox caps and T-shirts but no bumper or window stickers but see nothing wrong with those who openly support Mississippi State, Florida or even Alabama on LSU turf—even if that person happens to Terrebonne Parish Sheriff Jerry Larpenter.

You remember Larpenter. He’s the one who got a judge to sign a search warrant so he could raid the home of a blogger whose only sin was being critical of Larpenter. You know, free speech and all that.

A federal JUDGE threw that search warrant in the trash can and in doing so, gave a Larpenter a verbal lashing and a refresher course on the First Amendment while clearing the way for a civil rights lawsuit against the high sheriff.

Well, now we learn that Larpenter, even as he cut back on his department’s matching deferred compensation for his employees and cut a boat load of other benefits as well in an effort to overcome his department’s $3 million deficit, saw nothing wrong with blowing a tidy sum on special tires and rims for one of the Sheriff’s Department’s vehicles.

In what was obviously a hilarious joke on the local LSU fans, Larpenter’s tires have nice white raised lettering reading “University of Alabama Crimson Tide.”

And while the “in your face” rolling proclamation might rankle resident Tiger fans, it should really raise the hackles of local taxpayers who’re paying for this unusual expenditure.

This little gesture must certainly fall under the “What the hell were you thinking” classification of really stupid things to do, Sheriff. It would have been far more economical to just get a Tide rear window sticker—and it’d be a lot less offensive to those who write checks for their property taxes each December.

But then again, this is the type mentality we get from elected officials who feel sufficiently immune to voter outrage and who seem to think of their office as just that—their office, instead of belonging to the people who have bestowed upon them the privilege of occupying the office temporarily.

(Lord, I hope he doesn’t get a search warrant to come barging through my front door at 6 a.m. to seize my laptop the way he loves to do to bloggers who criticize him. I just painted the door and put in new flooring following last year’s flood and don’t need the aggravation.)

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Word from inside the Louisiana Office of State Fire Marshal (LOSFM) is that state auditors have come calling and are taking a close look at agency expenditures.

Without being privy to any specific findings by the Legislative Auditor’s Office, it’s a pretty safe bet that the bean counters are going to find that the LOSFM likes to worm its way around the rules by making multiple purchases in amounts that fly—barely—under the radar, as it were, of minimum amounts for which quotes are required.

Other expenditures that might be questioned by auditors include meals at Mike Anderson’s Restaurant, purchases from a grocery store, a seafood market, a deli, a cookware outlet, association memberships and convention fees,

The  LOUISIANA PROCUREMENT CODE (LPC: that would be R.S. 39:1551-1755 for whoever is wearing military medals at LOSFM these days] does not require competitive bidding for purchases that are $5,000 or less. Purchases that are greater than $5,000, and up to $15,000, require quotes from at least three vendors by telephone, fax or other means. (emphasis ours.)

LouisianaVoice recently spent the better part of a week poring over and scanning stack upon stack of purchasing records by the fire marshal’s office. Several years’ worth of receipts, no less.

If LOSFM is an indication, the so-called state budgetary crisis is largely a myth and U.S. Sen. John Kennedy, erstwhile State Treasurer, was correct when he said the state didn’t have a revenue problem; it has a spending problem. (Kennedy, alas, not knowing when to call it a day, would go on to talk about drinking weed killer and quoting a mysterious Louisiana adage known only to him about how we should love one another but should also carry a handgun).

State Fire Marshal Butch Browning apparently makes a lot of photocopies and prints volumes of documents, judging from the toner purchases made by his office. But those notwithstanding, it became fairly obvious from our findings that Browning, his second in command, Brant Thompson, and other top honchos like to split their purchases so that they fall just under that magical mystical $5,000 amount.

We even stumbled across one purchase of $4,999.99 on September 6, 2016, from Broad Base of Harvey for the purchase of 10 washers and 10 dryers for the agency’s laundry trailer. Apparently, they learned well from the Jindal administration which would issue state contracts for $49,999 so as to avoid the laborious approval of the old Office of Contractual Review, a requirement that kicked in at $50,000 and above.

LOSFM also liked a well-dressed agent. In 2015, it spent $33,490 with Guidry Uniforms of Lafayette, with at least three of those purchases being in increments of $5,000 and another for $5,000.01 (oops).

On April 7, 2015, the fire marshal’s office spent $2,558.59 with Guidry’s and immediate recorded another purchase that same day for $685.83. Six days later, on April 13, another $5,000 was spent with Guidry’s, all apparently without benefit of the required three quotes as there were no such quotes provided along with the receipts.

In 2014, records were found for expenditures with Guidry’s of $4,531.53 (September 15) and $5,000 (November 14). Another $17,600 was spent at Guidry’s in 2016, including individual purchases of $1,069 on March 31 and payments on outstanding invoices of $4,932.67 in April 12 and $2,517.61 in April 20.

“Agencies should maintain documentation of each quote received,” the state law says. “Procurement amounts may not be artificially divided in order to circumvent the LPC.” (emphasis ours) Quotes may be taken by telephone, facsimile or other means. The quotes must, however, be in writing if the price exceeds $5,000. Awards shall be made to the lowest responsive quotation.

Other apparent split purchases made without obtaining the required three quotations:

  • Tri-Parish Communications of Baton Rouge: March 10, 2015 ($1,870.75), March 16 ($1,876 and $382.80), March 18 ($107.80 and $148.30), March 19 ($232.85) and March 24 ($274.85 and $359.85) for a total of $5,253.20.
  • Louisiana Office Solutions of Baton Rouge: January 14, 2016 ($269.32), January 21 ($2,668), and January 22 ($2,828) for a total of $5,765.32.
  • Preferred Data Voice Networks of Baton Rouge: April 5, 2016 ($1,873.60), April 12 ($3,248.80), April 19 ($4,970.80) for a total of $10,093.20 with all three purchases precisely one week apart (clever).
  • Quality Lapel Pins of Littleton, Colorado (we’ll have more on them later): February 21, 2016 ($3,569), March 9 ($3,569—yep, identical amounts in two separate purchases barely two weeks apart), and March 30 ($1,040) for a total of $8,178 over a span of five weeks.
  • Quality Lapel Pins: June 27 ($4,862), July 13 ($921.02), and July 18 ($1,828.20) for a total of $7,611.22 purchased over a period of three weeks.
  • Goodyear Commercial Tire of Baton Rouge: March 26, 2015 ($3,484.17) and March 30 ($2,677.43), a total of $6,161.60.
  • Ferrara Fire Apparatus of Holden: December 11, 2014 ($4,985), December 12 ($2,747.52), and December 22 ($2,190.14), a total of $9,922.66.
  • Ferrara Fire Apparatus: April 2, 2015 ($3,784.38) and April 8 ($1,712.16), a total of $5,496.54.
  • Ferrara Fire Apparatus: March 18, 2016 ($4,828), April 14 ($3,196 and $1,164), and April 26 ($4,342), a total of $8,702 (grand total of split purchases: $24,121.20). Additionally, LOSFM had individual purchases from Ferrara of another $10,321 in the years 2014-2016, including one purchase of $4,985, just $15 below the amount requiring quotations.
  • Teeco Safety of Shreveport: November 6, 2014 ($4,731.50) and November 14 ($4,994.50), a total of $9,726.
  • Teeco Safety: December 5, 2014 ($3,979.30) and December 11 ($3,248.32), a total of $7,227.62.
  • Teeco Safety: February 13, 2015 ($3,525, $564.30, and $711.76) and February 19 ($546), a total of $5,347.06.
  • Teeco Safety: November 6, 2015 ($2,763), November 12 ($4,763.14), and November 16 ($1,413.96), a total of $8,940.10.
  • Teeco Safety: December 18, 2015 ($3,606.79 and $179.76) and December 22 ($2,601.31), a total of $6,387.86.
  • Teeco Safety: September 9, 2016 ($4,587.96), September 14 ($3,433.92), and September 30 ($1,919.76), a total of $9,941.64. LOSFM also made individual purchases of $4,941.98 on October 30, 2014, and $4,777.80 on April 8, 2015, and had three purchases totaling $4,804 in December 2016.

Documents provided by LOSFM indicated that an occasional quotation was obtained from Teeco prior to purchases, but there were no quotes from other vendors.

Besides the four purchases of $5,000 each from Guidry’s and the $4,999.99 from Broad Base, the fire marshal’s office also chalked up at least a dozen one-time purchases that fell just below the $5,000 amount requiring quotations. Those purchases ranged from $4,000 to $4,900, $4,990 and $4,999—all without benefit of quotations.

That $4,900 expenditure was for a deposit to LR3 Consulting for creation of the “Louisiana Firefighter Proud” website. The State of Louisiana has IT personnel to perform such tasks.

Over a relative short span, from May 9 to September 22, 2016, LOSFM spent $9,600 at Best Buy on such items as juice boxes, computer and video cable, and other computer-related equipment.

Another $8,754 was spent on association memberships and sponsorship fees for conventions, records show. Those included:

  • $1,300 for 2015 memberships in the Merchant International Association of Arson Investigators (IAAI);
  • $1,875 for 2016 memberships in the Louisiana IAAI;
  • $1,175 for 2017 IAAI membership;
  • $1,404 for 2015 membership in the Automatic Fire Alarm Association (AFAA);
  • $700 for sponsorship of the Louisiana Municipal Association (LMA) 2015 convention;
  • $750 for sponsorship of the LMA 2016 convention;
  • $800 for sponsorship of the LMA 2017 convention;
  • $750 for sponsorship of the Louisiana Police Jury Association (LPJA) 2017 convention;

On December 3, 2015, LOSFM employees were treated to a Christmas meal at Mike Anderson’s Seafood Restaurant at a cost of $2,195. Another $1,014 was spent at LeBlanc’s Food Stores and $126.62 was dropped at Tony’s Seafood Market & Deli in January 2016, and $479.85 was spent at Jason’s Deli in April 2016.

On January 21, 2015, $895 was spent at Krazy Kajun Cookware for the purchase of a 30-gallon roll-around combo set, including the pot and accompanying paddles—apparently to compliment the purchase later that year (May 18) of a special service trailer for “emergency field food service” to support USAR events/emergencies. (A quick Google search of USAR came up with U.S. Army Reserve and Urban Search and Rescue.)

But that pales in comparison to more than $62,000 spent by the Louisiana Fire Marshal’s Office between May 2014 and September 2016 on such things as badges, ribbons, plaques, coins, medallions, stadium cups, lapel pins, and decals—all without benefit of obtaining quotations. A couple of those nudged right up against that $5,000 limit:

  • $5,000 with Quality Lapels and Pins in February 2016, $7,138 in two purchases of identical $3,569 on February 21, 2016 and again 16 days later, on March 9, and $4,862 on June 27;
  • $4,617 from Rebel Graphics of Baton Rouge in June 2016, and
  • $4,997 with Action Flags of Baton Rouge (no invoice date).

There was no indication if any of those purchases were for military medals to be worn by Browning.

 

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To get past those cute but misleading TV ads, and arrive at a better understanding of just how the insurance industry really works, you need to understand first, that insurance companies are in the business to make money for their stockholders.

That’s it. There is no second. The policyholder is never taken into consideration when there is a claim. The mindset for the insurance company, no matter what name or logo is on its letterhead, is driven by one overriding question: How can we get out of this obligation with the least cost to shareholders?

It matters not one whit whether it is life, property & casualty, auto, or health insurance. The company’s very purpose for existing is not to see that policyholders are made whole but how the payout on claims may be minimized so as to inflict the least monetary damage to the company’s bottom line.

Do you think that life insurance claim that was slow paying off was simply to investigate whether or not the beneficiary had a part in the insured’s death? While that may be a part of it, particularly in cases of suspicious circumstances (such as falling off a cliff during a hike in Bryce Canyon), there may well be other factors involved, such as delaying payment as long as possible in order to accrue as much return on the investment of premiums as possible.

You didn’t really think the companies just leave that money lying around waiting for the insured to die, did you? No, it’s invested heavily in all sorts of things in order to earn money for the company.  https://www.paxforpeace.nl/stay-informed/news/insurers-invest-nearly-7-billion-in-controversial-arms-trade

And it’s your money they do it with.

Did you ever wonder why your auto insurance company would suggest a particular body shop for repairs to your car after an accident? Why not the body shop of the dealer from whom the car was purchased? It could be—and often is—because the recommended body shop uses what is called “after-market” parts for repairs. That means the parts are generally inferior to those of the dealership’s original parts and can diminish the resale value of your vehicle. Did you ever notice that after repairs at some of those shops, the quarter panel replacement no longer fits flush with the original undamaged part of your car? Or you have air leaks (or worse, water leaks) around the replacement door that weren’t there before? That would be the likely result of after-market parts. http://www.repairerdrivennews.com/2015/02/12/anderson-cooper-360-piece-attacks-insurers-for-steering-parts-video/

You’re not happy, but your insurance company is ecstatic. https://louisianavoice.com/2014/05/08/insurers-auto-repair-tactics-only-part-of-problem-jindal-old-firm-mckinsey-co-coached-katrina-on-claims-delays-denials/

And who hasn’t experienced battles with health insurance companies that refused to cover a certain type of treatment because it’s considered “experimental.” Now, because of changes in the Office of Group Benefits instituted by the Jindal administration, state retirees who move out of state may find themselves no longer covered because their physicians are “out of network,” meaning they are non-participants in OGB’s coverage plan. Sorry, we don’t have any doctors in Arkansas or Mississippi who are part of the plan. https://louisianavoice.com/2014/08/25/louisianavoice-learns-of-jindal-plan-to-force-state-retirees-out-of-ogb-by-raising-members-premiums-cutting-benefits/

But by far, the most subtle method of claim manipulation is in the property & casualty field, namely your homeowners and flood insurance programs.

As we wrote in April, insurers will prepare repair estimates at two costs, depending on whether the damage to a home was caused by wind or flood. Repair estimates generally run much less on wind damage claims than for floods—even though the same material is used on each claim.

That is because the companies themselves are on the hook for any wind damage while flood damage, if covered at all, is the responsibility of the National Flood Insurance Program (NFIP), claims for which are paid by the federal government, i.e. taxpayers.

But that’s not to say Allstate is averse to handling flood claims. Quite the contrary. Allstate, in fact, has had an arrangement with NFIP under which NFIP Allstate is paid for handling flood claims.

Accordingly, if Allstate found itself on the hook for wind damages, it would use a lower formula for paying claimants but if it determined the damages were caused by flooding, a second, more expensive separate formula would be employed.

In one example we found, damage was determined to be from wind and Allstate paid 83 cents per square foot for removal and replacement of drywall (sheetrock). In another claim from the same storm and in the same part of the state, it was determined to be flood damage and that same dry wall removal and replacement—paid for by American taxpayers—was $1.53 per square foot, a difference of 70 cents per square foot. Painting that drywall cost Allstate 35 cents per square foot for the wind-damage claim but cost NFIP (taxpayers) 58 cents per square foot for the flood damage claim.

That was not an anomaly. In comparing two 2011 claims from Tropical Storm Lee in southwest Louisiana, LouisianaVoice found that damage to one home was determined to be from wind. The cost of removing and replacing drywall (sheetrock) was estimated at $1.75 per square foot and painting of the drywall was estimated at 55 cents per square foot. That, of course was the cost to the insurance company, in this case, Colonial.

A second claim only a few miles away, also the result of Lee, was also for a home covered by Colonial. In this case, the damaged was determined to be the result of flooding, so the claim now belonged to NFIP. The estimate to remove and repair drywall for this home was $2.47 per square foot and the cost of painting that same drywall was estimated at 87 cents per square foot.

Assuming an area of 1000 square feet, you’re looking at a cost differential of $720 for removal and replacement of the drywall and a difference of $320 for painting, or an overall cost increase of $1,040 for repairs to a flood-damaged home compared to the wind-damaged structure.

By the time, other costs are factored in—costs for such things as replacing and painting molding, baseboards, doors and door frames, replacing electrical outlets and door hardware, removing and replacing windows and window trim, painting window frames, replacement of carpeting and/or wood flooring, the difference between a wind and a flood claim can be enormous.

And that doesn’t even include one other factor that goes into all estimates—overhead and profit (O&P) for the contractor. There has to be a profit for the contractor. That’s understandable; no one would expect him to repair your house for nothing.

But like the repairs themselves, the percentage of overhead and profit has a wide variance, depending on whether or not the damage is determined to be from wind or flooding.

LouisianaVoice has obtained three boxes of claims documents that not only reflect damning evidence of NFIP gouging on the costs of specific repairs, but in the allowance for contractor O&P, as well.

Built-in allowances for O&P for wind claims paid by the individual companies range around 20-29 percent. But for flood claims, paid by the American taxpayer through the NFIP, that O&P can range from 48 to 51 percent, according to documents in our possession.

For example, going back to 2005, O&P for one wind-damage claim was estimated at 28 percent for a Mississippi wind claim from 2005’s Hurricane Katrina. But flood damage from the same hurricane resulted in contractor O&P of 51 percent. Both estimates were done by Allstate.

Wind damage from Hurricane Ida in Texas in 2009 resulted in a claim in which contractor O&P was 29 percent, according to Allstate damage estimates. But when damage from that same storm was determined to be from flooding, the contractor O&P shot up quickly, to 49 percent, Allstate documents show.

But Allstate and Colonial were not the only practitioners of such claim manipulation—not by a long shot. Here’s a story about how the game was played in the same manner by STATE FARM.

Project these tactics over a large, densely-populated area like that destroyed by Hurricane Katrina in Louisiana and the Mississippi Gulf Coast, and at least one estimate of the increased cost from “padding” both specific damages and contractor overhead and profit has taxpayers in the two states being ripped off to the tune of approximately $10 billion.

And while strict insurance fraud laws are on the books that could result in a prison sentence if you so much as included a non-existent flat screen television on your claim, there apparently is no one minding the store to guard against raping the taxpayer-funded NFIP.

And as long as the insurance companies continue to pour money into the campaign coffers of members of Congress, state legislators and regulators, you can be sure there will never be.

Perfect.

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