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State Audit Finds Stimulus ‘Fraud, Waste, Abuse’

Atlanta Lawyer > Atlanta News  > State Audit Finds Stimulus ‘Fraud, Waste, Abuse’

State Audit Finds Stimulus ‘Fraud, Waste, Abuse’

A scathing audit reveals major missteps on how Georgia’s Department of Human Services spent federal stimulus money, mistakes that likely cost Georgians thousands of jobs.

State auditors went through emails and financial records from the DHS from 2009 and 2010. The same information was requested by Channel 2 Action News for an investigation in November, but Channel 2 producers were told a copy of the documents would cost $174,000.


READ: State Audit Of Adult Subsidized Employment Program

The documents revealed DHS mismanaged millions of federal stimulus dollars meant to create jobs in Georgia, according to auditors.

“Apparent fraud, waste and abuse in low-income jobs program likely resulted from mismanagement and weak controls at the central office,” the report said in its opening paragraph.

The report, obtained by Channel 2’s John Bachman, outlines several major missteps by DHS officials.

Most notably, the state agency expected to create at least 5,000 jobs with the money but managed to create less than half that amount, just 2,400. The audit also showed DHS officials never spent $4.6 million earmarked for adult job creation.

In May, Channel 2 Action News confronted several businesses who got money from DHS but still owed back taxes. The audit does not specifically address that aspect, but auditors did find 62 percent of the employers who participated in the jobs program did not meet all of the eligibility criteria.

The report showed at least 48 companies may have taken taxpayer money and not paid their employees. Several other companies in the program are suspected of taking money for employees they never hired.

Auditors also found $415,000 in questionable computer purchases. DHS purchased or leased 739 computers eight months after the jobs program ended, according to the report, and auditors found 35 computers and 139 monitors never taken out of the box.

DHS Commissioner Clyde Reese released a statement late Thursday responding to the audit.

“I committed to DOAA that DHS would cooperate fully in the investigation, and I offered unfettered access to all staff, records and other information to ensure a full and thorough investigation could be conducted … I am chagrined at the overall picture presented and many of the findings. The ARRA stimulus funding is now part of the past. However, to the extent this report points to any potentially lingering systemic internal control weaknesses, DHS will immediately institute the proper remedial measures. My goal is to ensure that this Department is a worthy steward of the public’s dollars, whatever the source and whatever the program,” the statement concluded.

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