State Environment Department is lambasted again by auditors

February 04, 1994|By Timothy B. Wheeler | Timothy B. Wheeler,Sun Staff Writer

The Maryland Department of the Environment has mishandled, overspent and failed to collect millions of dollars in federal and state funds in the past three years, and it has longstanding lapses in oversight of hazardous wastes, says an audit report released yesterday.

In its third blistering review of the department in the past five years, the Office of Legislative Audits found "significant problems" in the agency's handling of federal grants. Also found were overpayments to private contractors, sloppy recordkeeping and poor financial controls that could mask "unauthorized payments."

Indeed, the department and the attorney general's office are investigating the disappearance of $1.2 million from bank accounts of the department's Water Quality Financing Administration.

Rufus Ukaegbu, the administration's chief fiscal officer, has been suspended without pay since probes began in the fall.

Jack Rubin, Mr. Ukaegbu's lawyer, would not comment on the investigation. But he said his client has appealed his removal from the payroll.

Seven of the 17 problems listed in yesterday's audit report are holdovers from reviews in 1989 and 1991. Nearly one-third of the 23 deficiencies identified in the last audit three years ago have not been fixed, the latest report says.

Among the audit's findings:

* The department claimed to be owed $2.5 million in federal funds that it was not entitled to collect. The deficit, first identified in June 1992, was reduced by $1 million last year by improperly juggling federal and state accounts.

* The agency lost $105,000 in interest in just six months because it was slow to seek reimbursement from the U.S. Environmental Protection Agency for legitimate expenses. The state apparently "ate" another $338,000 for which it should have sought repayment.

* The department overspent what it had received under the federal Superfund program by nearly $500,000 when it paid a private contractor to study cleanup of a hazardous-waste dump at Kane and Lombard streets in East Baltimore.

* The same contractor, not identified in the report, was paid nearly $213,000 for work not called for in its original contract, in apparent violation of state procurement regulations.

* The department continues to lag in reviewing hazardous-waste facilities. And gaps remain in the agency's system for tracking hazardous waste shipments.

* The department has failed to collect overdue fees for monitoring underground fuel storage tanks, in violation of state regulations. As of last May, the agency was owed $915,000, most of which was then nearly two years late.

* More than $30 million in payments of various kinds were made without adequate checks against losses, fraud and theft.

Ironically, the department's internal checks were strengthened to prevent improper payments after being criticized in a 1991 audit.

But those controls apparently proved inadequate and have been tightened still more since the discovery of the loss of water quality funds.

The audit covers the period from January 1991 through last June, when Robert Perciasepe was secretary of the environment. He shook up the department's fiscal staff after the critical 1991 audit and pledged to fix the accounting problems in six months.

Mr. Perciasepe left the agency in August to become the assistant EPA administrator for water programs.

David A. C. Carroll, who succeeded Mr. Perciasepe, pledged to correct all remaining problems "as quickly as possible."

He blamed some of the deficiencies on inadequate accounting systems and attributed others to shortages of money and staff.

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