Auditor seeks fraud hot line

Weinstein awaits legal opinion on new whistleblower legislation

July 16, 2006|By LARRY CARSON | LARRY CARSON,SUN REPORTER

There has not been a major internal scandal in Howard County government for more than two decades, but county auditor Ronald Weinstein wants to set up a fraud, waste and abuse hot line, just in case.

"It's becoming more and more something that's recommended," in professional accounting circles, said Weinstein. "A lot of audit tips come through employee hot lines."

Weinstein said he is waiting before implementing the program, which would allow reports either by telephone or computer, to get a legal opinion on whether Howard needs new whistleblower legislation to protect employees who report abuses.

"I think it would give county employees more assurances that they could do this without retribution," he said. Another decision will be whether to have calls taken by employees in the auditor's office or an outside private firm. The latter would cost about $5,000 to $10,000 a year, Weinstein estimated.

Bruce A. Myers, legislative auditor for state government, said his office received 400 calls and e-mails in each of the first two years since a state hot line was created in February 2003. There were about 300 contacts last year, he said.

Two-thirds of those tips were worthy of investigation, according to a report on the program released late last year.

In Baltimore County, where employees can complain via e-mail only, auditor Brian J. Rowe said, "Most of what we get are [personal] gripes." But he said confidential tips can be important in ferreting out problems.

"Most auditors will not find fraud. Most fraud cases occur from a tip," he said.

The hot line is for general county employees, Weinstein said. Complaints about the school system - which represents more than half the county's annual budget - would be referred to John J. Conners, the school board's newly hired auditor. Conners said school officials have discussed creating a hot line, but have not made a decision.

Howard County's worst internal scandal came in 1984, when $277,000 in tax receipts were found missing from the finance office. Three employees pleaded guilty to the thefts, but a private audit found other problems, too.

Some 400 firms had not paid their corporate personal property tax bills for at least one year, the audit revealed.

Not all irregularities involve simple theft, officials said.

Myers said several investigations he has undertaken from tips involved allegations of conflicts of interest between the state and employees connected with private firms doing state business, or in the sale of surplus state vehicles.

"I think it's been very useful," Myers said, adding that state employees personally take all tip calls to offer a human voice to nervous callers - and to get as much information on that first contact as possible in case the caller later gets cold feet. Calls can be confidential, though the state has laws to protect whistleblowers. The state also has separate fraud investigators for Medicaid and welfare abuses, he said.

Howard County Council members say they favor the idea - except for fiscal conservative Charles C. Feaga, a western county Republican who sees the hot line as another unnecessary government program.

"Here in the county, I've never seen any reason for it," he said, adding that he feels county auditors should be able to ferret out fraud. "Maybe in Washington, but we're too small. Not here."

The others disagreed.

"I support a fraud, waste and abuse hot line," said council Chairman Christopher J. Merdon, an Ellicott City Republican who is running for county executive. "The hot line gives people the opportunity to protect the county without retribution."

"You don't just respond to something because there's a scandal. The idea is to prevent scandals from happening," said Guy Guzzone, a North Laurel-Savage Democrat who also favors a hot line.

Calvin Ball, an east Columbia Democrat newly appointed to the council, agreed.

"I think it's a great idea. I think it's important," he said.

Councilman Ken Ulman, a west Columbia Democrat also running for county executive, said he welcomes the hot line.

"It's actually a way for the county to save money. We want to make sure the government is run as efficiently and cost-effectively as possible," Ulman said.

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