Corrections employees dip into inmate funds

November 10, 2010|By Yeganeh June Torbati, The Baltimore Sun

Maryland lawmakers expressed outrage Tuesday that state corrections employees in Baltimore were regularly tapping into prisoner accounts for their own use, one of several major problems uncovered in a state audit that has been referred to the attorney general's office for further investigation.

"This is inmates' money, and it's like a giant ATM," said Del. Steven J. DeBoy Sr., a Baltimore County Democrat who is the House chairman of the legislative committee that reviews audits. "If people are stealing, we need to get them out of state service and prosecute them."

Corrections officials told lawmakers that they had instituted several reforms as a result of the review, including a reorganization that merges the finance functions of the Baltimore facilities with those of Jessup. Two workers have been disciplined, including one who was fired, officials said, and two others left the department.

"Looking at this audit, it's horrendous, some of the things that occurred," said Gary D. Maynard, secretary of the Department of Public Safety and Corrections.

Released last week, the audit found serious deficiencies in two accounts — a fund that contains inmate money, and another fund of public money used to finance small expenditures. The review found that the five Baltimore sites in the state prison system gave some employees easy access to blank checks and the signature plates needed to authorize checks drawn on the public account with no supervisory oversight; and perhaps as a result of those gaps, could not account for tens of thousands of dollars in missing funds.

The report also disclosed that some prison employees were drawing money from the inmate account to pay salary advances. While such advances, intended for newly hired employees awaiting their first biweekly paychecks, are allowed, prison workers were mixing the funds from the inmate and public accounts. There was no documentation to justify why some veteran employees were drawing advances.

At times, the audit found, inmate signatures that would indicate they had received money to which they were entitled were missing. Instead, correctional officers had signed for the prisoners.

"Here we had employees handing out cash to inmates when they leave and the inmates didn't sign for it, so we don't even know if they got it," said Bruce A. Myers, the state's chief auditor.

In one case, a prisons employee who resigned in June 2005 was issued a check for $541 in February of 2008 for no apparent reason. In 2007 alone, 72 salary advances totaling around $53,000 were issued to employees without proper paperwork, and at least one employee failed to repay two advances totaling almost $2,300 after retiring in July of 2009.

The prison system also paid more than $23,000 in bank fees mainly as a result of bad checks on the prisoner accounts.

State auditors referred their findings to the attorney general's office, which would not confirm or deny an official investigation.

Department spokesman Rick Binetti said that since 2008, of five employees connected to the possible fraud, one has been fired, two left the department, one was disciplined and is still with the department and another was not disciplined and remains employed in the finance office, thought not in a supervisory role.

J. Michael Stouffer, the state’s corrections commissioner, indicated Tuesday that all five individuals had been fired, but on Wednesday said he had misspoken at the hearing.

The department said it plans to investigate all cases of missing funds by June 30 and refer any possible misconduct to the attorney general.

During the course of the audit — conducted every three years — the state's fraud allegations hot line received a tip indicating possible fraud in the Baltimore correctional region's working fund, said auditor Brian S. Tanen. That tip was incorporated into the report released last week, Tanen said.

The department tried to fix some financial oversight problems through staff training, Stouffer said. But the training did not produce results, he said, and in 2008 the department decided on more fundamental reform, merging four finance offices into one, a move completed in May.

The merged finance offices are based out of Jessup. An audit of the Jessup finance facilities, completed in July of this year, found some accounting problems, but those problems were far less serious than those in Baltimore and did not raise any red flags for fraud, auditors said.

Several of the findings reported last week were deficiencies contained in a 2006 audit of the Baltimore sites. "Things didn't get any better, let's put it mildly," Myers said.

He added that he hopes "there will be follow-up to make sure things are not only put in place but maintained in place."

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