Thursday, November 10, 2011
Arkansas Lottery Lottery audit suggests travel abuses by former officials UPDATE
Posted by Max Brantley on Thu, Nov 10, 2011 at 9:05 AM
The Legislative Joint Auditing Committee is meeting this morning and fireworks are expected over the annual audit on the state Lottery Commission. Doug Smith will report later, but the audit itself is already available.
Lots of good data there, but the juicy stuff begins on Page 51, in a review of various internal controls on expenditures. It has been turned over to Pulaski Prosecutor Larry Jegley for review.
* TRAVEL EXPENSES: This is the biggie. Auditors couldn't determine if lottery officials — during the era of Ernie Passailaigue's leadership — had actually attended all seven meetings in Georgia billed to the state as trips for lottery-related conferences. But that's just the beginning.
Also:
"Based on analysis of vendor reimbursed travel costs and the number of business gtrips that resulted in the Executive Director [Passailiague] or vice president of gaming [David Barden] flying home, we question whether some travel was reasonable and necessary. While the agency's employee manual requires 80 hours to constitute a full pay period, it appears the executive director and vice president of gaming worked alternate work schedules based on analysis of travel. However, a policy authorize alternate work schedules did not exist ..."
All that travel — as many have long believed — appears, the audit said, to have been used so Passailaigue and Barden could maximize their time at home in South Carolina. Ernie P. was hired from there, where he was South Carolina lottery director, and brought along Barden as a $225,000-a-year aide. They shared an apartment in Little Rock and apparently never moved families here.
Passailaigue traveled to South Carolina 61 of 216 working days in fiscal 2011, the audit said. For 10 of 16 business trips, Passailaigue flew to South Carolina on the last day of the trip, meaning he spent 71, or 27 percent, of work days at his South Carolina home. Barden pulled the same deal, auditors said, racking up 55 working days in South Carolina.
Documentation for their business travel was lacking, the audit says, and some information, such as flight schedules, were redacted, and there was conflicting information on different forms.
Barden and Passailaigue defended their work in letters submitted to auditors, said they worked lots of overtime and did work while traveling.
The audit, shared with current interim director Julie Baldridge after the abrupt recent resignations of Passailaige and Barden, produced an agreement with management to tighten its travel policies. It will be interesting to hear what Diane Lamberth, chair of the commission has to say, because after some early questions in the lottery era about Barden and Passailaigue reviewing each other's travels expenses, the commission chair was supposed to step in and sign off on their expenses.
* NO BID: It questioned whether a $91,000 contract with JM Associates to produce broadcast advertising was done properly because it wasn't bid. The procedure has been changed.
* SECURITY: The audit also questioned adequacy of security on access to agency offices and failure to retain a long enough history of records on electronic access to the offices.
Passailaigue, who was hired for $324,000, brought both Barden and Ernestine Middleton, also at $225,000 a year, to help him get the lottery underway in September 2009. All departed in early October after some changes on the Lottery Commission had produced a stream of questions on lottery practices. Ernie P. has continued to have defenders for his quick startup and the revenue, which has produced millions for college scholarships, all detailed in today's audit. Internal auditor Michael Hyde had indicated earlier that he had referred some expense questions to legislative auditors, though both Passailaigue and Barden disavowed knowledge of any problems when they suddenly departed last month.
FROM THE MEETING: Not surprised Chairman Lamberth is urging legislators to look forward, not back. But really? Do we let abuse of leave and travel go in return for officials' departure? Don't we prosecute every city council bookkeeper who's caught doing her Walmart shopping with public loot? Is use of public money for trips home — particularly if justified with bogus reimbursement forms — a no harm/no foul thing? Sen. Jonathan Dismang is remonstrating Lamberth for lack of oversight.
UPDATE: Doug Smith contributes coverage from the meeting:
Julie Baldridge, the interim director of the Lottery Commission, was generally well received by the legislators, some even complimenting her for taking on a difficult job on short notice. Lamberth was treated more roughly. Lamberth and Baldridge were seated side by side at the witness table, Baldridge answering most of the questions. when Rep. Andrea Lea (R-Russellville) noted that last year's audit of the Lottery Commission also found travel discrepancies. Lea suggested that after a repeated offense, "you should walk in here more humbly."
Baldridge started to respond, mentioning she'd only been director since October, and Lea said her remarks were intended mainly for Lamberth, who had little to say in response.
Answering questions from Sen. Jonathan Dismang (R-Beebe) about who approved the trips taken by Passailaigue and Barden, Lamberth said that she approved "only three or four of the travel things." Baldridge had earlier testified that Barden was the travel administrator for the Commission. Dismang said, "I think it's easy to conclude we were
supporting personal travel with lottery funds. Do you agree?"
Lamberth said "I hope not." She said she hadn't spoken with Passailaigue or Barden about the travel, and "They are no longer in our employ." She also said she hadn't seen letters from Passailaigue and Barden that were received by the Commission's lawyer, Bishop Woosley, Wednesday afternoon. Woosley said that the two essentially disputed the auditors' findings.
Lamberth said the Lottery Commission needed to look at its travel policies and try to assure there would be no more discrepancies in the future. Dismang continued to ask whether the Commission could get its money back, and whether criminal prosecution would ensue. "What about these things that have already happened? I think it's your
responsibility to pick up the phone." Sen. Bill Pritchard (R-Elkins), co-chairman of the LJAC, said the auditors' report would be turned over to the prosecuting attorney.
Passailaigue wrote a six-page, very detailed letter rebutting the legislative auditors' findings. He said that both he and Barden "were on duty and call 24 hours a day, 365 days a year and worked a minimum of 80 hours or more per pay period, unless when a specific leave form was required to be filed by ALC [Arkansas Lottery Commission] policy.
... The DLA [Division of Legislative Audit] fails to provide any evidence that either the Executive Director or the Vice President of Gaming did not fully comply with ALC policies ... "
Barden's letter said much the same. He concluded: "I do readily admit I have a family and residence in South Carolina, and am unaware of any ALC policy prohibiting such. Other staff members also have residences outside of Arkansas, but for some reason no other staff members are mentioned in the report."
For whatever it's worth, Lamberth was appointed by Governor Beebe, a Democrat, and the sharpest comments directed at her came from Republicans.
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Comments (17)
Showing 1-17 of 17
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You nailed it, Max. They owe us a big personal check, at the very least. F'in grifters.
Max with your history of dislike of the lottery your continuing complaints have the same validity as Fox News on Obama.
"Chairman Lamberth is urging legislators to look forward, not back."
She learned that from the 1%. And the Obama administration.
What ironic luck that the lottery should be the only government department where this type of unprincipled standard is the norm. As with all public employees those involved will suffer minimal consequence and continue to receive the exorbitant remuneration they believe they deserve. The chance of a real resolution to any central planning nightmare is equal to winning Powerball.
I'm still wondering what Lamberth's qualifications are to be chairman of anything.
Lamberth's qualifications ?
usu it's campaign contributions or knowing some really big ones.
What? Ernie P was a crook? Who could possibly have seen that coming? And we had to bring in crooks from out of state? Arkansas crooks should be insulted!
Of course Julie Baldridge was well received by legislators. She has a long history of cronyism--which is how she got the job in the first place!! Thanks Bob Johnson and Ray Thornton!!!
I think the most interesting, but less juicy part was that outside vendors had access, including being able to edit, all of the Lottery data. Who and why?
Also, those that remember how we got Ernie P in the first place--Julie Baldridge picked him. He was her hand chosen person for the job.
Isn't politics fun??!!
So Ernie was a hand job?
But, lest we all forget, Arkansas Scholar Ship Lottery has created ELEVEN MILLIONAIRES.
That's right, Arkansas Bidness reports today that it's created 11 millionaires in the Land of Opportunity, the natural state.
But, discerning minds realize that the Farm Welfare Bill has created even more millionaires and Arkies didn't have to pay for it.
http://www.arkansasbusiness.com/article.as…
The lottery can be hard to win if you don't know how to play. This lotto system has won people a lot of money and made people multi-millionaires. If you want to learn the system on how to beat the lottery, check out this site.
http://adf.ly/3eQUt
Hey, Piggy Girl, lighten up on Miss Julie! Please. I had a big-time crush on the girl when we were teenagers. She never knew. Then, as now, I was a very shy guy.
Miss Piggy, has the green-eyed monster gotten you in the gut? All this interesting news about the Lottery and all you can yak about is how awful it is that that shiftless Julie is lookin' kinda successful in the news. Yessir, that Julie had all the breaks--grew up in wealthy Heber Springs, went to elite schools like Arkansas Tech, worked nights at the old Arkansas Gazette, raised two kids by herself. Obvious she is rock solid with the in crowd. Those women (and men) who like to see women succeed are just suckers, right?
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