Audit: After-school program invited theft

By Tony Cook

Monday, Jan. 21, 2008 | 2 a.m.

You probably wouldn’t expect your gym teacher to be a financial expert. So maybe it’s unfair to expect the folks at Clark County’s Parks and Recreation Department to have a strong grasp on its finances.

Still, some of the revelations in a stinging internal county audit are disconcerting.

What did the audit find?

The department left itself wide open to theft and abuse. It charges fees for a lot of its services and as a result there’s a lot of cash floating around. That means you’ve got to have good procedures in place to ensure accountability.

And that’s the problem. Auditors found there weren’t good procedures in place.

Perhaps the most egregious problems showed up when auditors looked into the department’s SafeKey program.

What’s the SafeKey program?

It’s a before- and after-school program for children. The department runs the program at more than 70 elementary and middle school sites.

What’s the problem?

Auditors found it was easy to steal cash.

Parents can pay for the service daily or weekly. They often do so in cash. Once a week, a worker at each school site collects the cash and writes down the amount on a “drop sheet.” The cash is then taken to Bank of America.

Auditors looked over only a few months at a couple of the sites, but what they found caused a lot of concern. In one case, a drop sheet listed $654, but only $641 was deposited at the bank. So $13 disappeared.

In another case, the drop sheet wasn’t completely filled out. That means no one knows how much money was supposed to be deposited.

A bigger problem, though, is what happens with cash before an amount is listed on the drop sheet. Auditors found there was no way to verify how much cash was actually coming in because workers sometimes failed to make sure children were signed in on the daily log. Moreover, receipts weren’t always prepared. In short, if you worked at one of these sites and wanted to steal cash, it wouldn’t be difficult.

There were other problems.

Like what?

Auditors found that the department often accepted checks that bounced. Then it let those people enroll in additional courses.

Auditors also discovered problems with how the department awarded scholarships — discounts for people who can’t afford to pay for services. The biggest problem: The department overawarded scholarships by $130,000. Additionally, the scholarship money used wasn’t recorded on the county’s books, resulting in an overstatement of the department’s resources.

There were more problems, but you get the idea.

The audit covered July 2005 through July 2006, though it was just released late last month. County Auditor Jerry Carroll said Parks and Recreation Department Director Leonard Cash, who took over in June, has made many of the changes recommended in the audit.

“He has directed his staff to clean this up,” Carroll said.

How did last week’s commission meeting go?

As expected, Commissioner Tom Collins’ proposal to give former county workers retroactive pay increases was controversial. By the time the meeting came around, Collins had apparently decided to back off the proposal. Instead, he said he just wanted some questions answered, such as why so many former county workers had failed to ask for the pay increase. County staff will look into that and come back with answers.

The dispute arose because the county and the workers union failed to agree on pay increases until eight months after the old contract expired. The agreement they finally reached gave raises retroactive to the date the old contract expired. During the time in between, some county workers quit or retired. The contract gave them 30 days to request the retroactive pay increase. Many did not. Collins said he thinks it’s because the county didn’t notify them. County management said it’s the responsibility of workers to know their rights.

Was that the only labor issue?

Nope. Collins and Commissioner Chris Giunchigliani, both friends of organized labor, made a stink about janitorial services at a county building operated by University Medical Center.

The county hospital’s management wanted to outsource the work. The low bidder said it would do the work for about $16,000. It would cost the county about $73,000, UMC chief executive Kathy Silver said.

Collins questioned how those figures were calculated. Giunchigliani emphasized that she doesn’t think the county should be outsourcing work that could be done in-house. The rest of the commissioners outvoted them.

Speaking of UMC, didn’t the public corruption case against former UMC boss Lacy Thomas go before the grand jury last week?

Yep. Four or five witnesses testified in the case Tuesday. More are expected to be called. That means the case will last at least one more session, maybe more. The next is scheduled for Tuesday.

Thomas is accused of giving contracts to friends in Chicago in exchange for kickbacks. The grand jury will decide whether Metro Police have gathered enough evidence to justify an indictment.