Sal@TexasTollParty.com
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C O N F I D E N T I A L
Dallas District
(18)
District Engineer
William L. Hale
Texas Department of Transportation
Management Directed Review
Investigate allegations that L. D. Miller of the Central Maintenance Office misused the state Voyager Fleet card to purchase gasoline for personal vehicle.
Note to Dallas District Personnel: Do not allow
anyone other than authorized personnel to read or
reproduce this report or any portion of this report,
without the prior approval of the District Engineer.
anyone other than authorized personnel to read or
reproduce this report or any portion of this report,
without the prior approval of the District Engineer.
Received (Original signed by William L. Hale) Date
02/15/06
BY
Management (Appropriate action through a Standard Operation Procedure has been
Response: implemented to assure detection and prevention off Voyager Care missue.)
Report Prepared and Submitted By: (Original signed by Dean Havens) Date 02/13/06
Report Number: MDR 06-302 Report Date: 02/13/06
Introduction
On February 1,2006,I was directed by William Hale, District Engineer to investigate allegations that L. D. Miller, an employee of the Central Maintenance Office, misused the state General Purpose Voyager Fleet card to purchase gasoline for his personal vehicle.
Scope
The scope of this effort was limited to Voyager purchases identifying the purchaser as L. D. Miller. Also, the operations of the Central Maintenance office in regards to validating voyager purchases and the safeguarding of state property related to such purchases. The Internal Audit Department conducted interviews with employees of TxDOT's Central Maintenance Office and with the managers of gas stations in which the purchases were made. Relevant documents were also examined. Fieldwork was conducted at the Central Maintenance Office from February 1,2006 to February 7, 2006.
Background
During a recent investigation involving an employee using the Voyager card to purchase gasoline for his personal vehicles it was noticed that another employee was also making questionable purchases with the card. Upon a closer look at the Voyager report it was noted that L. D. Miller was making questionable gasoline purchases before, after and sometimes during work hours with the General Purpose Voyager card. Further investigation revealed that Mr. Miller was using the card when not scheduled to work, using comp time, suspended or on sick leave. A few purchases were made during work hours but approval for those purchases cannot be substantiated. Additionally few receipts were submitted by Mr. Miller to the office for any of his purchases over a five month period. Some of the employees interviewed who uses the General Purpose Voyager card remember that there was times it was missing from the keyboard where it is normally kept. When audit asked to see the card it could not be found. Internal Audit visited several service stations to determine if a video tape could be obtained showing Mr. Miller refueling his personal vehicle at a time corresponding to the Voyager report. A Shell station at 3915 Linfield Rd., Dallas, Texas, showed audit a video that did correspond to the Voyager report for January 26, 2006, at 6:56 A. M. in which a white Ford F150 Supercrew Pickup fitting the description of Mr. Miller's vehicle pulled into the station and refueled.
Opinion
The available evidence in this matter, when considered in its totality is, in my opinion, overwhelmingly sufficient in weight and credibility to conclude that Mr. Miller, a public servant, did purchase gasoline with the General Purpose Voyager card for personal use.
Findings of Fact
Finding 1: Mr. Miller did have access to the General Purpose Voyager card to take with him for use after, before and during work hours.
Finding 2: The General Purpose Voyager card was unsecured and there was no procedure in place to make sure the card was returned after each use and at the end of the day.
Finding 3: When the Voyager reports were reconciled with the gasoline purchase receipts the discrepancies were not resolved allowing unauthorized purchases to continue over a five month period.
Finding 4: Time sheets show that Mr. Miller did make gasoline purchases with the General Purpose Voyager card during hours not worked, when taking comp time, when on sick pay and during suspension. Authorization for purchases made during work hours cannot be substantiated.
Finding 5: Mr. Miller admitted that he purchase gasoline one time for personal use with the General Purpose Voyager card.
Observations
The key control in determining if unauthorized Voyager purchases are being made, is detection procedures. This control was not in place within the Central office, as evidenced by the lack of follow up of discrepancies when the Voyager report was reconciled with the receipts. Had this control been in place the unauthorized purchases could have been detected four to five months earlier. Instead, the violations continued and increased in frequency over time. Identified unauthorized purchases from this individual totaled over four thousand dollars for a period of five months. In addition, the section can improve in safeguarding the department's property by making sure the General Purpose Voyager card remains secured at all times and a record kept of who uses it and when it is returned.
Recommendations
1. Voyager receipts should be reconciled with the voyager report every month and discrepancies resolved immediately.
2. The Voyager report should be looked over carefully by management to determine if unauthorized purchases are being made outside work hours, week ends, holidays or days when employees are off work or if the purchase location is questionable.
3. The report should be authorized for payment each month, to the district shop, after the reconciliation and discrepancies has been resolved.
4. The General Purpose Voyager Card should be locked up and checked out when used and checked back in immediately after use.
Closing Comments
The cooperation of all personnel involved was excellent.
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C O N F I D E N T I A L
Dallas District
(18)
District Engineer
William L. Hale
Texas Department of Transportation
Management Directed Review
Investigate allegations that one or more individuals of the District Maintenance Office misused the state Voyager Fleet card to purchase gasoline for personal use.
Note to Dallas District Personnel: Do not allow
anyone other than authorized personnel to read or
reproduce this report or any portion of this report,
without the prior approval of the District Engineer.
anyone other than authorized personnel to read or
reproduce this report or any portion of this report,
without the prior approval of the District Engineer.
Received William Hale
Date 02/21/06
BY
Management Recommendations have been incorporated and are now a standard
Response: operating procedure for the District.
Report Prepared
and
Submitted By: Suzy A. Oviedo Date 02/17/06
Report Number: MDR 06-303 Report Date: February 17, 2006
Introduction
On February 8, 2006, I was informed through the Director of Administration, Tim Powers of a situation in which an employee or employees of the District Maintenance heavy equipment crew may be using the Voyager fleet card to purchase gasoline for personal use.
Scope
The scope of this effort was limited to Voyager purchases identifying the purchases made by the District Maintenance crew. Also, the operations of the District Maintenance office in regards to validating voyager purchases and the safeguarding of state property as related to such purchases. During the course of the investigation, it was learned that one of the individuals suspected of purchasing gas for personal use also carries a state procurement card. The scope was then expanded to include a review of purchases made with the state procurement card. The Internal Audit Department conducted interviews with employees of TxDOT's District Maintenance heavy equipment crew, the Assistant Director of Maintenance and some employees of the District Equipment Shop. Mechanical expertise was provided by the District's heavy equipment mechanic, Mr. Danny Huckeba. Relevant documents were also examined. Fieldwork was conducted in the District Maintenance Office from February 8, 2006 to February 17, 2006.
Background
It was brought to the attention of Gary Bailey, Assistant Director of Maintenance, that fuel receipts were not being submitted by Mr. Oscar Faz. When Mr. Bailey inquired as to why the receipts were not being submitted Mr. Faz replied he had not purchased any gasoline. Mr. Bailey then sought out more information in regards to the voyager purchases and was able to learn the locations where gas had been purchased. Mr. Bailey visited a gas station to see if any video footage was available to identify who had been purchasing gas. However, no one was identified on the video tape. Three individuals were put on suspension with pay pending the investigation.
Opinion
The available evidence in this matter is, in my opinion, insufficient to identify the individual or individuals responsible for the misuse of the Voyager cards.
The available evidence in this matter, when considered in its totality is, in my opinion. overwhelmingly sufficient in weight and credibility to conclude that Mr. Damon Cronk, a public servant, did misuse the state procurement card, misuse a state vehicle and falsified
documentation.
Findings of Fact
Finding 1: Mr. Cronk did use a state vehicle, on February 3, 2006, to go to two different parts stores to purchase parts for his personal vehicle.
Finding 2: Mr. Cronk did falsify documentation by intentionally crossing out references to the '84 Chevrolet on the O'Reilly receipt dated 2/3/06, and by writing "Bitelli" and 10507 on the receipt, indicating the parts had been purchased for equipment 10507, a roto mill machine. In fact, the parts were all for his Chevrolet pickup.
In addition, a second purchase was found, dated 1120106. Mr. Cronk noted on the receipt the purchase was for equipment 2030-E, a flat wheel roller. However, the items purchased do not fit the roller.
Finding 3: On at least two occasions, Mr. Cronk did use the state procurement card to purchase items for personal use.
Mr. Cronk stated that he accidentally used the state procurement card on February 3, 2006. However, the receipt was intentionally defaced to hide the vehicle description. It was marked up to show that the parts were for equipment 10507 and it was then submitted to be paid. All of' this was deliberate and was not done by mistake.
Mr. Cronk further stated that on January 20, 2006, he was in O'Reillys in Seagoville making purchases for his personal vehicle. While in the store, he decided to get some parts for the flat wheel roller, equipment 2030-E. He purchased a gauge kit, copper tubing, a chrome air breather and transmission fluid. Mr. Cronk stated he did not purchase the chrome air breather nor the copper tubing, but it was on the receipt and he had signed for it. The receipt was marked "2030-E", however the parts purchased do not fit the flat wheel roller. In addition, Mr. Cronk was off on January 20,2006.
Observations
There were several items that contributed to the abuse of the fuel cards. First of all, while the voyager cards were kept in a locked drawer, the key to that drawer was kept in a letter tray on top of the desk. This provided a minimum of protection. The location of the key would be divulged to individuals picking up heavy equipment. Also, the office space was shared with the district shop employees. Furthermore, the pin numbers were located on top of the desk of the admin tech of the District Shop and could have been accessed when no one was around. Finally, the voyager report was not being reconciled monthly with the receipts.
Procedures for the procurement card also had not been followed. Prior approval was not obtained and the vendor status had not been verified prior to purchase for the February 3rd purchase.
In addition, it was noted that repair orders are not always done to support work completed on state equipment.
Recommendations
1. Voyager receipts should be reconciled with the voyager report every month.
2. The report should be authorized for payment each month, to the district shop, after the reconciliation has been done.
3. Voyager cards should be in a safe secure place.
The District Shop should maintain the pin numbers in a secure place.
The District maintenance heavy equipment crew should all be issued new pin numbers.
The General Purpose card for the maintenance heavy equipment crew is missing and should be revoked and replaced.
7. The proper procedures for procurement card purchases should be followed. Supervisors should follow up on any suspicious items, such as items crossed out and items purchased during time off.
Closing Comments
The cooperation of all personnel involved was excellent.
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FORT WORTH DISTRICT
MANANGEMENT DIRECTED REVIEW
(MDR 06-005)
Conducted at:
DISTRICT PAVEMENTS & MARKINGS
Conducted by:
FORT WORTH DISTRICT
INTERNAL AUDIT OFFICE
MDR 06-005 May 16,2006
FORT WORTH DISTRICT
MDR 06-005
BACKGROUND
The Fort Worth District was contacted by the General Services Division (GSD) regarding the possible fraudulent use of a Voyager Credit Card (card) assigned to a Department vehicle used by personnel from the Fort Worth District. The vehicle is a 2003 year model Ford van assigned to the Construction Division (CST) and is used by district personnel to perform pavement testing in the Fort Worth and a number of other regional districts.
The Internal Audit Office was asked to investigate the allegation and determine if employee negligence was involved and/or make recommendations regarding any needed actions to the Fort Worth District Engineer. The investigation was assigned to and performed by Jim Sawey and Jack Johnson.
ALLEGED ISSUES:
A Voyager Card assigned to TxDOT vehicle 29-3288-G had been lost/stolen and $1202.99 of illegal charges was made fraudulently.
INVESTIGATIVE CONCLUSIONS:
There is sufficient evidence to assert that the above allegation can be substantiated.
There is sufficient evidence to assert that the subject Voyager Card and the charges made against the card were made under the control of a current district employee. The employee is the lead worker in the section and responsible for the safekeeping of state property and resources, including the missing credit card.
According to the Voyager Record, 171 gallons of gasoline were purchased at a Dallas location. It was discovered that the purchase was actually for a television, radio, headset and miscellaneous foodstuffs. The assistant manager, who became involved during the course of the transactions, remembers a Hispanic male making the purchase. We were unable to positively identify the individual as being a TxDOT employee.
Two fuel purchases were made in Ennis and Corsicana, Texas, both within the Dallas District. The Ennis location is 7 miles from the employee's primary residence.
A description of the vehicle used was obtained at the last service station used was obtained from the clerk on duty. It was a white "dually" (1-ton dual rear wheeled axle). The description matches a similar vehicle owned by the employee in question.
INVESTIGATIVE DETAILS and FINDINGS:
There is sufficient evidence to assert that the subject Voyager Card and the charges made against the card were made under the control of a current district employee.
The employee is the lead worker in the section and responsible for the safekeeping of state property and resources, including the missing credit card. According to interviews conducted with section personnel, the keys and credit cards for vehicles had no specific location for security purposes. There also was no sign-in/out register for tracking and accounting purposes. It was approximately a month later before anyone realized the keys and credit card were missing, as the vehicle the credit card is assigned to was used sparingly during the months in question (JuneIJuly'05). On the first day of fraudulent use, the card was supposedly located in the desk of another employee. The timesheet of the employee in question indicated that he was on vacation that day. However, security access logs indicate that he was on the District headquarters' property at least during the morning hours. Records do state that the employee was on vacation, sick leave or taking comp time earned for the majority of the timeframe the credit card was used (late June - early July).
Three purchases were made well outside of the Fort Worth District, Dallas, Ennis and Corsicana, Texas. Both cities are located in the Dallas District. Mr. Gilbert transferred from the Dallas District to the Fort Worth District May 1, 1994. Additionally, upon further investigation it was determined that the purchase made in Ennis is approximately 7 or less miles from the house where Mr. Gilbert currently resides.
The specific purchase that warranted an investigation was a $360.43 receipt for gasoline. According to the Voyager records, 171 gallons of gasoline were purchased at a Dallas location (7721 Bonnieview at IH 20). The vehicle the credit card is assigned to uses diesel fuel. A site visit was made to the location. It is a large truck stop for 18 wheeled tractor trailers & a truck repair center. It was discovered through cross referencing and
Discussions with management and their accounting department that the purchase was actually for a television, a radio and a headset. An assistant manager, who became involved during the course of the actual transaction, remembers a Hispanic male making the purchase. The manager did not see what type of vehicle the individual was driving or if anyone else was him. We were unable to positively identify the individual as being a TxDOT employee.
The card was used again after the events highlighted in the preceding paragraph. The service station, a Conoco, also caters to large 18- wheeled tractor trailers. The management and clerk provided a description of the person using the credit card as being a young White male. The clerk did see the vehicle the individual was driving or filled up. The individual entered the station and made purchases, 3 times in the space of 35 minutes. The vehicle used was described as a white "dually" (1-ton dual rear wheeled axle) by the clerk on duty. The description matches a similar vehicle owned by the employee in question, as verified through an open records request to the Department's Vehicles, Titles and Registration Division. The clerk also stated that he could see that there was someone else in the vehicle, however, would not be able to identify the other vehicle occupant.
General Services Division had the Profiler Truck brought to Austin to have the vehicle re-keyed in order to protect the expensive equipment contained therein. The total cost for the action was $980.70. During the same period, the key to the vehicle and the sleeve that contained the missing credit card were found in Mr. Gilbert's unlocked desk drawer, where it was normally kept.
Mr. Gilbert admitted that he had driven his vehicle to the Arlington/Grand Prairie area during the estimated timeframes. He also stated that he had gotten rid of his white dually around that time. He allowed the dealership to repossess the vehicle as he no longer needed it. It was primarily used as a farrnlranch vehicle. He was asked to produce documentation as to when it was repossessed. He has failed to do so (the request was made May 2, 2006 and has not been provided, as of this report). VTR records indicate that the vehicle remained in his possession during the affected time frame.
While maintaining his innocence, but acknowledging that all the evidence points toward him, Mr. Gilbert stated that he was willing to repay the monies ($1202.99) used fraudulently via the credit card. He stated that he was willing to do this so he would keep a good name. He was also informed that unless he was able to prove or verify that the vehicle was no longer in his possession at that time, he would be required to repay monies required to re-key the Profiler Truck ($980.70), This agreement was reiterated and accepted in the presence of the District Chief Accountant and the two District Auditors.
The Chief Accountant developed a form letter, outlining the amounts to be paid and the timeframe for doing so, for Mr. Gilbert and the Fort Worth District Engineer's signatures. He was scheduled to return on Thursday (May 4, 2006) to sign the agreement. Mr. Gilbert never returned to work and failed to contact his immediate supervisor, even after messages were left for him. As a result, the documented agreement was sent to his last known address via registered mail. The return receipt was received in District Accounting on May 16, 2006.
Conclusion:
The preponderance of evidence gathered and interviews conducted suggest that Mr. Larry G. Gilbert did take and fraudulently use the state of Texas credit card assigned to the TxDOT vehicle #29-3288-G, to obtain fuel (gas & diesel), a television, a radio, a headset, foodstuff and various miscellaneous items for personal use.
ACTIONS TAKEN:
1. Mr. Gilbert maintains his innocence, but has agreed to repay TxDOT the sum of $2,183.69, in order keep his name clean. Twelve hundred two dollars and ninety-nine cents are the charges for the use of the credit card. The remaining nine hundred eighty dollars and seventy cents is the cost charged for having the Profiler Vehicle re-keyed.
2. A registered letter was sent to Mr. Gilbert documenting his agreement to repay the above amounts on May 12,2006.
RECOMMENDATIONS:
It is recommended that the Mr. Larry Gilbert's employment with the Fort Worth District is terminated immediately for theft and misappropriation of government funds via the fraudulent use of a state assigned credit card.
CLOSING COMMENTS:
According to the information received from the General Services Division fraudulent charges were made on the credit card assigned to the Profiler Truck (van) which operates out of the Fort Worth District. The credit card company was less than forthcoming regarding the timeliness of their alert to this department. Additionally, safeguards and controls associated with the card did not work, thereby permitting the illegal use of the card with no verification of propriety regarding questionable purchases. The card was primarily used where payment(s) could be made at the pump, rather than going inside of the service stations. On several occasions, purchases were made inside the services station. At the time, the section had not yet instituted a formal system of accounting for keys and credit cards for the assigned vehicles
FORT WORTH DISTRICT
Internal Audit Office
MEMORANDUM
TO: Mario Medina, PE
District Engineer
FROM: Juan J. Martinez, District Auditor
SUBJECT: Verification of Material on Hand
Construction Project: 001 8-05-062
Highway: 1H 35, Webb County
Contractor: Price Construction, Ltd..
DATE: April 28,2006
Material on hand for the above construction project was verified beginning on April 24, 2006 and ending on April 26, 2006. Material on hand as reflected on Form 1915, Request for Payment of Material on Hand, for March 2006, as submitted by the contractor, was used to verify amounts of materials physically on hand. Operation personnel assisted in the verification. The review was begun as a result of Bob Price of Price Construction Ltd. reporting to the District Office that employees in his employment had stolen materials of this project. He indicated that possibly MOH had not been affected. The following below was observed during the field work. These issues have been discussed with Mr. Carlos Rodriguez and Mr. Eduardo de Leon of the Laredo Area Office. A separate report has been issued by Operations personnel.
Observations: MOH
Laredo Area Office personnel were not able to provide information that would indicate that material on hand is being physically verified by someone in their office or by inspectors out in the field. It seems that Area Office personnel are relying on the contractors that the amounts submitted on the 1915 form are true and accurate statements as certified by signatures on the 1914 form.
Material on hand is being maintained at several sites. For example, Price construction has some situated at their field office. Summit Construction and Star Operations, which are subcontractors of Price Construction, had their situated at their site. The San Ysidro Cement Plant site was another location where material is being maintained. Yet, in several instances accounting for an exact amount as reflected on the form was not probable as materials have been used. Other materials are still pending to be verified with the contractor. The foreman we talked to about this would call so that we can go by the site and verified. However, after we discuss this issue, the items we were trying to verify were zeroed out in the 1915 form, Request for Payment of Material on Hand, for April 2006. To better improve controls over MOH, a centralized location for all MOM to be maintained was suggested.
An abundance of rebar which we were not able to agree with record amounts remained near the exit ramp of the Pilot Truck Stop exposed to the public. The rebar had been there since the beginning of the verification which was Monday, April 24, 2006. Area Office personnel indicated at that time that the rebar was soon to be used by Price Construction workers for construction of a culvert. At no time during our field work did we see Price Construction workers working in that vicinity.
Management Response:
Laredo Area personnel are making sure that for the month of April and May all material on hand is verified before approving MOH payment. In addition, the contractor has been advised about the need of proper storage. A notation will be entered on the DWRs when the MOH has been field verified, and the inspector will initial MOH forms.
Observation: Roadway Material Stockpiles
Roadway material measurement taken by Lab personnel on April 27, 2006, for example
Grade 3 Rock, was less than the measurement number the contractor provided that same day. Lab personnel accounted for 40,752 tons. The contractor submitted an amount of 49,227 tons of materials, a difference of 8,475 tons. The difference is still in question. Area Office personnel indicated that they would resolve the difference with Mr. Bob Price.
Management Response:
We have re-calculated the tonnage of materials shown on the MOH report using the measurements taken by the District Lab personnel and contractor personnel. We have found that no major discrepancies exist between the calculated quantities and the quantities shown on the MOH report (around 5% difference). However, Laredo Area
Office personnel will ensure that all stockpiled material is measured and calculated before payment is made.
Observation: Metal Bean Guard Rail
Metal beam guard rail amounts installed were verified with amount reflected on record.
In three instances, entries on record were duplicated which could mean that the contractor was paid again for the same work. In another instance, an entry was made for an area where metal bean guard rail had not been installed. This also could be an overpayment to the contractor. Installation of two more areas of rail installed did not agree with records. Records showed that more railing was installed than what actually was placed. These issues were reported to the field inspector on April 26, 2006, and he checked the plans. The end results were errors that the inspector would correct.
Management Response:
The entries were duplicated in error; however no payments have been made. Additionally, no underpayment occurred. The Laredo Area Office will ensure that correct information is entered by the inspector in the DWRs to support payments. We will continue checks for errors and will correct before paying for such items.
Observation: Traffic Concrete Barriers
An attempt by Operations personnel was made to account for concrete traffic barriers set and installed as per records on file. The task was not completed as there was difficulty in the count because barriers are moved from place to place. Records still reflected some entry duplications which could mean overpayments. Subsequently, it was learned that one of the employees involved in the stealing had confessed indicating that' at least 4 concrete barriers belonging to TxDOT had been sold. An investigation by the Laredo Police Department has begun.
Management Response:
The Laredo Area Office has reviewed records for payment of barriers and has found that overpayments have not been made or duplicated. In the future, the inspector will
be more detailed in recording information to avoid confusion.
Observation: MC-30
MC-30 which is used to seal the flex base material before the hot mix material being placed is basically sprayed at a rate of .25 per square feet, and this rate is set on the distributor. It is unknown at this time whether there's documentation to show that the distributor being utilized by Price Construction workers was calibrated.
The number of gallons poured onto the distributor also needs to be verified before and then after to determine the amount of gallons sprayed. Yet, Area Office personnel were not sure whether the tank filled with MC-30 is being checked before or after the run with a measuring instrument. It was indicated that there is a measuring meter on the distributor, and by this instrument the inspector accounts for the amount of MC-30 contained in the tank of the distributor before and at the end of the run.
Management Response:
Laredo Area personnel will be entering on the DWRs more accurate and complete information about the stations, measurements taken, and the rate used for MC-30 sprayed for that date. The inspectors have been recording the rate on the Asphalt Daily Reports.
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HOUSTON DISTRICT
MANAGEMENT DIRECTED REVIEW
Voyager Fuel Purchase Card
Conducted by:
David Kossa Kenneth McCollum
HOUSTON DISTRICT
INTERNAL REVIEW OFFICE
MDR 06-01 0
May 1,2006
BACKGROUND
In March of 2006, the Houston District Engineer received information that suggested that a Voyager Card (fuel procurement card) assigned to a vehicle used by the Waller/West Harris Area Office was being misused. On March 23, 2006, The District Engineer ordered a Management Directed Review (MDR) to be conducted by Internal Review. The investigation was assigned to and performed by David Kossa and Kenneth McCollum of the Houston District Internal Review office.
ALLEGATION:
It is alleged that a fuel procurement card assigned to the Waller/West Harris Area Office was used to purchase fuel for other than states vehicles.
OBJECTIVES
Investigate the circumstances surrounding the alleged abuse of the Voyager Card and determine if abuse is occurring and who is responsible for any abuse.
SCOPE AND METHODOLOGY
1. Attempt to secure and review any video recordings of transactions made with the Voyager Cards at the point of sale and identify persons making purchases.
2. Examine and analyze relevant documents and billings related to the Voyager program and Daily Equipment Utilization reports for relevant vehicles.
3. Examine the work schedules, time sheets, and Daily Work Reports of persons using the voyager Card.
4. Interview employees and management who have or may have information about the use and abuse of the Voyager Card.
FINDINGS
In reviewing the billing of fuel purchases, an accounting employee noticed that an unusually large amount of fuel was being purchased for a vehicle using a Voyager card. Accounting contacted the Waller/West Hams Area Office who became concerned that the Voyager Card was being used to purchase gasoline for non-state use. A review of the charges showed that the card had been used numerous times outside the area where the vehicle was used for state purposes.
An analysis of the Voyager Vehicle Report and the Voyager Driver Report was made. It was determined that the personal identification number (PIN) used in all of the questionable purchases was assigned to Mr. Namon Thomas. Mr. Thomas is a construction inspector who works for the Waller/West Harris Area Office. Mr. Thomas was assigned the use of a vehicle and a Voyager Card to be used with that vehicle.
Between August 2005 and March of 2006, forty five purchases were made at a Shell Station located within one and one half miles of Mr. Thomas' home. During this same time period, the Voyager Card was also used eighteen times to purchase fuel at a Chevron station within one mile of Mr. Thomas' second job location. This Chevron is located on Lockwood which is on the east side of Houston, far away from Mr. Thomas' TxDOT work site.
The management of both of these gasoline stations were contacted and requests were made for any photographic or video records of their transactions. While management at both locations were cooperative, neither location was able to provide video records of their transactions.
In addition to these locations, many other purchase locations remote from the jobsite were identified. No business related reasons could be identified for travel to these locations. Transactions occurred at all hours of the day and night and days of the week. Many purchases were made outside of working hours and on days on which Mr. Thomas was not assigned to work. Purchases were made on weekends, holidays, and on days that Mr. Thomas called in sick. Attempts were made to acquire video of these purchases without success.
On April 18, 2006 Mr. Thomas was interviewed in the Internal Review Office. Mr. David Kossa, District Audit Manager and Mr. Kenneth McCollum, Internal Auditor conducted the interview. Mr. Thomas was reminded of the TxDOT policy of cooperating with audits and investigations and he was instructed to keep the interview confidential and to refrain from discussing the interview with others.
After a few initial questions, Mr. Thomas volunteered the information that he had used the Voyager Card to purchase fuel for his personal use. Mr. Thomas then agreed to sign a statement describing his purchases. He acknowledged in that statement that no promises had been made to him and that he had not been threatened. In the statement he recognized that he would receive a disciplinary action. Mr. Thomas reported in the statement that he has used the card to purchase fuel for his personal vehicles, and to provide fuel for friends and family. He admitted to using the card on numerous occasions, including weekends and holidays. He acknowledged leaving his work area to purchase fuel for his personal vehicle. Mr. Thomas expressed remorse and agreed to reimburse TxDOT for his personal purchases.
A review was made of all purchases made on the Voyager Card since it was assigned to Mr. Thomas. It was determined that the card was used on at least 127 occasions to purchase fuel for non-state business. Inappropriate purchases of 2,089.04 gallons were identified for a total cost of $5,081.93.
CONCLUSIONS
Evidence gathered, including the analysis of the Voyager information and his signed confession, is sufficient to conclude that Mr. Thomas used the Voyager card to purchase gasoline for his personal use.
SUBSEQUENT ACTIONS
Mr. Narnon Thomas was terminated through departmental procedures on April 25, 2006. During the termination meeting, he was given a repayment demand letter. The letter states that Mr. Thomas will repay TxDOT $5,081.93 for the gas he had purchased for personal use on TxDOT's Voyager Card. It also states that if he does not repay TxDOT by May 30, 2006, the matter will be turned over to the Attorney General's office.
ADDITIONAL OBSERVATIONS
In the course of the investigation equipment utilization logs were reviewed. This examination revealed that in almost every case the mileage reported for each day was in increments of five miles. It was also noted that the mileage reported on the equipment utilization log did not correspond to the mileage reported on the Voyager vehicle report. It is unlikely that the vehicle would consistently be driven in even mileage increments of five miles. It was also observed that the utilization reports were not checked or signed by anyone other than the driver. It appears that the reports were not prepared daily using actual miles driven but were instead prepared on a later date using estimated amounts.
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HOUSTON DISTRICT INTERNAL RE VIEW OFFICE
HOUSTON DISTRICT
MANANGEMENT DIRECTED REVIEW
Galveston Ferry
Voyager Fuel Purchase Card
Conducted by:
Original signed by Kenneth McCollurn Original signed by Teresa Green
Kenneth McCollum Teresa Green
HOUSTON DISTRICT
INTERNAL REVIEW OFFICE
I MDR 06-005 March 1,2006
BACKGROUND:
On January 13, 2006, the Houston District Manager of Internal Review was contacted by the Assistant Ferry Operations Manager who reported that he believes a Voyager card (Fuel procurement card) issued to the Galveston Ferry was being misused. The Internal Review Manager notified the District Engineer who ordered the Management Directed Review (MDR). The investigation was assigned to and performed by Kenneth McCollum and Teresa Green of the Houston District Internal Review office.
ALLEGATION:
It is alleged that a fuel procurement card assigned to the Galveston Ferry was used to purchase fuel for other than states vehicles.
OBJECTIVES:
1. Investigate the circumstances surrounding the alleged abuse of the Voyager card and determine who is responsible for the abuse
2. Review current policies and procedures regarding the use of the Voyager card and examine compliance with those policies and procedures.
3. Identify ways in which the policies and procedures can be safeguarded and the security of the voyager cards can be strengthened.
SCOPE AND METHODOLOGY:
1. Examine the history and activities surrounding the use of the Voyager cards by reviewing prior audits and reviews with emphasis on previous recommendations.
2. Review relevant policies and procedures.
3. Attempt to secure and review any video recordings of transactions made with the Voyager cards at the point of sale and identify persons making purchases.
4. Examine and analyze relevant documents and billings related to the Voyager program and to vehicle utilization.
5. Examine the work schedules, time sheets, and gate passes of persons using the Voyager card.
6. Interview employees and management who have or may have information about the use and abuse of the Voyager card.
INVESTIGATIVE DETAILS, FINDINGS and DISCUSSIONS:
On January 10, 2006, in the course of accounting for fuel purchases, an accounting employee noticed that a Voyager card assigned to a diesel vehicle was used to purchase unleaded gasoline. When the accounting employee contacted the Galveston Ferry office it raised concerns that the Voyager card was being used to purchase gasoline that was not for state use. A review of the charges showed that the card had been used numerous times to purchase unleaded gasoline. The Voyager card was cancelled and destroyed. The accounting department requested that the provider cancel the Voyager card number.
From June until the card was canceled it was used for gasoline purchases 29 times, roughly once a week. On average 19 gallons were purchased each time. The greatest purchase was for 29.79 gallons And the least was for 13.43 gallons. A total of 555.24 gallons of gasoline for a total cost of $1,363.78 was purchased using the Voyager card assigned to the diesel vehicle.
Abuses of the voyager card do not appear to be limited to the diesel vehicle. Many other instances of questionable purchases were observed, two that were specifically examined. The amount associated with the diesel vehicle may be only a small portion of the actual losses.
The investigation included a review of the gasoline stations that were identified on the reports issued by the procurement card company. The card was used at four stations to purchase gasoline. Only one of the stations had video cameras. Permission to view the videos was difficult to obtain but was eventually granted. Only one date, on which a misuse occurred, was available for viewing. All previous recordings had been erased. The single recorded instance of Voyager misuse showed a customer wearing a TxDOT badge pumping gasoline into a red Ford pickup. (Not a TxDOT vehicle). The purchase was the only transaction made at that station at the time that the Voyager transaction was recorded. The Assistant Ferry Operations manager viewed the transaction and identified the customer as Mr. Bennie C. Charles Jr., a Ferry Maintenance Technician with 28 years of service. The license plate on the vehicle was not legible. The video has since been erased and is no longer available for review.
A survey of the Ferry parking lot was made and several red Ford Pickup license plates were checked against the Texas Dept of Public Safety license plate registry. One was identified as being registered to Bennie C. Charles Jr.
Access logs were compared to the purchase times and dates of several of the unauthorized transactions. All employees reviewed, except for Mr. Charles, were eliminated from suspicion on one or more of the occasions by their location at the time of the purchase. In no instance was Mr. Charles eliminated. On several of the occasions of improper use, the access log indicated that Mr. Charles left the Ferry worksite just prior to the purchase and returned immediately after an improper purchase was made.
Several TxDOT employees, including Mr. Charles, were interviewed by Internal Review Auditors. After some preliminary questions and answers, Mr. Charles was confronted with the information that he had been identified on video as making an unauthorized purchase. Mr. Charles admitted to the unauthorized purchase. When asked how he acquired the Voyager card he stated that he took it "from the desk". When questioned further he said that he took the card from the welders' desk. When asked how he acquired the PIN number he stated that he had seen another employee use the card to fill his personal vehicle and had memorized the PIN number used by the other employee. Mr. Charles then stated that he used the card one morning before he had arrived at work. When asked how he got the card and if he had taken the card home with him he refused to answer.
At this point Mr. Charles began to deny that he had ever used the Voyager for an unauthorized purchase. When asked why he confessed he replied, "It's what you wanted to hear". Mr. Charles now contends that he has never used a Voyager card for an unauthorized purchase.
CONCLUSIONS:
1. Evidence gathered, including the viewing of the video and the interview with Mr. Charles and his confession is sufficient to conclude that Mr. Charles used the Voyager card to purchase gasoline for use in his personal vehicle at least once. It is likely that that the single recorded instance of abuse by Mr. Charles was not the only instance. No conclusion can be reached regarding abuse of the Voyager card by other individuals. Mr. Charles continues to deny his role in the misuse of the Voyager card and now refuses to cooperate in the investigation.
2. Investigations of Voyager card abuse have been conducted on at least 2 other occasions. On December 19,2000, MDR 01-001 was submitted documenting the results of an investigation of fuel card abuse. The circumstances of the abuse were very similar to the alleged abuse currently investigated. On February 23, 2005 MDR 05-003 was submitted. It also reported the alleged abuse of a Voyager card. Recommendations were submitted as a result of both Management Directed Reviews.
RECOMMENDATIONS:
The Ferry Operations manager has requested assistance and advice regarding the handling of the fuel procurement cards. In response to the alleged abuses of the fuel procurement cards, recommendations have been made concerning their use and control. The District Accountant has designed a series of proposed policies and procedures and is in the process of getting approval for their implementation.
1. It is recommended that the policies and procedures designed by the District Accountant be reviewed, modified if required, and implemented.
2. It is recommended that all users of the fuel procurement cards and their supervisors be informed of the changes in policy and provided with training in their implementation.
3. It is recommended that a follow-up review of fuel card purchases be conducted by the Internal Review Department in five to six months.
OBSERVATIONS:
Easy access to the Voyager cards, and the limited controls placed on their use has provided the opportunity for abuse. The perception that detection is unlikely, combined with the increased price of gasoline has created an incentive for exploitation that will likely reoccur unless steps are taken to reduce the opportunity for abuse.
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HOUSTON DISTRICT INTERNAL RE VIEW OFFICE
Management Directed Review
Dallas District
Alleged Improper Payments and Administrative Irregularities
Introduction
This report has been prepared for the Executive Director and the Dallas District Engineer (Dal DE) regarding the results of a Management Directed Review (MDR) for alleged Improper Payments and Administrative Irregularities at the Northwest Area Office.
On March 10, 2006, the DAL DE requested assistance with an in progress MDR that the DAL Internal Auditors were working on. Their initial intent was to examine administrative irregularities at the Northwest Area Office. At the end of an interview, an employee voiced concerns because two other employees had been seen with a stack of receipts and were seen exchanging cash. The explanation obtained from one employee was that the receipts and cash were related to partnering with the Executive Director and approved the request for the Audit Office (AUD) to complete the MDR regarding these allegations.
Paula M. Bishir and Raymond Martinez conducted the audit. The audit work was performed during the period of March 13-31, 2006. All work was performed in accordance with the International Standards for the Professional Practice of Internal Auditing of The Institute of Internal Auditors. Audit work included reviewing information gathered by the DAL Internal Auditors; interviewing employees that worked on the High Five project and other employees in the Northwest Area Office, to the allegations; reviewing personnel files; reviewing various documentation relating to the allegations such as equipment utilization records, vehicle use authorization forms and time sheets; and analyzing the expense records and receipts for the barbeques, merits and promotions, FLSA comp time and time charges. Input was also obtained on fact situations from TxDOT’s Office of General Counsel (OGC).
Background
TxDOT executed a contract with general contractor Zachry Construction Corporation (ZCC) for the construction of the High Five project. This five-level interchange involved the interchanges of U.S. 75 (North Central Expressway) and IH 635 (LBJ Freeway) in Dallas and was the largest interchange project in Texas. ZCC broke ground on this project on January 2, 2002. While the original timetable called for a five-year-build-out with completion in January 2007, innovative equipment and state-of-the-art techniques were employed (such as the segment erector and on-site concrete casting) to accelerate the completion of the project. The High Five was substantially complete (all ramps, bridges and main lanes open to traffic) in Decemer 2005, twelve months ahead of schedule. Finishing ahead of schedule allowed the contractor to earn an$11.5 million dollar incentive bonus.
The Northwest Area Office is responsible for managing the construction of the High Five project. The area office is allocated about 49 FTEs (full time equivalents). The current Area Engineer of the Northwest Area Office was the TxDOT project manager for the High Five before he was selected the Area Engineer position in March 2004.
Partnering is used by the department to improve working relationships and reduce construction related disputes and claims. The department’s Construction Contract Administration Manual indicates that partnering involves a facilitator, the contractor is reimbursed half the cost of the meeting (if requested) and the initial partnering meeting may last one to two days. The Construction Division added that the costs are charged to the project on the Monthly Estimate in the month the meeting is held. Partnering was utilized on the High Five project, the initial meeting and additional steering committee meetings were appropriately handled by change orders and these meetings were separate from the barbeques described below in Finding # 1.
Summary of Findings
Contractor reimbursement checks were received by the Area Engineer. Several administrative irregularities at the Area Office were also identified. Misuse of state vehicles was allowed by the Area Engineer and there was misuse of a state vehicle by the record keeper. Misuse of state time was allowed by the Area Engineer. There was misuse of a contractor supplied computer by the record keeper. There was smoking in a TxDOT facility by the record keeper. There was outside business and professional activities by the Area Engineer. There was misuse of employee funds by the Area Engineer. There were loans from subordinates to the Area Engineer. In addition, there are indications that the Northwest Area
Office has some management issues as reflected by concerns raised by the employees in the areas of morale, FLSA overtime, raises/promotions/evaluations and inequity in the work load.
As far as the High Five project is concerned, the DAL Director of Construction has directed staff to review certain change orders on the High Five project and to complete a construction audit of the project records. These efforts are still in progress.
Detailed Allegations and Findings
Allegation # 1: The Northwest Area Engineer received payments from the contractor, in the form of reimbursement checks for barbeques.
Finding # 1: Allegation Substantiated.
The Area Engineer stated that he accepted money from the contractor , in the form of reimbursement checks for barbeques held during the construction of the High Five project. The barbeque payments totaled $23,205.43 over 16 separate payments according to the records that were obtained from the Area Engineer and ZCC. The exact number of barbeques could not be determined. The Area Engineer purchased the food for the barbeques from his personal accounts and then submitted the receipts to the contractor for reimbursement. The Area Engineer believes these barbeques were state functions and morale boosters for a very difficult and fast paced project. The Area Engineer stated stat he submitted receipts to the contractor for reimbursements for breakfasts held at the field office for some of the TxDOT staff meetings on Fridays. The Area Engineer stated that he submitted receipts to the contractor for reimbursements of other functions including a Christmas cookout at the Area Office, a retirement function for a TxDOT employee, a going away function for a former TxDOT employee and a retirement function for a city of Dallas inspector at the Area Engineer’s house. The Area Engineer stated that he submitted duplicate receipts to the contractor to fund a future fish fry to be held at the end of the project. The Area Engineer also stated that he accepted some meals from the contractor’s employees at the Saltgrass, Aztec and other restaurants.
This is a violation of the HUMAN RESOURCES MANUAL, CHAPTER 8, CONDUCT, SECTION10, CONFLICT OF INTEREST- GIFTS, BENEFITS, AND FAVORS which states that employees will not accept or agree to accept door prizes, gifts, benefits, or favors for themselves or others from any person, company, organization, or other entity that could influence or reasonably appear to influence them in performing their duties, does any kind of business with the department, or is regulated by the department in any way…
According to OGC, this is a personal business arrangement between the Area Engineer and the contractor. As such, it is a possible violation of the GOVERNMENT CODE SECTION 572.051, STANDARDS OF CONDUCT (1),(3),(4), and possibly (5) which states a state officer or employee should not: (1) accept or solicit any gift, favor, or service that might reasonably lend to influence the officer or employee in the intent to influence the officer’s or employee’s official conduct; (3) accept other employment or compensation that could reasonably be expected to impair the officer’s or employee’s independence of judgment in the performance of the officer’s or employee’s official duties; (4) make personal investments that could reasonably be expected to create a substantial conflict between the officer’s or employee’s private interest and the public interest; or (5) intentionally or knowingly solicit, accept, or agree to accept any benefit for having exercised the officer’s or employee’s official powers or performed the officer’s or employee’s official duties in favor of another.
According to OGC, this is potentially a violation of the PENAL C
ODE 36.08 GIFT TO PUBLIC SERVANT BY PERSON SUBJECT TO HIS JURISDICTION AND 36.09 OFFERING GIFT TO PUBLIC SERVANT on the part of both the contractor and the Area Engineer, 36.08 (a) states a public servant in an agency performing regulatory functions or conducting inspections or investigations commits an offense if he solicits, accepts, or agrees to accept any benefit from a person the public servant knows to be subject to regulation, inspection, or investigation by the public servant or his agency. 36.09 (a) states a person commits an offense if he offers, confers, or agrees to confer any benefit on a public servant that he knows the public servant is prohibited by law from accepting.
In addition, this is potentially a violation by the contractor of Spec 2.13 of the 2004 Standard Specifications 2.13. GRATUITIES which states do not offer Department employees benefits, gifts, or favors. The only exceptions allowed are ordinary business lunches.
Allegation #2: Administrative Irregularities in the Northwest Area Office.
Finding #2: Allegation Substantiated.
Administrative irregularities involving the Area Engineer and the record keeper identified in the form of misuse of a contractor supplied computer, misuse of state vehicles, misuse of state time, smoking in a TxDOT facility, misuse of employee funds and loans from subordinates.
Misuse of Contractor Supplied Computer
The record keeper for the High Five project did admit to using the contractor supplied computer to access the Internet and use e-bay and indicated that this usage continues into March 2006. It wasn’t clear why the record keeper was provided with a computer (the High Five project wasn’t a SiteManager project). The record keeper stated that the Area Engineer wanted him to learn how to use SiteManager for another project but the record keeper never did learn. SiteManager wasn’t even loaded on that computer.
This is a violation of the INFORMATION SECURITY MANUAL, CHAPTER 11. INTERNET USE, SECTION 4, INTERNET ACCESS, NON-TXDOT INTERNET ACCESS which states TxDot employees who are provided access to non-TxDOT owned and/or provided equipment, computers, and/or services (information resources) for Internet use must at all times adhere to the same policies and procedures governing TxDOT owned and/or provided equipment, computers, and services for Internet access, as described in this manual.
This is a violation of the CONSTRUCTION CONTRACT ADMINISTRATION MANUAL, CHAPTER 9, LEGAL RELATIONS AND RESPONSIBILITIES, SECTION 3, CONFLICT OF INTEREST AND ETHICS, NON-TXDOT INTERNET ACCESS which quotes the above referenced policy
Misuse of State Vehicles
The Area Engineer stated that he allowed employees to use state vehicles to purchase food items for the barbeques as he considers the barbeques at state functions. He also had a few employees pick him up at his house in state vehicles but states these instances were always related to attending meetings away from the office. He stated that he felt this was justified because he put mileage on his personal vehicle that he did not claim for reimbursement from the state. The Area Engineer also stated that he used stat vehicles to pick up the barbeque pits at his house for use at the barbeques.
The record keeper for the High Five project also used a state vehicle for personal use. He was assigned 5425F since September 2005 and averaged 555 miles per month in fiscal year 2006. The record keeper stated that the reason the mileage is that high is because he drove to and from the district office in order to meet the vehicle’s annual mileage requirement. The reason documented on the Equipment Utilization Record is mostly “project records.” These Equipment Utilization Records weren’t reviewed or approved by anyone at the Area Office. The record keeper admitted to taking the stat vehicle to buy a car part of another employee; in the fall of 2005, he missed his car pool ride because he had to work late; in December 2005, he had to go home to pick up his cell phone; and on December 26, 2005 at 7:30 a.m., he visited a friend in Lewisville (no mileage is shown on the Equipment Utilization Record for that day). The record keeper admitted that he used his state vehicle to eat at his house occasionally. The record keeper also stated that his state vehicle was at his house on March 2, 2006 at 10 am because he probably forgot something at his house.
The State Vehicle Special Use Authorization form that was completed to allow the record keeper to take a state vehicle home (dated January 12, 2006) is for a _ ton GMC but the vehicle assigned to the record keeper (5425F) is a Ford F150. The justification provided on the authorization form is to handle HCRS (Highway Condition Reporting System) incidents after work hours. However, the record keeper stated that he doesn’t have access to HCRS and doesn’t know how call outs are handled. In addition, the record keeper isn’t on DAL’s emergency call out list. The record keeper didn’t report any auto days until February 2006.
This is a violation of the HUMAN RESOURCES MANUAL, CHAPTER 8, CONDUCT, SECTION 7, USING DEPARTMENT PROPERTY, USE BY EMPLOYEES – STATE VEHICLES which states employees will use state vehicles only for official state business. They may not use state vehicles for any political campaign or for any personal activities.
Misuse of State Time
The Area Engineer stated that he allowed employees to purchase and prepare food for the barbeques on state time because he considers the barbeques as state functions. There were sometimes more than one trip to the grocery store and more than one employee per trip. The Area Engineer also stated that he allowed all the employees to charge state time for preparing the food at his house. An analysis of a small sample of employee time sheets indicates that some of this time was charged to the project CSJ (control job section)
This is a violation of the HUMAN RESOURCES MANUAL, CHAPTER 5, WORK SCHEDULES, SECTION 1, and TIME SHEETS that employees will not falsify time sheets… Managers and supervisors will not instruct employees to incorrectly or falsely report time worked or paid leave taken on their own time sheets. Falsification of time sheets is grounds for termination of employment.
Smoking in TxDOT Facility
The record keeper for the High Five project did admit to smoking in the field office after hours.
This is a violation of the HUMAN RESOURCES MANUAL, CHAPTER 8, SECTION 6, SMOKING which states smoking is not allowed inside any building or facility owned or leased by the department, nor in any state passenger vehicle or in any enclosed cab of other state vehicles, such as construction equipment. In leased buildings shared with other tenants, no smoking is permitted in the department’s space, and should be prohibited throughout if the other tenants are agreeable.
Misuse of Employee Funds
The Area Engineer stated that he used funds from the employees’ coffee/coke fund and funds received from employees for cell phone overage charges to help finance the barbeques. He would purchase cokes and coffee from his personal accounts and submit these receipts to the contractor for reimbursement along with the receipts for the barbeques. The cell phone overage payments received from employees didn’t go to the contractor so there are outstanding funds due to TxDOT or the contractor depending on if TxDOT paid the contractor for these charges. No paper trail exists to show which employees paid the Area Engineer. One supervisor said that a former employee told him that he gave the Area Engineer cash for cell phone overage charges on a different project but that the contractor complained that he didn’t receive the payment
This is a violation of the FINANCE REVENUE ACCOUNTING MANUAL which imposes requirements on “all employees” for processing money received.
This is a violation of the DAL GENERAL NOTES FOR CELL PHONES ON CONSTRUCTION PROJECTS which states should the monthly invoice for any individual telephone exceed the base rate; the contractor will be reimbursed by the employee to whom the cell phone is assigned. Receipt of that payment will be returned to the engineer.
This is a potential violation of the Government Code 404.094 FUNDS TO BE DEPOSITED IN TREASURY which requires all receipts to be deposited in the Treasury within three business days.
According to OGC, this is a potential violation of the Penal Code 31.03 (f)(1) THEFT since the actor was a public servant at the time of the offense and the property appropriated came into the actor’s custody, possession, or control by virtue of his status as a public servant.
Loans from Subordinates
The Area Engineer stated that he borrowed money from several of his employees. He also stated that the record keeper for the High Five project fronted the money for some of the barbeque expenses until the reimbursement checks from the contractor arrived. The employees indicated that all the loans have been repaid.
According to OGC, this is a potential violation of Sec. 572.051 of the Government Code STANDARDS OF CONDUCT which states “a state officer or employee should not: (3) accept other employment or compensation that could reasonably be expected to impair the officer’s or employee’s independence of judgment in the performance of the officer’s or employee’s official duties.” OGC added that this type of thing just opens the supervisor up to allegations of coercion and/or favoritism
Other Issues: During the course of this review, the following potential policy violations and management issues were also identified.
Outside Business and Professional Activities
The Area Engineer stated that he performed engineering work for Edwin Jones (aka EJES Inc.) prior to 2003. EJES has been a pre-certified TxDOT consultant since February 2001. One employee indicated that the Area Engineer may have done some work for this engineer a few months ago. The Area Engineer also states that he performed engineering work for a housing developer (about three years ago), an Area Office employee and a relative. OGC verified that no approval has been given to the Area Engineer to perform work for a TxDOT consultant.
This may be a violation of the HUMAN RESOURCES MANUAL, CHAPTER 8, CONDUCT, SECTION 10, CONFLICT OF INTEREST, OUTSIDE BUSINESS AND PROFESSIONAL ACTIVITIES which states employees...will not engage in outside business or professional activities or accept employment in private enterprises if such activities:
Interfere with their working hours or efficiency
Create a conflict between their private interests and public duties, or
Use or appear to use information obtained in connection with their official duties.
Any employee in the classified salary A14 above, or B6 and above must have the prior written approval of the Executive Director to accept employment from an entity with which the department does business…
Project Issues
There are some change orders for the High Five project that still need to be evaluated and the DAL Construction Office is looking into this. One employee expressed a concern about some cracks in the pavement on the project that were repaired with epoxy. The DAL Director of Construction hasn’t examined the repairs closely but after a visual observation, she concluded that the repairs appeared limited in scope, insignificant and acceptable. There is also some material on hand that hasn’t been accounted for (three 36” gate valves that were replaced due to plain error) and the district is looking into this.
Management
Morale
Several employees indicated that management (Area Engineer) is not taking care of business and cited problems with delays in paperwork, lack of discipline, inequity in the work load, not being professional, party atmosphere, personality change and lots of time away from the office.
FLSA
Several employees believe there was inequity in how FLSA was handled and who was allowed to get paid for FLSA overtime. The district has already taken action to address the issue. The record keeper earned enough comp time to exceed the 180 hour threshold in the last few years (this employee is a rehired retiree so his FLSA balance was accumulated after he returned to work three or four years ago). The Area Engineer didn’t think this was unusual for a project with 800 items.
Raises/Promotions/Evaluations
Our analysis didn’t show any patterns of favoritism; however, some employees hadn’t received a merit/promotion recently even though their evaluations were good. Also, over 30% of the employees’ evaluations were past due so those employees weren’t eligible for merits/promotions.
Work Load
Some employees feel that the work load isn’t shared equally. The admin tech assigned to the High Five field office has no assigned duties other than answering the telephone. She was told to report to the field office after she returned to work from workman’s compensation. She hasn’t been given a performance plan or evaluation by the current Area Engineer. She returned to work in May 2005 and still got paid for FLSA overtime in fiscal year 2005. She locks herself in the office and uses her personally owned laptop. She is an Office Tech V.
Area Engineer
The Area Engineer averaged 32 hours of leave per month in fiscal year 2006. The Area Engineer has received rides from his employees to and from work on several occasions. One of the Area Office employees occasionally picks up the Area Engineer’s kids from school when she picks up her kids at the same school. Employees have delivered paperwork to the Area Engineer to sign at a restaurant or his house. The Area Engineer also stated that he spent hours at home reviewing the traffic control plans for the High Five project and that the contractor offered to pay him but he declined.
Equipment Utilization Records
The Equipment Utilization Records (Form 1228) aren’t reviewed or approved by anyone at the Area Office
Closing Comments
The results of this MDR were discussed with the DAL DE on March 24, 2006. We wish to thank the DAL Internal Auditors for their assistance and insight during the audit. We wouldn’t have been able to complete the work in such a timely manner without their involvement. We would also like to thank the district office security for providing assistance.
Submitted by: _________________________
Paula M. Bishir
Auditor-In-Charge
_________________________
Raymond Martinez 4/4/06
Approved/ _________________________
Reviewed by: Owen Whitworth 4/4/06
Director, Audit Office
_________________________
Richard D. Monroe 4/4/06
General Counsel
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