Audit finds Vt. Public Safety Dept. payroll vulnerable to fraud - WCAX.COM Local Vermont News, Weather and Sports-

Audit finds Vt. Public Safety Dept. payroll vulnerable to fraud

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James Deeghan James Deeghan
WATERBURY, Vt. -

"There is not widespread fraud or abuse within the Department of Public Safety," Vt. Public Safety Commissioner Keith Flynn said.

Flynn is responding to a report commissioned by the Shumlin administration after former state trooper Jim Deeghan was able to rack up $200,000 in fake overtime without his supervisors noticing.

"One thing that we learned from the Jim Deeghan case was he worked very hard at perpetuating his fraud," Flynn said.

But the independent audit by Stone Turn Group revealed the department's payroll system is vulnerable to fraud, abuse and waste. The forensic analysis firm was charged with examining the department's payroll data over a 28-month period, starting in January 2010. They found the manual system for employees to report their hours worked is open to errors and intentional misreporting, and is not managed for optimal efficiency. The report also found that supervisors tend to "rubber stamp" time reports and perform inadequate review. Further forensic analysis raised several red flags, including 167 DPS employees with above average overtime. And the analysis saw overtime levels for 172 employees dropped after it became known that an investigation was under way.

"I feel confident that we've done all we can at this point," Flynn said.

The commissioner argues overtime is an inherent part of the public safety business, but admits the department must get better at managing it. He says this will require a more hands-on approach. The department has already eliminated electronic signatures on timesheets and changed how they're submitted, ensuring an employee cannot alter them after a supervisor signs off.

"Just the fact that someone was identified as having a risk is not indicative that there was some type of fraud," Flynn said.

Of the top 16 trooper overtime earners identified in the report, all but Deeghan were able to verify their hours. Flynn says Deeghan was an isolated case, but vows to remain vigilant.

"I'm confident that we have very qualified and dedicated people doing this job. However, I will always remain diligent looking for that other person that may try to commit fraud," Flynn said.

Reporter Jennifer Reading: Will there be ramifications for these rubber stampers?

Keith Flynn: Those days are over.

Flynn says more oversight is key. He's added two night commanders to the force to monitor overtime. He plans to hold supervisors accountable for the time sheet they approve.

"I believe that trust is good, but verification is better," Flynn said.

The audit included numerous recommendations for revamping the DPS payroll system, including replacing manual measures with an automated reporting system. The state says that project in the works, but could not provide a timetable.

In a statement, Gov. Peter Shumlin, D-Vermont, said, "I am glad the report that I asked for has been completed, and I appreciate the auditor's thorough review. I expect the Department of Public Service and the rest of my administration to review the recommendations carefully as we continue to improve our overtime procedures across state government."

Click here to read the full report.

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