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Vt. governor addresses allegations of stolen taxpayer money - WCAX.COM Local Vermont News, Weather and Sports-

Vt. governor addresses allegations of stolen taxpayer money

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MONTPELIER, Vt. -

At Gov. Peter Shumlin's weekly press conference government transparency was the hot topic.

Reporter Jennifer Reading: Speaking of transparency, what is your reaction to a state employee under investigation for allegedly falsifying insurance claims and stealing state funds?

Gov. Peter Shumlin: Well, as you know, I feel that any state employee who rips off taxpayers should be prosecuted. We should do everything in our power, not only to get that money back, but to ensure that that employee is punished.

The investigation started after a whistleblower from Michigan says a liability claims adjuster within the Vermont Office of Risk Management tried to buy his $6,000 guitar online using a state of Vermont check.

"When we find that there's wrongdoing by an employee or suspected wrongdoing by an employee we look at every possible encounter that we can, going as far back as we can, to make sure that we have a full picture and that's what we're trying to get here," said Shumlin, D-Vermont.

Charges have not been filed against the state worker, so WCAX News is not naming her. But after seven years with the state, her employment ended last week. Now, simultaneous internal and police investigations are underway.

Jennifer Reading: Have you been briefed on the investigation?

Gov. Peter Shumlin: Yes.

Jennifer Reading: Do you have a timetable on when it may resolve?

Gov. Peter Shumlin: We're going to do the most thorough, fair, objective investigation that we can. And as soon as we have the facts we'll let you know.

The state employs about 7,500 workers. And despite constantly evolving oversight efforts, the governor says keeping tabs on everyone can be a challenge.

"You don't always find ways to catch every evil intent and most of our state employees are incredibly honest and hardworking folks," Shumlin said.

"Even with the best internal controls there are always people who are going to find a way to game the system; human beings being who they are. You can't look over every employee's shoulder all the time. That takes another employee," Vt. Auditor Doug Hoffer said.

The auditor says to avoid fraud, no one employee should control an item from start to finish. In Risk Management, the employee in question was the sole liability claims adjuster, investigating property damage claims against the state. She only needed manager approval for payouts exceeding $15,000.

Jennifer Reading: Should a manager have to sign off on every payout?

Vt. Administration Secretary Jeb Spaulding: That is under consideration.

As for the agency that cut the check, the treasurer says the transaction was by the book.

"Our staff did take the appropriate steps here," said Beth Pearce, D-Vt. Treasurer.

The treasurer's office processes roughly 1.8 million payments per year. More than 500,000 of those are in the form of checks issued after the commissioner of Finance and Management approves the payment.

"The initial call came in to this office about the check. We notified the appropriate authorities; we stopped payment on the check," Pearce said.

The auditor initially criticized the treasurer's office for allowing the Risk Management employee to mail out the check herself, calling it a deviation from normal practice. Now he says he had bad information and that's not necessarily a red flag.

The state stands by its internal controls, calling them strong, but says every April assessments are done in each department to identify ways the state can improve oversight.

Related Stories:

Did state miss warning signs in employee fraud case?

Police investigation: Was a Vt. employee shopping with taxpayer money?

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