The State Auditor’s Office released much-anticipated audit reports for JobsOhio and for Ohio’s Development Services Agency yesterday. We already discussed the conflict of interest issues uncovered in the first report. Today I’d like to discuss the over one million dollars in undocumented spending uncovered by the audits. And then briefly wonder out loud why Auditor Yost has no interest in asking where all of that money went.
First up: JobsOhio employees and their corporate credit cards.
The JobsOhio audit found that JobsOhio employees were issued business charge cards for personal expenses and, in a large number of cases, were submitting expenses for reimbursement without providing any receipts or proof that the spending was for actual business purposes.
In a small number of cases, the auditor was able to identify personal expenses made on the cards that employees never paid back. The auditor warned that “unreimbursed personal use of corporate charge cards could lead to significant misuse of JobsOhio funds over time if proper control is not exercised.”
Even more troubling, the auditors reviewed a sample of 131 credit cards reimbursements and discovered that 58 did not contain a receipt or invoice proving it was a valid business expense. The value of these mystery expenses totaled $124,633, almost half of which was paid using public funds.
Kasich envisioned JobsOhio as a private company run by seasoned business professionals from Corporate America. People who know how to run a successful business. Fact: You do NOT run a successful business by losing track of hundreds of thousands of dollars.
I have worked for some of the largest corporations in the US (and the world) for nearly two decades and I’ve been submitting expense reports for nearly all of that time. This is NOT how Corporate America works. If this was a real company, and it was discovered that nearly half of employee expenses were being reimbursed without any receipts, all hell would be breaking lose.
The managers in charge of approving expenses would likely be fired. Employees who didn’t submit recipients would be reprimanded and tasked providing the appropriate documentation. And independent auditor would be brought in to review the expenses to ensure they were business-appropriate.
Right now we just don’t know if these were valid business expenses or if these unsupervised JobsOhio employees were traveling the world and boozing it up with their friends on the state’s dime.
We have no idea. Even worse: Yost doesn’t seem at all bothered by the fact no one knows.
Instead of digging in and trying to determine if JobsOhio and the State of Ohio are being ripped off by dishonest employees, Yost simply recommends that management update their user manuals for expense reporting to help “increase employee accountability.”
Yost never even brings up the possibility that these undocumented expenses could be inappropriate, even though he made a big deal a few paragraphs earlier about the personal expenses that he was able to identify.
A separate audit report for Kasich’s Development Services Agency (DSA) was released the same day and it found even more problems with missing documentation.
According to that audit, JobsOhio billed the Development Services Agency $860,000 for “economic development and marketing services” but included no information about how those amounts were. DSA just paid JobsOhio and didn’t ask any questions.
The audit also found $165,245 in public money went to the the JobsOhio Beverage System. Again, those payments “were not supported by an invoice or other detailed documentation.”
Together the two audit reports identify over one million dollars in undocumented spending involving JobsOhio, yet Yost makes no recommendations for recovering that money like he has in other audits.
Earlier this month Yost released the audit of an ambulance company that failed to keep accurate documentation. In that case Yost found that the company owed the state slightly over $71,000 “due to inadequate documentation”. “There aren’t any shortcuts around the law,” Auditor Yost said. “Keeping an accurate and complete book is part of the job. Just get it done.”
When asked about JobsOhio’s missing documentation during a press event for the audit (video here from Marc Kovac), Yost replied that it’s “not unusual that there is some lack of documentation. We don’t live in a perfect world.”
So an ambulance company fails to document $70K and they need to “get it done.” But when JobsOhio can’t tell us where over one million dollars went, we’re going to just shrug it off?
It was clear from the beginning of that pressser that Yost did not want to talk about the results of the audit. Instead of opening with a review of the findings, which might have given JobsOhio opponents some great sound bites, Yost started off by downplaying the significance of the findings: “None of this is headline making stuff,” claimed Yost.
For years opponents of JobsOhio have warned that its lack of accountability and transparency were incompatible with an organization set to receive over $6 Billion in public money over the next 25 years. And now we find out that JobsOhio has no process in place for determining conflicts of interest AND they seem to have misplaced the receipts for over a million dollars?
This is EXACTLY the type of thing that makes headlines.
While I’d like to give Yost some credit for conducting the audit, it’s clear that politics is preventing him from following through and doing his job.
Campaign season has already started, and both Yost and Kasich are up for reelection next year. Yost needs Kasich to be strong at the top of the ticket to help improve his own chances of reelection. And Kasich needs JobsOhio to appear successful if his jobs and economy message is going to resonate with voters.
We already know Yost’s former campaign manager, Ohio Republican Party Chairman Matt Borges, pressured Yost to avoid the audit. I guess they agreed to compromise on conducting it, then not making any recommendations for recovery and downplaying the results.
Another fun political fact: The wife of Yost’s Deputy Chief of Staff, Tony Tanner, just happens to be JobsOhio Managing Director Kristi Tanner, who the Dispatch reports is likely paid $255,000 year. No word on whether Kristi turned in the receipts on her latest JobsOhio credit card expenses.
Here are copies of the audit documents: