MetroNews staff photo


CHARLESTON, W.Va. — A legislative audit on the Department of Agriculture found extensive problems with financial controls within the agency. Agriculture Commissioner Walt Helmick sought to audit soon after taking the position which had been held for decades by Gus Douglass.

The preliminary report spotlighted shortcomings in the Rural Rehabilitation Loan Program, but the full audit report found other significant problems within the agency. House Speaker Tim Miley and Senate President Jeff Kessler, after getting the first look at the report before it was made public, forwarded the information to the U.S. Attorney for further investigation.

Auditors found problems with the loan program were largely a lack of internal control. There were no systems in place to reconcile payments made on the loans and a severe lack of documentation throughout the program. The loans were also made, according to auditors without sufficient appraisal or collateral.   The report also found in some instances a conflict of interest in the loan approval and in some cases the money was not being used for agriculture purposes.

Auditors examined other areas of the Department of Agriculture which also showed problems. Areas of travel expense reimbursement, hospitality expenses, leasing programs, and the classification of one employee all had glaring errors.

The report claimed there were instances in which receipts for reimbursement of travel and lodging expenses had been fabricated. One instance was a campsite at the State Fair.  The audit found Douglass sought reimbursement at 106.72 per night while another employee with a campsite next to Douglass’ sought reimbursement for 30 dollars a night.

“Upon contacting the Chief Executive Officer (CEO) over the State Fair of West Virginia, we found the former Commissioner was not charged for his campsite during the 2012 State Fair and that it was the policy of the State Fair to provide one free campsite to the Commissioner of the Department of Agriculture. Additionally,” the audit stated. “The CEO provided us with a copy of a page from the receipt book used by the State Fair and we determined the receipt accompanying the former Commissioner’s travel form was not a receipt from the State Fair receipt book.”

Auditors added there was one incident in which travel expenses were considered “extravagant.”  The cost was 3,150 dollars to fly the commissioner from Charleston to Ravenswood for an event and then to a vacation spot in North Carolina.  The return flight was included in the expense even though there were no passengers on the plane.

Mileage reimbursements were another area where the audit team explored.

“During our testing of travel expenditure documents, we noted 215 instances on 44 different travel reimbursement documents where employees claimed a mileage amount in excess of the recalculated distance for one or more trips. The largest mileage difference for one trip was 188 miles and the smallest was 11 miles. The total difference was approximately 8,000 miles and $4,000.”

The audit team also concluded the Department of Agriculture erred in the classification of the Department’s General Counsel as a full time state employee, which qualified them for PEIA insurance and state retirement.

“The WVDA improperly classified their General Counsel as a full-time employee for 21 years. Whether or not the individual was eligible to receive Public Employees Insurance Agency (PEIA) insurance benefits, Public Employees Retirement System (PERS), annual or sick leave and annual increment hinged on the individual’s classification as an employee.”

There were other areas of significant finding.  The team explored allegations in the complaint of finances at the farmers markets and the Gutherie office were out of compliance with state spending rule.

“WVDA’s cash receipts were not adequately safeguarded from unauthorized use or disposition. The total revenue received during our audit period was approximately $23 million of which 4% was received in the form of cash and 96% was either received directly by the State Treasurer’s Office or was a non-cash transfer.”

The area of hospitality expenses delved into the cost of a meeting of the state’s Fairs and Festivals. Auditors said a deputy commissioner was improperly reimbursed 404 dollars for expenses related to the meeting without an itemized receipt. The audit team then obtained copies of the original itemized receipts, which showed several alcoholic beverages were purchased, totaling $41. That purchase was not in compliance with the department’s expenditure schedule. The beverage purchase increased the restaurant’s 20 percent gratuity by $8.

According to the audit 90 percent of hospitality charges were out of compliance with department policies and procedures.

The audit covered a time frame from July 1, 2011 to December 31, 2012.

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  • Really

    It's funny that two of the comments below more than likely came from two individuals that are part of the old loan committee!!!

  • John

    I agree " Term Limits" !!!!!!! For state and feds!!
    Four years and out.

  • Independent View

    What, no mention of the sexual harassment scandal and lawsuit against Douglas that taxpayers paid to the lady to shut up and go away.
    No details, an out of court settlement, with a gag order, so taxpayers that footed the bill would never know the cause of action/lawsuit.
    Don't soft-peddle this decades of total disregard for the law, ethics, policy and procedure. Get to the bottom of this no matter who violated laws or ethics. Appoint a special prosecutor and prosecute the law breakers and fire the ethics violaters. Enough of the usual, "oh well, he's gone, let's not sully his reputation." If a lower level state employee had pulled these stunts and blantant disregard for established policy and procedures and embezzlement, they would be summarily fired and prosecuted. Only when politicians are held accountable for their actions will residents begin to believe change is coming to WV politics. Hypothetically, if Douglas were convicted of wrongdoing, and it appears that he committed same then, he would loose his state pension. A just punishment for thumbing his nose at rules and regulations and taxpapers.
    Fortunately, Mr. Douglas's personal Playhouse is over!

  • Steve

    Elected officials are as good as the people around them. The new commissioner still has Douglass hires around him. So will these crimes continue or will the new commish get rid of the few left and turn the ship around?

  • Larry

    Good thing we have an honest, ethical, democrat party, lifetime politician water farmer in there now, the shenanigans will end!

  • Stephanie

    You would think that a new commissioner would bring his own division directors in? Especially after this ridiculous audit that showed all these crimes. If he keeps the fiscal division director, what makes you think she won't turn her head again when a crime is being committed?

  • Janet

    Why does the new commissioner keep the Fiscal director that obviously let this go on? Are we missing something? The division director of fiscal has proven that she will let these unethical practices happen. And she still works there? Step #1: Do an Audit. Step #2: get rid of the problems.

  • Medman

    They still have not drilled-down to getting the facts and expenses related to his lady friend who worked in the department. That will come when all of the expenses are audited, maybe.

  • cutty77

    Gus was in power along time,and i'm sure not eveything was done on the up and up. But if The State is going to dig,lets dig them all up,brother.

  • GregG

    Seems to me like a lot of time and money being spent on a witch hunt after the fact. Audits should be done regularly, on all political offices.

  • Mike

    Based on my experience, in the Corporate world you would be fired effective immediately when the falsification of records was noticed. In this case you can't fire Gus but he should have to pay for any of the proven discrepancies. Any current employees with proven discrepancies should be terminated from their jobs. Plain and simple.

  • Nettie

    Since these problems date back 21 years, at least in some instances, you have to ask why have no such audits ever taken place in the past? Where else in our government is there such a great lack of accountability occurring and therefore how much tax payer money is being misused? Audits of all departments should be occuring on a regular basis. Accountability keeps honest men honest and helps get rid of the the dishonest.

    • Medman

      Nettie, It appears that no one was willing to challenge the system until Walt Helmick uncovered this mess when he took over the Ag. Commission.

  • Max

    Two words "TERM LIMITS".....44 years in office has you thinking your invincible...

    • Chris


  • Mark

    Some sleezy transactions which should be investigated, and those responsible prosecuted whether still in office or not.

  • WV Grad

    Home Cookin' !