The West Virginia Auditor’s Office has found that the state kept paying to rent office space at the Middletown Mall in Fairmont for almost three years even though the state had canceled the lease and had moved out. The snafu cost taxpayers nearly $1 million.

Auditor J.B. McCuskey’s office determined that the state canceled a lease for the Department of Health and Human Services on May 31, 2015 when DHHR moved its Fairmont offices from the mall to a new building.  However, state government kept paying the mall $30,907.34 per month until last February.

J.B. McCuskey

MetroNews reporter Brad McElhinny, who first reported the story last Friday, wrote, “So the total amount the state paid over the years for the property that it was no longer using was $989,034.88.”

The checks went to Pin Oak Properties LLC of Morgantown. McElhinny reports that Pin Oak filed for Chapter 11 bankruptcy in June 2017 and the company recently sold the mall to General Acquisitions LLC for $13.7 million.

“It was purely wasted money,” McCuskey said on Talkline Monday.  “Am I glad that it was found?  Absolutely.  But this is not something that we are happy about.”

Well, nobody should be happy.  McCuskey is scheduled to testify before the Legislature’s Joint Government Accountability, Transparency and Efficiency Committee this morning at 11 a.m. so we should learn more at that time, but a few obvious questions come to mind.

How did DHHR and the Department of Administration’s Real Estate Division allow this to go unnoticed for three years?  Governor Justice released a statement Friday saying one state worker has been fired and two more are suspended without pay.  However, the taxpayers are entitled to know exactly how the breakdown occurred.

What are the repercussions for Pin Oak, which McCuskey says continued to cash the checks from the state even though the state was no longer leasing the mall space?  “If we can’t find a way that this was illegal, it needs to be made illegal in the future,” McCuskey said.

What system does the state have in place to keep this kind of sloppiness from happening?  McCuskey credited a diligent auditor in his office with rooting out the costly error, and thank goodness for that person, but shouldn’t best practices for accountability in state government spending prevent this sort of oversight?

Is this mall lease scandal a one-off, or if auditors scoured state government would they find more instances of waste, fraud and abuse?

Can the state get the money back?  To paraphrase the late U.S. Senator Everett Dirksen, a million here, a million there… pretty soon it adds up to real money.*

This is the kind of waste that drives taxpayers crazy.  We know that government, by its nature, is not as efficient as the private sector because there is little incentive. However, the fact that this slipped through the cracks for three years is a prime example of  outrageous waste.

*(Dirksen’s actual quote was, “A billion here, a billion there, pretty soon it adds up to real money.”)

 

 

 

 

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