Audit requested by MDOC commissioner finds hundreds of thousands in misspent funds by previous administration

Updated: Dec. 17, 2020 at 8:49 PM CST
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JACKSON, Miss. (WLBT) - Six years after a corruption scandal rocked the Magnolia State, the Mississippi Department of Corrections finds itself once again under investigation over misspent funds and a former commissioner who violated the law.

That investigation, revealed Thursday, details 18 separate instances where leadership within MDOC engaged in “widespread fraud, waste and abuse.”

State Auditor Shad White said former MDOC Commissioner Pelicia Hall was responsible for mishandling most of those taxpayer dollars, particularly for authorizing all employees with comp time to be able to get that unused time as a buyout payment.

“In this particular case, the big dollars that were received by the top brass at MDOC, the former leadership, that is comp time money, that is not legally allowed to be paid to them, period,” White said.

Hall herself received $109,646 in payments over a two-and-a-half year period. The former deputy commissioner of institutions, Jerry Williams, got nearly a quarter-million dollars through the same buyout system.

In all, employees received more than $10 million in buyout payments, all of which were illegal, White said.

The report also said those buyouts count as payroll wages, meaning Hall and Williams, both of whom draw pensions from PERS, are receiving “artificially inflated” amounts due to the extra money they received. Current MDOC Commissioner Burl Cain, who requested the audit, did so because he said he wanted a clean slate for the embattled agency.

Cain, who also got Gov. Tate Reeves’ blessing to ask for an in-depth review of the agency’s financials, admits he didn’t know what they would find.

The comp time issue is troubling, Cain said, because many MDOC employees received far less than Hall or Williams and may not have known it was even illegal because their superiors approved it.

“You’ll probably see some legislation and so forth that’ll come through that will hurt a lot of people that are not, didn’t take a lot, didn’t get paid a lot and didn’t have that much time on the books,” Cain said.

White said they’re now looking at how much money MDOC’s former leadership, and possibly the agency, now owes the state because of this audit.

“At minimum, we’re talking about tens of thousands of dollars here, maximum, we’re talking about millions of dollars,” White said. “That’s going to be a set of decisions that we have to make based on what the investigations division finds.”

Some of that misspent money stems from improper travel records and excessive purchases, too.

The audit found Hall owes the state $18,580 for travel expenses that were not appropriately recorded, monitored or approved; Parole Board Member Betty Lou Jones owes $47,321 for the same instances.

Investigators also found MDOC spent $41,084 in taxpayer dollars for what Hall called “stress reduction rooms,” with massage chairs, Himalayan salt lamps and art. Those purchases were deemed excessive by the auditor’s office.

Another finding from the investigation flagged 36 different instances where MDOC did not issue a purchase order for a contractual purchase, which is required in order to ensure contracts are not overpaid.

Contractual purchases without purchase orders totaled $14,387,463, according to the report.

White acknowledges that finding brings to mind Hall’s predecessor, Chris Epps, and the contractual improprieties that took place under his watch.

Epps remains in federal prison for receiving bribes and kickbacks in excess of $2 million, investigators determined.

“It’s really discouraging, because you would hope that at the end of a big scandal involving an agency, the agency and agency’s leadership would then understand that they are going to be under extra scrutiny, and that they have to do things that will restore the public’s faith in their agency,” White said. “And in this case, not only did they not go above and beyond to restore that faith, but they also just ignored some of the basic rules and regs and the law around how they were supposed to spend money.”

In fact, the full extent of MDOC’s misspending under Hall’s watch may never be known.

Some records couldn’t be provided because the agency mistakenly destroyed audit documentation and records that were public, which included purchases, approvals and other accounting records.

Cain says if criminal charges come against current employees from this investigation, they’ll be dealt with swiftly.

“If you violate the law, we’re going to give you to the district attorney, and he’s going to work you over,” Cain said. “We’re not going to tolerate that.”

Whatever happens, Cain said his top priority is setting a positive example not just for the public, but those inmates under his care.

“If we don’t operate with integrity, how can we expect them to? And we’re trying to correct their deviant behavior and rehabilitate them and get them not to come back to prison, but if we’re not performing, and we should, we’re a terrible example for them. And that’s not acceptable,” Cain said.

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