Forensic Audit Pinpoints Potential Fraud Within Wicomico County - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

Forensic Audit Pinpoints Potential Fraud Within Wicomico County Government

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SALISBURY, Md.- The Wicomico County Council has released information regarding a recent forensic investigation into potential fraud within the county government.

The council on Thursday released a brief book of the report from the forensic auditor it hired, James Kern of Gross Mendelsohn & Associates, P.A.

In the brief book, Kern stated, "I attempted to perform a forensic accounting investigation pertaining to a document found in a county employee's personnel file relating to a change in the employee's pay rate."

It is important to note that in this brief book, most of the names of the people mentioned in the forensic audit have been redacted.

The suspicious document was initially found by the county's internal audit firm, PKS, and was dated Nov. 19, 2015. The letter "identified as being from (name redacted) Director of Finance and addressed to (County Executive) Mr. Culver," Kern said.

Kern stated later in the brief book that the contents of the letter had various "red flags." One of those "red flags" was the subject document, which Kern described as suspicious and potentially fraudulent. Kern said he noticed the letter "was not on county letterhead, did not contain actual signatures, but instead contained computer-generated typed signatures..."

The brief book also mentioned other "red flags" such as: 

  • The director of finance's statements claiming no knowledge of the document;

  • The document was used to support a pay increase and lastly;

  • "Conflicting statements have been made involving two high-ranking county directors," Kern said.

A year later, in November 2016 the letter was brought to the attention of the county employee who allegedly wrote the letter and that individual stated they "did not write that letter, did not gather or have knowledge of any of the information set forth in that letter." 

The individual then wrote in a letter dated Nov. 4, 2016 to PKS that (name redacted) "is extremely concerned as to what other documents have been written and signed representing the Wicomico County Director of Finance without my knowledge." 

On Feb. 16, 2017, the forensic audit investigation began and Kern began confronting county employees.

Before any further questioning could begin Culver said he would like to have Wicomico County Attorney Paul Wilber present.

On Feb. 20, 2017, Kern received a call from (name redacted). Kern stated the individual "recalls that (name redacted) complained about needing a raise...(name redacted) recalls discussing what (name redacted) considered to be a normal rate of increase...(name redacted) did not recall any discussions about gathering information on other H.R. Directors salary levels...(name redacted) recalls that one morning (name redacted) received a call from (name redacted) who told (name redacted) that Mr. Culver came down on his own and gave me a raise."

On April 21, 2017, Kern said he received a letter from Culver stating "he is not going to authorize staff to be interviewed at this time." 

Culver also wrote, "I authorized the raise at issue and it is beyond dispute that I had the authority to authorize the raise. I am also well aware of the face the (name redacted) at the time was supported of (name redacted) receiving a raise."

In response, Kern said to Culver, "The seriousness of potential fraudulent acts that may be have been committed by a county employee are why interviews are necessary to complete the investigation."

Culver followed up to Kern's email regarding the severity of this investigation stating, "The matter had previously been investigated by the external auditors (PKS) and ruled as a personnel issue, not fraud." 

Kern then said Culver's statement about a "personnel issue" was not supported based on the information PKS provided to Kern that deemed the letter from Nov. 19, 2015 as "suspicious."

Ultimately, Kern stated that "although Mr. Culver has precluded us from conducting interviews to complete the investigation," the documents that were presented to Kern indicated that the Nov. 19 letter was created to appear as if it were from the Director of Finance to give the unnamed individual a raise, was ultimately not written and not authorized by the Director of Finance.

Kern said it is imperative he interviews the county employees to get to the bottom of this matter.

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