Oklahoma State Auditor Gary Jones released the Oologah Talala Emergency Medical Service’s 2011 audit report Thursday, including several findings of inadequate internal controls, payroll fraud and other potential violations of state law.
OTEMS administration is seeking their board’s approval Monday to resolve the audit issues.
The 2011 fiscal year audit revealed payroll fraud of $13,216 from 938 hours of overtime paid to unnamed employee. The employee worked for OTEMS during 2010 and 2011 along with current Director of Operations Kelly Deal.
He was responsible for the payroll, accounts payable and receivable, according to Deal who was the acting supervisor at the time.
Deal admits it was his responsibility to oversee the payroll, but was new to the position and operated on the honor system.
The audit notes payroll records appeared incomplete on several instances where no time sheet records were present and were not approved or signed as approved for any of the 12 months under the audit.
Deal and the payroll clerk were the only two office employees at the time in a small department, which relied on an outside accounting to audit the financial records, according to Deal.
OTEMS Assistant Director Brandi Pond said, “There is an element of trust that must come in the workplace.”
Deal said he could not name the employee responsible for the audit findings, but noted OTEMS Board of Directors will meet in executive session to discuss the issue during tomorrow’s meeting.
On Monday, the OTEMS board executive session is stated to discuss matters involving Randall Williamson, according to the posted agenda.
After the executive session, the agenda lists another item for discussion, consideration and possible action on whether or not OTEMS will seek criminal and/or civil remedies against Randall Williamson.
Williamson has not been officially named as the payroll clerk.
The Claremore Daily Progress contacted Williamson regarding the issue. He said he did not know about the issue or the audit’s findings.
At the time of the payroll issues, records were kept manually, according to Deal. Since the issue became apparent OTEMS has outsourced payroll through Paycom and employees are required to track their time online, according to Deal.
The new system was put in place in August 2012, according to the audit.
The administrators asked the auditors for assistance when they noticed inconsistencies in the records, according to Pond.
“In the process of starting the regular audit, we alerted them of some issues, Pond said.”
The audit’s notes finds the EMS districts annual estimate of needs for funding and including an overstatement of funds by $205.65.
Other issues included having only one employee to sign checks, when two signers should be used to avoid unrecorded transactions, misstated financial reports or undetected errors, according to the audit. Two of 25 checks reviewed had no signature on the document, according to the audit.
Additionally, inventory controls were not in place in 2011, according to the audit. There were no fixed asset listings and an annual physical count was not performed, according to the audit.
Inventory is kept current as items are donated or purchased, according to Deal.
One other item was noted in the audit. OTEMS had not properly accounted for the funds needed to pay for an audit. The audit lists the finding as a noncompliance with statute by underfunding the Audit Expense Account.
Deal said because they had never had a state audit they did not realize how much it would cost and the issue has been corrected.
OTEMS has made arrangements to avoid the issues listed in the audit and improve internal controls, Deal said.
“We have made all the arrangements we can so we don’t touch any money,” Pond said.
Administrators are doing everything possible to improve internal controls despite the challenge of a small department and budget, according to Deal.
In 2011, the Oologah-Talala EMS announced it was in danger of closing due to higher fuel and maintenance costs, and lower reimbursements through Medicare and Medicaid.
The Oologah-Talala EMS is supported by taxpayer dollars and provides emergency medical care to a 180-square mile area of Rogers County.
Tim Albin, chairperson; Jack Griggs, vice chairperson; Richard F. Tesson Jr., secretary; James Senese, treasurer, and Mark Abdo currently serve on the OTEMS board. John M. Wylie II, publisher of the Oologah Lake Leader serves as the public information officer for the organization. The board will have the final say Monday on what to do next with the auditor’s recommendation to refer the payroll fraud and abuse to District Attorney Janice Steidley for further review.