State of New Jersey Office of the State Comptroller Bringing greater efficiency and transparency to the operation of all levels of New Jersey's government State Comptroller, Philip James Degnan
New Jersey Office of the State Comptroller Overview of Presentation • Office of the State Comptroller – History, Mission, Statutory Authority, Divisions • Investigations Division – Origin of Investigations (complaints, referrals) – Investigatory Tools and Resources – Final Work Product • Public Reports and Recommendations to Public Entities and / or Lawmakers
New Jersey Office of the State Comptroller Who Are We? • The Comptroller is appointed by the Governor with the advice and consent of the Senate to a six-year term. • Can be removed only for cause. • We are an independent office established in the Executive Branch of State government. The office is in, but not of, the Department of the Treasury. • The Comptroller reports directly to the Governor.
New Jersey Office of the State Comptroller Our Mission To promote integrity and transparency at all levels of New Jersey government by auditing government finances, examining the efficiency of government programs, investigating misconduct by government officers, scrutinizing the legality of government contracts and recovering improperly expended Medicaid funds .
New Jersey Office of the State Comptroller Our Responsibilities • Audit and assess State government entities’ and local government units’ performance and management of programs and the extent to which they are achieving their goals and objectives • Scrutinize government contracts; and • Investigate and uncover misconduct, waste and abuse at all levels of New Jersey government and within New Jersey’s Medicaid program.
New Jersey Office of the State Comptroller Audit Division - responsible for conducting audits and reviewing the performance of the executive branch of state government, public institutions of higher education, independent state authorities, local governments and school districts. Procurement Division - reviews the legality of public contracts involving school districts, counties, municipalities, state agencies, state authorities, local authorities and public institutions of higher education. Medicaid Fraud Division - detects, prevents and investigates waste, fraud and abuse in the Medicaid, New Jersey Family Care and Charity Care programs. The division also recovers improperly expended Medicaid funds, reviews the quality of care given to Medicaid recipients and excludes or terminates providers from the Medicaid program when necessary.
New Jersey Office of the State Comptroller History of the Investigations Division: OIG Abolished and Duties Transferred to OSC • 2010: Office of the Inspector General (OIG) was abolished and all of the duties, powers and functions of that office were transferred to OSC. • References in the statute or other documents to the OIG are now incorporated into our powers within OSC. N.J.S.A. § 52:15C-21 OIG OSC
New Jersey Office of the State Comptroller Powers of Investigations Division • Power to conduct investigations, reviews and evaluations; • Must do so in accordance with prevailing national standards; • Power to compel appearance and testimony by subpoena; • Power to compel production of documents by subpoena; • If subpoenaed to provide testimony, individual has right to be accompanied by counsel and shall be entitled to all due process rights. N.J.S.A. § 52:15B-8. Powers of the Inspector General
New Jersey Office of the State Comptroller Sources of OSC Investigations The Investigations Division receives tips, allegations and referrals from a variety of sources, including: • OSC Hotline – Government Waste and Mismanagement Hotline • Referrals from other state or local government units • News media or public reports • Proactive investigations
New Jersey Office of the State Comptroller Government Waste and Mismanagement Hotline • OSC investigators field and review all tips. • Tips come from the general public and from government employees. • Tips are received by phone, via email or through the mail. • Some tips are fruitful and have led to great investigations, while others may lead to referrals or close-out, if not within our jurisdiction.
New Jersey Office of the State Comptroller Considerations for Further Investigation • Public actors • Public funds • Jurisdiction • Other investigations or litigation • Political/policy issues • Timeliness • Resources
New Jersey Office of the State Comptroller Authority to Refer Complaints • OSC is authorized to refer complaints received that allege criminal conduct to the Attorney General or other appropriate prosecutorial authority. • In the course of conducting audits, investigations, and performance reviews, OSC may also refer matters for further civil, criminal, and administrative action to the appropriate authorities. N.J.S.A. § 52:15B-11
New Jersey Office of the State Comptroller Close-Out / Referral Letter • Acknowledgment letter • Acknowledgment letter and notice of referral (e.g. Sandy Task Force, DCA/LGS, IG, etc.)
New Jersey Office of the State Comptroller Significant Referrals Newark Watershed Conservation and Development Corporation The former executive director of the Newark Watershed Conservation and Development Corporation… “ admitted accepting approximately $999,000 in kickback payments…” pleaded guilty to… wire fraud and subscribing a false tax return for the year 2012…
New Jersey Office of the State Comptroller Wire fraud charge = maximum potential penalty of 20 years in prison Filing a false tax return = maximum potential penalty of 3 years in prison Both charges are punishable by a fine of $250,000 or twice the amount of the pecuniary gain or loss from the offense. Sentenced in 2017 to more than 8 years in prison.
New Jersey Office of the State Comptroller NWCDC: Convictions Still Ongoing Sentencing pending for a consultant to the NWCDC who pleaded guilty to wire fraud and faces up to 20 years in prison for her role in the scheme.
New Jersey Office of the State Comptroller Investigative Tools and Resources • Document Request • Subpoena • Interviews • Database Searches (Clear, MVC, Wages, Pensions, etc) • Social Media/Internet Searches • Surveillance • Site Inspections
New Jersey Office of the State Comptroller Cooperation with OSC by State agencies OSC is authorized to call upon any department, office, division or agency of State government to provide such information, resources, or other assistance necessary to fulfill the duties and functions and responsibilities of OSC under this act. Each department, office, division and agency of this State shall cooperate with OSC and furnish the office with the assistance necessary to accomplish the purposes of this act. N.J.S.A. § 52:15B-6
New Jersey Office of the State Comptroller Report of findings, recommendations OSC shall report the findings of investigations performed by the office, and issue recommendations for corrective or remedial action, to the Governor, the President of the Senate and the Speaker of the General Assembly and to the entity at issue. OSC shall monitor the implementation of those recommendations. N.J.S.A. § 52:15B-15
New Jersey Office of the State Comptroller Investigations Division Reports
New Jersey Office of the State Comptroller Findings/Recommendations • NJSFA and the LRAs Accumulated Nearly $245 Million Due to Antiquated Statutory Restrictions that Limit How the Funds Can Be Spent • A Lack of Oversight and Internal Controls By NJSFA Resulted in Questionable Relief Payments • Some LRA Officers Signed Their Own Relief Checks Because NJSFA Did Not Have a Written Recusal Policy to Guard Against Abuse • Little to No Oversight By Any State Agency • Referral to Legislature to Amend Statutes • Recommendations to NJSFA to tighten controls
New Jersey Office of the State Comptroller Municipal Tax Assessors: Conflict of Interest • Referral from a criminal agency • Conflict arose if Tax Assessor also worked for the revaluation firm hired by municipality to perform the revaluation • Existing law did not prohibit this dual employment • Interviewed Division of Taxation and Local Government Services • Issued Letters with Recommendations to both agencies
New Jersey Office of the State Comptroller Low Income Home Energy Assistance Program
New Jersey Office of the State Comptroller FINDINGS / REFERRALS LIHEAP is a federal program administered by the State that provides home energy assistance to qualified residents. NJ received over $250 million in LIHEAP funding during the two year period reviewed by OSC. OSC reviewed a sample of LIHEAP applications that were processed by a non-profit agency. OSC uncovered the following due to a lack of proper oversight by the Department of Community Affairs: - Applicants who underreported income earnings by over $10,000 - Three public employees who earned in excess of eligibility requirements and who failed to report secondary income Over 30 applicants with invalid social security numbers, a prerequisite to eligibility - SSNs associated with deceased applicants - SSNs that did not match up with applicants name and/or DOB Resulted in referrals to DCJ and DCA
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