WEST VIRGINIA RECORD

CHARLESTON -- An audit of the Attorney General's office shows that the former attorney general reimbursed more than $54,000 to employees for educational expenses, including nearly $21,000 to State Supreme Court Justice Allen Loughry.

Loughry's educational reimbursement was from when he was pursuing a graduate law degree from American University while he was employed by the West Virginia Attorney General's Office when Darrell McGraw was the AG.

Another employee was reimbursed for tuition in the amount of $26,524 over a two-year period and the most recent employee was reimbursed $6,698.69 in 2012 for tuition and fees for attending an in-state university, according to an audit performed by the Post Audit Division of the State Legislative Auditor.

"The employee assistance was not reported as a taxable fringe benefit on the employees' W-2 Wage and Tax Statement as far back as 2004," the audit states. "However, we were unable to determine if the educational expenses were included as a taxable fringe benefit for the employee from 1999."

The audit states that it is possible the agency did not pay the required employment taxes on the wages and the employees may have under paid their Federal and State taxes.

The audit says no written, established educational assistance program existed.

"The current administration is not providing tuition reimbursement or tuition payments for any employee, therefore, the issue with not exist moving forward," said current Attorney General Patrick Morrisey in his office's responses to the audit findings. "However, in response to the audit finding, the CFO and an attorney with employment law experience will perform a review to determine whether or not corrected W-2's will need to be filed with the IRS."

Loughry, who won the seat on the Supreme Court in 2012, worked for the Attorney General's Office from 1997 until 2003.

"The AG's office at that time had excellent people and I’m sure they crossed every 'T' and dotted every 'I'," Loughry told the Charleston Daily Mail.

The audit was requested by Morrisey after he took office in 2013.

The auditor's tested 343 transactions on purchasing cards totaling $55,690.60, out of 429 transactions totaling $68,198.29.

There were transactions at Sensel Signs, Tiger Direct, Lowe's, Amazon, Wal-mart, Xyron, Nuway Cleaners, Pennington's Auto Care, The Paint Shop, Classic Chocolates, Young's Flowers, Office Max, Dick's Sporting Goods, among others.

"Additionally, we inquired about items we considered to be unusual purchases or higher priced," the audit states. "The WVAGO was unable to determine why 2 catalytic converters or 2 copies of Rosetta Stone had been purchased during our audit period. They were also unable to locate a Canon EOS Rebel T2I DSLR camera that was purchased for $579.99."

During the audit period, there were $35,270.42 in fuel purchases, according to the audit.

Fuel cards were not assigned to individual employees or to vehicles, rather, they were kept by the WVAGO Division Office Managers to be given to an employee on an "as needed basis."

Vehicle logs and mileage forms were not properly completed with employee names or the reason for travel, according to the audit.

"We were unable to determine if fleet expenditures totaling over $35,000 were legitimate State expenditures for the benefit of the WVAGO," the audit states. "The possibility exists that the fuel cards and/or vehicles could have been misused."

During the audit of travel expenses, the auditors noted that 18 transactions totaling $45,803.35 out of 36 transactions totaling $53,370.61 tested did not comply with the WVAGO's travel regulations on file with the West Virginia Secretary of State.

More than $11,000 in expenses during the audit period were misclassified, according to the audit.

Morrisey stated in his office's responses that the WVAGO has taken steps to eliminate the causes of the findings and will "continue to develop practices that improve the integrity of monies we manage."

"We appreciate the service performed by the West Virginia Legislative Auditor's Office," he wrote.

The audit was for the period of July 1, 2011, through Jan. 14, 2013.