SALISBURY – Officials in Wicomico County this week accepted a forensic investigative report on a potentially fraudulent letter that supports a pay raise for a county employee, but will take no further action on the matter.
In a legislative session of the Wicomico County Council Wednesday, James Kern, a certified public accountant and fraud examiner with Gross Mendelsohn & Associates, presented inconclusive findings to an investigation that was requested by the council and internal auditor.
According to the report, the county’s external auditor, PKS & Company, discovered the potentially fraudulent letter addressed to County Executive Bob Culver in a county employee’s personnel file while performing payroll testing. The contents of the letter, dated Nov. 19, 2015, state the salary ranges for an undisclosed position at nearby facilities and recommended a pay raise for a county employee’s position. Though the letter appears to be sent from the director of finance, typed signatures of the director of finance and another county employee had been redacted. On that same letter, Culver approved a lower pay rate increase for the position and signed off on the raise.
Kern said the document stood out to external auditors for a number of reasons. For example, the letter was not typed on Wicomico County letterhead, the signatures were produced electronically, and the electronic signature for the director of finance did not contain a middle initial, which was usually present in that person’s signature.
“These are red flag indicators of a potential fraudulent document,” he said.
Kern said Culver confirmed that the signature and notations made on the document were in fact his, but when the letter was presented to the director of finance, Kern said that person denied having written the letter or researching salary information for the position.
“The director of finance expressed an extreme concern as to what other documents may have been written and signed representing the Wicomico
County director of finance without the director’s knowledge, stating that this was a very serious matter that needed to be addressed” he said.
Kern said he and the internal auditor attempted to interview the county employee about the letter earlier this year, but discussions were curtailed when the department supervisor and Culver came in and ended the meeting.
Though agreements were made through the county attorney to resume interviews with county employees at a later date, a later email from the attorney stated that Culver had told employees not to participate in the interviews.
Culver later stated in the report that the external auditor had investigated the matter and was ruled a personnel issue, not fraud.
Councilman Joe Holloway asked if it was common for employees to not cooperate in this type of investigation.
Kern replied that the response was not common.
“I usually do obtain cooperation from the administration in order to conduct the interviews that are necessary to obtain factual information to come to a conclusion in this type of investigation,” he said.
In a separate interview, Council President John Cannon said Kern’s report made it clear that the investigation had concluded.
“Even if it were to continue, the investigation could have been compromised,” he said.
The council voted 6-1, with Councilman John Hall opposed, to accept the report. Prior to hearing Kern’s report, Hall made a motion to move the presentation to a closed session to discuss what he believed to be a personnel matter, but the motion was not seconded.