SUN HERALD | Editorial: Federal audit of DMR paints picture of conflicts of interest, mismanagement

June 22, 2013 

For months, the headlines have marched across the front pages of the Sun Herald. "Federal auditors question DMR land buys." "$210,000 from DMR buys Walker's son's land." "Foundation fleet: DMR pours more than $1.4 million into recreational fishing boats." "Connections: Neighbors, relatives and politicians land DMR jobs." "DMR charters fishing trips for lawmakers, others."

The stories saddened some, angered others.

Each story took our reporters and readers deeper into the inner workings of the Mississippi Department of Marine Resources.

But none captured the DMR in full.

Then Wednesday, we reported on the two-month assessment of the DMR conducted by Horne CPAs & Business Advisors. The assessment was commissioned by DMR Executive Director Jamie Miller, who said of the findings, "Clearly there is an environment and culture at MDMR that is susceptible to fraud, waste and abuse, which must be changed."

The Horne report described nothing less than a public agency gone rogue.

And today we provide extensive coverage of a federal audit of one of the DMR's primary sources of grant money, the Coastal Impact Assistance Program.

According to the audit, the DMR has moved well past being "susceptible" to misconduct and is "rife" with waste of public funds and abuse of public trust.

So Miller had good reason to say last week, "We have been living in a false economy and certainly for the past five years we have not represented our finances in an accurate and honest way, in my opinion."

Miller's opinion is validated by the preliminary findings of the audit of CIAP in Mississippi by the Office of Inspector General of the U.S. Department of the Interior.

The audit found "significant deficiencies" in the management of CIAP grants by the federal Bureau of Ocean Energy Management, Regulation and Enforcement and the DMR, such as:

n Grants approved that did not meet criteria in CIAP legislation.

n Widespread conflicts of interest at DMR in the administration of CIAP and land purchases.

n Improper land appraisals that diminished CIAP's impact.

n Circumvention of sole-source procurement regulations.

n Improper charges to CIAP grants.

n Improper use of equipment.

n Various accounting, payroll and financial issues.

The federal audit connects many of the dots that have been floating around since the Sun Herald first reported in October that the DMR had become the focus of state and federal investigations.

And the audit expands the range of the repercussions of state and federal mismanagement of this multimillion-dollar grant program to such Coast institutions as the Infinity Science Center in Hancock County, the Institute for Marine Mammal Studies in Gulfport and the Ohr-O'Keefe Museum of Art in Biloxi.

The draft audit is not the final word on the matter. Typically, those mentioned in a draft are given the opportunity to respond to problems found by the audit before a final audit report is issued. That report is expected this summer, Miller said.

After that report is issued, state and federal agencies will develop a plan for various corrective actions if necessary, said Dr. Moby Solangi, IMMS president and executive director.

Considering how gut-wrenching these initial findings are, those corrective actions should be considerable.

As noted in the audit, CIAP provides grant funds derived from federal offshore lease revenues to oil-producing states for conservation, protection or restoration of coastal areas, wildlife and natural resources.

Yet millions of those dollars were squandered by derelict public officials at both the federal and local levels of government.

According to the inspector general's report, the DMR, along with Hancock, Harrison and Jackson counties, were awarded 100 CIAP grants totaling $99.8 million from fiscal year 2009 through fiscal year 2012. But because of poor oversight, grant recipients were able "to operate in an environment rife with conflicts of interest, with no assurance that many of the grants issued in Mississippi were used for intended purposes or benefitted the general public.

"In fact, of the almost $39 million in our sample representing 57 grants, we question approximately $30 million" as being either ineligible or unsupported, or which could have been put to better use.

So now what?

At the federal level, we trust appropriate action will be taken to ensure grants are properly monitored and managed.

On the Coast, Bill Walker, the DMR executive director during the period covered by the audit, was fired months ago. Tina Shumate, the DMR's CIAP director, resigned soon afterward.

But somehow the members of the Commission on Marine Resources, which oversees the DMR, continue to comfortably conduct their monthly meetings. Can CMR Chairman Vernon Asper and his colleagues on the commission possibly weather the fury that should be whipped up by this federal audit?

There are also the trustees and managers of the institutions that received and misused CIAP funds. What measure of accountability is to be exacted from them?

And the biggest shoe has yet to drop: the findings of the state Auditor's Office and the FBI.

As for the day-to-day operations at the DMR, we commend those employees who continue to perform their duties honorably under extremely difficult circumstances.

Their boss, Jamie Miller, knew DMR was a mess when he accepted the position. Now he has a much better idea of how scandalous the situation had become.

Miller now has an assessment and an audit that clearly identify problem areas at the DMR and solutions to correct them.

It is not a job we envy. But it is a job that must be done.

This editorial represents the views of the Sun Herald editorial board,which consists of President-Publisher Glen Nardi,Vice President and Executive Editor Stan Tiner,Vice President and Chief Financial Officer Flora S. Point,Audience and Human Resources Director Wanda Howell,Marketing and Interactive Director John McFarland and Associate Editor Tony Biffle. Opinions expressed by columnists, cartoonists and letter writers are their own.

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