Audit reveals “payroll fraud” for Crescent EMS

A State audit report for the Crescent Emergency Medical Service District shows 10 findings, including payroll fraud and unauthorized sale of an ambulance. Now, according to audit papers, the Logan County District Attorney will be consulted regarding possible criminal charges.

Earlier this month, the Crescent EMS district announced for the second time in several months that the ambulance service would no longer serve their district due to funding. Related story: Ambulance service expected to stop, again, in Crescent

Last November, the Logan County Board of County Commissioners appointed three new members to the Crescent EMS I-2 Board of Directors after receiving two resignations. Related story: BOCC votes three new members to Crescent EMS board

Currently, the City of Guthrie is responding to medical calls on a mutual agreement in Crescent. A long-term plan has not been revealed at this time.

The audit was for the period of July 1, 2013 through June 30, 2015. The letter is signed on March 2, 2016 by Oklahoma State Auditor and Inspector Gary Jones.

According to the report, the fourth finding is labeled “payroll fraud.” The report shows in June 2015 a check (number 9448) was created and printed in the amount of $1,379.08 at 9:44 a.m. and one minute later the check was deleted in the payroll system and the actual check was “voided.” Payroll information was changed to show 32 hours overtime at the rate of $22.50 per hour.

Check number 9449 was created and cashed in the amount of $1,712.80. On check number 9449 the hours were changed to show no overtime which changed the amount of the check to $1,379.08. The payroll tax report was changed to show the payroll amount of $1,379.08. This kind of fraud can be committed by employees or even owners, whether companies are private or public. This is why it’s so important for any company to hire forensic accounting firms to carry out regular checks to make sure nothing untoward is going on.

This fraud should not be tolerated and it might be in the interest of the organization to implement the top rated scheduling app into their payroll procedures so that clock-ins/outs can be monitored and fraud can be minimized.

The report goes on to state, “we reviewed overtime pay for possible exceptions. One employee’s hourly wage and hours from monthly timesheets were compared to actual amount paid to the employee’s from January 2015 – June 2015. It was noted that the total hours worked (including overtime hours) for the month were paid at regular rate pay and then the overtime hours were paid again at time and half. Resulting in overtime wages being paid twice, once at regular rate of pay and again at time and a half of regular pay.”

In response, the Chairman (name not given) for Crescent EMS states the district has purchased a time-keeping program to properly record payroll, as is done with CloudPay global payroll services.

“Closer oversight by the Board of Directors will be implemented. The Logan County District Attorney will be consulted regarding criminal charges.”

Unauthorized Sale of Ambulance

The second of the 10 findings surrounds the unauthorized sale of ambulance.

It was noted on Jan. 14, 2013 the City of Kingfisher transferred a 1990 Ford ambulance to the district. As inspectors observed inventory, the ambulance could not be found. The report shows investigators interviewed employees and was informed the ambulance had been sold, which no documentation in board minutes indicated the sale. At the time of sale, the title of the ambulance was signed by the Crescent EMS Director.

Investigators said after further review there was no evidence the proceeds from the sale were deposited into the district’s bank account. In addition, no documentation in board meetings indicate City of Kingfisher was offered the ambulance back prior to the sale of the ambulance as required by state statue.

The Chairman for the district responded to the finding by saying, “the person who authorized this transaction is no longer with the service. All future dispositions of assets are to be approved by the Board following state laws.”

Additional findings

The audit shows other findings, including inadequate segregation of duties over inventory (repeat finding), inadequate internal controls over payroll process, inadequate segregation of duties over receipting and reconciliation process (repeat finding), inadequate segregation of duties over disbursements, inadequate internal controls over board meeting minutes, inadequate internal controls over charges for services, inadequate internal controls over contracts and inadequate internal controls and noncompliance over bidding process and lease purchase of equipment.

Investigators said they determined the district’s staff does not follow up with the third party billing service to ensure a second bill is sent if payment has not been received for the previous fiscal year (2015).

After reviewing 25 runs by the ambulance, related receipts and deposits and noted deficiencies, it was found three instances in which a patient was not billed and two instances in which the amount recalculated did not agree to the amount billed for charges for services. In addition, 11 runs were not properly billed and payments have not been received to date and two runs did not have a second billing or authorization from the Board to be written off.

The District’s Chairman responded with, “A new Director has been hired to oversee billing. The Board is currently reviewing previous billing and implementing new procedures to ensure all transactions are accurate.”

According to the audit, the ending cash balance of the fiscal year 2015 shows $114,333 compared to the 2014 fiscal year reporting of $124,916 for the EMS district. View the complete audit