Audit Slams Oxendine’s Special Fraud Program

February 10, 2010 0:54 am

by Icarus · 43 comments

In a January 2008 report obtained by Peach Pundit, the Georgia Department of Audits has slammed John Oxendine’s Special Fraud Program, noting that only a small percentage of reported fraud cases are investigated in a timely manner, and “very few” are ever prosecuted. The audit found that over two-thirds of the cases under investigation were closed due to the statute of limitations expiring, and less than ten percent were referred on for criminal prosecution.

The program was created by statute in 1995 with the express intention that “proper investigation of fraudulent insurance acts, followed by vigorous prosecution of insurance fraud” would reduce premiums. And our current commissioner would have us believe that is occurring, given his frequent appearance in front of any news camera rolling to cover a suspicious fire.

But when the cameras are off, so is the investigative heat. The audit found, among other problems, the failure of the department to ensure that cases were investigated in a timely manner, action had not been taken to ensure that the investigators focus their efforts on their most significant cases, and that the department had no formal goals, objectives, and performance standards to monitor the Program’s efficiency and effectiveness.

While the audit questioned the ability of the unit to effectively investigate and resolve cases, it also found that charges billed to the Special Fraud Program often had no relation to the program itself. The audit concluded that Oxendine had charged $343,000 of his office overhead had been allocated to the unit, when $125,000 should have been an appropriate number. $69,000 of $86,000 in travel costs billed to the unit had no direct relation to employees assigned to the unit, and $14,000 of $69,000 in contract fees and per diem expenses from the program appeared to be improperly charged. Thus, the financially squeezed fraud unit’s funds were redirected to cover other expenses within the Department of Insurance instead of spent on investigating cases to prepare them for prosecution.

But despite any objective measures to quantify success, Oxendine’s office response to the audit included the following:

“Based on the amount of restitution ordered, indictments obtained, and the limited occurrence of financial fraud since inception, the program has been successful, and has been a valuable service to the citizens of this state.”

Over two thirds of cases closed by statute of limitations. Less than ten percent of reported fraud referred for criminal prosecution. Resources diverted to pay for the overhead of the remainder of the Department of Insurance. And without any objective measures in place, Oxendine deems himself a success.

An actual analysis with quantifiable benchmarks indicates that at least the Special Fraud Program falls short. Oxendine should have spent a little less time chasing cameras in front of fires, and a little more time ensuring that those under his charge investigating suspicious fires were actually doing their job.

Tyler February 10, 2010 at 12:56 am

So the Georgia Department of Insurance lacks internal control, much like its Commissioner.

HowardRoark February 10, 2010 at 5:07 pm

Would you say it lacks focus, aim, and/or a targeted approach? I do get the feel things are a bit scattered over there. Indeed, more safety procedures should be taken. I hope the next Ins Commissioner will attack this with both barrels.

polisavvy February 10, 2010 at 6:12 am

So, the “Tagged as” words say volumes.

Mozart February 10, 2010 at 12:10 pm

That is Icarus’s personal choice of words to tag it as, Poli.

polisavvy February 10, 2010 at 12:13 pm

Once again, you missed my point. I completely understand the concept of “tagged” words. Nothing more to say.

Mozart February 10, 2010 at 5:57 pm

How can we possibly banter if we keep missing each other’s points, Poli?

polisavvy February 10, 2010 at 6:07 pm

I know, right? Strange how we have seemed to have connected, isn’t it? You literally crack me up!

NorthGAGOP February 10, 2010 at 7:50 am

Any of the $69,000 in travel expenses cover trips to Alabama?

Mozart February 10, 2010 at 8:06 am

Apparently the Department of Audits is run by the lib’rals.

fishtail February 10, 2010 at 8:54 am

The Department of Audits is run by Sonny, and we all know who he is backing.

I Am Jacks Post February 10, 2010 at 9:26 am

Hey, did you hear the one about the self-proclaimed “grassroots candidate” running for Secretary of State who hadn’t voted in a GOP primary in almost 20 years?

It gets better: he didn’t even vote in the primary that served to create the city council on which he serves.

If this site served as anything other than a “Ox attack/Handel will save the Republic” blog, that news would’ve been on the front page Saturday evening. But as the saying goes, “The keyboard is mightier than the sword, but those front page posters who wield the keyboard while serving as paid consultants are the mightiest of all.”

Icarus, I’ll hang up now and listen to your response.

Mozart February 10, 2010 at 9:31 am

“Voting” in any primary is not a prerequisite for running for office. Or did the legislature secretly slip that requirement into Georgia law?

I Am Jacks Post February 10, 2010 at 9:50 am

That’s some solid detective work, Mozart.

No, of course you can pass on 20 years of GOP primaries and still choose to run for office. But to do so while selling yourself as the “grassroots candidate” A. makes you look like an idiot and B. demonstrates precious little–if any–involvement in party politics.

Think it through again–the dude couldn’t even bring himself to vote in the primary that allowed for the creation of the very city in which he lives and on whose city council he serves.

We’ve seen this crap before. Guys who begin voting conservative the year before they choose to run for office and candidates who begin showing up at local party events the year before they choose to run for office. Now we’ve got a guy who voted in his first GOP primary in 20 years the year before he decided to run for office.

Ken in Eastman February 10, 2010 at 10:03 am

IAJP,

This seems like a pretty important piece of information. could you share the name or even initials of this _____-come-lately to voting Republican?

Inquiring minds want to know.

Doug Deal February 10, 2010 at 10:17 am

To be honest, seeing the people who rise in party politics and how they rise, avoiding it could be considered a positive attribute.

I Am Jacks Post February 10, 2010 at 10:20 am

Doug, that’s just the sort of answer I expected from someone who posted, “I was totally and utterly undecided about this race but now I’ve sworn my undying allegiance to Doug MacGinnittie because I’m certain Doug would’ve passed up the SOS appointment had Sonny offered it to him because the dude is brimming with integrity and he loves the grassroots.”

Doug Deal February 10, 2010 at 10:24 am

So you are a liar. If you are going to quote someone, quote them, not make up BS and attribute it to them.

Doug Deal February 10, 2010 at 10:25 am

Of course this is the type of behavior one would expect from a supporter of someone with such little moral character as Kemp. “Birds of a feather flock together” is how the expression goes.

Ken in Eastman February 10, 2010 at 10:40 am

Guys, please!

IAJP,

I really would like to know the answer to my question.

Thanks!

I Am Jacks Post February 10, 2010 at 10:55 am

Ken,

Doug MacGinnittie

Kellie February 10, 2010 at 10:57 am

can’t we all just get along? ;-)

polisavvy February 10, 2010 at 11:11 am

Apparently not. They want to say women are catty, but dang that’s not the case here, right? ;) Such sniping!!

Mozart February 10, 2010 at 12:11 pm

+50 points to Mr. Deal.

Ken in Eastman February 10, 2010 at 12:16 pm

IAJP,

Thanks for the info. That is very interesting, indeed – as it would be no matter who was involved.

Mozart February 10, 2010 at 12:25 pm

Detective work? Hardly. It’s called common sense.

HowardRoark February 10, 2010 at 4:59 pm

I’ll just say…frankly I don’t care. I don’t like it, but I don’t mind it. We need less people like Brian Kemp in office. Pardon Doug MacGinnitie if he hasn’t spent his entire life angling for the governor’s mansion.

Brian is probably just mad Doug didn’t vote for him for Ag Commish in ’06.

a February 10, 2010 at 6:28 pm

[sorry--correct thread]
You’re right…it would be news–except it isn’t correct. When Sonny’s boy made it his first priority during his 3 weeks in the SoS’s office to snoop around his opponent’s voting record, he must have found spelling all four of those syllables correctly too much. If he’s going to sling mud, he should at least get his facts right. The fact that he bothers tells you he’s running scared, even with the leg up from the Guv.

Icarus February 10, 2010 at 9:35 am

Icarus is on the road, and under the weather.

Regular programming will resume soon, and this one is near the top of my list.

Ken in Eastman February 10, 2010 at 9:39 am

I hope you feel better soon, Charlie.

NorthGAGOP February 10, 2010 at 9:30 am

I know there are a lot of Ox attacks, am I missing the Handel will save the world posts?

I Am Jacks Post February 10, 2010 at 9:51 am

Then you’re not paying attention.

David Staples February 10, 2010 at 11:29 am

While I suppose yes, the content you see on PP does reflect the dictionary definition of attack, I don’t know that I’d call what you see here an attack. More of an enlightening. We’re just all trying to see Ox’s true character. We can’t help that he has such a negative character. :-)

I Am Jacks Post February 10, 2010 at 11:48 am

Understood.

Let me rephrase: Regarding the candidates for governor, the opinion items (masquerading as news items) posted on the front page serve solely to promote Karen Handel or criticize the other candidates.

Sure, once in awhile someone posts a moderately positive item about Austin Scott, but that’s the exception, not the rule.

polisavvy February 10, 2010 at 12:09 pm

I guess some feel that the election is already etched in stone. I, for one, do not.

I Am Jacks Post February 10, 2010 at 3:47 pm

I refer you to today’s front page.

AlanR February 10, 2010 at 2:09 pm

Is it an attack if its true?

This report is dated January 2008. Icarus probably got it at the library. Its a pretty cold description of the program. This report is not an attack on anyone’s character. It is a audit report that describes the management of a department of a state agency. Its dead cold.

The non prosecutions look like a way to handle junk cases without investing time and money, unless they track on campaign contributions. The accounting practices are very bad. Something like this at a publicly owned company would likely cause a lot of heart ache.

Republican Lady February 10, 2010 at 9:02 pm

What if Ox got elected (nightmare) and brought those accounting practices to the governor’s office? You think we have budget problems now? According to the audit, he would brankrupt the state and we might never recover.

There is no excuse for any office being so inept, public or private, and especially on the scale of the governor’s office.

polisavvy February 10, 2010 at 9:05 pm

Amen, Republican Lady, amen. Could you imagine him as Governor? What a big mess that would be!! I totally agree with you.

aquaman February 10, 2010 at 2:33 pm

I’m no fan of the Ox but the Department of Audits isn’t exactly a crack team with impeccable credentials in forensic accounting and insurance fraud investigation. One “auditor” I had some dealings with had a degree in ‘Sports Promotion” whatever that is and was just doing the audit gig until a real job came along. If it was known or even suspected that Ox was going to run for governor before this audit was done it could well be a hack job.

a February 10, 2010 at 6:23 pm

You’re right…it would be news–except it isn’t correct. When Sonny’s boy made it his first priority during his 3 weeks in the SoS’s office to snoop around his opponent’s voting record, he must have found spelling all four of those syllables correctly too much. If he’s going to sling mud, he should at least get his facts right. The fact that he bothers tells you he’s running scared, even with the leg up from the Guv.

Mozart February 10, 2010 at 6:48 pm

That is an interesting point. If the only “dirt” the Kemp Boys can dig-up on their opponent is that he didn’t vote in primaries, I doubt that’s going to fly much further than the fan it hits.

polisavvy February 11, 2010 at 8:37 am

While I’m not sure that this will make it on here today, perhaps you could enlighten yourselves about the new legislation that Representative Scott has introduced. It can be found at SWGA. Makes sense to me.

polisavvy February 11, 2010 at 8:53 am

As an aside, it is not a “publicity stunt.” In my opinion, and for whatever it is or is not worth, something needs to be done about this very issue. It’s a start to the correcting of a problem.

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