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Audit finds weak NDOT spending controls

CARSON CITY — An audit of the state Department of Transportation found that weak controls over procurement of supplies resulted in a case where a stockroom employee made $250,000 in fraudulent purchases over a four-year period.

The employee was able to engage in the fraud because there was no supervisory review required for the purchases.

The agency also does not ensure that accounts held by former employees are disabled, and does not conduct criminal background investigations on all staff occupying sensitive positions, according to the audit by the Legislative Counsel Bureau audit staff.

While the department has proposed changes to its procurement card process, those changes had not been formally incorporated into its policies 11 months after the fraud occurred, the audit said.

The audit, covering 2013 and 2014, was reviewed and accepted Tuesday by the Legislative Commission’s Audit Subcommittee.

The agency accepted all eight recommendations made by audit staff and said in a response that it has already taken action to address the concerns.

The agency employee involved in the fraud was from Fallon and pawned the purchases to support a gambling habit, officials said. He pleaded guilty to a felony count of fraud in November 2014.

Contact Capital Bureau reporter Sean Whaley at swhaley@reviewjournal.com or 775-687-3900. Find him on Twitter: @seanw801.

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