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W.Va. ag agency audit finds possible fraud

CHARLESTON, W.Va. — Investigators found “additional instances of possible fraud or abuse” during the final 18 months of former state Agriculture Commissioner Gus Douglass’ tenure, according to a follow-up audit of the state Department of Agriculture released Tuesday.

That includes the questionable spending of $661,790 of federal stimulus funds in June 2011 to install new refrigeration units at the Inwood Farmers Market in Berkeley County.

Auditors concluded that was a bad investment, considering that the farmers market was struggling; it lost an average of $100,000 a year in operating losses for the past six years. Under Douglass’ replacement as agriculture commissioner, Walt Helmick, the department shut down the farmers market in April. The location has since been leased to a private company at $4,000 a month, according to the audit.

“It appears the former administration made a decision to replace the refrigeration units without adequate consideration of cost-to-benefit analysis or alternate uses of the government funds due to tight time constraints,” the audit concluded.

Tuesday’s audit follows up to an audit first released in January that focused primarily on mismanagement, lack of oversight and possible conflicts of interest involving a federally funded $5 million revolving loan program administered by the department.

At the time, it noted that loans were made with little or no collateral, while little effort was being made to collect on 25 of 40 outstanding loans that were delinquent. It also raised concerns that at least two loans were made to department employees, and a third loan went to Douglass’ son, Thomas, for a cattle farm he co-owns with his father.

Tuesday’s audit raised additional issues with the loan program, finding that at least 11 loan recipients failed to provide proof they had been turned down for conventional loans, as required under federal regulations for the Rural Rehabilitation Loan program…

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