Auditor demands repayment of misspent welfare money

 

Demands were served this week for more than $77 million of misspent welfare money. The funds were from the Temporary Assistance for Needy Families fund.

The people who signed off on the illegal spending — like former Department of Human Services Executive Director John Davis, of Brookhaven, along with vendors who were paid yet failed to do the work required — received these demands.

“Two years ago my office audited DHS,” said State Auditor Shad White. “After two years of work, we found tens of millions of dollars in misspending. Those findings have now been confirmed, this month, by an independent forensic audit commissioned by DHS. It’s time for the taxpayers to attempt to recover what we lost.”

DHS’s forensic audit, conducted by an outside independent CPA firm from Maryland, released its findings Oct. 1.

“After our first DHS audit, I told the public we would have to consult with our federal partners at the Department of Health and Human Services before coming to final conclusions about who owed what money back,” White said. “Those partners were waiting for this forensic audit. Now that it’s complete, we are in a position to demand the illegally spent welfare funds be returned to the state.”

Davis was issued a demand for $96.313 million, including interest, for his role authorizing more than $77 million in illegal spending. He is currently awaiting trial on embezzlement charges. Though Davis took his direction from then-Gov. Phil Bryant, who hired Davis in 2016, auditors have not placed any culpability on Bryant.

Two nonprofits, the Mississippi Community Education Center and the Family Resource Center, either misspent or improperly dispersed portions of that $77 million, meaning the money was ultimately misspent by a vendor to the nonprofit. As a result, the board and leadership of MCEC were served with a demand for $68.159 million and FRC’s board and leadership were served with a demand for $15.549 million.

Auditors issued additional demands to vendors who received monies but did not completely fulfill the terms of their contracts:

• Ted Dibiase Jr. — $3.903 million
• Favre Enterprises, along with Brett Favre and Robert Culumber — $828,000
• The Marcus Dupree Foundation, controlled by Marcus Dupree — $789,534
• Heart of David Ministries, controlled by Ted Dibiase Sr. — $722,299
• JTS Enterprises and Transformational Ventures, controlled by Brian Jeff Smith — $674,715
• Austin Smith — $378,791
• NCC Ventures, controlled by Nicholas Coughlin — $237,915
• Brett Dibiase — $225,950
• Warren-Washington-Issaquena-Sharkey Community Action Agency, along with leaders Jan Vaughn, Jannis Williams, Janice Jelks and Delinda Robinson — $75,261
• Zach New — $74,118 (payments received from FRC)
• Nancy New — $2,589 (payments received from FRC)
• Former DHS Deputy Director Jacob Black — $1,824 (unallowable first-class air travel)

These individuals are liable jointly and severally for the demands, meaning the individuals share responsibility for repaying portions of the total amount along with Davis.

If the demanded amounts are not repaid within 30 days, the Attorney General’s Office is responsible for enforcing the demands in court. These demands are civil in nature, not criminal, which means they do not imply criminal liability.

“I’m grateful that DHS Director Bob Anderson has worked with the Attorney General’s Office to hire an attorney to recover these funds,” White said. “These demands serve as the next step in the recovery process. If there is more money that the Attorney General believes has been misspent than what we have identified in these demands, we stand ready to help them investigate if needed. More demands are possible.”

No comments were made by White regarding ongoing criminal investigations.