More details are available about wasteful spending and financial management problems at the Tucson-based Udall Foundation, an audit report obtained by the Star shows.
Auditors found numerous violations of federal laws and rules from 2006 through 2012 — some of which they believed could be criminal. A letter and presentation from the Interior Department’s Office of the Inspector General were obtained by the Star through the Freedom of Information Act. They were prepared for the Udall Foundation Board of Trustees by the inspector general’s staff after a December 2012 audit.
The problems were first made public last month when the Government Accountability Office (GAO) issued a report on progress made by the Udall Foundation to solve the problems.
The Udall Foundation is an executive-branch agency whose mission includes environmental conflict resolution and tribal policy consulting. Nine of the foundation’s 13 board members are presidential appointees, and the board is responsible for setting internal-control policies.
Through an email from Executive Director Philip Lemanski, the board declined to comment on the reports until the GAO and inspector general issue their final reports. The foundation is implementing its improvement plans, Lemanski said.
The board requested the 2012 audit by the Inspector General’s Office after it “became aware of some questionable actions by its employees that required a more in-depth review,” Deputy Inspector General Mary Kendall wrote in her report.
But her staff didn’t complete the audit, instead turning their findings over to the GAO.
“Because of the potential violations we identified, we chose to terminate our audit so that we would not inadvertently impede any future criminal investigations,” Kendall said in her letter to the board.
Appearance of conflict
“The foundation does not have internal controls to ensure that it follows good contracting practices,” Kendall wrote in her letter to the board.
A senior program manager who awarded and oversaw a contract to his wife’s company violated the standards of conduct for employees of the executive branch and may have violated the criminal conflict-of-interest law, the report says.
Former executive director Ellen Wheeler didn’t report the problems, told workers not to talk to the board about it, and allowed the manager to retire a year later when he became eligible for retirement benefits, the report says.
Wheeler, who now works for Pima County, could not be reached for comment Friday.
The inspectors also found other violations of contracting rules, including some contracts that were changed to pay more than 10 times their original value, to add funds to fixed-price contracts, or to add work outside the original scope of the contract.
JOB HUNTers on payroll
The inspectors found three cases of workers who were paid as Udall Foundation employees while looking for jobs elsewhere.
One employee who was let go “was paid for more than two months to look for another job while not performing any Udall Foundation duties,” according to the report.
Another employee was allowed to look for other work part time while receiving full-time pay for at least six months. After she was let go, “the foundation paid almost $13,000 to move her household goods from California to Virginia,” the report says.
Inspectors also said another worker, who had performance problems for nine years before quitting, was allowed to stay nine months as a contract employee.
In another case, a worker was on paid leave from the foundation while working for the State Department in violation of the Dual Compensation Act, which prohibits a federal civilian worker from getting paid for more than one government job, the report says.
In another case, the foundation violated the rules for early retirement when the executive director eliminated an operations director’s job and terminated the employee, the report said.
The worker was told duties would be divided among other employees and there was no other position available. But that wasn’t true, the inspectors said in the report.
The foundation created two new director jobs to replace the operations director’s job and promoted two employees into those jobs when it could have moved the other employee into one of those positions.
