A state audit has confirmed the key elements of a scandal that tore through the Ohio Bureau of Workers’ Compensation over the past two years, including abuse of power by its chief financial officer, and a lack of proper oversight and internal checks and balances.
State auditors also found during the routine review of operations for 2005 and 2006 that some key financial documents had been destroyed. State Auditor Mary Taylor is asking the bureau to review the situation.
The audit was released today by Taylor, a Republican whose party was toppled from power amid the scandal at the bureau over lost investments....
The audit found:
• Former chief financial officer Terrence Gasper entered into inappropriate relationships with financial managers by accepting cash and other benefits in exchange for business with the bureau, which provides benefits to injured workers. Gasper pleaded guilty in June to accepting bribes in exchange for doling out agency business, and awaits action as he cooperates with authorities.
• Bureau private equity investments were not properly monitored by management, allowing external investment managers to make improper investments. The review found the ability to accurately track investment activity and determine its value was seriously compromised.
• Rate-setting policies for employers seeking injured workers’ insurance were inadequate and lacked oversight. An override policy at the bureau that allowed staff members to change the rates of employers at the behest of some lawmakers is under investigation.
• Communication was lacking between the bureau’s legal and financial staffs, allowing omissions in financial reporting requirements....