Federal audit finds millions in grants misspent at MDMR
Published: July 2,2013
BILOXI — A federal audit has found millions in grant money administered by the Mississippi Department of Marine Resources was misspent.
The government said MDMR and the counties of Hancock, Harrison, and Jackson were awarded 100 Coastal Impact Assistance Program grants from the U.S. Department of Interior totaling $99.8 million from fiscal year 2009 through fiscal year 2012.
The report from the Office of Inspector General says $39 million, which represents 57 percent of the grant projects approved, did not meet the criteria of CIAP.
The audit began after the U.S. Fish and Wildlife Service took over the CIAP program in October 2011 from the Bureau of Ocean Energy Management, Regulation and Enforcement.
The final report provides 37 recommendations to help FWS eliminate program deficiencies.
There is an ongoing state investigation into MDMR’s business affairs in addition to the federal probe.
Questions about the mismanagement of MDMR led to the firing of executive director Bill Walker on Jan. 15.
MDMR executive director Jamie Miller said Monday he is glad to have the final audit report.
“I’m just glad it’s out,” he said. “Many of those issues and concerns were not surprises. We can now move forward correcting issues identified by the OIG in our grant administration and oversight.”
A section of the report outlines questionable purchases and management of real property by the MDMR.
It details the $195,000 purchase of Pascagoula property owned by the parents of former CIAP program director Tina Shumate and the $3.7 million purchase of Harbor Landing in Ocean Springs from David Harris, a friend of Walker.
The report also mentions conflicts of interest between Walker and his wife Sharon, who has been employed by two major sub-grantees — the University of Southern Mississippi and the Institute for Marine Mammal Studies.
Walker’s son, Scott, served on the board of trustees of the Nature Conservancy, which was the recipient of grants, another conflict of interest. MDMR also used CIAP funds to purchase property owned by Scott Walker.
“Conflicts of interest within the Mississippi DMR have marred the program and the public’s perception of CIAP,” the report states in its conclusion. “Improper land appraisals have undermined CIAP’s intended impact of protecting environmentally fragile coastal areas and communities.
“In areas of procurement and accounting, sole-source regulations were circumvented; unallowable … and unreasonable charges were allowed to be made on certain grants; and equipment purchases and other financial issues were mishandled.”
It also concluded that failure to act on the report’s recommendations “could further undermine CIAP and open the door to fraud, waste and mismanagement of millions of dollars of federal funds meant to conserve, protect and restore American coastal areas, wildlife and natural resources.”
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