State Auditor Stacey Pickering Reports Fraud, Waste, and Abuse at Mississippi Auctioneer Commission and Board of Cosmetology

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JACKSON, Miss. – On Tuesday, January 16, 2018, State Auditor Stacey Pickering released two compliance audit reports detailing fraud, waste, and abuse at the Mississippi Auctioneer Commission and Mississippi State Board of Cosmetology. The scope of the audits included Fiscal Years 2015-2017 for the Mississippi Auctioneer Commission and Fiscal Year 2016 for the Mississippi State Board of Cosmetology. Executive Summaries of each report may be found online at the OSA website.

Mississippi Auctioneer Commission
This audit report, which can be found online at the OSA website , identified and detailed several egregious instances of noncompliance with state law and need for internal controls to provide accountability. Notably, Pickering and his staff found excessive amounts of in-state travel reimbursements to the Executive Director. Often, she was reimbursed for travel expenses during the same time period she advertised to be available to meet with clients of her personal business; no personal or medical leave was recorded for the Executive Director during this time or any other time within the scope of the audit. Additionally, several purchases, personal in nature, were made using the procurement card for the Mississippi Auctioneer Commission.
The Mississippi Office of the State Auditor also found that the Board of Commissioners did not meet with regularity or in accordance with State Law and did not exercise any oversight over day-to-day operations of the Commission.

Mississippi State Board of Cosmetology
This audit report, which can be found online at the OSA website , showed alarming practices that have resulted in fraud, waste, and abuse. Checks and cash payments for cosmetology licenses – some nine months old – totaling in excess of $360,000 in value, which had neither been processed nor deposited, were left unsecured in the State Board of Cosmetology office. Several checks were returned due to non-sufficient funds after the delay between receipt and deposit by the Board, and cash received by mail was not recorded. Records of license renewals were severely backlogged and members of the Board of Directors had little oversight on daily operations of its employees. The Board’s procurement card was used for operating expenses, and a large balance was held; this resulted in interest and late fees being charged to taxpayers.

State Auditor Stacey Pickering supports the creation of an “Office of Shared Services” to remove the daily accounts receivable and payable functions from smaller Boards and Commissions in the State of Mississippi. Mississippi House Bill 1058 , authored by Representative John Read, stands to serve that purpose. “I appreciate the efforts of Governor Bryant to continue to lead the charge to reduce government waste,” said Pickering.

***Note: Both cases have been referred to the OSA Investigative Division.

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