The City of Memphis put itself at “increased risk” of recurring fraud from employees, according to an audit released by the U.S. Department of Justice Tuesday. DOJ found the city violated its policies when it comes to approving overtime pay.
The DOJ audit began after former Memphis Police Lieutenant Mike McCord was arrested for allegedly submitting requests for nearly $5,000 in overtime pay. In October, he was granted diversion, which means his record will be wiped clean if he does not commit any other crimes, DOJ referred to the incident in the report as one of “embezzlement” and went on say “given the prior fraud involving overtime and the creation of guidance designed specifically to address the fraud, the Memphis Police Department should implement its policies as written.”
But the city failed to follow its overtime policies in two ways according to the report. First, auditors found managers were not approving overtime worked by Memphis police officers. Second, investigators found officers submitted requests by initialing them only rather than signing their full names.
The audit was limited to the payment of overtime using federal funds for rape kit testing.
Chief Communications Officer Ursula Madden issued the following statement late Tuesday.
“The Inspector General Audit of the City of Memphis SAKI began in June 2016 and was extremely thorough. The City concurred with the single recommendation of the audit: “Ensure the City of Memphis follows its signature and attestation requirements within its guidance for overtime accountability and documentation.” Specifically, employees were initialing overtime on their time sheets rather using a full signature. The Memphis Police Department also added a level of approval for overtime. Previously, only a supervisor signed off on overtime. Now a manager’s signature is required as well.
Per the corrective action the City committed to taking, MPD issued a memo to all employees with the written policy requirements for overtime signature and attestation requirements. The memo and revised policy were discussed at all MPD roll calls.
Here’s the bottom line: The auditors found that the grant was being managed appropriately and did not identify significant issues. Further, they found that we were making adequate progress on testing consistent with the grant’s purpose. Their finding was based on a previous, unrelated incident of fraud related to overtime, and they found one incident where we didn’t follow the process outlined above.”