MDHS discusses largest embezzlement scheme in state history, upcoming policy changes

MDHS discusses largest embezzlement case in state history, upcoming policy changes

JACKSON, Miss. (WLBT) - It was one week ago that the news broke of what’s been called the largest public embezzlement case in state history.

As a reminder, the scheme includes more than $4.15 million dollars in embezzled government money.

DHS went on camera with WLBT to answer questions about what happened and what they’ve changed to prevent the problem from happening again.

Uncovering the scheme goes back further than you may realize. Executive Director John Davis was two-and-half-years into his time as head of the agency when they decided to add an Office of Inspector General within DHS.

“There really hadn’t been the internal auditing capability, the program integrity ability before that we had at that point that was created,” explained DHS Chief Communications Officer Danny Blanton.

And they did start an internal audit at the beginning of 2019. When it comes to finding the misspending detailed in the indictments, this was the atmosphere at the agency at the time.

“People may have identified or suspected that something was amiss but, because of the atmosphere of fear and intimidation, they were afraid to say anything for fear of losing their jobs,” noted Blanton.

As we reported, the Mississippi Community Education Center or MCEC was a sub grantee receiving TANF dollars that first flowed through DHS. We confirmed that it was John Davis who was making those approvals on the money.

“He had the latitude to unilaterally disperse funds as he felt necessary or wanted to,” Blanton confirmed.

There’s a lot of flexibility given for how states use TANF funds. So,there was nothing illegal about those transfers, only how it was spent after that.

“The complexity of the cover-up was as such that it would’ve been highly unlikely that anybody would’ve uncovered it, except by being able to find it from within,” Blanton said.

After DHS employees reported their findings to the Governor, the State Auditor was notified and the investigation was launched.

Since then, the subgrantee process has changed and the state plan for TANF reflects those changes.

“All TANF funds will go through the RFP process,” Blanton said. "That’s to create the transparency. That’s to be open with how funds are distributed and who they’re going to.”

They’ve also started bringing in subgrantees for training on what’s expected and how they can best meet federal guidelines.

“All of this is being put in place to make sure the sins of the past never recur in the future,” added Blanton.

We will continue to follow this case and update you as new developments are made available. The Auditor’s office has made it clear that the investigation is ongoing and more arrests are still possible.

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