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STATE WATCHDOGS: Let us count the ways Virginia officials lose state property

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News,Watchdog

One might think it difficult to misplace an incinerator or, for that matter, three baby grand pianos.

But somehow, Virginia State University managed to do just that, along with sculptures, laptops, lawnmowers, a tractor, copiers and lots of other sizeable and costly objects.

The rest of the story behind the "lost or stolen" incinerator, which was bought in 1980 for $10,000 and went missing in June 2010 may, well, go up in smoke.

University spokesman Tom Reed refused Watchdog.org an interview with any of the workers who may have been responsible for tracking university inventory.

"We are confident that the items in question were properly accounted for in accordance with existing university and Commonwealth of Virginia policies and practices," Reed said.

Virginia State University isn't alone. A Watchdog.org request under the Freedom of Information Act for a list of public property recorded as lost, missing and stolen across commonwealth agencies turned up roughly $8 million in taxpayer-funded fixed assets.

"Once again, it seems that as long as the bureaucrats are dealing with other peoples' money, it gets virtually no attention," Tim Wise, president of the Arlington County Taxpayers Association, told Watchdog.org.

But that $8 million figure, the acquisition value of the assets analyzed, is probably just the start; the state doesn't have a complete database of its assets, and therefore no complete list of missing ones.

"There is no consolidated report of lost or missing assets that's gleaned from either that system or directly from agencies," David Vonmoll, the Commonwealth's comptroller, told Watchdog.org.

The closest thing to a full list is the state's Fixed Asset Accounting and Control System, or FAACS, used by assigned agency employees and maintained by the Department of Accounts to categorize and track assets for financial reporting reasons.

But FAACS isn't comprehensive.

For starters, agencies are required only to record "capitalized" assets -- anything with a minimum $5,000 value upon purchase and with a life expectancy longer than one year -- in the system. Reporting anything valued under $5,000 -- a "controlled" asset -- is completely optional.

Agencies are still required to take inventory of items worth less than $5,000 -- just not with the state.

"That doesn't mean that agencies are any less responsible for safeguarding those assets," Vonmoll said.

To make matters even murkier, public universities still have to keep internal records of their assets but don't have to report them to the state. Virginia State University, along with James Madison University, are the only two Virginia universities that do.

"It's clearly the intent of the legislature to allow universities to operate autonomously, under the assumption that, the universities argue, it allows them to be more efficient to not have Richmond telling them what to do, so to speak," Vonmoll told Watchdog.org.

JMU's records show scores of computers categorized as "lost." But Bill Wyatt, JMU public affairs manager, refused to set up an interview with any of the managers responsible for overseeing assets regarding the missing computers, saying that, "as a general rule, the university does not respond to speculative questions or hypothetical situations."

Unfortunately, the missing laptops aren't "hypothetical situations" -- they're on paper.

But, not even documented missing items stay on the list forever. They're purged after three years.

Using the information from the FOIA request, Watchdog.org called a handful of the state entities that listed lost, missing or stolen items.

The Virginia Department of Social Services, for example, in 2009 lost nine hand-held tracking devices worth $12,657.82 each.

"None were returned," said Necole Simmonds, director of the public affairs division with the Department of Social Services.

The department began using sign-in sheets to better track the items.

The first response to our inquiry was from Larry Traylor, spokesman for the Virginia Department of Corrections.

"I can tell you that just off the top of my head I have no information whatsoever," Traylor said when Watchdog.org first called. "We're a big agency."

The problem, it seems, is Virginia has roughly $20 billion in assets for the state to track.

State auditors review individual agencies' entries into FAACS and the agency's internal controls for managing them, but they don't specifically investigate how many items have gone missing or why, said DeAnn Compton, audit director for capital asset management with the Auditor of Public Accounts.

For the state's Comprehensive Annual Financial Report, essentially the state's financial statement, only assets worth more than $50,000 are included.

"So a lot of times, when we're auditing, we're only focusing on the higher-dollar items," Compton said. "So that leaves out a lot of things, a lot of the smaller things. If you're looking at the state, they've got $20 billion worth of assets, and so we're focused on the larger-dollar items."

Still, between 2008 and 2011, auditors found recurring fixed-asset issues at Virginia State University, the Department of Corrections and the Virginia Community College System.

A 2012 state audit of Norfolk State University raised serious concerns, noting that university personnel "have not recorded, tagged, or otherwise controlled fixed assets, including equipment, for most of fiscal 2012."

If items go missing without a clear explanation, agencies have to replace them out-of-pocket, said Linda Lilly, assistant director of risk management for the Virginia Department of Treasury.

Even if the state's insurance policy covers an item, the taxpayers will pay.

"The state is self-insured, so we're going to repay for it one way or another," Compton said.

Kathryn Watson is a reporter for the Virginia bureau of Watchdog.org, which is affiliated with the Franklin Center for Government and Public Integrity.

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