Audit reveals former SEANC director misspent nearly $500k
Published April 13, 2015
by Angie Baslouny, WRAL, April 12, 2015.
The former director of the State Employees Association of North Carolina misappropriated nearly $500,000 in credit card charges and unjustified spending, according to an audit released by the organization Saturday.
Dana Cope resigned in February after Wake County’s district attorney asked the State Bureau of Investigation to look into spending irregularities at the 55,000-member nonprofit. The irregularities under question included a $19,000 check paid to a Washington, D.C., computer company that was reportedly cashed by an Apex landscaping company doing work at Cope’s Raleigh home.
The audit, conducted by national accounting firm Bond Beebe, found Cope “fabricated” the invoice for the $19,000 check, which was deposited by the landscaping company. The audit also found only about $14,000 paid to the company was legitimate, while another $94,500 in payments were “excessive.”
Other findings include:
- Cope did not reimburse SEANC for nearly $15,000 in travel expenses for a trip to Asia taken by family members.
- Cope used SEANC funds to buy more than $31,000 in private flying lessons.
- Cope received about $17,200 in reimbursement for questionable charges or items missing receipts.
- Cope used the SEANC credit card more than 2,000 times between October 2012 and Febreuary 2015 to charge nearly $405,000. Of that amount, about $361,000 was for questionable or undocumented items such as women’s accessories, car washes, online retail purchases, hotels, airlines, restaurants, iTunes and online gaming.
“The results of the audit are clear: Our former executive director, Mr. Dana Cope, grossly misused SEANC credit cards and misappropriated SEANC funds for personal gain,” current SEANC Executive Director Mitch Leonard wrote in a letter accompanying the audit summary.
“Based on my observations over the last few weeks and upon review of this audit report, these findings stem from a culture of submissiveness, deliberately built over time by Mr. Cope, and maintained for his own financial benefit. As a result, established financial controls were compromised, transparency thwarted and the truth denied,” he wrote.
Leonard wrote that SEANC is working to recoup the money and implement changes, including many of the recommendations made by Bond Beebe in the report.
The audit firm noted “consistent, broad and systematic internal control failures” because SEANC’s written policies and procedures were not followed.
Among the changes, no check can be issued without proper documentation, a credit limit of $5,000 has been set and credit card charges are allowed only for fuel and hotel expenses unless approved by a supervisor.
April 13, 2015 at 11:23 am
Richard L Bunce says:
The inevitable result when person surrender their power (and wealth) to an organization... eventually someone will be placed in that organization that will abuse that power. It is more likely to happen in a government organization as their powers tend to be much greater than private organizations but a private organization representing government bureaucrats is no surprise either.
April 13, 2015 at 3:12 pm
Frank Burns says:
This is a prime example of why we should never allow for automatic union dues collections from worker's salaries.
April 13, 2015 at 7:26 pm
Norm Kelly says:
First, is anyone actually surprised?
'Leonard wrote that SEANC is working to ... implement changes, including many of the recommendations made by Bond Beebe ... '. Good. Of course, the horse is already out of the barn, but I guess better late than never. However, 'no check can be issued without proper documentation' - this is a NEW policy? How can an organization that serves some 55,000 people NOT already have a policy like this in place? Is it because they are ALL LIBS and therefore fully trustworthy? Is it because they believe they are above question and just because they SAY the expense should be paid for by the organization (and the workers!) that it should be paid for, without question? It's hard to imagine that an organization of THIS SIZE wouldn't already require documentation? And why did it take an audit to catch this 'misuse' of funds and not show up in a tax audit?! Of course, since this organization supports libs, is lib at heart, it's no surprise that there weren't checks & balances in place like this already to keep the management honest!
'a credit limit of $5,000 has been set and credit card charges are allowed only for fuel and hotel expenses unless approved by a supervisor'. Seriously? Only NOW is this a planned change? This or a similar control didn't already exist? Wonder how all those state employees who pay into this organization feel about their money being wasted by this organization that seems to care so little for them!? 'Unless approved by a supervisor'? What an absolutely absurd statement! Not only should this also have already been in place, forgive me if I've misread this editorial, but wasn't Mr. Cope THE SUPERVISOR of ALL supervisors? Wasn't he the ultimate boss in the organization? If so, then this NEW policy says that he could have spent anything he wanted on the credit card because HE would have been the one to approve or not! Seems like $5,000 may be a bit high as the limit anyway without approval of a supervisor. Seems the limit should automatically be something more like $500, and only 1 of those per day so the expense can't simply be broken down into smaller but multiple charges! Trust me, someone would think of doing this.
Based on the honesty of management of SEANC, and the 'new' planned changes, I'd drop my membership in this organization, keep my money in MY pocket, until they can PROVE that they are aware of how they are playing games with MY money! Haven't met a union yet worth belonging to, and every time some info comes out about a union the more I believe their time has passed! When Rockefeller & Carnegie were killing employees, unions had a place. What's their excuse for existence today? To buy demon pols and prevent Boeing from opening a new plant!? What else? Buying a nice living for the union bosses? AND!?
(and before libs have a fit, yes, i've been forced to belong to a union before. tried every day to get thrown out of the union. since they knew i wanted out, they refused to push me out. if i left the union, my job was also gone. but if they threw me out, i got to keep my job, but they lost my dues. so they refused to let me out. and they never did anything good for me either. job still sukced!)
