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N.C. Department of Environment and Natural Resources

NC Department of Environment and Natural Resources
Marine Fisheries - nr-51-2012_audit

Marine Fisheries

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Release: Immediate
Date: Dec. 18, 2012
Contact: Patricia Smith
Phone: 252-726-7021

Division Already Acting on Recommendations in State Audit

RALEIGH – The N.C. Division of Marine Fisheries has already taken steps to correct the problems identified in a state auditor’s report released today.

The division has shifted the duties of staff and instituted other procedures to ensure there is no conflict of interest in the way it does business with private companies.

The audit found that a biology supervisor in the Oyster Rehabilitation Program contracted with and prepared invoices for a trucking company owned and operated by his father-in-law. The use of this company predated the promotion of the biologist supervisor into a contracting position. After his promotion, the biologist supervisor continued the same contracting process that his predecessor used, and continued contracting with his father-in-law’s business.

The selection and contracting process has now been shifted to an employee who has no relation to the potential hauling companies, and all employees have been instructed not to prepare invoices for companies with which they contract. The division has reviewed its transactions with the relative’s trucking company and found it was paid the same set rates as other trucking companies for transportation services. There were no overpayments, and the rates were competitive with rates paid by other state agencies for comparable services.

The audit also found that the father-in-law’s trucking company subcontracted some of the oyster shell hauling work to a subsidiary that lists the biologist supervisor’s wife as president of the company. The audit report states that the biologist supervisor’s wife received one payment of $5,000 from the subsidiary. That amount has been repaid by the biologist supervisor.

The division has a conflict of interest policy that prohibits staff from contracting with companies owned or operated by direct relations. Under this policy, it is the responsibility of each employee to not participate in an activity that may provide a conflict of interest and to notify his supervisor when a situation or assignment may lead to a conflict of interest.

The audit further found that, due to the misinterpretation of a special delegation, the division erred by not soliciting bids for trucking services used to haul oyster shell for the Oyster Rehabilitation Program. The Oyster Rehabilitation Program falls under a special rule that exempts it from the bid solicitation requirement in certain circumstances. The division has received recent guidance from the N.C. Department of Administration, which expands the special delegation to include hauling services.

The division had already acted to correct some of the issues raised by the audit, and it is taking action to make sure the remaining issues are promptly and fully addressed.

nr-51-2012

N.C. Division of Marine Fisheries • 3441 Arendell Street • Morehead City, NC 28557 • 252-726-7021 or 800-682-2632

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