CPIC / CPIC

Transcription

1 INVESTIGATION REPORT CPIC / CPIC Date: May 29, 2014 Report Number: /

2 Table of Contents: Report Background 1 Allegations 1 Audit Procedures 1 Audit Findings 2 Conclusion 2 Appendix Distribution 3 Audit Performed By 3 Report Number: /

3 Detailed Findings Background OIA was assigned two anonymous reports alleging the unethical behavior of a Claims Litigation and Disputes Manager (herein referred to as LDCU Manager ). In both instances the caller reported the concerns directly through the Ethics Hotline ( TellCitizens ). The first report was received on February 27, 2014 with the other reported March 9, Due to the similar nature of the allegations and the fact that the LDCU Manager, a LDCU Employee and a LDCU Contract Staff were identified in both instances OIA, along with the assistance of Human Resources, opted to combine the investigation of the two reports. Both reports alleged various unethical behaviors with a limited amount of detail and/or support provided by the complainant. OIA and HR provided follow up questions to the caller(s) via the hotline, but have not received any response. Allegations In assessing the reports received, we noted the following which required investigation: An LDCU Manager (named in report 0003) and LDCU Employee (named in report 0001) allegedly falsified and/or embellished their resumes and do not have the necessary work experience and skill sets required for the positions they hold; The LDCU Manager allegedly provides preferential treatment to the LDCU Employee and LDCU Contract Staff by giving them assignments and positions for which their skills and experiences do not meet the required position criteria. Additionally, the Manager s behavior has caused a feeling of mistrust and favoritism in the Litigation Department; The LDCU Manager, in conjunction with the LDCU Contract Staff member, having potentially violated the Code of Ethics, specifically the section on Conflicts of Interest, and Gift Policy. Audit Procedures OIA and HR performed the following procedures: Reviewed the resumes and qualifications of the LDCU Manager and LDCU Employee to determine if these individuals have the necessary skills and experiences to meet the requirements as set forth by their position description. In addition, the interview and onboarding processes were reviewed, with those involved in the hiring decisions, to determine if any unethical behavior was present at the time the individuals were placed and also to understand others views as it relates to their individual skills. Inquired with Claims Vendor Management to determine if any reported instances of unethical separation and/or treatment of individuals, specific to the LDCU Manager and their department, have been reported within the past year. The purpose of which was to understand if favoritism or mistrust has been identified as an issue within this department or with the LDCU Manager. Reviewed the organizational relationships (i.e. ability to influence compensation and/or work) between the LDCU Manager, LDCU Employee and LDCU Contract Staff member to understand if preferential treatment, either with compensation or assignments, may have been compromised. Report Number: / Page 1

4 Detailed Findings Interviewed select individuals to understand the relationships between the LDCU Manager, LDCU Employee and LDCU Contract Staff member. Specifically, OIA and HR reviewed the LDCU Manager and LDCU Contract Staff member s relationship as it was alleged as a potential violation of the Code of Ethics and/or Gift Policy. Audit Findings 1. The LDCU Manager has been employed by Citizens for 8 years and has had no performance issues to date, as noted by HR. HR had, at employment, an independent background check performed by a third party verifying the validity of the LDCU Manager s qualifications and skill set for their position. Note: The LDCU Manager s supervisor noted consistent performance and quality of work. 2. The LDCU Employee was hired in March of 2014 and was interviewed by several other Citizens employees who, during interviews, noted that the LDCU Employee was well qualified for the position. Note: Hiring decision was not made by one person, but rather by a group of three. HR confirmed that a third party background check was performed to verify the validity of LDCU Employee s qualifications. 3. The Claims Vendor Management did not note any instances of favoritism, mistrust or any other complaints regarding the LDCU Manager nor the associated department. Additionally, HR also did not note any other complaints. 4. The LDCU Manager did approve the selection/appointment of the LDCU Contingent Staff member on February 3, Per Claims Vendor Management, Contingent Staff member selection is at the discretion of the manager as long as the individual meets the qualifications and is presented as such in CAIS. Note: LDCU Director (supervisor of the LDCU manager) stated that LDCU Contingent Staff has worked on and off for many years and has been requested to work under many supervisors and managers. LDCU Director noted that this specific LDCU Contingent Staff, has had an immediate positive impact which is why the person has been welcomed back by so many managers. 5. The LDCU Manager reviews and approves the LDCU Contingent Staff member s timecard; however, the review did not find any instances related to work hours that would lead to reasonable suspicion of overpayment (i.e. # of days within the norm). Additionally, compensation is predetermined by contracted rates set by Citizens and the Independent Adjusting Firm. 6. LDCU Manager does have oversight of LDCU Employee. However, LDCU Employee was recently hired into current position and Citizens Human Resources division reviews and approves all salary requests to ensure proper salary assignments. Additionally, HR did not note any issues related to LDCU Employee s salary. 7. LDCU Manager and LDCU Contingent Staff member do have a personal relationship wherein they attend events and activities (i.e. lunch, movie, river rafting) together outside of work. Additionally, LDCU Contingent Staff member has stayed at the LDCU Manager s residence rent free for the last two months and has done so at other times in the past. Also, the LDCU Manager visited and stayed at LDCU Contingent Staff member s residence (outside of the State) last year. Documentation was provided to Report Number: / Page 2

5 Detailed Findings Conclusion verify that LDCU Manager reimbursed LDCU Contingent Staff member for meals and lodging (at approx. $80/day per diem rate) as well as for the flight. 1 No instances of unethical behavior or violations of Citizens policies were identified based on the finding; however, the appearance of a conflict of interest is present. It is recommended that management, with the support of Human Resources, assess this instance and determine the most appropriate action given the circumstances and evidence provided in this report. 1 LDCU Contingent Staff member utilized points to book the flight and based on cost for similar flights the LDCU Manager provided reimbursement. Review of Southwest s website for flights in 2014 (unable to obtain 2013 price data because paid via points and not currently available) identified roundtrip flights ranging from $400 to $900. The LDCU Manager stated research for flights identified cost at approximately $300 roundtrip. LDCU Manager provided LDCU Contingent Staff member with a check for $550 to provide for flight and what they referred to as per diem reimbursement. Additionally, both maintained that the LDCU Manager paid for their own meals. Report Number: / Page 3

6 Appendix 1 Distribution Addressees Copies LaTrice Calhoun, Assistant Director-Vendor Management Anne Olson, Director Litigated Claims Operations Tom Lynch, Citizens Audit Committee Chairman Freddie Schinz, Citizens Audit Committee Member Juan Cocuy, Citizens Audit Committee Member Barry Gilway, President/CEO/Executive Director Charles Johnson, Chief Human Resources John Rollins, Chief Risk Officer Dan Sumner, General Counsel & Chief Legal Officer James Adams, VP Claims Christine Turner Ashburn, VP Communications, Legislative & External Affairs Lori Andrade Dillingham, Director HR Business Partner Management Maria Lang, Partner HR Business Debby Kearney, Ethics and Compliance Officer Bruce Meeks, Inspector General Johnson Lambert, LLP (External Auditors) Following Audit Committee Distribution The Honorable Rick Scott, Governor The Honorable Jeff Atwater, Chief Financial Officer The Honorable Pam Bondi, Attorney General The Honorable Adam Putnam, Commissioner of Agriculture The Honorable Don Gaetz, President of the Senate The Honorable Will Weatherford, Speaker of the House of Representatives Investigation Performed By Auditor in Charge Audit Director Under the Direction of Billie Hamrick Josh Shilts Joe Martins Chief of Internal Audit Report Number: / Page 4