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Tag: audit

  • DiZoglio to sue MassPort over settlement details

    BOSTON — State Auditor Diana DiZoglio said she plans to sue the agency that oversees Logan International Airport, accusing officials of withholding details of settlements with state employees her office was seeking for a required audit.

    DiZoglio released an audit on Wednesday that found the Massachusetts Port Authority entered into a $1.37 million settlement agreement in 2022 which her office says took advantage of nondisclosure laws to conceal allegations that included gender- and disability-based discrimination as well as unequal pay.

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    By Christian M. Wade | Statehouse Reporter

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  • Exclusive: Former OpenAI policy chief debuts new institute called AVERI, calls for independent AI safety audits | Fortune

    Miles Brundage, a well-known former policy researcher at OpenAI, is launching an institute dedicated to a simple idea: AI companies shouldn’t be allowed to grade their own homework.

    Today Brundage formally announced the AI Verification and Evaluation Research Institute (AVERI), a new nonprofit aimed at pushing the idea that frontier AI models should be subject to external auditing. AVERI is also working to establish AI auditing standards.

    The launch coincides with the publication of a research paper, coauthored by Brundage and more than 30 AI safety researchers and governance experts, that lays out a detailed framework for how independent audits of the companies building the world’s most powerful AI systems could work.

    Brundage spent seven years at OpenAI, as a policy researcher and an advisor on how the company should prepare for the advent of human-like artificial general intelligence. He left the company in October 2024. 

    “One of the things I learned while working at OpenAI is that companies are figuring out the norms of this kind of thing on their own,” Brundage told Fortune. “There’s no one forcing them to work with third-party experts to make sure that things are safe and secure. They kind of write their own rules.”

    That creates risks. Although the leading AI labs conduct safety and security testing and publish technical reports on the results of many of these evaluations, some of which they conduct with the help of external “red team” organizations, right now consumers, business and governments simply have to trust what the AI labs say about these tests. No one is forcing them to conduct these evaluations or report them according to any particular set of standards.

    Brundage said that in other industries, auditing is used to provide the public—including consumers, business partners, and to some degree regulators—assurance that products are safe and have been tested in a rigorous way. 

    “If you go out and buy a vacuum cleaner, you know, there will be components in it, like batteries, that have been tested by independent laboratories according to rigorous safety standards to make sure it isn’t going to catch on fire,” he said.

    New institute will push for policies and standards

    Brundage said that AVERI was interested in policies that would encourage the AI labs to move to a system of rigorous external auditing, as well as researching what the standards should be for those audits, but was not interested in conducting audits itself.

    “We’re a think tank. We’re trying to understand and shape this transition,” he said. “We’re not trying to get all the Fortune 500 companies as customers.”

    He said existing public accounting, auditing, assurance, and testing firms could move into the business of auditing AI safety, or that startups would be established to take on this role.

    AVERI said it has raised $7.5 million toward a goal of $13 million to cover 14 staff and two years of operations. Its funders so far include Halcyon Futures, Fathom, Coefficient Giving, former Y Combinator president Geoff Ralston, Craig Falls, Good Forever Foundation, Sympatico Ventures, and the AI Underwriting Company. 

    The organization says it has also received donations from current and former non-executive employees of frontier AI companies. “These are people who know where the bodies are buried” and “would love to see more accountability,” Brundage said.

    Insurance companies or investors could force AI safety audits

    Brundage said that there could be several mechanisms that would encourage AI firms to begin to hire independent auditors. One is that big businesses that are buying AI models may demand audits in order to have some assurance that the AI models they are buying will function as promised and don’t pose hidden risks.

    Insurance companies may also push for the establishment of AI auditing. For instance, insurers offering business continuity insurance to large companies that use AI models for key business processes could require auditing as a condition of underwriting. The insurance industry may also require audits in order to write policies for the leading AI companies, such as OpenAI, Anthropic, and Google.

    “Insurance is certainly moving quickly,” Brundage said. “We have a lot of conversations with insurers.” He noted that one specialized AI insurance company, the AI Underwriting Company, has provided a donation to AVERI because “they see the value of auditing in kind of checking compliance with the standards that they’re writing.”

    Investors may also demand AI safety audits to be sure they aren’t taking on unknown risks, Brundage said. Given the multi-million and multi-billion dollar checks that investment firms are now writing to fund AI companies, it would make sense for these investors to demand independent auditing of the safety and security of the products these fast-growing startups are building. If any of the leading labs go public—as OpenAI and Anthropic have reportedly been preparing to do in the coming year or two—a failure to employ auditors to assess the risks of AI models could open these companies up to shareholder lawsuits or SEC prosecutions if something were to later go wrong that contributed to a significant fall in their share prices.  

    Brundage also said that regulation or international agreements could force AI labs to employ independent auditors. The U.S. currently has no federal regulation of AI and it is unclear whether any will be created. President Donald Trump has signed an executive order meant to crack down on U.S. states that pass their own AI regulations. The administration has said this is because it believes a single, federal standard would be easier for businesses to navigate than multiple state laws. But, while moving to punish states for enacting AI regulation, the administration has not yet proposed a national standard of its own.

    In other geographies, however, the groundwork for auditing may already be taking shape. The EU AI Act, which recently came into force, does not explicitly call for audits of AI companies’ evaluation procedures. But its “Code of Practice for General Purpose AI,” which is a kind of blueprint for how frontier AI labs can comply with the Act, does say that labs building models that could pose “systemic risks” need to provide external evaluators with complimentary access to test the models. The text of the Act itself also says that when organizations deploy AI in “high-risk” use cases, such as underwriting loans, determining eligibility for social benefits, or determining medical care, the AI system must undergo an external “conformity assessment” before being placed on the market. Some have interpreted these sections of the Act and the Code as implying a need for what are essentially independent auditors.

    Establishing ‘assurance levels,’ finding enough qualified auditors

    The research paper published alongside AVERI’s launch outlines a comprehensive vision for what frontier AI auditing should look like. It proposes a framework of “AI Assurance Levels” ranging from Level 1—which involves some third-party testing but limited access and is similar to the kinds of external evaluations that the AI labs currently employ companies to conduct—all the way to Level 4, which would provide “treaty grade” assurance sufficient for international agreements on AI safety.

    Building a cadre of qualified AI auditors presents its own difficulties. AI auditing requires a mix of technical expertise and governance knowledge that few possess—and those who do are often lured by lucrative offers from the very companies that would be audited.

    Brundage acknowledged the challenge but said it’s surmountable. He talked of mixing people with different backgrounds to build “dream teams” that in combination have the right skill sets. “You might have some people from an existing audit firm, plus some people from a penetration testing firm from cybersecurity, plus some people from one of the AI safety nonprofits, plus maybe an academic,” he said.

    In other industries, from nuclear power to food safety, it has often been catastrophes, or at least close calls, that provided the impetus for standards and independent evaluations. Brundage said his hope is that with AI, auditing infrastructure and norms could be established before a crisis occurs.

    “The goal, from my perspective, is to get to a level of scrutiny that is proportional to the actual impacts and risks of the technology, as smoothly as possible, as quickly as possible, without overstepping,” he said.

    Jeremy Kahn

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  • Maryland Labor Dept. missed chance to recover $760 million in overpaid unemployment, audit says – WTOP News

    Labor Secretary Wu says state has taken action to improve oversight, but places a majority of blame on Hogan administration.

    This article was republished with permission from WTOP’s news partners at Maryland Matters. Sign up for Maryland Matters’ free email subscription today.

    Maryland overpaid $807.4 million in unemployment benefits since the COVID-19 pandemic and missed the opportunity to recover $760 million of that amount because it took too long do to so, state auditors said.

    The report published Friday by the Office of Legislative Audits covered unemployment benefit paid out between Nov. 16, 2020, and Jan. 15, 2025, when states were flush with federal cash to help them through the pandemic and the sudden and historic loss of jobs that came with it. The chance to collect many of those overpayments passed in May 2025, the auditors said.

    “That is quite concerning to me when we are not good stewards of taxpayer money,” said Sen. Shelly Hettleman (D-Baltimore County), co-chair of the Joint Audit and Evaluation Committee. “We have a (budget) shortfall, and we need to make sure that our money is spent on the priorities and the values we adhere to.”

    Labor Secretary Portia Wu said her department takes the findings of the audit “very seriously” and that it is working to recover as much as it can going forward. But she also noted that “about 90%” of the unrecoverable overpayments would have fallen under the administration of Gov. Larry Hogan (R), and that much of the money involved would not have been state funds, but federal money that states received during the pandemic.

    “We had been working on addressing these underlying problems far before these audit findings,” Wu said Friday, noting that the department has recovered “over $500 million in fraudulent, overpaid claims in 2025” and is “pursuing another $1.3 billion in overpayments.”

    The Labor Department’s Division of Unemployment Insurance collects unemployment insurance taxes from employers and distributes unemployment benefits. The department explains on its website that “overpayments can occur for several reasons, including unreported wages, changes in work availability, or identity theft or fraud committed by a third party, which was particularly an issue during the COVID-19 pandemic.”

    During the pandemic, the federal government offered states additional money to help keep up with surging unemployment claims at the time.

    “We all know that the unemployment system had enormous, enormous strains during COVID and it just wasn’t functional in the way it needed to be during that crisis,” Hettleman said. “And then there were lots of starts and stops to get it up and running, and then there were legal issues and lots of concerns about fraud.”

    State auditors found that the unemployment division “did not timely pursue recovery of claimant overpayments totaling $807.4 million resulting in up to $760.7 million that is no longer collectable as of May 2025.”

    The labor department argues that the unrecoverable overpayments are closer to $600 million. Wu also noted that part of the collection of those overpayments were stalled in January 2022 by a legal challenge, which did not lift until September 2023.

    But the audit notes that the department did not have “sufficient” overpayment collection even after the suspension ended, “resulting in an additional $33.6 million in overpayments not being adequately pursued.”

    In response, the department said there was “necessary back-end work to resume collection activities” which led to additional delays after the suspension was lifted.

    “Many of these issues, I think it’s over 90% of these overpayments were prior to this administration and during the pandemic,” Wu said. “Many of them may have been fraudulent. I can’t go back in time to change what was done. But I think we’re focused on doing our very best to recover as much as possible going forward.

    “Some of these unpursued claims are very old. So even if we had been able to take action slightly earlier, many of these payments are not recoverable because they’re older,” Wu said.

    “Obviously if actions had been taken closer in time to those overpayments, perhaps more of them could have been recovered. But I couldn’t have taken any action before that, before that 2023 window,” when the legal suspension was lifted, she said.

    Meanwhile, some Marylanders are getting hit with notices saying that they owe money to the state for unemployment benefits, some that date back during the COVID-19 pandemic years.
    Wu acknowledges that the notices from so far back are likely leading to confusion among Marylanders, especially those who may have been subjected to identity theft and fraud, which was prevalent during the pandemic.

    The audit comes just days before the start of the 2026 General Assembly, when lawmakers will be grappling with an estimated $1.6 billion deficit as they prepare the fiscal 2027 budget.
    It’s not clear how much the unrecoverable funds were lost state dollars. Wu says that that most of the lost funds were federal COVID-19 assistance, so the lost dollars would “not impact” the Maryland unemployment insurance fund.

    “Because of the overwhelming majority of benefits during that time were special federal benefits, even if they are recovered, they go immediately back to the U.S. Treasury,” she said.
    Hettleman is skeptical, especially as the state faces a $1.6 billion budget shortfall. Every state dollar counts.

    “There was quite a bit of delay in trying to get that money back and determine whether the state actually overpaid people,” she said. “I still have concerns in why did it take so long for the department to take some action to address those issues. And I don’t have a good answer to that right now, but we will try to get one.”

    The audit also found additional oversight issues involving potentially fraudulent unemployment benefit payments, as well as two cyber security-related findings that are redacted from public view.

    Diane Morris

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  • Trump administration says it’s freezing child care funds to Minnesota after series of fraud probes

    President Donald Trump’s administration announced on Tuesday that it’s freezing child care funds to Minnesota amid ongoing investigations into fraud allegations. Related video above: Group of Minnesota House and Senate Republicans calling on Gov. Tim Walz to resign over fraud investigationsActing director of the Centers for Disease Control and Prevention Jim O’Neill announced on the social platform X that the step is in response to “blatant fraud that appears to be rampant in Minnesota and across the country.”“We have turned off the money spigot and we are finding the fraud,” he said.O’Neill said all payments through the Administration for Children and Families, an agency within the U.S. Health and Human Services Department, will require “justification and a receipt or photo evidence” before money is sent. They have also launched a fraud-reporting hotline and email address, he said.The announcement comes after years of investigation that began with the $300 million scheme at the nonprofit Feeding Our Future, for which 57 defendants in Minnesota have been convicted. Prosecutors said the organization was at the center of the country’s largest COVID-19-related fraud scam, when defendants exploited a state-run, federally funded program intended to provide food for children.A federal prosecutor alleged earlier in December that half or more of the roughly $18 billion in federal funds that supported 14 programs in Minnesota since 2018 may have been stolen. Most of the defendants are Somali Americans, they said.O’Neill also called out a conservative influencer who had posted a video Friday claiming he found that day care centers operated by Somali residents in Minneapolis had committed up to $100 million in fraud. O’Neill said he has demanded Minnesota Gov. Tim Walz submit an audit of these centers that includes attendance records, licenses, complaints, investigations and inspections.Walz, the 2024 Democratic vice presidential nominee, has said fraud will not be tolerated and his administration “will continue to work with federal partners to ensure fraud is stopped and fraudsters are caught.”Walz has said an audit due by late January should give a better picture of the extent of the fraud. He said his administration is taking aggressive action to prevent additional fraud. He has long defended how his administration responded.Minnesota’s most prominent Somali American, Democratic U.S. Rep. Ilhan Omar, has urged people not to blame an entire community for the actions of a relative few.

    President Donald Trump’s administration announced on Tuesday that it’s freezing child care funds to Minnesota amid ongoing investigations into fraud allegations.

    Related video above: Group of Minnesota House and Senate Republicans calling on Gov. Tim Walz to resign over fraud investigations

    Acting director of the Centers for Disease Control and Prevention Jim O’Neill announced on the social platform X that the step is in response to “blatant fraud that appears to be rampant in Minnesota and across the country.”

    “We have turned off the money spigot and we are finding the fraud,” he said.

    O’Neill said all payments through the Administration for Children and Families, an agency within the U.S. Health and Human Services Department, will require “justification and a receipt or photo evidence” before money is sent. They have also launched a fraud-reporting hotline and email address, he said.

    The announcement comes after years of investigation that began with the $300 million scheme at the nonprofit Feeding Our Future, for which 57 defendants in Minnesota have been convicted. Prosecutors said the organization was at the center of the country’s largest COVID-19-related fraud scam, when defendants exploited a state-run, federally funded program intended to provide food for children.

    A federal prosecutor alleged earlier in December that half or more of the roughly $18 billion in federal funds that supported 14 programs in Minnesota since 2018 may have been stolen. Most of the defendants are Somali Americans, they said.

    O’Neill also called out a conservative influencer who had posted a video Friday claiming he found that day care centers operated by Somali residents in Minneapolis had committed up to $100 million in fraud. O’Neill said he has demanded Minnesota Gov. Tim Walz submit an audit of these centers that includes attendance records, licenses, complaints, investigations and inspections.

    Walz, the 2024 Democratic vice presidential nominee, has said fraud will not be tolerated and his administration “will continue to work with federal partners to ensure fraud is stopped and fraudsters are caught.”

    Walz has said an audit due by late January should give a better picture of the extent of the fraud. He said his administration is taking aggressive action to prevent additional fraud. He has long defended how his administration responded.

    Minnesota’s most prominent Somali American, Democratic U.S. Rep. Ilhan Omar, has urged people not to blame an entire community for the actions of a relative few.

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  • The IRS Is Facing a Huge Backlog After the Government Shutdown. What It Means for Businesses

    The U.S. government is getting back up to speed after the longest government shutdown in history. Airports have resumed their full schedules, which is a relief to anyone who’s planning to fly this holiday season. At the Internal Revenue Service, however, things are taking a bit longer to ramp back up, which could cause tax headaches for business owners and individual taxpayers over the next few months.

    A tremendous backlog of correspondence, appeals and filings built up during the 44 days workers were furloughed. Operations have resumed, but the IRS was short-staffed long before the shutdown, after massive DOGE layoffs earlier this year and funding cuts. That means cutting through that accumulation of work is slow-going.

    “The system is simply overwhelmed,” says Sharon Goldstein-Shapiro, a spokesperson for Legal Tax Defense, which provides legal representation to individuals and businesses facing tax problems. “Taxpayers waiting for refunds, installment approvals, or audit resolutions are seeing long delays.”

    That backlog is going to cause a host of problems. Communications are likely to be delayed, which could give the impression to some people that timeliness isn’t as high a priority as it normally is for the IRS. That would be incorrect.

    There’s not a lot you can do when it comes to getting a response in a faster period of time, but it’s critical for business owners to take steps to protect themselves and their businesses from being financially impacted by the backlog.

    That’s especially true if you’re in the midst of a dispute with the IRS. It could be weeks before submitted requests for penalty abatements or compromise offers are seen. Penalties and interest continue to accrue in that period, however.

    The best way to minimize that is through careful record keeping. Keep copies of all of the letters, notices and payment confirmations you receive and send. And any correspondence should be sent through a certified tracking system, so you can confirm when it was accepted.

    Most importantly, Goldstein-Shapiro says, don’t assume a lack of response means your case has been closed. And if you are facing a lien or levy, she suggests securing legal representation to ensure you are protected as case processing gets back underway.

    “For small businesses, a two-month delay can disrupt cash flow and planning,” she says. “Having professional representation ensures your case is documented and prioritized once review resumes.”

    It’s not just existing cases that experts are worried about. With the 2026 filing season just around the corner, the backlog could cause delays with new filings as well.

    “It’s too early to say definitively, but any sustained shutdown has a ripple effect that can carry well beyond the immediate timeline,” says Garrett Wagner, founder of accounting firm consultancy C3 Evolution Group. “The IRS was already facing delays and a growing backlog. Even a short pause in IRS operations will expand the issues we are already seeing.”

    Meanwhile, changes to the tax law as part of the 2025 budget bill that was passed earlier this year, are extensive, requiring the IRS to create new forms and instructions, which need to be sent out to tax professionals and reworking of software systems. The shutdown put that on pause, which could create a crunch as the 2026 tax season gets underway – and could delay the start of the season.

    Will that mean the filing deadline is extended? That’s possible, but it’s much too early to say with any certainty.

    The IRS does seem to grasp just how overwhelming the situation could be on its end. Over the first half of 2025, the IRS reduced its workforce from 100,000 to 60,000 employees, but later realized that created serious gaps in expertise and key areas, including IT and tax processing. In August, officials halted planned layoffs and began reaching out to employees who had been let go, encouraging them to rejoin the agency. There’s also been volatility when it comes to leadership at the agency. Since the start of 2025, the IRS has had seven directors or acting directors (and, as of October, one CEO). 

    The final deadline for the 2026 Inc. Regionals Awards is Friday, December 12, at 11:59 p.m. PT. Apply now.

    Chris Morris

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  • GOP candidate files lawsuit over legislative audit

    BOSTON — The state Legislature has been hit with another lawsuit over its refusal to open up the books to allow a voter-approved audit of its inner workings.

    The lawsuit was filed Thursday in Middlesex County Superior Court by Republican candidate for lieutenant governor Anne Brensley, who asked a judge to declare a voter-approved law giving State Auditor Diana DiZoglio the power to audit the Legislature constitutional and invalidate an internal state House of Representatives rule on audits.


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    kAmr9C:DE:2? |] (256 4@G6CD E96 |2DD249FD6EED $E2E69@FD6 7@C }@CE9 @7 q@DE@? |65:2 vC@FAUCDBF@jD ?6HDA2A6CD 2?5 H63D:E6D] t>2:= 9:> 2E k2 9C67lQ>2:=E@i4H256o4?9:?6HD]4@>Qm4H256o4?9:?6HD]4@>k^2m]k^Am

    By Christian M. Wade | Statehouse Reporter

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  • Audit Finds Metro Employees Reuse Practices Violated Ethics Rules – KXL


    PORTLAND, Ore. – A Metro audit released Wednesday found that a Central Transfer Station employee violated agency ethics policies by taking electronic waste dropped off by the public, raising concerns about oversight and public trust in Metro’s recycling programs.

    The audit stemmed from an anonymous tip to Metro’s Accountability Hotline regarding a laptop and other e-waste allegedly taken by the employee. A Human Resources investigation confirmed the events and found the employee believed they were acting within the agency’s Reuse Standard Operating Procedure.

    However, the audit found the procedure itself — and how it was applied — conflicted with Metro Code and the agency’s Employee Ethics policy. Auditors said it also increased the risk of violating Oregon law, which prohibits public officials from using their positions for personal financial gain.

    In multiple cases, employees failed to get required approvals before taking materials, and some had outdated liability waivers. The laptop and other items taken were not approved for reuse under existing policy.

    Metro services promote e-waste recycling, not reuse, and the audit noted that public trust could be undermined if customers believe their discarded electronics are not being recycled as promised.

    Metro management agreed with all audit recommendations, which include stronger oversight of the reuse program and improved clarity around approved materials and procedures.

    The full audit is available at oregonmetro.gov/auditor.

    More about:


    Grant McHill

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  • Sacramento Police Department dismisses dozens of reserve officers after CalPERS audit

    Sacramento police have let go 41 retired officers who were working part-time after a CalPERS audit found compliance issues with their employment conditions.These reserve officers, known as retired annuitants, were often considered extra help and included individuals brought in on an interim basis to fill vacancies or prevent emergencies.The audit found that one officer returned to work only 30 days after retirement, instead of the required 60 days. In another instance, some officers did not submit the required documentation showing they had not received unemployment insurance prior to their return to work.Dustin Smith, the president of the Sacramento Police Officers Association, said the audit marked the end of decades of service for dozens of officers. “For most of them, it’s just heart-wrenching because this is a big part of who you are and what you do in life,” Smith said. “We have 40-year employees that have given their life, their heart and soul to this community, that are all basically with a phone call, were told, ‘I’m sorry, we have to let you go.’”Smith said the reserve officers would generally help with things like cold case investigations, jail intake, and special events. He said losing them will hurt—especially amid a staff shortage.“There’s going to be more police officers pulled off the streets, trapped in a place like jail, doing basic admin work instead of coming back out to handle calls for service. So, call response times and all the things we talk about routinely to help the community are going to go down again,” Smith said. Sacramento Police shared a statement saying in part, “At this time, we are still working with City Human Resources to determine how the work previously performed by retired annuitants will be addressed, and we do not yet have details on what the impact will be to staffing.”Meanwhile, CalPERS released a statement saying, “We are working with the city to resolve the issues and ensure that the retired annuitants they want to utilize are processed correctly. CalPERS did not prohibit the hiring of any officers and ultimately the city is responsible for their hiring decisions.”Smith said this is a big loss for something he called a minor issue.“We really need the people at PERS and the city to get together and sit down and just use common sense. This was a technicality and it was an accident,” Smith said. “There’s a lot more to it than just numbers and response times. We’re losing some really good people.”See more coverage of top California stories here | Download our app | Subscribe to our morning newsletter | Find us on YouTube here and subscribe to our channel

    Sacramento police have let go 41 retired officers who were working part-time after a CalPERS audit found compliance issues with their employment conditions.

    These reserve officers, known as retired annuitants, were often considered extra help and included individuals brought in on an interim basis to fill vacancies or prevent emergencies.

    The audit found that one officer returned to work only 30 days after retirement, instead of the required 60 days. In another instance, some officers did not submit the required documentation showing they had not received unemployment insurance prior to their return to work.

    Dustin Smith, the president of the Sacramento Police Officers Association, said the audit marked the end of decades of service for dozens of officers.

    “For most of them, it’s just heart-wrenching because this is a big part of who you are and what you do in life,” Smith said. “We have 40-year employees that have given their life, their heart and soul to this community, that are all basically with a phone call, were told, ‘I’m sorry, we have to let you go.’”

    Smith said the reserve officers would generally help with things like cold case investigations, jail intake, and special events. He said losing them will hurt—especially amid a staff shortage.

    “There’s going to be more police officers pulled off the streets, trapped in a place like jail, doing basic admin work instead of coming back out to handle calls for service. So, call response times and all the things we talk about routinely to help the community are going to go down again,” Smith said.

    Sacramento Police shared a statement saying in part, “At this time, we are still working with City Human Resources to determine how the work previously performed by retired annuitants will be addressed, and we do not yet have details on what the impact will be to staffing.”

    Meanwhile, CalPERS released a statement saying, “We are working with the city to resolve the issues and ensure that the retired annuitants they want to utilize are processed correctly. CalPERS did not prohibit the hiring of any officers and ultimately the city is responsible for their hiring decisions.”

    Smith said this is a big loss for something he called a minor issue.

    “We really need the people at PERS and the city to get together and sit down and just use common sense. This was a technicality and it was an accident,” Smith said. “There’s a lot more to it than just numbers and response times. We’re losing some really good people.”

    See more coverage of top California stories here | Download our app | Subscribe to our morning newsletter | Find us on YouTube here and subscribe to our channel

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  • Denver’s police oversight office does too much work in secret, audit finds

    The office responsible for independent oversight of Denver’s law enforcement agencies is doing too much of its work in secret, a city audit found.

    The Office of Independent Monitor, which provides civilian oversight for the Denver Police Department and Denver Sheriff Department, has not publicly reported its recommendations about law enforcement misconduct investigations and disciplinary actions for years, undermining the effectiveness of its oversight, city auditor Tim O’Brien found.

    “Because the public doesn’t know what guidance the Monitor’s Office is giving to the police and sheriff departments, the public doesn’t know whether those departments are responding. There is no visible proof of accountability,” he said in a Thursday news release. “The lack of transparency is a disservice to law enforcement oversight.”

    The independent monitor’s office is also not publicly reporting its reviews and evaluations of the two agencies’ policies and practices, and isn’t thoroughly tracking its work. The office lacks a formalized strategic plan, the audit found.

    Former Denver Mayor John Hickenlooper and City Council members created the office in 2004 to provide independent oversight for the police and sheriff’s departments in the wake of two controversial police shootings. The monitor’s office reviews police and sheriff disciplinary cases and makes recommendations to the agencies about those cases that are aimed at improving discipline, policies and practices.

    The police and sheriff’s departments do not have to follow the monitor’s recommendations. Because the monitor’s office has not publicly reported its recommendations, it is difficult to tell what sort of changes the office has pursued and whether public safety officials accepted or ignored the monitor’s recommendations, the audit found.

    Denver’s ordinances require the Office of Independent Monitor to publicly report on disciplinary investigations and policy changes in its annual report, but also limit the office’s ability to do so because the materials are subject to deliberative process privilege, which allows information to be kept from the public if disclosing it would prevent honest and frank discussion within government.

    “We found legal guidance from the City Attorney’s Office is affecting what the Monitor’s Office publicly reports in terms of its oversight of the Police and Sheriff Departments,” the audit states. “A significant portion of what city ordinance tells the Monitor’s Office to publicly report is protected by the deliberative process privilege — according to the City Attorney’s Office’s interpretation.”

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  • SHA ‘knowingly charged’ $360 million in unauthorized expenses to federal projects – WTOP News

    A troubling audit of State Highway Administration finances could draw the scrutiny of a legislative oversight panel in Annapolis later this year.

    This article was republished with permission from WTOP’s news partners at Maryland Matters. Sign up for Maryland Matters’ free email subscription today.

    A troubling audit of State Highway Administration finances could draw the scrutiny of a legislative oversight panel in Annapolis later this year, lawmakers said Thursday.

    State Highway Administration officials “knowingly charged” nearly $360 million in unauthorized expenses to federal fund projects in an attempt to hide a deficit in the state’s Transportation Trust Fund, according to a report released Thursday by the Office of Legislative Audits.

    The audit looked at the period between Nov. 1, 2020, and Oct. 31, 2024, based on a complaint to the office’s fraud, waste and abuse hotline reporting a recent “rapid increase in the federal funds receivable balance.”

    It found that expenditures for more than 500 projects with $50,000 or more in expenses may not be recoverable. To cover the gap, the state may have to tap a $400 million Transportation Trust Fund balance or state general funds, according to the audit.

    Del. Jared Solomon (D-Montgomery), the House co-chair of the Joint Audit and Evaluation Committee, said the committee could bring the agency in for a hearing later this year.

    “I’m concerned with the findings and look forward to reviewing the documents and working with our auditors and agency partners to better understand how this happened,” Solomon said Thursday after the release of the audit.

    Timing of a hearing is uncertain: Solomon said he and Sen. Shelly Hettleman (D-Baltimore County), the Senate co-chair, are working to finalize the committee’s fall schedule.

    House Republicans, meanwhile, called for the attorney general to investigate the “stunning budget shortfall.”

    “Over the last two years, the Governor and Democratic Leadership have imposed massive tax and fee increases on Maryland drivers to close gaps in the Transportation Trust Fund,” House Minority Leader Del. Jason C. Buckel (R-Allegany) said in a statement from the House Republican Caucus. “To now be told there has been an ongoing effort, bordering on malfeasance, to hide the true breadth of that deficit is incredibly disturbing. The Attorney General must review these findings.”

    Besides the overall budget, Legislative Auditor Brian Tanen wrote in his report that, “More concerning is that the amount of unauthorized spending increased by 3,523 percent, including an additional $163.5 million between June 2024 and August 2025.”

    Auditors reported a sharp increase of expenses carried as billable to the federal government, even though they had not yet been authorized.

    Between 2017 and 2020, the amount of unauthorized expenses  ranged between $7.7 million and about $10 million. But by June 2024, the amount had grown to more than $195 million. And in August 2025, the amount approached $360 million.

    “SHA also was unable to provide documentation to support the propriety of accrued federal fund revenue entries totaling $449 million (which would include the aforementioned unauthorized expenses) or the subsequent recovery of the funds,” Tanen wrote. “To the extent that the federal funds are not available, Transportation Trust funds or State general funds, may be needed to cover any related deficits.”

    The findings in the report supported the allegation in the tipster’s complaint but “did not identify any matters that warranted” referral to the Office of the Attorney General for a criminal investigation.

    Republicans disagreed.

    “The Attorney General should really take a look at this,” said House Minority Whip Del. Jesse T. Pippy (R-Frederick), noting that Marylanders now pay “significantly more” for transportation fees, through higher registration fees or gas prices.

    “Now, not only has their trust been violated, but they may be on the hook for even more costs,” Pippy said. “This goes beyond gross mismanagement; this could be fraudulent activity. Our citizens deserve better.”

    In one example, auditors found that the highway administration had fully spent $2.7 million in federal funds on an approved, unnamed project by September 2023. Even so, the agency charged an additional $3.1 million to the same project through August 2025.

    Auditors noted that while the projects were authorized by the federal government, the amounts charged to them by SHA exceeded authorized federal aid.

    Those additional charges, the auditors noted, “may not be recoverable.”

    “According to agency management, SHA knowingly charged these costs as federal funds on the State’s accounting records to minimize the Transportation Trust Fund deficit,” auditors wrote. “Specifically, SHA management advised that they have sought additional federal funding when expenditures exceeded the federal grant and have attempted to find federal funds to cover more projects (including smaller projects that were traditionally funded through the Transportation Trust Fund).

    “However … the federal granting agency has not authorized additional funding for these projects which will need to be funded with Transportation Trust Funds … or state funds,” the audit said.

    In their response, state transportation officials said it was “not factually accurate to say that projects were not authorized, but it is accurate that in some cases, expenses charged exceeded the initial authorized amounts.”

    The agency said it works to determine if additional costs warrant modifications to its request for federal reimbursement.

    “If the expenditure is deemed federally ineligible for reimbursement, it would be expensed to state funds,” the agency wrote in its response.

    Auditors said they also found that in some cases, the highways administration “purposefully recorded” some “unbillable expenditures” as a federal receivable “without disclosing the unbillable nature of these funds.”

    Transportation officials agreed with the findings and said it was working to “quantify any unrecoverable amounts and adjust account balances.”

    – This story was updated at 10:30 p.m. on Thursday to include legislators’ reactions.

    Abigail Constantino

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  • Report: State education officials failed to investigate child abuse claims

    BOSTON — A “breakdown” in communication between two state agencies during the COVID-19 pandemic delayed the release of information about allegations of child abuse and neglect by licensed educators and others, putting students at risk, according to a new state audit.

    The review by state Auditor Diana DiZoglio’s office, released last Tuesday, faulted the state Department of Elementary and Secondary Education for a “failure” to ensure it received up-to-date information from the Department of Children and Families on whether alleged child abuse or neglect against licensed educators warranted investigation or disciplinary actions.


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    By Christian M. Wade | Statehouse Reporter

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  • Maryland pays out $5.4 million following IRS audit – WTOP News

    Maryland pays out $5.4 million following IRS audit – WTOP News

    The Internal Revenue Service audited Maryland government and taxpayers owe at least $5.4 million for tax year 2020.

    This article was republished with permission from WTOP’s news partners at Maryland Matters. Sign up for Maryland Matters’ free email subscription today.

    Maryland went through an IRS audit and owes millions, WTOP’s Kyle Cooper reports.

    The taxman cometh for everyone.

    Even the state.

    For the first time in memory — perhaps ever — the Internal Revenue Service audited Maryland government. And it turns out Maryland taxpayers owe Uncle Sam at least $5.4 million for tax year 2020.

    “This is a new one,” Comptroller Brooke Lierman said at Wednesday’s Board of Public Works meeting where the audit was discussed.

    “It might be the first time the state has ever been audited. We looked back 30 years and it had not happened before,” she said.

    State and local governments do not have income tax return filing requirements. The IRS notes that those entities are subject to employment and some excise tax filing requirements.

    An IRS spokesperson declined to comment on Maryland’s situation, citing federal law on tax return confidentiality. But publicly available data shows that in fiscal 2023, the IRS said conducted 1,645 examinations — the agency’s term for an audit — of tax-exempt organizations, employee retirement plans, government entities and tax-exempt bond returns.

    Initially, Maryland was on the hook for roughly $16 million.

    Lierman and Lt. Gov. Aruna Miller, sitting as the Board of Public Works, unanimously approved a $5.4 million payment to resolve most of the matter. Treasurer Dereck Davis was absent from Wednesday’s meeting to attend a funeral.

    “This [lower payment] is specifically because staff within the Office of the Comptroller and other state agencies worked tirelessly to provide and obtain documentation to the IRS to significantly reduce the amount the state owes,” said Rachel Sessa, deputy comptroller for law and oversight. “And since this is the first examination and assessment of its kind, the IRS agreed to waive penalties.”

    Sessa warned that the state may still have to pay interest. The amount of that is not yet known. Sessa said state officials were scheduled to meet with the IRS Wednesday afternoon.

    The penalties in tax year 2020 were related to three areas, according to Sessa.

    First, nine state agencies failed to properly withhold federal taxes for some employees.

    Second, a handful of state police within five agencies made contributions to deferred compensation plans that exceeded limits.

    Finally, the state was unable to show the IRS that backup withholding was applied to some vendors.

    Sessa said the state is implementing a series of “corrective actions” that include education and training for state agencies. She said the IRS will assist in the training, which will begin “over the next couple of months.”

    Lierman said she and other state officials “are working to resolve the underpayment issue with the IRS. It occurred under the previous administration. Gov.Moore, Treasurer Davis, I, Lt. Gov. Miller, I know we’re all committed to transparency in the business of government, and … wanted to make sure that people understand what this is, where it came from, and how we are handling it.”

    Board approves more public safety lawsuit settlements

    The two-member board also unanimously approved nearly $900,000 to settle three cases involving the Department of Public Safety and Correctional Services. The settlements Wednesday bring the total paid out by the department to $10.5 million for the year, according to Lierman.

    Joseph W. Sedtal, deputy secretary of administration for the Department of Public Safety and Correctional Services said the agency is working to improve document retention policies for both paper records and video recordings.

    “Obviously, one of the things we’ve seen before is that not having that documentation forces the department to defend a negative,” Sedtal told the board. “We’re trying to combat that through an infrastructure improvement, improving our cameras, improving our policies and retention associated with that, including now looking into ways to potentially audit the ability to retain that information, and ensure that when we say, ‘Hey, we need to hold this for a period of time,’ we’re actually doing it.”

    Lierman said such policies are necessary not only to protect the state but also to ensure that incarcerated individuals are not mistreated.

    “At the end of the day, it comes down to what evidence we have of what happened,” Lierman said. “We can’t allow our lawyers to be put in a position where they’re asking for video footage or sign-in sheets that have been destroyed or that were never made, because then we have put ourselves in a position where we can’t go to trial and we have to settle because there’s no evidence to prove what we what our side of the story, or to prove … to show what really happened, so that we can then discipline the employees and take appropriate action about against the employees.”

    Lierman said the department needed not only to update its policies but to ensure those policies are carried out.

    “It’s nice to have good policy, but what matters is actual implementation and follow through,” she said.

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  • DiZoglio blasts legislative leaders in audit

    DiZoglio blasts legislative leaders in audit

    BOSTON — The state Legislature lacks transparency and accountability in its dealings, according to a new state audit, which blasts legislative leaders for refusing to open up their books for the performance review.

    The audit, released Monday by Auditor Diana DiZoglio, faults the state House of Representatives and Senate for failing to conduct timely financial reviews of its spending, a lack of transparency in its procurement policies and a website that makes it difficult for the public to navigate, among other criticisms.

    But DiZoglio also leaned into House and Senate leaders for refusing to provide information her office requested for the audit, including tracking year-end budget spending, how they decide which major bills are brought up for a vote and whether the two chambers are following their own rules regarding non-disclosure agreements.

    “It is deeply concerning that legislative leaders have refused to cooperate with our office to help promote transparency and identify ways to improve service to the people of Massachusetts,” the Democrat said in a statement. “Transparency and accountability are cornerstones of our democracy and enable the people to participate in government as intended in our Constitution, in a system of checks and balances.”

    The audit comes as DiZoglio urges voters to approve Question 1, which if approved would force legislative leaders to open up their books for an independent review.

    Under current laws, the auditor has the power to examine “all departments, offices, commissions, institutions and activities of the commonwealth” but the ballot question would expand those powers to specifically include the Legislature.

    The referendum was proposed by DiZoglio, a Methuen Democrat and former state lawmaker, whose high-profile efforts to audit the House and Senate have been blocked by legislative leaders who argue the move is unconstitutional.

    The partial audit released on Monday found that the Senate and House didn’t ensure annual financial audits were completed, filed with required recipients, or made available to the public in a timely way, in an apparent violation of their own rules.

    The review also found that the Legislature’s procurement policies lack transparency, which auditors said limit the public’s ability to hold the Legislature accountable.

    The Massachusetts Legislature’s website also lacks content and is hard to navigate, compared to other state’s legislative bodies, which auditors said “hinders the public’s ability to understand and engage in the legislative process and hold the Legislature accountable for ensuring an equitable mode of making laws.”

    Other concerns flagged by auditors included a lack of details about how legislative leaders appoint committee chairpersons and other posts that bump up lawmaker’s prestige and compensation.

    Legislative leaders were asked to respond to the findings of the audit, but DiZoglio’s office said they declined.

    “The purported audit of the Legislature released by the Auditor today confirms only one thing: the Auditor has abandoned all pretext of faithfully performing her statutory responsibilities in favor of using her office for pure political self-promotion and electioneering,” House Speaker Ron Mariano said in a statement on Monday in response to the report.

    “The Auditor should instead be focusing on her statutorily mandated reviews, as she continues to underperform her predecessors in the completion of that important work,” he added.

    DiZoglio launched her review of the Legislature more than a year ago but said she hasn’t been able to get access to individuals and records her office needs for a forensic investigation.

    Mariano, a Quincy Democrat, and Senate President Karen Spilka, D-Ashland, have so far blocked her efforts to conduct the investigation into the House and Senate’s inner workings, calling the proposed audit “unconstitutional” and claiming it would violate the separation of powers.

    DiZoglio has framed the plan as part of a broader effort to improve transparency and accountability in Legislature, which is continuously ranked as one of the least effective and least transparent legislative bodies in the country. It is also one of only four state Legislatures that exempts itself from public records laws, DiZoglio points out.

    The effort was dealt a blow last year when Attorney General Andrea Campbell’s office rejected DiZoglio’s request to file a lawsuit to force the audit, saying a review of state laws, judicial rulings and the historical record, suggests she doesn’t have standing to file the legal challenge.

    A panel of six lawmakers who reviewed the proposal issued a report concluding that passage of Question 1 would “undermine the separation of powers between the branches of government.” The report included testimony from constitutional scholars and civics educators who oppose the move.

    Despite that, recent polls have shown voters strongly support Question 1 — one of five referendums on the Nov. 5 ballot — which hasn’t drawn any organized opposition.

    Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhinews.com.

    By Christian M. Wade | Statehouse Reporter

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  • DiZoglio hits road to promote ballot question

    DiZoglio hits road to promote ballot question

    BOSTON — State Auditor Diana DiZoglio is hitting the road to rally voter support for her ballot campaign to open up the state Legislature’s financial books.

    DiZoglio said she plans to begin a 141-mile trek across Massachusetts to raise awareness of Question 1, which asks voters in the election Nov. 5 to approve a performance and financial audit of the state Legislature.

    She argues that the audit would ensure the Legislature is operating in accordance with government rules and regulations.

    The Methuen Democrat’s “Walking for Sunshine” sojourn was to get underway Friday night in Great Barrington, where she was to meet supporters at a local bar before hitting the long road to Boston.

    DiZoglio said she will meet with voters at nightly events along the way and urge them to “demand greater transparency for the state Legislature” by approving the referendum.

    DiZoglio, a former state lawmaker, launched her review of the Legislature more than a year ago but said she has not been able to receive access to the people and records her office needs for a forensic investigation. She has framed the plan as part of a broader effort to improve transparency and accountability in state government.

    House Speaker Ron Mariano, D-Quincy, and Senate President Karen Spilka, D-Ashland, have so far blocked her efforts to conduct the investigation of the House and Senate’s inner workings, calling the proposed audit “unconstitutional” and claiming it would violate the separation of powers.

    The effort was dealt a blow last year when Attorney General Andrea Campbell’s office rejected DiZoglio’s request to file a lawsuit to force the audit, saying a review of state laws, judicial rulings and the historical record suggests she does not have standing to file the legal challenge.

    But DiZoglio and other supporters gathered enough signatures from voters to put the question on the November ballot.

    “We believe taxpayers deserve to know how their tax dollars are being spent, and they deserve transparency, accessibility and accountability from elected officials,” the Yes on 1 campaign said in a statement.

    “But instead of taking meaningful action that makes life better in the Commonwealth, they continue to be characterized as one of the least efficient, least productive legislatures in the country, plagued by late-night horse trading and closed-door discussions, with constituencies cut out of the process.”

    The state’s restrictive records law consistently earns Massachusetts failing grades from First Amendment groups.

    In 2016, the state overhauled its public records law for the first time in decades, limiting how much state and local governments and police departments may charge for public records and setting deadlines for agencies to respond to requests for information, among other changes.

    But lawmakers left in place many of the exemptions shielding the Legislature, courts and law enforcement agencies from disclosing certain records.

    Recent polls have shown voters strongly support for Question 1 – one of five referendums on the November ballot – which so far has not drawn any organized opposition.

    Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhinews.com.

    By Christian M. Wade | Statehouse Reporter

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  • DiZoglio hits road to promote ballot question

    DiZoglio hits road to promote ballot question

    BOSTON — State Auditor Diana DiZoglio is hitting the road to rally voter support for her ballot campaign to open up the state Legislature’s financial books.

    DiZoglio said she plans to begin a 141-mile trek across Massachusetts to raise awareness for Question 1, which asks voters in the Nov. 5 elections to approve a performance and financial audit of the state Legislature, which she argues will ensure that it is operating in accordance with government rules and regulations.

    The Methuen Democrat’s “Walking for Sunshine” sojourn gets underway Friday night in Great Barrington, where she will meet supporters at a local bar before hitting the long road to Boston.

    DiZoglio said she will meet with voters at nightly events along the way and urge them to “demand greater transparency for the state Legislature” by approving the referendum.

    A former state lawmaker, DiZoglio launched her review of the Legislature more than a year ago but said she hasn’t been able to get access to individuals and records her office needs for a forensic investigation. She has framed the plan as part of a broader effort to improve transparency and accountability in state government.

    House Speaker Ron Mariano, D-Quincy, and Senate President Karen Spilka, D-Ashland, have so far blocked her efforts to conduct the investigation into the House and Senate’s inner workings, calling the proposed audit “unconstitutional” and claiming it would violate the separation of powers.

    The effort was dealt a blow last year when Attorney General Andrea Campbell’s office rejected DiZoglio’s request to file a lawsuit to force the audit, saying a review of state laws, judicial rulings and the historical record, suggests she doesn’t have standing to file the legal challenge.

    But DiZoglio and other supporters gathered enough signatures from voters to put the question on the November ballot.

    “We believe taxpayers deserve to know how their tax dollars are being spent, and they deserve transparency, accessibility and accountability from elected officials,” the Yes on 1 campaign said in a statement. “But instead of taking meaningful action that makes life better in the Commonwealth, they continue to be characterized as one of the least efficient, least productive legislatures in the country, plagued by late-night horse trading and closed-door discussions, with constituencies cut out of the process.”

    The state’s restrictive records law consistently earns Massachusetts failing grades from First Amendment groups.

    In 2016, the state overhauled its public records law for the first time in decades, limiting how much state and local governments and police departments may charge for public records and setting deadlines for agencies to respond to requests for information, among other changes.

    But lawmakers left in place many of the exemptions shielding the Legislature, courts and law enforcement agencies from disclosing certain records.

    Recent polls have shown voters strongly support for Question 1 — one of five referendums on the November ballot — which so far hasn’t drawn any organized opposition.

    Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhinews.com

    By Christian M. Wade | Statehouse Reporter

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  • NYC’s only designated shelter for queer adults is a ‘nightmare’ of misconduct and living conditions

    NYC’s only designated shelter for queer adults is a ‘nightmare’ of misconduct and living conditions

    For the last seven years, Jha’asryel-Akquil Bishop has called city shelters their home. 

    Bishop lost their housing just one month after they immigrated to the United States from Guyana in 2016. They were living in Brooklyn with their uncle until they began experiencing domestic violence, which they said “forced me to move out.” 

    Now 27, they’re living at Marsha’s House, the only queer-designated shelter for adults in the city that’s been the center of several lawsuits for abuse and neglect, and has been called a “nightmare” of misconduct and unsafe living conditions by ex-residents.

    Despite the huge need for queer-designated shelters, there are only a handful of them out of hundreds of city shelters. In New York City, LGBTQ+ people make up only 4.5% of the general population, but comprise nearly 40% of the city’s homeless adults, according to New York State’s Office of Children and Family Services—and the population is three times more likely to be physically threatened, abused, and carry emotional trauma than others who are homeless. Of the queer-designated shelters in the city, most are limited to services for youth under age 24. 

    Marsha’s House, however, is an exception: located in Belmont in the Bronx, the shelter has an age limit of 30. But the shelter also comes with a slew of concerns, like broken facilities that go unfixed (despite required annual inspections), a layout that can contribute to emotional distress, especially for those who have experienced trauma, and staff who may be unfamiliar with LGBTQ+ issues, according to state reports and incident reports filed by residents that Fortune obtained through Freedom of Information requests. 

    Queer homeless residents are often traumatized, and require different resources than others 

    LGBTQ+ homeless people are disproportionately affected by sexual or violent assaults, which in many cases lead to mental illnesses like post-traumatic stress disorder, depression, suicidality, and more. These risks can be greater for youth and young adults, like Bishop. 

    “I’m someone who’s experienced sexual violence and abuse, and so thinking about sharing a room with someone else who I don’t know and in a shelter setting, I did not sleep at night,” Bishop said. “I had chronic pain because I had trouble sleeping. I got placed on medication for sleep because I had trouble sleeping.” 

    Sunny Nagpaul

    A recent study found homeless queer youth had been sexually assaulted at three times the rate of non-LGBTQ+ homeless youth, and almost half of queer youth reported sexual abuse by an adult caretaker, compared to about 20% of non-LGBTQ+ youth.

    According to a national study that analyzed mental illness in more than 400 homeless youth, 41% of those who identify as queer reported depression, compared to 28% of non-queer youth, and were also much more likely to report suicidal ideation and attempted suicide.  

    Marsha’s House, an 81-bed shelter that opened in 2017, is currently the city’s only adult shelter designated for sexual minorities—but Bishop believes “if Marsha’s House had an improved facility, it could become more accessible” to a population with a big need, but few resources for support. 

    Those who are queer and homeless, they said, “oftentimes are also victims of sexual violence and do need the privacy of a single room.” 

    At Marsha’s House, Bishop said they’ve witnessed their peers having manic episodes, bouts of psychosis, and mental distress. They said there are six single-person rooms usually reserved for people who have gotten a transitional surgery or when another room or bed needs repair. 

    Bishop believes the rooms could offer a few days of mental peace to residents who may need them—but they’re hard to access. The city’s department of homeless services, rather than shelter staff, determines who can stay in them. “I think it is a very disadvantageous situation at the shelter,” Bishop said, adding, “when you’re recovering from discrimination and violence, oftentimes it’s hard to rest or sleep when there are other people around you. People may need those rooms to reset themselves, and that’s not an option available to them.” 

    Other structural elements of the shelter, which is five stories tall but does not have an elevator, also prevent those who have physical disabilities from living there. 

    The city’s Department of Homeless Services, or DHS, did not confirm Fortune’s inquiry on how many single-occupancy rooms are in the shelter or how residents can be eligible for them. A DHS spokesperson told Fortune the agency has been strengthening its trauma-informed support for LGBTQ+ populations for the last several years, including more training courses for staff since 2015. 

    Residents describe staff who are ‘nasty and rude and talks down to people’

    Another challenge at Marsha’s House, Bishop told Fortune, includes staff members speaking rudely or yelling at residents. Bishop described such interactions as “tense.” 

    “Folks have had issues with staff to their gender identity and feeling discriminated or feeling unsafe,” they said. 

    Between December 2019 to April 2020, and June to December 2022, residents filed at least 10 complaints against staff behavior, according to residents’ grievance reports Fortune obtained through Freedom of Information requests, and is the second most frequent complaint from residents, those reports show. 

    A chart showing resident complaints at Marsha's House

    The complainants, whose names have been redacted from the reports, said ‘‘the staff is very rude and need to be changed and trained,” are “nasty and rude and talks down to people,” and talk “negatively and disrespectfully” about residents.  

    Another complainant said staff have called residents derogatory names. When the resident spoke to the director, they wrote, they “felt dismissed and no disciplinary action was taken against the staff member.” 

    Such interactions, it seems, have now shaped the shelter’s reputation. Maddox Guerilla, a senior consultant at housing-advocacy group Point Source Youth, also used to be homeless and heard about staff troubles at the shelter. “I don’t think the staff at Marsha’s House are being trained in queer issues,” Guerilla told Fortune, “because I hear people all the time saying, ‘they don’t respect me by my name,’ or ‘they’re harassing me, misgendering me, they don’t treat trans people right.’”

    A DHS spokesperson told Fortune all shelter staff receive a full-day training course in LGBTQ+ specific issues, and any additional training each shelter provider may offer, and that staff are expected to lead with care and compassion when engaging with clients. The spokesperson also said the agency has robust accountability mechanisms in place to address inappropriate staff behavior, but did not elaborate on what those measures are. 

    To be sure, queer homeless residents often face discrimination at shelters, and find themselves in positions where they may be too vulnerable or unstable to speak up for themselves. One transgender woman, Mariah Lopez, however, has sued the city several times for discrimination against her. Her most recent lawsuit was against Marsha’s House, which she sued because she says she was denied entry to the shelter with her service dog, Chica, who helps her manage her post-traumatic stress and anxiety disorders.  

    Her lawsuit led to changes. Following her case, in 2021 the city’s department of homeless services pledged to create another shelter specifically for transgender and non gender-conforming clients, and to reserve 30 beds across Manhattan, the Bronx, Brooklyn, and Queens that will include single-stalled toilets, showers, and private bathrooms with doors that can lock, where possible.  The city, however, is behind on those plans

    Unsanitary conditions remain unfixed for years 

    Queer populations still face challenges that other homeless people face, like infestations, mold, and broken things.

    The outside of Marsha's House
    Marsha’s House, the only queer-designated shelter for adults in the city, has been the center of several lawsuits for abuse and neglect.

    Sunny Nagpaul

    At Marsha’s House, the most common complaints were about heat or hot water in the building, according to the residents’ reports, which reveal that showers have had issues with uncontrollable burning hot water since 2020. 

    The showers in the shelter, Bishop said, operate by pressing a button rather than a dial, and often the temperature of the water is so hot, they’ve developed rashes, dry skin, and even breathing problems. 

    “If the temperature of the water is too hot or the room gets too humid, I usually lose my breath or faint,” Bishop said.  

    According to the residents’ reports, the most hot-water complaints were filed in March and April of 2020. The complaints in the report said “the water literally burns people’s skin,” and cited “water which is extremely hot in the shower.” One client said he mentioned this to staff, “but nothing has been done.”

    Bishop was also recently diagnosed with an intestinal parasite, and the bathrooms are so dirty that they worry it will spread. “You go there and you see feces from the person that used it before,” they said. Last year, one resident reported “there is a person or persons leaving poop smear all over in a lot of the restrooms. Directors know about this, this is still happening.” Other complaints cited mold and bug infestations.

    A DHS spokesperson told Fortune that when the agency is made aware of conditions that adversely impact residents’ quality of life, it works closely with shelter operators and landlords to rectify the situation in a timely manner. 

    New York’s homeless crisis is growing

    More than 200,600 migrants have arrived in New York since the spring of 2022, and more than 65,600 people remain in the city’s care, according to city data. Up to 1,500 migrants live in temporary emergency shelters outside the city. 

    In 2016, the New York State Comptroller began a series of audit reports on shelter conditions, with new versions released every four years. The goal was to reveal the gaps in shelter regulations, which allow broken things to go unfixed for years. 

    The most recent 2020 report found over 60% of the city’s 80 shelters had significant health and safety risks. Peter Caroll, the lead author of the audit report, told Fortune the biggest issues include mold, vermin, and bug infestations, and that while his team was doing surveys, it was clear that “nobody really knew the scope of the population or the problem.” 

    Jha’asryel-Akquil Bishop looking pensive

    Sunny Nagpaul

    He described how the inspection process works: OTDA, the main regulating entity of shelters state-wide, inspects shelters annually, and then works with shelters or property owners to address violations. If a violation requires more than one month to fix, the shelter should submit a “corrective action plan” to OTDA. But according to the report, that’s one of the steps causing confusion. In five shelters where corrective action plans stated issues like bathtub mold and broken toilets were fixed, Caroll’s audit team returned to see the find the same broken conditions. 

    “We found that in most cases, the conditions didn’t get better, they got worse,” Carroll said.

    The most promising solution for broken facilities, he said, may be more money or at least awareness of financial support that is already siphoned off for shelters. In the state’s yearly budget, $1 million is available through grants to shelters and shelter providers through OTDA for emergency repairs. 

    “It could bring up to $150,000 per facility, each year,” Carroll said, adding that many shelters his team visited said there wasn’t enough money to address the health risks. “This grant would be a way to close that gap.”

    Sunny Nagpaul

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  • Audit finds ‘inadequate’ payroll, controlled substance records at Maryland psychiatric hospitals – WTOP News

    Audit finds ‘inadequate’ payroll, controlled substance records at Maryland psychiatric hospitals – WTOP News

    A legislative audit found that five state-run psychiatric facilities failed to provide adequate recordkeeping and financial documentation for payroll adjustments, as well as inadequate verification of the disposal of highly controlled drugs, among other issues.

    The audit is the latest of several reports dinging the Department of Health for “unsatisfactory” or “pervasive lack of documentation,” that have led to financial woes for the agency.

    The report from the Office of Legislative Audits is dated May 29, but was only released to the public on Monday. It covers a time period beginning in 2018 – start dates vary depending on the hospital – through June 2022.

    Facilities covered included Spring Grove Hospital Center in Baltimore County, Clifton T. Perkins Hospital Center in Howard, Eastern Shore Hospital Center in Dorchester, Springfield Hospital Center in Carroll and Thomas B. Finan Hospital Center in Allegany. They are expected to “provide a wide range of comprehensive health and psychiatric services to patients throughout the State including inpatient treatment, competency and criminal responsibility evaluations, long-term inpatient services, and services to individuals in a maximum-security environment.”

    “This report contains findings common to each of the five hospital centers, as well as those applicable to individual or specific centers,” the audit said.

    It found that all hospitals failed to verify if highly controlled prescription drugs were properly disposed of when they were no longer needed, and that adjustments to payroll or time off were not properly authorized.

    The audit also found that some of the facilities could not verify if amounts paid for drugs or housekeeping services were consistent with vendor contracts.

    In her response to the audit, Health Secretary Laura Herrera Scott acknowledged that while concerns identified in the report were “factually accurate,” the department has taken corrective action or is planning to do so for each issue raised.One issue flagged at every facility was inadequate monitoring of the disposal of “controlled dangerous substances,” and a failure to ensure that such substances were properly locked away and out of reach of unauthorized personnel. The drugs include opioids, stimulants, depressants, hallucinogens and anabolic steroids.

    The facilities are supposed to return unneeded controlled substances to the vendor for proper removal, and possible reimbursement. But hospital records were not sufficient to ensure that the drugs were returned or the hospital reimbursed, the audit found.

    It also noted that employee access to those substances “was not being restricted” to appropriate staff.

    In its point-by-point response, the department said all expired or unusable drugs “are stored in a locked area within the pharmacy in a separate location” from other drugs, until they can be collected by the vendor. The hospitals will ensure appropriate access control to all drugs and “will ensure only appropriate personnel have access to such areas,” it said.

    The report also found that some adjustments to payroll and leave were not properly documented, in part because the hospitals did not have independent reviews of those adjustments.

    “For example, one person was awarded 632 hours of sick leave without support to justify the adjustment,” the report said. “As a result of these conditions, there is a lack of assurance that the SPHCs’ (state psychiatric hospital centers) payroll and leave adjustments … were authorized adjustments.”

    The audit found that the hospitals did not use appropriate channels to pay as much as $28.7 million in contractual services. About 47% of payments for contractual services were made directly, which the audit says “bypasses the critical automated document matching control found in other payment methods.”

    “Specifically, the direct payment method does not include the control of matching an invoice to the corresponding contract/purchase order prior to payment, to ensure amounts paid are consistent with the related contract and do not exceed contract maximums,” it said.The health department’s response said corrective measures are either already underway or will be implemented within the year.

    For the direct payment issue, the department said it has developed additional staff training to ensure state procedures are followed. The agency is also working closely with each hospital’s financial team to “ensure that financial tasks are completed appropriately each month.”

    The department said its Office of Human Resources has already created standard operating procedures to better review payroll adjustments. The office will “ensure only authorized adjustments had been processed and investigate the propriety of discrepancies.”

    And besides keeping controlled substances secured, it said, hospitals will be required to document when drugs have expired and will have to keep logs to record when they are removed from inventory and collected by vendors.

    The health department’s communications director, Chase Cook, pointed out in an email the audit covered the period before Gov. Wes Moore (D) took office. But he said the audit “reveals many opportunities for improvement at the Department’s health care facilities,” which he said the administration is committed to.

    “This administration is working diligently to correct the issues identified in these findings, as well as other issues we have identified, to ensure quality of care and financial accountability in our facilities,” Cook said.

    – This story was updated on Friday, June 7, to include comments from the Maryland Department of Health.

    Dana Sukontarak

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  • ‘Egregious and disturbing.’ NC audit questions $600,000 put on university credit cards

    ‘Egregious and disturbing.’ NC audit questions $600,000 put on university credit cards

    Fayetteville State University

    Fayetteville State University

    Fayetteville State University

    Employees at Fayetteville State University’s communications office allegedly misused university-issued credit cards, racking up $692,239 in questioned purchases, according to an investigation by the North Carolina auditor’s office.

    FSU’s former associate vice chancellor for the Office of Strategic Communication, former director of digital strategy and assistant vice chancellor for marketing and creative services were among the unnamed staff implicated in the investigation.

    Of the questioned spending, $165,570 was paid to businesses owned by employees who “had not disclosed a financial interest in the business, creating a potential conflict of interest,” according to the report. The purchases were made between January 2022 and August 2023.

    “Upon learning of these egregious and disturbing allegations, the University, working in concert with the UNC System, acted quickly and decisively in improving processes,” Fayetteville State Chancellor Darrell Allison said in a letter to the auditor.

    Fayetteville State, a historically Black university, is one of the oldest schools in North Carolina’s public university system.

    How was the money spent?

    Cards intended for travel expenses, which were assigned to the former associate vice chancellor and former director of digital strategy, were found to have instead paid consultants $71,792 for 26 purchases, among other improper spending.

    The travel expenses also included a $1,009 bill to arrive early and fly first class to a conference in New York City, followed by a $287 rideshare to a spa during the first day of the conference. Two employees in the office of strategic communications named in the report are no longer employed at the university, according to FSU.

    Meanwhile, purchasing cards assigned to all three officials were used to buy items from Amazon, gifts, travel, IT hardware or software and payment of invoices.

    “FSU’s leadership has been forthcoming, collaborative, and solutions-oriented throughout this process,” State Auditor Jessica Holmes said. “We appreciate their assistance in helping us identify and work together to address these issues and strengthen their internal protocols.”

    The findings from the investigative audit will be referred to the State Bureau of Investigation to determine if there is sufficient evidence to pursue criminal charges, according to the report.

    Related stories from Raleigh News & Observer

    Vivienne Serret

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  • ‘Egregious and disturbing.’ NC audit questions $600,000 put on university credit cards

    ‘Egregious and disturbing.’ NC audit questions $600,000 put on university credit cards

    Fayetteville State University

    Fayetteville State University

    Fayetteville State University

    Employees at Fayetteville State University’s communications office allegedly misused university-issued credit cards, racking up $692,239 in questioned purchases, according to an investigation by the North Carolina auditor’s office.

    FSU’s former associate vice chancellor for the Office of Strategic Communication, former director of digital strategy and assistant vice chancellor for marketing and creative services were among the unnamed staff implicated in the investigation.

    Of the questioned spending, $165,570 was paid to businesses owned by employees who “had not disclosed a financial interest in the business, creating a potential conflict of interest,” according to the report. The purchases were made between January 2022 and August 2023.

    “Upon learning of these egregious and disturbing allegations, the University, working in concert with the UNC System, acted quickly and decisively in improving processes,” Fayetteville State Chancellor Darrell Allison said in a letter to the auditor.

    Fayetteville State, a historically Black university, is one of the oldest schools in North Carolina’s public university system.

    How was the money spent?

    Cards intended for travel expenses, which were assigned to the former associate vice chancellor and former director of digital strategy, were found to have instead paid consultants $71,792 for 26 purchases, among other improper spending.

    The travel expenses also included a $1,009 bill to arrive early and fly first class to a conference in New York City, followed by a $287 rideshare to a spa during the first day of the conference. Two employees in the office of strategic communications named in the report are no longer employed at the university, according to FSU.

    Meanwhile, purchasing cards assigned to all three officials were used to buy items from Amazon, gifts, travel, IT hardware or software and payment of invoices.

    “FSU’s leadership has been forthcoming, collaborative, and solutions-oriented throughout this process,” State Auditor Jessica Holmes said. “We appreciate their assistance in helping us identify and work together to address these issues and strengthen their internal protocols.”

    The findings from the investigative audit will be referred to the State Bureau of Investigation to determine if there is sufficient evidence to pursue criminal charges, according to the report.

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  • California fails to track effectiveness of billions spent on homelessness, audit finds

    California fails to track effectiveness of billions spent on homelessness, audit finds

    California has failed to adequately monitor the outcomes of its vast spending on homelessness programs, according to a state audit released Tuesday, raising questions about whether billions of dollars meant to thwart the crisis has been worth it as the number of people living unsheltered has soared.

    A new report from the California State Auditor’s Office found that a state council created to oversee the implementation of homelessness programs has not consistently tracked spending or the outcomes of those programs.

    That dearth of information means the state lacks pertinent data and that policymakers “are likely to struggle to understand homelessness programs’ ongoing costs and achieved outcomes,” the audit says.

    “The state must do more to assess the cost-effectiveness of its homelessness programs,” California State Auditor Grant Parks said in a letter sent to Gov. Gavin Newsom and state lawmakers Tuesday accompanying the audit.

    California has spent $20 billion over the past five years dedicated to the state’s homelessness crisis, including funneling money toward supporting shelters and subsidizing rent. Still, homelessness grew 6% in 2023 from the year prior, to more than 180,000 people, according to federal “point in time” data. Since 2013, homelessness has grown in California by 53%.

    The California Interagency Council on Homelessness — created in 2016 to oversee the state’s implementation of programs dedicated to the worsening crisis — has not ensured the accuracy of the information in a state data system and has not evaluated homelessness programs’ success, according to the state auditor.

    The audit recommends that the state Legislature require that the council report spending plans and outcomes of state funded homelessness programs annually and to make that information public. It recommends a type of “scorecard” to track the success of programs.

    The council consists of state officials including Health and Human Services Secretary Dr. Mark Ghaly and California Department of Corrections and Rehabilitation Secretary Jeff Macomber.

    In a response to the audit’s findings, Meghan Marshall, executive officer for the council, said it has already “established a consistent method for gathering information on homelessness” but agreed with the state auditor’s recommendations and plans to pursue them “where possible.”

    Out of five programs analyzed, auditors found that two were likely cost effective: Project Homekey — Newsom’s COVID driven project to convert hotels into housing — and the CalWORKs Housing Support Program, which offers financial assistance and other services to low income residents. The others analyzed, including a state rental assistance program, could not be reviewed because “the state has not collected sufficient data on the outcomes of these programs,” according to auditors.

    “Collecting and reporting all state homelessness programs’ financial data allows for more complete and timely information about the state’s overall spending on homelessness. It also makes possible greater coordination of homelessness programs’ funding and may enable cost‑effectiveness comparisons,” the audit stated.

    Based on the data available, the audit also revealed that most people involved in state programs are placed into interim housing such as shelters and do not end up in permanent housing.

    A bipartisan group of lawmakers including state Sen. Dave Cortese (D-San Jose) and Assemblyman Josh Hoover (R-Folsom) requested that the Joint Legislative Audit Committee authorize a state audit of the efficacy of state homeless funding last year as California’s unhoused population — the nation’s largest — has continued to grow despite record state funding invested to combat it.

    “The biggest conclusion that the auditors came back with is there’s just inadequate transparency and data and information available,” Cortese told reporters in Sacramento on Tuesday.

    Cortese said the audit will act as a blueprint for the Legislature to consider stricter reporting on homelessness spending in the future and said it should not deter the state from funding homelessness responses.

    “I think our constituents want us to continue to invest, and I think our constituents are going to want us to continue to audit the effectiveness of our efforts,” he said. “I don’t think it’s a time to stop.”

    State Republicans chastised the Newsom administration for the lack of data and said it’s proof that Democrat-backed strategies are not working as the state grapples with a multibillion-dollar budget deficit.

    “California is facing a concerning paradox: despite an exorbitant amount of dollars spent, the state’s homeless population is not slowing down,” Sen. Roger Niello (R-Roseville) said in a statement. “These audit results are a wake-up call for a shift toward solutions that prioritize self-sufficiency and cost effectiveness.”

    Tuesday’s audit comes just weeks after voters approved Proposition 1, Newsom’s $6.4-billion bond measure that aims to address one aspect of homelessness by building more treatment facilities for people who have problems with drug addiction or mental illness.

    Another part of the audit examined spending by the cities of San José and San Diego, which have both struggled to help unhoused residents. The audit found that neither of those cities have “evaluated the effectiveness” of their programs despite millions in funding to respond to homelessness.

    “San José and San Diego identified hundreds of millions of dollars in spending of federal, state, and local funding in recent years to respond to the homelessness crisis. However, neither city could definitively identify all its revenues and expenditures related to its homelessness efforts because neither has an established mechanism, such as a spending plan, to track and report its spending,” the audit states. “The absence of such a mechanism limits the transparency and accountability of the cities’ uses of funding to address homelessness.”

    Cortese — whose Silicon Valley district has long been home to some of the nation’s largest homelessness encampments, a stark juxtaposition against the backdrop of stunning wealth — said the findings regarding the two major cities could be a harbinger for future data discoveries.

    “If those two cities are experiencing issues or if there’s symptoms of challenges that we need to correct, that probably exists in many, many other cities in the state of California,” he said.

    Mackenzie Mays

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