He saw the opportunity to build a kingdom there when he was appointed to the presidency of the agency that manages more than $1 billion in public assistance programs in 2016. This Monday, Shad White, the State Auditor, stated just before the release of a 104-page report detailing the many ways the agency had misplaced millions. MDHS Twitter The state audit released Monday shows that federal funds meant to help the poor were used instead to enrich his family and friends. It paid for luxury vehicles, concerts, public events with athletes, lobbyists and even a speeding ticket. White stated that once you convince yourself to ignore the rules and regulations about how to spend the money it is easy to make absurd spending decisions over time. The latest report, which covers fiscal year 2019, questions $94million in Human Services spending. Some of the previous years are also included. Six arrests were made in February by six state auditors. The single audit is conducted each year for the federal government. Human Services announced recently that it had revised its internal policies. It will now require welfare subgrantees submit more detailed financial records. Governor Bob Anderson appointed Bob Anderson as the new executive director. Tate Reeves, the governor’s new executive director, appointed Bob Anderson earlier this year as interim director Jacob Black’s deputy. He is currently overseeing an internal investigation to find out if any employees are involved in the scheme and making any personnel changes. To conduct a forensic audit, the agency plans to also hire an accounting firm. The U.S. Department of Health and Human Services could have serious consequences for the agency. They can cut state grant funding, impose heavy fines, or demand that the state increase its match to compensate. In 2016, Davis was appointed director. The agency was providing cash assistance to a record number of families at a time when he is currently awaiting trial in the biggest public embezzlement case state history. As the state reported that it spent more money on programs such as skills training and parenting classes, welfare cases continued to drop. The department did not keep track of the beneficiaries and many cases didn’t require income requirements. Stephanie Palmertree is the financial and compliance auditor director at the state auditor’s. “And that’s what’s the greatest concern is that when you’re funding things such as baseball fields for select teams, obviously that money goes to people who don’t need it and people who really need that assistance. They’re missing out because they’re choosing not to fund services for people who can’t afford them.” The auditor stated that Davis was the first to dismantle the agency’s competitive bidding process for contracts. The auditor directed Davis to direct the agency to make multi-million-dollar upfront payments to Mississippi Community Education Center (Mississippi) and Family Resource Center of North Mississippi (Families First of Mississippi). According to state expenditures reviews, the Human Services provided the nonprofits with $65 million and $45 millions over less than four years. According to several subgrantees, the welfare program usually allows subgrantees to submit claims for reimbursement rather than receiving upfront payments. This makes the arrangement with Mississippi Today all the more unusual. According to the auditor, Davis encouraged nonprofits to pay substantial sums to former professional wrestlers Ted Dibiase and Ted Dibiase Jr. for work that they did not do or didn’t help those in need. Davis was close to DiBiase’s family. His agency gave more than $2 million in grants to Heart of David Ministry, owned by Ted DiBiase Sr. The patriarch, Ted DiBiase Sr. The director involved both Ted and Ted in departmental matters and on taxpayer-funded, out-of-state trips. Emails indicate that Ted DiBiase Jr. and Davis had been in business together. They developed a motivational training program called Law of 16 which they distributed to public agencies on the non-profit’s dime. The audit shows that Davis did not benefit financially from the $3 million received by Priceless Ventures LLC and Familiae Orientem between 2017 and 2019. Davis even tried to help the wrestler by writing an autobiography. In February, a Hinds County grand juror indicted Davis as well as Brett DiBiase for allegedly using welfare money to pay Brett’s drug treatment at Malibu. They have pleaded not guilty. Mississippi Today did not reach Davis’ attorney Merrida Cooper on Monday. A grand jury indicted Nancy New, founder of Mississippi Community Education Center, and Zach New, her son, for allegedly embezzling more than $4 million for their own use. They pleaded not guilty. According to the audit, the New nonprofit is the worst example of misusing funds. It transferred more than $6 million to private schools, including New Summit School. Nancy New bought luxurious vehicles for her family and paid high rents for property owned by the News. Then, the buildings remained empty. According to the audit, Zach New used welfare money to repay a loan on his retirement fund. Although the auditor found many million in mispent funds, he didn’t specify the dollar amount of the $94million that was used to pay back the loan. Lack of documentation to show where the money went led to many more questions about costs. The money in question was Temporary Assistance for Needy Families. This federal block grant gives states wide latitude in using it to help low-income families. Mississippi receives approximately $86.5 million each year in TANF. State funds must match this grant. The accounting is complicated because the state may also spend federal grant money from prior years. After being accused of not spending millions in TANF funds and carrying a large unobligated balance year after year, the agency began to reduce that fund in 2017. According to federal reports, Mississippi spent just 5 percent of $135million TANF dollars in 2018 on direct assistance for families. It reported that the state spent most of its remaining funds on programs such as education and training and supportive services. The state also spent approximately $40 million on “Fatherhood and Two Parent Family Formation” which included child welfare and support services. The federal government requires that states provide documentation about families receiving cash assistance, such as the number and work requirements of those families. However, states are not required to report what they buy with the remaining money. It only asks for vague information. In previous audits, the department was frequently cited for not properly monitoring federal funds spending. The agency was responsible for 10 out of the 63 findings in the fiscal year 2018 audit. This came shortly after the auditor’s investigation into Human Services’ TANF expenditure. While they found management mistakes in $30 million of human services spending, they only identified $3,100 in actual questioned cost in TANF, which was payments to low-income families who may not have met all eligibility requirements to receive benefits. White explained that annual audits of agencies’ internal controls are ineffective at identifying fraud. This kind of revelation typically requires tipping from the inside. After agency employees gave information about misspend to the then-Gov, the auditor’s office began investigating TANF in June 2019. White was contacted by Phil Bryant who handed the information to White. White explained to White that auditor agents had arrested the six defendants before the investigation was over. This was because his office wanted to obtain the initial indictments to stop any further theft or misspending. Anna Wolfe Mississippi Today reported the $5 million payment to the New nonprofit for the construction of the University of Southern Mississippi’s new volleyball stadium. The mortgage of Marcus Dupree’s Flora community ranch was paid at $9,500 per month. Paul Lacoste funded a well-known boot camp-style fitness program. Each of these purchases were included in the audit as a finding. The lease agreement the nonprofit used once for a Healthy Teens Rally 2018 in 2018, covered the cost of the volleyball center. Auditor found that the payment was in fact a donation and not a lease. Dupree declined to speak with Mississippi Today in March. He was working as a payroll employee at Mississippi Community Education Center and Family Resource Center. There he made hundreds of thousands of dollars to travel the state and give lectures to schoolchildren. The nonprofit paid for the Lacoste boot camp using TANF money under a contract with Victory Sports Foundation. However, the audit shows that the program was not geared towards the poor. Many professionals and lawmakers were able to participate free of cost. Clarion Ledger was told by Lacoste that he didn’t know he was being paid with welfare money. He also refused to return multiple phone calls from Mississippi Today. Victory Sports was paid $1.3 million from its $1.4million contract by the nonprofit. Clarion Ledger also reported that some of the money went to expensive meals at steakhouses. The audit questioned the Lacoste bootcamp, the Dupree ranch, and the volleyball center. However, no criminal charges were brought against any of these expenses. The indictments include a $2.15million personal investment that News made with welfare funds to fund Prevacus, a medical device company developing a treatment for concussions. This is the largest fraudulent purchase. According to the audit, Prevacus signed a $1.7million contract with the New nonprofit in 2019. Mississippi Today reported for the first time that Brett Favre, a football legend, had promoted Prevacus and met with then-Gov. According to emails Mississippi Today obtained from Bryant, Bryant funded two welfare projects: Prevacus, an investment that the athlete endorsed and the new Southern Miss volleyball center. Favre’s relationship to the News is revealed in the audit. Favre Enterprises was paid $1.1 million by the nonprofit between 2017 and 2018, according to emails Mississippi Today obtained. “MCEC provided a list dates and events that met the contract terms. However, auditors were able, after a cursory examination of those dates, to determine that the individual who was contracted did not speak or was present for those events,” said the audit. Favre didn’t return phone calls or texts Monday afternoon. Mississippi Community Education Center paid $150,000 to Davis’ brother in law to be the department’s leadership outreach coordinator. The $365,050 was also obtained through a lease on property in Brookhaven. It paid $140,809 for Davis’ nephew to create a coding academy, website design program, and $67769 in salary. Family Resource Center also paid Davis’ family members. Families First for Mississippi, which has received more than $100 million in funding since 2017, said that it would not offer any cash assistance to those living in poverty. Davis stated to Mississippi Today that he was not sitting back and saying “Oh, I don’t want help these people” as an agency head. This statement was made just a few months prior to the investigation. “My job is helping people. “I don’t get paid more if I don’t help people.”