Conservatively Speaking

State Senator Mary Lazich (R-New Berlin) represents parts of four counties: Milwaukee, Waukesha, Racine, and Walworth. Her Senate District 28 includes New Berlin, Franklin, Greendale, Hales Corners, Muskego, Waterford, Big Bend, the town of Vernon and parts of Greenfield, East Troy, and Mukwonago. Senator Lazich has been in the Legislature for more than a decade. She considers herself a tireless crusader for lower taxes, reduced spending and smaller government.

LAB letter: Fraud, Waste, and Mismanagement Hotline


During the 2007-08 regular legislative session, I co-sponsored legislation that was approved and signed into law that created
a toll free telephone number with voice mail maintained at the Legislative Audit Bureau’s office to receive reports of fraud, waste, and mismanagement in state government.


The Legislative Audit Bureau (LAB) has operated the Fraud, Waste, and Mismanagement Hotline since April 2008, and has produced a letter report outlining hotline activities as of December 2009.

Of the 79 hotline reports received during 2009, 53 were related to state programs and funding. The other 26 did not relate to the hotline’s purpose since they involved federal or local issues or were simple requests for information.

Most reports by the LAB during the first two years of the hotline’s  operation involved allegations of waste and inefficiency. Other allegations claimed agency mismanagement, inadequate control over spending and oversight of staff, or noncompliance with statutory requirements. There were also allegations that vendor or contractor goods or services had not been provided as expected, that the State was improperly billed for services rendered, and that agencies did not follow required processes for selecting vendors and agencies were not properly monitoring contractors. Three reports received during 2008 alleged misconduct by state employees. No reports of employee misconduct were made to the hotline during 2009.

Of the 53 reports during 2009 related to state programs, 16 were resolved. Some reports were referred to the appropriate state agencies. Others were handled by LAB staff.  Another 19 reports remain under review, and 18 concerns or allegations reported during 2009 could not be substantiated with information at hand,  did not require additional action, or were unfounded.

Only 4 of the 75 state hotline reports received during 2008 continue to be under review.

The LAB letter report contains selected summaries and outcomes of problems submitted to the hotline. Here are some examples:

Department of Transportation Concrete Quality Assurance Process


Shortly after the hotline began operating, a call was received questioning whether the Department of Transportation (DOT) was ensuring that contractors were following required concrete thickness specifications for state highway projects. The LAB then discovered that a former employee of a

concrete contractor had alleged during 2004 that the contractor falsified pavement thickness and smoothness measurements. The Department of Justice had closed the case during 2008. The Joint Legislative Audit Committee held two hearings in response to the LAB’s review of
construction engineering on state highway projects. The LAB continues to monitor DOT’s progress in meeting concrete thickness specifications.

Overtime Payments


Hotline allegations were received involving the potential of individual state employees working large amounts of overtime. Reports about individual employees’ work schedules were sent to the employing agency for investigation. In one case, following review by the LAB, one employee’s use of overtime during 2009 dropped from 500 hours to 60 hours. The LAB continues to monitor payroll records for these employees to help guard against unnecessary overtime costs.


Coordination Efforts with the Department of Revenue

We regularly receive allegations of individuals or businesses underreporting taxable income or otherwise submitting fraudulent tax filings. The LAB referred 13 reports of individuals or business underreporting taxable income to the Department of Revenue (DOR) during 2009 either directly or by instructing hotline callers to contact DOR.  Subsequently, the LAB encouraged DOR to create a referral form similar to the one used by the Internal Revenue Service. The DOR made such a form for its website, available since January 2010.

The LAB letter report demonstrates the Fraud, Waste, and Mismanagement Hotline is fulfilling its intended purpose under the LAB’s outstanding management. I greatly appreciate the LAB’s great work on behalf of state taxpayers.

You can read the LAB letter report here. 

For more background, here is a Milwaukee Journal/Sentinel article, details from the Legislative Audit Bureau  about how the fraud hotline works, and the history of Senate Bill 86 that contains links to Legislative Council memos and the enacted law.


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