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LANSING — A civil service hearing officer on Tuesday reinstated two fired state employees, with full back pay, after determining they were wrongfully accused of filing fraudulent expense claims for meal reimbursements.
Matthew Wyman, a Michigan Civil Service Commission hearing officer, said the firings were based on a handful of meal expenses totaling less than $200, out of hundreds of expenses an audit scrutinized over several years.
There was no evidence the two women, who worked as financial institution examiners for the Department of Insurance and Financial Services until they were fired early this year, ever exceeded their maximum daily meal allowances of $36 each, during their frequent travels on state business, Wyman said.
A Michigan Civil Service hearing officer has cleared two state employees of fraud accusations related to expense reimbursements for meals, while traveling on state business. (Photo: Susan Tompor, Detroit Free Press)
A July hearing heard evidence that Laura Kondel and Lisa McGlashen, who both joined the department in 2008 and had never been disciplined, were in the habit of sharing lunches and other meals with each other or other state employees while traveling. Wyman said a fewincidents where the two women used the same receipts for reimbursement that were used by other employees, without itemizing who ate what, were most likely honest mistakes.
There was no immediate word on whether the state agency planned to appeal the rulings to the Michigan Employment Relations Board. “We are reviewing this but cannot comment on legal or personnel matters,” said Laura Hall, a spokeswoman for the department.
But Jeffrey Foldie, Kondel’s attorney, said the entire case is “crazy” and the state should drop it.
In a nine-page ruling, Wyman said the most Kondel could have received in excess reimbursements — out of more than 500 of her receipts that were scrutinized over five years — was $52.
“It is unreasonable to conclude that Kondel would risk her career for want of $50,” Wyman wrote.
“The scarcity of this happening — and the petty amounts at issue — undermine DIFS’s evidence and argument that overpayment was caused by an intentional act of fraud,” Wyman wrote.
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“The more likely reason why Kondel might have claimed $8.50 for a shared breakfast when she should have claimed $4.25 is because of the occasional mistake of not immediately notating a receipt, not correcting a software default, or other honest oversight or other lapse in memory.”
In the case of McGlashen, the most she could have been overpaid was $25, Wyman said.
He ordered both women “reinstated and awarded full back pay, seniority, leave credits, benefits and all entitlements.”
Wyman’s ruling suggested the state’s own accounting system contributed to what he believed were honest errors.
For example, state employees are not required to submit receipts with their expense claims, but are told to keep their receipts for five years, in case they are audited. In cases where two employees share a meal, both are expected to keep a copy of the single receipt and make notations about who ate what, according to the ruling. Auditors found a few instances where Kondel and McGlashen claimed the full amount for a single meal that was also claimed as an expense by another state employee, indicating the cost of the meal should have been divided between two employees, but was not.
But Wyman said it would not be hard to forget to put the relevant notations on a receipt before storing it away, and the state produced no evidence that either employee exceeded daily meal allowances of $36.
And when an employee entered an expense claim in the state’s software program, the software would default to the maximum, unless it was corrected, he said.
“A receipt deficient in an essential element is no different than a lost receipt,” Wyman wrote. “And lost receipts seemed to be a regular thing for many of the other DIFS employees who were audited, yet none were fired.”
Foldie said it is a shame the state treated two respected state employees so badly. And a few other employees resigned over the audit, when they likely should have fought to keep their jobs, he said.
“It’s really kind of crazy,” he said. “The people that went after them are supposed to be expert fraud investigators.
Aaron Davis, McGlashen’s attorney, declined comment.
Contact Paul Egan: 517-372-8660 or pegan@freepress.com. Follow him on Twitter @paulegan4. Read more on Michigan politics and sign up for our elections newsletter.
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