The West Virginia Department of Health and Human Resources has launched a statewide investigation into the $24 million Wheels-to-Work welfare car program and a new donated-car initiative that took its place.
The inquiry has been given "high priority" and put on the "fast track"— although it's expected to last several months, according to those familiar with the review.
"There are going to be people brought in from all over," said DHHR spokesman John Law. "And they're going to be doing a lot of work and looking at a lot of documents."
Those assigned to the investigation are targeting alleged fraud and mismanagement. They already have received complaints about alleged kickbacks, illegal expenditures and questionable car purchases and sales, DHHR employees said.
The DHHR review includes an examination of a new $1 million donated-car contract awarded in October to Human Resource Development Foundation of Morgantown, an offshoot of the state AFL-CIO.
At least four other state agencies also are investigating the welfare car programs: the Commission on Special Investigations, the Tax Department, the Legislative Auditor and the Department of Motor Vehicles.
In November, the Sunday-Gazette Mail reported that nonprofit groups leased clunker cars to many low-income West Virginians while used-car dealers and mechanics reaped millions. Some agencies had questionable relationships with used-car dealers and garages.
DHHR's comprehensive review signals a sharp departure from department officials' previous assertions about the Wheels-to-Work program.
For months, they've lauded the program, which leased cars to about 2,900 welfare recipients so they could drive to work or job training programs.
The department has assigned Assistant Attorney General Harry Bruner to lead the probe.
Forensic accountants and welfare fraud investigators with the department's inspector-general division have joined the investigation. The West Virginia State Police also might assist.
Auditors also are scrutinizing DHHR "monitoring reviews" of four nonprofits that ran Wheels programs over the past three years.
Three of four programs received positive reports. But investigators will examine whether DHHR staff members overlooked program shortcomings and gave preferential treatment to some nonprofits.
In recent weeks, Human Resource Development Foundation executives have complained to state officials that the ongoing investigations have hampered their plans to collect donated cars and give them to welfare recipients.
On Dec. 4, Homer Kincaid, the organization's executive director, fired off a letter to the DHHR, calling for a quick end to the investigation.
The foundation received a $1 million contract to run the donated-car program in November. The group also ran a Wheels-to-Work program over the past two years.
The foundation had promised to put at least 60 vehicles in the hands of welfare recipients by the end of December, according to its grant application. By last week, the nonprofit had collected only six cars and hadn't given out a single vehicle, Kincaid said. The agency also hadn't obtained an auto dealer's license, which the grant required.
"Damage to the donated-vehicles program will continue or escalate as long as the Wheels-to-Work program investigation continues," Kincaid wrote to DHHR Commissioner Fred Boothe. "It is imperative this unfortunate situation is settled as quickly as possible."
Kincaid said used-car dealers who had promised to donate cars to the agency are reneging on agreements. One dealer, for instance, had promised 15 cars but has "since decided they want no association with HRDF's program."
"They don't want to be caught up in the line of fire," Kincaid said in a recent interview. "It's having an adverse effect on us getting a large volume of cars."