Deepwater Horizon audit finds one in five business, seafood claims lack proper documentation | Louisiana Record

Deepwater Horizon audit finds one in five business, seafood claims lack proper documentation | Louisiana Record December 2, 2014

By KYLE BARNETT 

NEW ORLEANS – An audit of the Deepwater Horizon settlement facility shows that nearly one in five claims in certain fraud-prone categories were paid without proper documentation.

The $14 million independent audit, paid for by oil giant BP PLC, shows that 20.6 percent of business loss claims attributed to the 2010 oil spill lacked documentary proof. Similarly, fishermen claims for losses lacked proper documentation 18.4 percent of the time. These two loss categories have been cited by BP and federal investigators as magnets for fraud and both programs have been a focus in recent months for scores of clawback requests and criminal indictments. 

 The audit, released last week by Virginia-based accounting firm McGladrey LLP, found that some $538 million of nearly $4 billion in randomly selected claims paid by Claims Administrator Patrick Juneau lacked proper documentation. Although the audit stopped short of stating that all of the $538 million Juneau paid out in improperly documented claims was fraudulent, it noted that in many cases auditors working under Juneau may not have exercised “appropriate professional skepticism’’ when sending out checks. 

The audit also faulted Juneau’s office for exercising careless internal controls across a variety of operations. For example, it said its attempt to reconcile claims payments accounts uncovered an “unexplained” discrepancy of $5.4 million. In other cases, the audit cited a general lack of internal monitoring, an incomplete history of claims, no systems in place to document manual overrides of the claims processing system and other program deficiencies."



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