A longtime state employee stands accused of bilking two agencies of more than $142,000 for services that were never received and giving the money to fake companies named after her husband.
On Monday, an attorney for Dawanna Walls entered an innocent plea to two felony theft charges that were filed months after state legislative auditors discovered payments to fictional companies. A trial date was set for Oct. 18 in Pulaski County Circuit Court.
Court documents released Tuesday showed that Arkansas State Police investigators were able to track about 170 falsified invoices to multiple agencies. The invoices totaled more than $142,000.
Walls, 42, is on administrative leave from her position as a fiscal support supervisor at the Department of Human Services. She did not return a call for comment Tuesday, and her attorney, Denise Fletcher, said she did not care to comment on Walls' case.
Walls first began working for the state in 1997, according to state finance records. It was during her employment at the Arkansas Department of Higher Education, from 2008 through 2014, that investigators found what they called "payment discrepancies."
State police said they met with officials from Legislative Audit in February after auditors found 39 checks issued to names such as "H E Walls" and an "H&E Wall Computer Supply." The checks were worth $67,893 and were for computer ink cartridges that weren't compatible with the printers at the Department of Higher Education.
No such companies existed, and tax identification information tied to the companies were actually the Social Security numbers of people living outside the Little Rock area, according to investigators.
Investigators did note that Walls' husband's name was Harold E. Walls Jr., who worked for a company that cleans out grease traps at local restaurants.
According to interviews with education officials, Dawanna Walls had the authority to order, receive and pay for products needed at the agency, and she only needed a supervisor to confirm that an invoice be sent for payment.
A senior administrator at the agency, Harold Criswell, told investigators that Walls would electronically enter an invoice for payment to a vendor, and Criswell would then confirm the payment. Walls was authorized to pick up the checks for the service at the state auditor's office.
Detectives also met with officials from Arkansas Community Correction, where Walls worked between 2002 and 2006, and discovered that 131 checks totaling $74,886 were written to "Walls H E" for maintenance services.
In 2014, Walls received a 10 percent pay raise to take her current job at the Human Services Department, according to a court affidavit. She makes $44,404 a year, according to the state transparency website.
After meeting with investigators, Walls refused to sign a statement put together by investigators, but verbally said it was correct, according to a detective's affidavit in the court files.
"During that time I created fake invoices from fake companies and then would submit the invoices for payment to my supervisor. A state of Arkansas check would be issued to the fake company I made up," the statement prepared for Walls read. "I would then pick up the check made out to Walls H E ... deposit it in my personal bank account. ... I knew what I was doing was wrong and I knew I was not entitled to the money but I did it anyway because I needed the money to pay bills."
Legislative auditors have not released the findings from their investigation into the case, nor would they release findings or recommendations for agencies to adopt better safeguards or oversight.
Officials from the Arkansas Department of Finance and Administration would not speak about Walls' case, but said in an interview with a reporter Tuesday that common practice in state government purchasing is to ensure that purchasing is "segregated" so that there are multiple checks and balances in the purchasing process.
Also declining to discuss Walls directly, Criswell said in an interview with a reporter Tuesday that his agency and others have moved away from using generic "one-time" vendor numbers and have adopted more rigorous documentation for purchasing.
Criswell said they've moved toward electronic purchasing and also added more individuals to the process of approving purchases and making invoices so that one person can't do multiple steps.
"Now, my staff can't set up a vendor, they couldn't set up a phony vendor ... that [purchasing information] goes down to [Finance and Administration], they check it out, make sure it's not a phony Social [Security number] or a phony tax ID. We can't set it up internally," Criswell said. "I'm very confident in our fiscal process right now with the agency."
Metro on 06/08/2016