CHARLESTON, W.Va. - The office of then-Attorney General Darrell McGraw didn't properly manage its Consumer Protection Fund during the 2012 fiscal year, according to a legislative audit.
The report, presented last week to lawmakers at committee meetings in Wheeling, says the legislative auditor's office reviewed expenditures from the Consumer Protection Fund from July 1, 2011 to June 30, 2012. It also looked at internal controls and the office's compliance with law and rules concerning its finances.
"I would say there was a serious lack of internal controls," said Legislative Auditor Aaron Allred.
Auditors examined the funds at McGraw's request, Allred said. The report states the office "comptroller" requested the audit after "the previous attorney general lost the most recent election."
During McGraw's 20-year tenure as attorney general, he faced numerous allegations of misspending the money in the Consumer Protection Fund. The fund contains settlement money from consumer protection cases won by the attorney general on behalf of the state.
Opponents criticized McGraw for failing to turn over the money for appropriation by the Legislature and for inappropriately spending money on advertising.
McGraw lost to Republican challenger Patrick Morrisey in 2012. During his campaign, Morrisey accused McGraw of mismanaging the fund.
Morrisey also requested an audit after he was elected, Allred said. Morrisey spokeswoman Beth Ryan said the office appreciates the audit.
"The audit raised some significant issues about how the fund was handled before we entered office," Ryan said. "Since taking office, we have implemented new policies and protocols to address the findings in the audit and ensure the fund is managed in an ethical and appropriate manner."
McGraw repeatedly said he never misspent any money from the Consumer Protection Fund. He said so-called advertising expenditures actually were public education.
Fran Hughes, McGraw's chief deputy attorney general, said Monday in a phone interview the office never misspent any money.
"I'm quite comfortable, even in light of any conclusion that might have been reached, that given the millions and millions upon millions of dollars that we recovered on behalf of the state of West Virginia, that there was no wrongdoing," Hughes said.
"I feel perfectly comfortable with how we handled the consumer accounts."
Hughes, who now lives in Florida, said she had not seen the report and was not contacted by auditors.
The auditors found five problems with the management of the fund and the office practices in general but no evidence any money was spent inappropriately.
There was no way to prove whether the money in the fund was spent correctly because records of how the money was spent were scant, said Stacy Sneed, director of the Post Audit Division of the Legislative Auditor's Office.