- Associated Press - Tuesday, May 20, 2014

CHARLESTON, W.Va. (AP) - Former Attorney General Darrell McGraw’s office reimbursed more than $54,000 for employee education without paying appropriate federal taxes, a West Virginia legislative audit states.

The audit released Tuesday says McGraw’s administration spent almost $21,000 for one employee’s out-of-state graduate classes in less than three months. Another employee was reimbursed about $26,500 over two years.

The most recent was reimbursed $6,700 in fiscal year 2012 for in-state university studies.

The assistance dated back to 1999. Payments went unreported on employee W-2 forms back through 2004, possibly earlier. That means Social Security and Medicare taxes went unpaid, the audit states.

The audit covers July 2011 to January 2013. It suggests the attorney general’s office issue corrected W-2 forms to employees who received educational assistance in 2011, 2012 and 2013.

The audit says no written, established educational assistance program existed. With an appropriate program in place, up to $5,250 of educational help can be excluded from an employee’s wages each year, the audit says.

McGraw told The Associated Press he is unfamiliar with the audit. He said it is a state practice to cover tuition for employees to develop relevant skills.

Current Republican Attorney General Patrick Morrisey says his office doesn’t cover employee tuition. Morrisey defeated five-term Democrat McGraw in 2012.

Legislative Auditor Aaron Allred found other potential issues in the office.

The audit states there was a lack of internal controls and management oversight of revenue, travel, purchasing cards and accounts payable.

The office paid almost $600 for two purchases of flowers, which the audit says appear “either extravagant spending or unallowable.” The administration couldn’t explain why they bought two copies of Rosetta Stone or two catalytic converters. Nor could it find a $580 camera bought with state money.

The attorney general’s office wasn’t able to provide documentation backing up $6,100 of about $7,000 hospitality and travel purchases, including a $4,800 Christmas lunch.

Morrisey’s response says the office has already taken steps to eliminate potential issues in the audit.

Another audit of the McGraw administration from July 2011 through June 2012 found a variety of issues in its Consumer Protection Recovery Fund.