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Heads roll over close call at state finance office

TALLAHASSEE — Two of state Chief Financial Officer Alex Sink's top administrators have been forced out after an audit found a lack of internal controls for handling billions of dollars in public funds.

Sink ordered the audit in the wake of a scheme to defraud the state of $5.7-million by diverting it to Lebanon. The scheme was derailed by alert bank employees.

The auditors "identified a number of internal controls that were lacking," Sink said Friday. "We just uncovered some things that I would call 'Control 101.' "

Dismissed Thursday were Doug Darling, 55, director of the state Division of Accounting and Auditing, and Herb Fillyaw, 46, chief of the Division of Information Systems. Both helped manage billions of dollars in electronic transfers from the state to vendors.

The scheme was discovered by employees at Regions Bank and Anderson Columbia, a Lake City contractor. The FBI said that in July, the state began depositing funds intended for the contractor to a bank account controlled by Ali Hassan Hammoud of Miramar.

In early August, Sink hired the auditing firm of Deloitte & Touche. The $170,000 audit recommended an agencywide assessment of internal controls including "fraud risks."

Sink, who spent three decades in banking before being elected CFO in 2006, said it was the first time in 10 years that the accounting and auditing division was audited.

"One of my concerns about state government is you have an environment where people have been doing things the same way, year after year after year," Sink said.

Darling earned about $111,000 a year and Fillyaw about $116,000. Their respective replacements are Kimberly McMurray and, on an interim basis, Craig Vollertson.

Steve Bousquet can be reached at bousquet@sptimes.com or (850) 224-7263.

Heads roll over close call at state finance office 09/26/08 [Last modified: Monday, September 29, 2008 3:10pm]

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