DURHAM -- State auditors say they'll ask local and federal prosecutors to follow up on an audit that found at least five employees at N.C. Central University who bought phony Social Security cards on some sort of black market.

N.C. Auditor Les Merritt and his staff will relay their findings to District Attorney Mike Nifong, Middle District of North Carolina U.S. Attorney Anna Mills Wagoner and N.C. Attorney General Roy Cooper, a spokesman for Merritt said.

"We are required by statute, any time we discover a possible violation of law, to turn over the report to the appropriate law enforcement agencies," said Chris Mears, Merritt's director of public affairs.

Auditors would share information from their work files if investigators want it, Mears added.

NCCU officials didn't dispute any of the audit's findings, and indicated to state auditors they've already begun complying with its recommendations, including crosschecking with a list the state issues monthly of potentially phony Social Security numbers.

NCCU Assistant Vice Chancellor for Financial Affairs Charles O'Duor released the following statement through NCCU spokeswoman Sharon Saunders on Tuesday:

"The report contains six findings and recommendations as it relates to invalid Social Security numbers being used by some employees, a few student workers not completing the immigration and naturalization (I-9) forms, and one transaction of an employee being overpaid. These findings were limited in scope and many resulted from typographical or keystroke errors.

"[NCCU] Chancellor James H. Ammons has met with the senior leadership team as well as pertinent members of the finance staff. We have implemented corrective action."

The auditor's report, released Monday, criticized officials at NCCU for not doing enough to check the legitimacy of their employees' Social Security paperwork.

Auditors found that seven employees had listed Social Security numbers that the U.S. Social Security Administration hasn't issued, and that two more were using numbers that had belonged to dead people.

The auditors tried to question all nine workers, but couldn't find four of them, who had either quit or were on leave. The other five admitted that they had purchased their Social Security cards rather than securing them properly from the federal government.

One of the five, who had a dead person's number, told auditors "this problem was more widespread" than indicated by the lists of potentially invalid numbers.

The warning prompted auditors to check the files of 18 more employees. They found that 13 of the 18 had names that didn't match the name on file for their ID at the Social Security Administration.

Merritt's auditors also found that NCCU officials didn't have proper Social Security paperwork for 11 work-study students, that clerical workers frequently had copied numbers incorrectly while entering them into campus records, and that officials had failed to cross-check their files against a list of state employees with potentially phony ID numbers. The state controller's office publishes the list monthly.

A controller's list published in late July listed 146 employees at NCCU with Social Security data mismatches, many of them subsequently documented by the audit.

"If NCCU had been using this report and investigating the issues identified in it, 18 of the errors we found could have been resolved," auditors said.

The auditors said they had asked NCCU's director of disbursements about that, and were told that the university "had not been using" the controller's lists.

The director also told them that if university officials had doubts about a Social Security number, they'd ask the employee to bring it in so they could look at it and make sure they had the correct number in their records.

NCCU officials instead should have directed employees with doubtful cards to contact the Social Security Administration and let the federal agency take the lead in addressing the problem, Mears and the audit report said.

Checking cards on their own was "not sufficient, for the very reason that [employees] obtained fraudulent cards on the black market," Mears said. "It's easily faked."

The report of NCCU was the first use of a new type of audit that makes heavy use of computerized "data mining" to find anomalies in state-government records that could indicate malfeasance, Mears said.

Auditors weren't targeting NCCU initially, but "the numbers" led them to the school's doorstep, Mears said. Merritt and his staff believe they've uncovered "a widespread problem" likely to trip up other state agencies, Mears said.

The audit also found that six of the nine people with fraudulent Social Security cards also possessed valid North Carolina driver's licenses. Auditors don't know yet whether the six used their Social Security numbers to procure their licenses, but are checking with the N.C. Division of Motor Vehicles to find out.

The failure to crosscheck names with the state's controller's mismatch list was particularly galling to the auditors.

"That is a very serious problem, and it's not isolated to NCCU," Mears said. "Sometimes it's from oversight, other times it's negligence. But we do know when they are used, these Social Security numbers can be successfully purged. This tool provided by the state controller could be a tool essentially to uncover identity theft or misrepresentation."

Mears added that auditors don't know whether the nine NCCU employees with phony cards are foreign nationals, as that was a question "outside of the scope" of their investigation.

"It's quite possible that they are," he added. "I mean, just kind of following things up to the logical conclusion, if we are talking about someone who's a U.S. citizen, why would they need to purchase U.S. Social Security Administration cards or fabricate Social Security numbers?"

The audit report repeatedly noted that NCCU had been advised to "take appropriate action against" the employees with phony cards, but was silent on what that might be.

"We didn't recommend firing; we didn't go that far," Mears said. "But obviously, if there's a violation of their policy for which their remedy is to fire the employee, that would be appropriate."

Durham authorities said Tuesday that they hadn't yet received the audit or launched an investigation.

Nifong couldn't remember anything specific about prior investigations of forged Social Security cards.

"Obviously, there are other forms of false identification we've dealt with in the past," he said. "I don't know if it'll be a federal crime or what will be implicated because I don't know enough of the facts."
 

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