Posts tagged audit
By Chris Butler | Tennessee Watchdog
Universities not keeping good track of student loans, audit says
KNOXVILLE — If you’re a University of Tennessee at Knoxville student on financial aid, it’s possible you could quit going to class outright or even graduate and you would still qualify for that money.
An audit that Tennessee Comptroller Justin Wilson released last week said it will happen if school officials aren’t watching you carefully.
The audit also said it’s possible to attend another school in the University of Tennessee system, UT-Martin, and receive thousands of dollars in student aid even though your grades don’t measure up.
At UT-Knoxville, auditors took a sample of 40 student loan recipients and discovered that five of them likely already had left school. Other students might have started attending less than half the regular time, auditors said.
UT-Knoxville officials didn’t return Tennessee Watchdog’s request for comment Tuesday.
A list of quick facts on the school’s website didn’t say how many students overall accept financial aid.
“Student enrollment information is extremely important, because it is used to determine if the student is still considered in school, must be moved into repayment, or is eligible for an in-school deferment,” auditors wrote.
The website reports the school has a 66 percent graduation rate.
“For students moving into repayment, the out of school status effective date determines when the grace period begins and how soon a student must begin repaying loan funds.”
In a written response to auditors, UT-Knoxville officials said they would implement stronger standards. Auditors wrote they made similar findings at the school the previous academic year.
The samples were taken from the 2012-13 academic year, as were those for UT-Martin.
Auditors at UT-Martin sampled $392,582 in financial aid — out of a total $51.6 million given — and discovered two students received $18,527, even though they didn’t meet the university’s own minimum academic standards.
In a written response, UT-Martin officials said they concur with those findings, will implement stricter procedures and already have returned that money to the U.S. Department of Education.
UT-Martin spokesman Bud Grimes told Tennessee Watchdog the school has a six-year graduation rate of 46.5 percent.
Two individuals are responsible for handling the school’s student loan applications, Grimes said.
Last year, several students at Middle Tennessee State University in Murfreesboro told Tennessee Watchdog that student loans to attend any Tennessee college are extremely easy to acquire and sometimes given to students who aren’t college material.
Those loans don’t just burden students — to a degree, they also burden taxpayers.
University officials hire state employees to process those loans, said Tennessee Higher Education Commission spokesman Russ Deaton. The more student loans given, the more state employees are needed to process those loans.
Russ Deaton also said that if you process student loans at a Tennessee university you likely have the safest job on campus, even when college presidents make drastic cuts elsewhere.
Federal guidelines help see to that, Deaton said.
Such was the case during the most recent recession, when funding for Tennessee’s colleges and universities dropped, and more of higher education’s revenue came from tuition increases, he said.
“The student loan industry, as you can probably guess, has a lot of federal regulations and paperwork attached to it,” Deaton said when asked if these student loan processors, who are state employees, could ever face downsizing when money is tight.
“Most of those financial aid offices are already slammed and understaffed. I doubt that presidents would look there first.”
The U.S. government made $50 billion off student loans in 2012, according to the Congressional Budget Office.
Deaton said campuses generally don’t do independent credit checks or risk analyses on students who apply.
Image credit: http://tennessee.watchdog.org
By Chris Butler
Audit: School employee used nearly $500,000 on iTunes, jewelry
A former Alcoa City School District employee who oversaw federal funds took nearly $500,000 in taxpayer money to use for herself, according to an audit Tennessee Comptroller Justin Wilson released Tuesday.
The former employee spent the money on her home mortgage, food, jewelry, clothing and iTunes songs, Wilson said. She even invested some of that money in a local gym, according to the audit.
Unlike many other state audits involving theft of taxpayer money, in which authorities already have indicted the accused government employee, officials haven’t arrested the employee yet, and they haven’t publicly identified her.
“Due to the fact that federal money is involved, this matter has been referred to the U.S. Attorney’s Office in Knoxville,” said Cortney Dugger, spokesman for Tennessee Ninth Judicial District, in a statement to Tennessee Watchdog.
Dugger couldn’t say whether local or federal officials, or both, would prosecute the case, assuming an arrest is made.
Director of Schools Brian Bell didn’t return Tennessee Watchdog’s messages seeking comment Tuesday, and neither did anyone at Knoxville’s U.S. State Attorney’s Office.
According to the audit, the former school district employee, who assisted the school district’s federal projects administrator, diverted the half-million dollars from the district and two professional organizations — the Tennessee Attendance Supervisors Steering Committee and the East Tennessee Attendance Supervisors Association — where she served as treasurer .
The audit also said the school district reimbursed her for 70 work-related trips that she didn’t actually take.
The Tennessee Bureau of Investigation assisted with the investigation, which covered almost six years, comptroller spokesman Blake Fontenay said in a news release.
The audit also said the school district and the two professional organizations didn’t properly oversee how the employee spent taxpayer money.
By Peter Schiff
Dark Gold: Shedding Light on a Mysterious Market
Gold is the simplest of financial assets – you either own it or you don’t. Yet, at the same time, gold is also among the most private of assets. Once an individual locks his or her safe, that gold effectively disappears from the market at large. Unlike bank deposits or stocks, there is no way to tally the total amount of gold held by individual investors.
I like to call this concept “dark gold.” This is the real, broader gold market that exists below the surface-level transactions on the major exchanges. It’s impossible to know precisely how much dark gold exists around the world, but we do know that it is enough to render “official” gold holdings insignificant. That’s why I don’t buy and sell gold based on the decisions of John Paulson, or even J.P. Morgan Chase. It is a long-term investment that requires a deep understanding of the nature of money – and how little Wall Street’s media circus really matters.
Observing Dark Gold
Think of dark gold like dark matter. Dark matter is a mysterious substance that scientists hypothesize is an essential building block of our universe. All we know is that the universe is a certain size and that a huge amount of its mass is unobservable – this is what we’ve come to call dark matter.
We haven’t yet looked directly at dark matter. We can only observe phenomena that suggest there is a substance we aren’t seeing and can’t quite measure.
Likewise, dark gold is an essential building block of global financial stability. But the extremely private nature that makes it so valuable also makes it nearly impossible to directly observe.
But every now and then, we get a glimpse into the hidden undercurrents of dark gold. In the past year, the Federal Reserve slipped up in a big way and momentarily poked a hole that we can peek through to see what’s happening with some of the largest stores of dark gold in the world.
Gib Mir Mein Gold!
A year ago, the big news was that the Bundesbank, Germany’s central bank, would begin the process of repatriating a portion of its foreign gold reserves, including 300 metric tons stored at the New York Federal Reserve Bank.
The controversy really started in late 2012, when Germany simply wanted to audit its gold reserves at the Fed. They were denied this access, so the Germans switched their approach. If they weren’t allowed visitation with their holdings, they would instead demand full custody. In response, the Fed said it would oblige – within seven years!
As of the end of 2013, a Bundesbank spokesman reported that only 5 tons had been transported from New York to Germany so far, leaving the repatriation far behind schedule.
“But wait,” some might argue, “the repatriation process might be delayed, but we know the gold is there. Central bank holdings constitute the most visible gold in the world. These institutions report their holdings to the world regularly. The gold at the Fed isn’t dark gold at all!”
If this is a true and certain fact, then why was the Bundesbank denied a third-party audit of its gold in the Fed’s vaults? The closest we’ve seen was an internal audit by the US Treasury last year. Of course, the US government holds the sovereign privilege of answering to no one but itself, but that hardly makes for reassuring statistics on which to base one’s investments.
The truth is that we have no clue of the official gold reserves of any central bank in the world. All the Fed has to do to convince me otherwise is let an outside party into its vaults and count the gold. They’ve shown lots of paper; now show us the money!
It is very simple to count bars of gold where they exist. And it is clearly moral (and generally good business) to return assets that are held in trust when the creditor demands them. The Fed’s reluctance on both counts suggests that there is more to this story than meets the eye.
Fortunately, the veracity of the Fed’s claimed gold holdings has little bearing on the long-term precious metals investor. It’s the same with gold futures contracts and the daily spot price. These have no effect on whether or not you have a chest of real money buried in your backyard.
So why is it important that intelligent investors do keep some gold “buried” in their possession? Germany’s repatriation scandal begins to answer this question. The maneuverings of the New York Fed are like the patter and flourish of a magician – it distracts you from the real trick being played.
Or, in this case, where the most impressive piles of dark gold reside.
China Going For Gold
I’d bet that Western central banks are very pleased that the media has latched onto the dustup between Germany and the Fed. It means they are paying much less attention to the massive unreported stores of gold that many observers believe China has been accumulating, and which could have dire repercussions for the US dollar reserve system.
China last reported its gold reserves in 2009, clocking in at 1,054 metric tons. In the official rankings, this makes China’s reserves the sixth largest in the world. Germany comes in second with 3,387 metric tons (or so they hope), and all nations trail the United States’ claimed 8,133 metric tons.
Many speculate that China’s reserves have grown far beyond its official number in the past five years. However, the People’s Bank of China (PBOC) is playing its cards close to its chest.
Last year, a deputy governor of the PBOC tried to convince the world that its reserves have not changed much since 2009. He explained that the Chinese government is keeping a limit on its gold reserves, because “if the Chinese government were to buy too much gold, gold prices would surge, a scenario that will hurt Chinese consumers.”
But a quick look at the numbers coming from the Chinese government shows that they just don’t add up.
China is the largest producer of gold in the world, pulling an estimated 437 metric tons of gold from the earth in 2013 – way more than runner-up Australia, with only 259 metric tons.
On top of this, China imported far more gold than any other country in the world in 2013. Via Hong Kong alone, China imported 1,158 metric tons of gold last year – a more than 107% increase from 2012.
This gold is not leaving the country in large quantities. Sure, China is the biggest exporter of gold jewelry to the Western world, but the value of these trinkets is negligible compared to the thousands of tons of bullion they are creating and importing.
Jim Rickards has estimated that China has probably added at least 1,000 metric tons to its reserves every year since 2010, meaning it has well over 4,000 metric tons today.
This is a conservative estimate. Wikileaks documents claim that China actually imported more than 2,000 metric tons from Hong Kong in 2011 alone.
If this is the case, when China does finally reveal how much gold it’s holding, it will leap from the sixth largest reserves in the world to the second, easily surpassing Germany in a single bound.
They might even give the US a run for its money.
Out From Under
It’s no longer a secret that China would prefer a “de-Americanized world.” Whether it’s the PBOC or average Chinese consumers hoarding all this dark gold, the effects will be the same when China decides it is fed up with the funny-money central banking system long dominated by the US dollar.
It certainly seems like the East is preparing for this endgame. Several new physical gold vaults have opened in Singapore in the past year, Moscow recently launched a spot gold exchange, and Dubai is planning a new spot gold contract for this year. Let’s not forget that the Hong Kong Exchange bought the London Metals Exchange in 2012, and there have been rumblings of physically moving it to Hong Kong.
If China were to initiate a gold-backed currency attractive to international trade partners, its government and citizens are poised to become extremely wealthy and powerful overnight. Americans, on the other hand…
Are You Afraid of the Dark?
Some investors avoid the gold market because of its innate unofficial nature. But in a time when governments are in a race to tax anything that moves and inflate anything that prints, gold’s privacy becomes the difference between preserving wealth or facing destitution.
I challenge my readers to worry less about the short-term movements in the gold futures market, or even which central bank has what holdings. Understand that gold is a deep, global market that has witnessed the rise and fall of countless empires. Your decision is simple: you either own it, or you don’t.
Peter Schiff is the CEO and Chief Global Strategist of Euro Pacific Capital, best-selling author and host of syndicated Peter Schiff Show.
Federal Reserve Ducks Public Scrutiny During Centennial Anniversary
Published by NextNewsNetwork
On January 3, 2013 Congressman Paul Broun, Jr. (R-GA) introduced HR 73, The Federal Reserve Board Abolition Act. The thrust of the legislation is to “abolish the Board of Governors of the Federal Reserve System and the Federal reserve banks, to repeal the Federal Reserve Act, and for other purposes.” It looks like Ron Paul’s consistent cries for dealing with the Federal Reserve have not fallen on deaf ears, nor has the idea dissipated from elected representatives since he left office.
This piece of legislation was not the only one to be introduced. House Resolution 77, the Free Competition in Currency Act of 2013, was also introduced by Rep. Broun. This legislation seeks “to repeal the legal tender laws, to prohibit taxation on certain coins and bullion, and to repeal superfluous sections related to coinage.”
But Broun wasn’t about to stop there. He also introduced two other pieces of legislation: HR 24, the Federal Reserve Transparency Act of 2013, which is put forth “To require a full audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks by the Comptroller General of the United States,” and HR 33, the Audit the Fed Act of 2013, which purpose is “To amend title 31, United States Code, to reform the manner in which the Board of Governors of the Federal Reserve System is audited by the Comptroller General of the United States and the manner in which such audits are reported.”
All of these pieces of legislation are very similar to those proposed by former Congressman Ron Paul.
The Federal Reserve is a huge problem from America and this is not some recent news. It has been going on since the early 20th century.
Felix Bronstein wrote a piece in which he cited a piece on proposals to help cut the Federal budget written for The Heritage Foundation in 1986 by Warren T. Brooks. Bronstein writes,
Brookes began by stating that “conservatives need to understand that without basic monetary reform there is no way to balance the U.S. budget, with or without tax increases and budget cuts, and even with the most optimistic GNP growth projections.” He then offered a 3 part solution:
(1) “the nation must return as quickly as possible to gold-based money and debt” (Heritage’s Policy Review published another piece endorsing a return to the gold standard as a key component of balancing the budget, in the next issue, by the late Congressman, HUD Secretary and Vice Presidential candidate — Jack Kemp, My Plan To Balance The Budget, Spring 1986)
(2) we should allow “free exchange of gold and silver, both public and private, setting up a parallel monetary system on a free market basis, allowing the public to choose,” (Heritage’s Policy Review published another piece endorsing the idea of Hayekian currency competition or privatization, also in the next issue — Richard W. Rahn, Time To Privatize Money?, Spring 1986) and
(3) “the Federal Reserve would be phased back to its original role as a bank-owned clearing house, thus eliminating its huge and costly presence in the money markets where its open market operations now run as high as $1 trillion a year.”
With all of the talk about the “fiscal cliff” and raising the debt ceiling yet again, it is clear that the problems of the Federal budget and debt, and especially the cost of servicing the Federal debt, have certainly not gotten any better since Warren Brookes’s [sic] solutions were published (and ignored) in 1986.
So far we have seen that Washington is not serious about the fiscal cliff or the debt ceiling. So now, we’ll see how serious they are about dealing with the Federal Reserve. So far, each of the bills have been referred to committee. It would behoove us to inform our representatives about these pieces of legislation and to push them through committee for a vote on the House floor.
Hat tip: American Vision News
Posted by Brianna Panzica on the Wealth Wire
Gold conspiracy theorists don’t trust the government…
Of course, that’s nothing new. By nature, groups like the Gold Anti-Trust Action Committee(GATA), a group formed to expose control over the price of gold, are suspicious of collusion linked to the government.
But now they’re taking this suspicion into action with a petition to audit the nation’s gold reserves. According to the petition, the last full audit of bullion owned by the U.S. Treasury occurred in 1953: 60 years ago.
The Treasury last claimed to have 261 million ounces in its possession on December 31, 2012. But the time lapse between that and the last time the store was officially checked is significant.
“The gold bars need to be assayed and weighed,” the petition advocates. “Once the gold is verified the paper trail must be audited to determine who really owns the gold; i.e. how much has been loaned to bankers and dealers and sold or swapped to non-Treasury entities including foreign governments.”
“The audit must include professional auditors outside of the Mint, Treasury, GAO, Inspector General and the Federal Reserve System,” the petition concludes.
The petition landed a spot on the White House website on Wednesday, January 9. By Monday morning, it had garnered 3,834 signatures.
If it reaches 25,000 by February 8, the White House has to respond. Policy experts will be required to review the request, and a public statement will be made.
Chris Powell, Secretary and Treasurer of GATA, thinks the request is likely a long shot. He wrote in an article published on GoldSeek:
Of course the U.S. government may be less likely to tell the truth about its gold than to declare signers of the petition to be terrorists and to send rocket-firing drone aircraft after them or have them hauled off to the military prison at Guantanamo Bay, Cuba, outside the jurisdiction of the federal courts and beyond any claim of habeas corpus. But it’s a risk we have to take and if enough people sign and the petition has to be answered, clamor about the gold issue will increase.
If you’re interested in signing the petition or in reading the full petition text, you can check it out here.
In 2007, the Sentinel Management Group (SMG) collapsed, leaving many customer segregated funds lost after they had been used as collateral. After a plethora of lawsuits and creditor claims, a decision earlier this month in the 7th Circuit Court placed the banking cartels ahead of customer claims for funds returned. Essentially, the Bank of New York Mellon (BNYM) sued to be first in line for return on stolen customer account monies – and won the right by the US court system.
In the mainstream media (MSM), the SMG collapse and subsequent ruling in favor of BNYM was touted as a difficulty “for customers to recoup money lost”.
SMG, a Chicago-based futures broker, had stolen more than $500 million in segregated customer funds to use as collateral on a loan to BNYM for in-house proprietary trading operations. Their books were audited by the National Futures Association (NFA), however the NFA admitted that they could not understand the convoluted mess they were provided by SMG to sign off on. And yet they did; and approved the audit.
BNYM sued SMG to re-coup any monies owed to them. However, these monies were customer segregated funds that SMG stole and re-hypothecated.
In federal court, John D. Tinder, US Circuit Court Judge ruled “that Sentinel failed to keep client funds properly segregated is not, on its own, sufficient to rule as a matter of law that Sentinel acted ‘with actual intent to hinder, delay, or defraud’ its customers.”
This means that once a banking customer deposits their money into an account with a bank, the funds become property of the bank. The customer, at the point of deposit, relinquishes all rights to that money regardless of any laws in place, legal assurances, claims or guarantees; and this extends from investments to private checking accounts.
Ron Paul ‘Constitutionally Correct’ 2012.
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By Ron Paul & Campaign for Liberty
Thanks to Teri C, Matt & C4L!
I always knew, though, that if more Americans decided enough was enough and took action, the Fed would finally be held accountable, and our nation could take a giant step toward a sound monetary policy.
Now, thanks to your help, my Audit the Fed bill is ready to be voted on in the U.S. House of Representatives this month.
I don’t have to tell you what we could finally learn about the Fed’s actions if Audit the Fed were passed.
But there are still far too many Americans who must be made aware of how critically a thorough audit of the Federal Reserve is needed.
Once they get the message, I’m sure they’ll passionately rally to this cause like so many before them.
With a floor vote in the U.S. House later this month, and time running out to carry our momentum over into the Senate, C4L must rally millions of Americans in support of Congressman Ron Paul’s Audit the Fed bill!
So please make the most generous donation you can today to C4L’s “Audit the Fed Moneybomb.”
This is our best chance ever to pass Audit the Fed, but C4L needs your support to run the ads, send the direct mail and email, and make the phone calls it will take to turn up the heat on Congress.