Bates proposes to cut budgets of agencies with repeat audit problems

By Megan Poinski
Megan@MarylandReporter.com

Cutting the budgets of agencies that have problems with waste, poor policies, and lack of adequate controls will spur them to fix the problems more quickly, said Del. Gail Bates, R-Howard.

Del. Gail Bates presents her bill that would allow the General Assembly to cut budgets of agencies with too many repeat audit findings.

Bates, a new member of the Joint Audit Committee, has proposed a bill that would allow budget committees to withhold up to 5% of an agency’s funds if there are at least three repeated findings on the regular audit reports done every three years by the Office of Legislative Audits. Once those findings have been addressed to the satisfaction of auditors, Bates said the withheld funds could be released.

Bates said she was surprised to see how many state agencies have wide-ranging and often repeated financial control issues.

“We’re at a time where we’re looking at getting additional money from taxpayers, and there are agencies that don’t have their house in order,” Bates said.

According to her calculations, there are 38 state agencies that have had three or more repeated findings in their last audits. There are findings that have come up in audits time and time again.

They include the Developmental Disabilities Administration’s failure to follow up on federal fund reimbursement claims; the Child Support Enforcement Administration’s failure to follow up on suspending driver’s licenses of parents owing child support; and lack of adequate accounting controls over money from the Boards of Nursing and Pharmacy.

Bates said that it is important that government agencies operate smoothly and with accountability. Agencies often promise auditors and legislators on the Joint Audit Committee that they will fix problems.

“But we’re not putting enough pressure on them to do what’s right,” Bates said.

To write her bill, Bates worked closely with the Office of Legislative Audits to make sure that the language would be effective. She said that it wouldn’t cause any extra work for the state – the Office of Legislative Audits follows up on their reports. It may save the state some money in the long run, she said.

Bates brought her bill before the House Appropriations Committee on Tuesday, where many of her colleagues lauded her for bringing the issue to the forefront. Del. Barbara Robinson, D-Baltimore City, said that she had been interested in putting together a study to see how often agencies did not remedy issues brought up in audits.

The bill’s fiscal and policy note, written by analysts from the Department of Legislative Services, says the bill may be problematic. Sometimes, auditors find problems because departments have limited budgets – like a finding that would require a department to hire another employee that it cannot afford. If an agency’s budget is cut, the analysis says, it will have more problems coming up with the finances to fix the problem.