July 03, 2012 at 7:44 am
By Len Lazarick
When it comes to finding waste, fraud and abuse — or just plain old carelessness — within Maryland government, no agency does more than the Office of Legislative Audits – mainly because it’s their job.
Bruce Myers, 61, has headed the office for the last 15 years and was the deputy legislative auditor for 10 years before that. On Friday, he retired after 35 years of producing hundreds of audits that have generated familiar headlines over the years:
Medicaid benefits paid for dead people; ethics violations and contracting problems at the highway agency; university fails to collect overdue tuition and verify residency; employees stole using government credit cards; possible fraud in Baltimore-area prisons.
The list of outrageous headlines from Myers’ tenure is long, but they often arise out of reports that are fairly bland on the surface, starting with a letter of transmittal from Myers to the House and Senate chairs of the Joint Audit Committee.
Most agencies cooperate
Myers’ letter typically ends: “We wish to acknowledge the cooperation extended to us during the course of this audit by” whichever agency is under review.
“Most of the time [the acknowledgement is] there,” said Myers in an interview on his last day. But not always.
“State officials know what we have to do, and most of them appreciate what we do, but not all of them do,” Myers said. “We’ve got a good group of professional people. We try to be balanced and fair.”
The office has a budget of $12 million and about 110 people, half of whom are certified public accountants, as the chief auditor is required to be. “We hire primarily out of college, and they become CPAs out of here” on the job.
Under state law, every agency must be audited every three years, including the clerks of court and registers of wills in every county. The law requires the agencies to release even confidential information to the auditors.
“Some people have denied us access to records, and we had to go to the attorney general” to get them to release them.
“Our law is pretty strong,” Myers said. “We can even subpoena the records,” something they only had to do once during his tenure. “We never were ultimately denied access to what we needed to do a full audit,” he said.
In the audits, the agency under the gun always gets a chance to respond, and in a great majority of cases the bureaucrats agree to comply with the auditors recommendations.
But that formal response is at the end of the process. Even before the auditors submit a draft report, the auditors and agency officials have “an exit conference” where they go over the findings.
“We have some heated discussions at that exit conference,” Myers said. Some years back, those disagreements would often go public in confrontations before the Joint Audit Committee, which currently has nine senators and 10 delegates.
Repeat findings of problems
The number of repeat audit findings in which an agency’s problems have gone uncorrected has drawn the attention of legislators, who proposed legislation this year to withhold some funding from such agencies. The bills were not reported out of committee.
“It’s an issue I’d like to see improved,” Myers admitted. But “it has been heading in the right direction.” Some years ago, about half of audits findings of problems or issues were repeated from prior reports, “and now we’re like 25%.”
“Obviously, 75% is not good enough,” Myers said, given that an agency has three years to correct a problem before the auditors return. However, some problems are so serious that the auditors and the Joint Committee demand quarterly reports on how the problems are being fixed.
“The budget committees have been keeping it in the spotlight,” Myers said. “A lot of these things are like control issues that allow fraud to occur.”
Some of the fixes are costly to implement, but “most of them are not like that,” he said. Agencies sometimes complain that budget and staffing cuts have made it difficult to have two or three people handling or monitoring financial transactions.
“We try to explain how they could do it with the people they have,” Myers said.
No suspects named
One factor that frustrates reporters doing stories about audits is that the reports never name the culprits suspected of fraud or malfeasance.
“We don’t name vendors, companies or people,” Myers explained. Some of that longstanding policy is due to legal requirements, and some of the information comes from confidential records the office has a responsibility not to disclose.
“We’re not trying to punish John Smith, we’re trying to improve accountability,” Myers said. (Specific names are passed along to the attorney general for prosecution.)
More inspectors general needed
Some lawmakers have pushed for a statewide inspector general, and Myers agreed that more state departments should have them. Currently, only three Maryland departments have inspectors general: Health and Mental Hygiene; Public Safety and Correctional Services; and Human Resources.
“I think there are places that should have more inspector generals,” Myers said. In those agencies, his staff often works with internal audits that have already been done.
The office recently was given responsibility for auditing the local school systems that receive more than $5 billion a year in state funding. Those audits, however, are only being done every six years. When Myers told lawmakers that he would need 18 new auditors to do the job every three years, they gave him nine and doubled the length of time between audits.
Karl Aro, director of the Department of Legislative Services, will name Myers’ replacement with the concurrence of the House Speaker and Senate president. The job pays about $150,000 a year.
If the past is any guide, the new legislative auditor will be promoted from within. Both Myers and his predecessor served as the deputy auditor before getting the top job.