The Joint Audit and Evaluation Committee voted Monday to back a package of bills aimed at forcing agencies to be more attentive to fixing problems uncovered by state audits.
The bills follow a number of sometimes contentious hearings over the last year where lawmakers expressed frustration over the seriousness of the problems identified in audits, as well as the growing number of repeat findings, sometimes stretching back a decade or more.
“For a second year in a row, a significant amount of general funds were needed to resolve an increased need for deficiency funding,” said Sen. Shelly Hettleman (D-Baltimore County), Senate co-chair of the committee.
Hettleman said the increase was “a concern and highlights the need for better fiscal practices to ensure financial transparency and accountability in the management of taxpayer funds.”
But the concerns stretch beyond questions of fiscal accountability. A number of audits raised questions about how the state manages its office space and justifies when a contract is in the best interest of the state. In one report, auditors raised concerns about a lack of background checks for those who work with or live with foster children.
The committee met Monday afternoon to discuss a package of bills aimed at improving audit compliance. The vote to back the bills — sponsored by members of the committee — was rare but not unexpected.
“We are seeing a number of findings and a number of increased repeat findings,” said State Legislative Auditor Brian Tanen.
Tanen said the number of repeat findings is now at 34%. Ten percent of findings were repeated in two or more audits. Each agency is audited, on average, every three to four years.
“So they had not been corrected for quite a while,” Tanen told the committee.
The bills backed by the committee Monday would codify an existing group — the Audit and Fiscal Compliance Unit — into law. The bill not only makes the unit responsible for overseeing compliance but would also require it to report progress on a public dashboard.
A second bill would set minimum education and experience standards for chief financial officers. The proposal would also allow exemptions in the state pay plan to recruit CFOs. An amendment to the House version of the bill would do the same for chief information officers.
That same bill would also require agency heads to justify to the Board of Public Works why an agency does not go to court to force contractors to pay the state when they fail to live up to their end of contracts.
A third bill sets requirements for mandatory criminal background checks and alerts of criminal activity that happens after those background checks occur.
All three proposals have identical House and Senate versions.
Even with the backing of the audit panel, the bills need the approval of standing House and Senate Committees. Hearings on the bills begins this week in both chambers
All three bills have the backing of Gov. Wes Moore (D).
“We share the same objectives of strong financial management, meaningful accountability and effective oversight of state resources, which means instead, our work together has focused on implementation, making sure that these policies function well in practice, can be sustained over time and ultimately strengthen state government operations,” Budget Secretary Yaakov “Jake” Weissmann told the panel Monday.
Over the last year, the Office of Legislative Audits released a number of reviews of faltering government operations including:
- The failure of the Maryland Department of Human Services to conduct comprehensive background checks to prevent individuals with criminal histories from accessing children. Seven registered sex offenders were found living in homes with children under court-approved guardianships, according to that audit.
- A review of the Department of Juvenile Services found an individual with a recent assault conviction working with children at a Maryland facility, among other issues.
- Another audit involving state leases raised questions about whether taxpayers saved hundreds of millions from state leases as claimed by Moore.
- One audit found that the state lost the chance to recoup more than $750 million in unemployment overpayments because it failed to seek repayment in a timely manner.
- Another audit flagged $360 million in unauthorized expenses charged to federal projects by the State Highway Administration and raised questions about whether the state may ultimately have to cover those costs through the Transportation Trust Fund or state General Fund.
Moore, reacting to the spate of poor audits, began an internal push to improve agency responses. A directive issued in February mandated internal reviews of audit findings.
Agency heads have 60 days to review past audit findings and identify those that can easily be fixed. They have 180 days to identify repeat audit findings and resources needed to make fixes.
Moore earmarked $24 million for improving audit outcomes. That includes two new positions within the Audit and Financial Compliance Unit.
The governor’s budget includes a proposed $5 million for addressing audit findings. The legislature must approve that request. If approved, the Department of Budget and Management would oversee how it is spent.
Efforts to address audit findings are not new. More than a decade ago, then-Gov. Martin O’Malley implemented StateStat. O’Malley first used the tool in Baltimore City. He based it on the New York City Police Department’s CompStat program.