Repeat audit offenders would lose state money under proposed bill

ANNAPOLIS — Legislation that would strip state agencies of a portion of their budget should they have repeat audit findings would add teeth to such legislative audits, the bill’s sponsor said Tuesday.

If passed, the state could realize significant savings by 2014, a Department of Legislative Services analysis said.

“At a time when our state is looking for additional money from our tax payers, it seems we need to get our house in order,” said Del. Gail Bates, R-Howard.

House Bill 843 was being heard by the House Appropriations Committee Tuesday afternoon.

State agencies undergo audits every three years, and Bates said often the audits show problems identified in the previous round of audits went uncorrected.

In the last cycle, 38 state agencies had audits with three or more repeat findings.
“At some point we’ve got to say enough’s enough,” Bates said. “This bill puts teeth into it.”

The Maryland Transit Administration, which totaled nine findings in the latest report released this month, had six repeated findings.

Not that the MTA stood alone — 37 other agencies had at least three repeated findings, including the State Highway Administration, the Department of Education and six University System of Maryland institutions.

Under law, agencies with five or more repeat findings are required to provide quarterly reports to the Office of Legislative Audits, the first coming within nine months of the audit report. Those filings most continue until the issues are deemed resolved.

Under Bates’ legislation, those agencies would be subject to having up to 5 percent of their total budget withheld by the state until the Office of Legislative Audits determines the problems, which encompass “a whole range of things,” from simple record keeping processes to fraud and abuse, are rectified.

“We’d have…language drafted saying we would withhold this money,” Bates said. “You withhold money. That’s how you get things done.”

A Department of Legislative Services policy analysis said that while the state could save a great deal of money depending on the number of agencies that have repeat findings, subtracting up to 5 percent of an agency’s budget could make the problems identified more difficult to fix.