House Supports 3 Measures to Require Spending/Performance Audits of State Agencies
OKLAHOMA CITY (21 March 2017) – State agencies would be subjected to spending and performance audits under three measures approved this week in the Oklahoma House of Representatives.
Performance audits of the 20 state agencies receiving the largest appropriations from the Legislature would be performed no more than once every four years, under House Bill 1690.
The Legislative Service Bureau would contract with the State Auditor & Inspector’s Office or an outside company to conduct the audits.
The bill describes an “Independent Comprehensive Performance Audit” (ICPA) as “a review and analysis of the economy, efficiency, effectiveness and compliance of the policies, management, fiscal affairs and operations of state agencies, divisions, programs and accounts” to enable the Legislature to “implement the best budgeting and policy-making practices for government services to run in the most cost-effective way.”
An ICPA would address policies that include constitutional mandates, statutory mandates, statutory authorizations, administrative rules or policies of the agency, all sources of funding received by the agency, and management of the agency, including its governance, capacity, divisions, programs, accounts, information technology systems, plus agency operations.
Results of the proposed analyses would be presented to state officials and then reported to the general public.
The Republican author of the measure said his bill is modeled after Ohio legislation.
An audit of the State Department of Education would cost an estimated $500,000 to $800,000, the bill’s author said. The SDE received 35% of all state appropriated dollars for Fiscal Year 2017, and 34.6% in FY 2016, House fiscal reports show.
Pointing to the projected cost of performance audits, opponents of HB 1690 noted that the State of Oklahoma has a budget deficit calculated at about $900+ million this year, and had a shortfall last year of $1.3 billion.
The House embraced the bill Tuesday, 70-25. Every vote against the measure was cast by a Democrat and every vote in favor of the proposal was cast by a Republican. Now the bill will be referred to the Senate for consideration.
A similar Republican measure, House Bill 1425, would create a Joint Committee on Accountability to conduct performance audits, identify assets owned or services provided by the state government that could be privatized, and delve into suspected fraud, waste and corruption in state government.
A performance audit would determine whether the targeted agency, division or program is “engaging in activities or programs which go beyond” its statutory authorization, and whether the agency, division or program is “efficiently and effectively administered.” That assessment would include whether it is operated under “the best practices of this state or other comparable entities” and whether its functions are “duplicative of, or could be better provided by,” other state agencies or the private sector.
The nine-member bipartisan committee would be composed of two members appointed by the Speaker of the House and two appointed by the Senate President Pro Tempore, one appointed by the House Minority Leader and one by the Senate Minority Leader, plus the State Auditor and two people appointed by him/her. The joint committee would replace the Legislative Oversight Committee on State Budget Performance.
HB 1425 was approved overwhelmingly Tuesday, 87-3, and will be referred to the Senate.
Another related proposal was debated in the House on Monday. All state agencies would be evaluated at least once every four years “in order to identify agency-specific efficiencies,” House Bill 2311 stipulates.
A 10-member Agency Spending Review Commission would be authorized to contract with a private company, a non-profit or academic institution to assist with the spending audits.
Opponents noted that every year the Legislature examines the budgets of all appropriated state agencies (which number approximately 70). Opponents also pointed to the potential cost of the proposed audits.
State Sen. Kay Floyd, D-Oklahoma City, wrote recently that state agency chiefs testifying in Senate committees have said that examinations of their agencies by the State Auditor & Inspector have cost “from $8,000 to as much as $26,000.”
Similarly, Rep. Cory Williams, D-Stillwater, provided a document which showed that the Payne County Commissioners paid the State Auditor & Inspector’s Office almost $362,000 over the past four fiscal years for audits of the county’s ledgers.
Objections notwithstanding, HB 2311, by Speaker Charles McCall, R-Atoka, passed, 64-24, and was sent to the Senate. As with HB 1690, all votes in support of HB 2311 were cast by Republicans and all votes against were cast by Democrats.
MIKE W. RAY
Media Director, Democratic Caucus
Oklahoma House of Representatives
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