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Outside audits for all state departments

Accounting and AuditingConservationExecutive BranchSmall BusinessesMedicaid

It is time for our state to have independent audits of all departments and agencies.

The appalling misuse of federal education funding discovered earlier this year is already well known. Baltimore City and Prince George's County schools wasted over $540,000 of federal stimulus money and funds intended to educate some of our poorest populations. Instead of putting more teachers in the classroom or updating textbooks and supplies, the money paid for parent/teacher harbor cruises, makeovers, theater tickets, watches for administrators and catered dinners. All at the same time that the General Assembly was pushing to increase funding for Baltimore City Public Schools.

In 2012, it was discovered that our state government paid out benefits such as Medicaid, adoption assistance and welfare without being able to verify whether many recipients were qualified. The Maryland Department of Human Resources kept such poor inventory records of a $4.2 million food distribution program that we have no way of knowing if there was theft or fraud. Reporting errors at state universities interfered with the U.S. Department of Education's student loan and grant programs. There were many cases of over-reporting the student population, resulting in the unlawful retention of federal aid.

These and other issues were recently uncovered not by internal state audits but by the "single audit," the annual independent review required by the federal government on the state's use of almost $13 billion in federal funds. This independent audit of federal dollars only underscores the need for independent audits on the spending of state dollars.

When other states have tried independent audits, as opposed to internal audits, waste and fraud were frequently uncovered. Gov. Chris Christie brought in independent auditors for New Jersey's health programs and uncovered $700 million in misuse, fraud and double billing. An outside audit in New York recently revealed that the state Medicaid program had overcharged $15 billion over the past 20 years.

And last month, Massachusetts received the results of an independent audit that found $80 million in welfare payments were misappropriated, with much of it going to dead people.

Maryland does not do independent audits. The cases of unconscionable waste and misuse of federal funds stated above only came to light through outside audits conducted by either a federal inspector general or private sector accounting firm. There is no reason to believe that the same state officials blatantly wasting federal dollars are somehow being more responsible with state money.

In order to build a new Maryland, we must first understand where the money is currently spent. Only then can we eliminate government waste and provide the best service possible with the resources we have.

Despite what Gov. Martin O'Malley seems to think is an endless base for tax revenue, our state has limited resources. Waste is one of the persistent problems that diminishes the impact of vital programs.

It is not a coincidence that we uncover state agencies misappropriating federal funds more often than state funds. While all federal funding goes through a rigorous external, independent review, state spending receives, at most, an internal review by the Office of Legislative Audits.

The audits office is well respected for objectively investigating the workings of our state government. It routinely brings to light cases of fraud and abuse, such as last year's audit uncovering inappropriate working relationships between State Highway Administration officials and the contractors they were responsible for overseeing. Unfortunately, it rarely is able to identify the run-of-the-mill government waste that is costing the state tens of millions.

The value of independent audits in both the public and private sectors is indisputable. Through higher taxes and federal government largesse, the O'Malley administration has increased the state's annual spending from $28 billion when he took office to $37 billion. Not only has this rapid increase created more opportunities for waste, but the speed and scope of the expansion has, for many programs, outpaced effective oversight.

Every dollar Maryland spends comes out of the pocket of a hardworking taxpayer. Government waste is unacceptable.

Bringing in professional, independent auditors to review every department and agency will allow us to root out the waste and redirect funds to programs where they will do the most good. Independent audits work.

Ron George, a two-term state delegate from Anne Arundel County, is a small business owner and Republican candidate for governor. His email is ron.george@house.state.md.us.

Copyright © 2014, The Baltimore Sun
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