Utah state auditor John Douglas is right when he says, “Stupidity is hard to fix.”
(Francisco Kjolseth | The Salt Lake Tribune) Utah State Auditor John Dougall, pictured at the Utah Capitol, Thursday, May 23, 2019.
I was encouraged by the observation of Utah State Auditor John Dougall that “stupidity is hard to fix,” and that he therefore has “a lack of confidence” in Utah County’s lawmakers, as recently reported in the Salt Lake Tribune, and he called Uintah County the “Epicenter of Financial Dysfunction”.
In his capacity as custodian of the tax accountability of local governments in the state, I support his call to amend a state law (Senate Law 124) that allowed district commissions in 2012 to make such controversial changes to the duties and powers of district auditors. I have been encouraged that Senator Michael McKell, Chairman of the Political Subdivision Interim Committee, support the drafting of a bill that will address Dougall’s concerns in the upcoming term.
At the time SB124 was passed, I was the director of the audit department for the Salt Lake County Auditing Office. I wrote a 2012 Salt Lake Tribune comment – “A Bill Inviting Fraud and Abuse” – to challenge that bill and appeared before Senator Curt Bramble’s Revenue and Taxation Committee. I testified that the Utah Legislature had in the past mandated the separation of powers between auditors and the county government. Senate Bill 124 gave each county administrative body the power to exercise exclusive powers over budget planning in all counties of Utah, including designating the “budget officer” as a county commission, board of directors, or council, depending on the county’s government. This has been changed through a change so that it only applies to 1st class districts. (Salt Lake County held the only award at the time.)
In previous years elected district auditors were, by law, the “budget officers” charged with drawing up a preliminary budget for submission to the district’s executive and legislative branches for proposed changes and adoption. The auditor also monitored budget expenditure each year and performed bookkeeping functions to prepare the annual consolidated financial report for external review.
The bill also allowed the district councils or commissions to delegate “an accounting service” to the district board or an elected office or department “in accordance with good administrative practice”. This authority gave the district managers ample leeway to control accounting practices. Finally, the bill allowed auditors to conduct performance audits, but only under the supervision of the legislature or district executive, a provision that could affect the auditors’ independence and objectivity. These provisions also only applied to 1st class circles. These provisions essentially deprive the Salt Lake County Auditor’s Office of the principal powers and responsibilities. That eventually turned out to be a reality in Salt Lake County.
Studies by the Association of Fraud Examiners and others conclude that three factors, often referred to as the “fraud triangle”, favor fraud and abuse:
• Pressure: Elected officials can experience significant pressure from political allies, campaign donors, and voters to keep their pledges, or county employees can face financial pressure beyond their means.
• Opportunity: The possibility of misuse of public funds is increased when internal controls are weak or easily overridden, where roles are unclear and powers and duties are not segregated. The separation of powers between auditors and district officers should prevent abuse of executive powers.
• Rationalization: Elected officials are often in a constant, time-consuming effort to raise campaign funds. Your remuneration may be disproportionately low in relation to the time and effort required to be elected and the requirements of the office. This makes it easier to rationalize misuse of funds.
So I applaud the State Auditor’s sincere remarks on the efforts of the elected district officials to follow the path created by the ill-conceived SB124. Checks and balances are hallmarks of transparent and accountable government.
| Courtesy Jim Wightman, Comment Mug.
Jim Wightman is retired but continues to seek to influence policymakers at all levels of government.
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