Not All Audits are Bad: One Out of Four State Agencies has a Clean One

By Megan Poinski, Megan@MarylandReporter.com

(August 04, 2011)—Stories about the results of legislative audits make it appear that many government departments have problems with controlling funds, computer systems and contracts. And many do.

A wider look at the reports published by the Office of Legislative Audits show a different picture.

In the review of all government agencies over last three years, 47 state agencies have had perfectly clean audits with no problems found. There are about 200 agencies that the Office of Legislative Audits monitors, meaning that about a quarter of them are doing everything right.

Many of those agencies are county courthouse offices – 17 registers of wills, and 11 clerks of circuit courts. The others, however, follow no pattern. There are some large state agencies that got clean audits – like the Maryland Department of Planning and the Office of the Attorney General. But there are also some smaller agencies, like the Baltimore City Police Department Death Relief Fund and the Historic St. Mary’s City Commission.

And there are other agencies that surprised auditors, like the Hagerstown Region of the Department of Public Safety and Correctional Services, which includes the Roxbury Correctional Institution. Many of the other prison regions have had some of the most scathing audits.

“There are some that have had many problems,” said Legislative Auditor Bruce Myers. “It’s good to see one that didn’t have any.”

What can point to a clean audit?

Myers said that there are some broad things that help an agency have an audit without issues.

First of all, he said that small agencies tend to have an easier time controlling their finances, procedures and contracts. This might be one of the reasons so many courthouse departments get clean bills of health.

“I know that a lot of these clerks, if there is an issue, they get right on it,” Myers said. “They don’t want to see it again.”

Employee turnover also can contribute to audit findings. If there are new employees always coming into an agency, Myers said they may not always know the policies and procedures they need to follow.

“The tone at the top can help with that,” Myers said.

Another issue that sometimes makes accounting for everything easier is when the rules governing the agency stay the same. Many state agencies, especially ones dealing with health and human services, receive federal funds with constantly changing guidelines. When the rules are changing, it is sometimes difficult to keep tabs on what an agency should be doing.

Agencies with better audits may also handle less money. Myers said it is a matter of simple math: an agency that is processing millions of dollars has more to keep track of than one that receives less income and makes fewer payments.

But a lot of what makes a clean audit, Myers said, is the way that the agency looks at the findings. Some agencies make concerted efforts to correct problems in their audits.

“Some people have monthly meetings to see how they are doing,” Myers said. “Some have internal auditors, and other places don’t have that.”

Clean for good?

One clean audit is good, but it does not always mean that the agency is on track to solving all of its problems forever.

Just over half of the agencies with clean findings – 25, to be exact – had a clean audit directly before the most recent one. The rest corrected anywhere from one to nine issues. Fifteen only had one to fix, while the Division of Workforce Development at the Department of Labor, Licensing and Regulation remedied nine issues.

Myers said that once they get a clean audit, all agencies don’t keep up their track record.

“One of the amazing things is sometimes we walk into a place that didn’t have anything a couple of times, and then we find a lot,” Myers said. “They let it go, and maybe just thought it would run by itself.”

Just this week, the latest audit of the Office of the Chief Medical Examiner showed this. The agency went from two straight clean audits to one with a problem identified.