State Agencies Obstruct Audits

The New York State Comptroller is complaining about State agencies obstructing audits. In his 2015–2016 Annual Report on Audits of State Agencies and Public Authorities. The Comptroller complains, “For the reporting year 2015-16, four agencies significantly delayed, obstructed, or otherwise impaired the scope of six audits…” For example, the Comptroller said:

“ESD [Empire State Development Corporation] officials refused to provide auditors with access to pertinent records and staff, and failed to provide requested responses to certain preliminary audit findings.”

“The Office of Information Technology Services often did not provide auditors with timely or independent access to certain data and staff, calling into question the reliability of some of the data that auditors received and constraining auditors’ interviews with agency personnel.”

This is a common tactic that is occurring within the government community today at the federal, state and local level of government. Agencies are seeking ways to thwart the efforts of auditors to hold government officials accountable. They delay access to records, they make auditors go through an audit liaison, they insist on managers or lawyers sitting in on interviews. These tactics are inappropriate and must be challenged and stopped. These tactics simply do not allow the auditors to draw appropriate conclusions about the program, function or activity they are auditing. There is little assurance the audit has produced the right conclusions in these cases.

In New York’s case though, the State Comptroller has subpoena power under the State Finance Law. Article 2, Section 9 says:

“The comptroller, deputy comptrollers and assistant deputy comptroller, or either of them, may issue a subpoena or subpoenas requiring a person or persons to attend before the comptroller, a deputy comptroller or assistant deputy comptroller and be examined in reference to any matter within the scope of the inquiry or investigation being conducted by the comptroller, and, in a proper case, to bring with him, a book or paper.”

The failure to use this power creates difficulties for the auditors and only encourages State agencies to continue obstructing the audit process.

Under prior administrations, the Comptroller’s Office used its subpoena powers. We used it to compel Public Administrators in New York City to comply with our audit that was seeking “…the public administrator’s testimony concerning the financial and management practices and policies of [their] office.” The audit ultimately concluded public administrators were stealing from the estates of dead people.

We also issued a subpoena to compel the judges of the Appellate Division of the Supreme Court in Manhattan to comply with our audit. The judges came to our office in Albany and ultimately agreed to cooperate. Our audit uncovered problems with the use of resources that were not readily apparent in the normal state process.

The auditing profession needs to stand up and put a stop to any efforts made to thwart accountability. As the opening lines of the Government Auditing Standards say,

“Audits provide essential accountability and transparency over government programs. Given the current challenges facing governments and their programs, the oversight provided through auditing is more critical than ever. Government auditing provides objective analysis and information needed to make the decisions necessary to help create a better future.”

Have the courage to do the right thing!