Auditor candidates tout experience, new ideas to help track finances
by Jack Deming
Nov 01, 2012 | 1054 views | 0 0 comments | 5 5 recommendations | email to a friend | print
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Note: We asked the three candidates for Vermont Auditor of Accounts to respond to questions about their respective race. Two candidates chose to respond, Jerry Levy of the Liberty Union Party did not. This report was compiled by Jack Deming.

1. What role will the auditor’s office play in making sure that a health care exchange program is efficient, effective, and fiscally responsible?

2. How can the auditor’s office ensure that in the event of a disaster, like Tropical Storm Irene, state and local agencies are transparently distributing federal funds in a timely manner?

3. What are the issues statewide that must be addressed in order for Vermont to be accountable to its citizens?

Doug Hoffer

Hoffer is the Democratic candidate for auditor

1. Although the health care exchange is not single payer, it will involve a great deal of federal money. The state is required to annually audit large programs supported with federal funds (the “single audit”). Therefore, it is certain that the exchange will become part of the single audit after the program begins in 2014. But since a program cannot be audited until after it has existed for a time, the exchange won’t be audited for the first time until at least 2015.

Vermont (like other states) has already received considerable federal funding to help prepare for the exchange. Also, the state has already spent millions in federal dollars to help hospitals, physicians, and other health care providers with new or improved electronic health record systems. These activities (e.g., the Green Mountain Care Board) will be covered by the single audit.

Note that the single audit is not a performance audit, so the auditor should conduct a performance audit of the exchange and the GMCB to determine if they are meeting the goals intended by Congress and the Legislature.

2. First, the auditor can only track the funds after they have been expended so an examination of the timeliness of the expenditures will necessarily be after the fact. For now, the auditor should review the state’s performance after Irene to determine how well the state performed and if changes in the process are needed (including issues of transparency). The lessons learned can help improve performance in the future.

3. The key to accountability is access to information. For example, Vermonters need to know how and why the Legislature makes the choices it does. We have access to some of the Legislature’s business but not all. Ideally, committee hearings should all be videotaped, as well as sessions of the House and Senate. And of course we need access to all of the documents discussed and produced by policymakers (which is usually the case but not always in a timely manner).

Note that during his tenure as chair of the Senate Institutions Committee, my opponent failed to record the vast majority of committee hearings. From 1999 to 2004, there are only 12 recordings. During the same period, the Senate Finance Committee produced 346 recordings.

For its part, the administration should make budget and payment information more accessible. The Department of Finance and Management has improved in this regard but more can be done. In addition, all agencies and departments of state government should produce annual performance reports.

There are ongoing efforts to address the (arguably excessive) exemptions in the public records law but that work needs to be completed.

The auditor can help by conducting performance audits of various departments and programs. These are especially important because the Auditor is independent and can be objective. And I think the Auditor should report the cost of each audit performed and the amount of any savings identified.

Vince Illuzzi

Illuzzi is running for auditor of accounts as a Republican. Illuzzi was elected to the state Senate in 1980, and served in that capacity for 32 years. Born in Montpelier to Italian immigrants, Illuzzi graduated from St. Michael’s College in 1975 and received his juris doctorate degree from Vermont Law School in 1978. Illuzzi also serves as the Essex County State’s Attorney.

1. While the auditor’s office does not play a direct role in setting policy, it does conduct both financial and performance audits. In considering a health care exchange program, first I would examine whether the program met the guidelines set out in statute by the General Assembly. Were funds or resources used as designated by the Legislature? Are proper internal controls and best practices in place to govern the administration of funds?

Second, I would evaluate whether the program is operated effectively and efficiently. Are taxpayers getting a good return on investment with this program?

Finally, I would determine whether Vermonters were actually better off with the options offered under the program. For example, depending on the design of the program and goals set out in the statute, do people have better access to high quality health care at an affordable price then they had before the program was established.

Based on these three levels of review, I would issue findings and recommendations that outline the strengths and/or weaknesses of the program as well as recommendations for fiscal and program improvement.

2. As auditor, I will conduct a performance review of the overall procedures used in the wake of Tropical Storm Irene to assure that the millions of dollars of state and federal funds used to rebuild after the storm were handled effectively and efficiently. In devising my audit plan, I will listen closely to those in the affected areas, including homeowners, businesses, and municipal and state officials to get a sense of the issues.

I will carefully consider how contracts and procurements were handled. We know that in some cases, strict bidding and procurement polices, as well as permit requirements, were waived or suspended in order to deal with the immediate need to rebuild infrastructure and communities.

For example, the agency of administration oversees Bulletin 3.5 that establishes general policy and minimum standards for soliciting services and products from vendors outside of state government. This bulletin also sets out standards for processing and overseeing contracts. The bulletin’s purpose is to assure the state of Vermont obtains high quality services and materials in a cost effective manner through the use of an open and competitive contract solicitation process.

It also ensures that the state maintains proper development and review of contracts prior to their being signed, and that there is good oversight through their completion.

In those cases where parts of the bulletin were waived, was the intent maintained and was the quality of goods or services in keeping with standards? Were the Bulletin’s audit provisions maintained so that the issuing department or the state auditor’s office can track whether funds were properly spent?

Just as we all drive more safely when we see a police vehicle parked by the side of the road, I believe that that the departments and vendors of state government will proceed with great care and deliberation when they know that the auditor’s office is monitoring their expenditures and outcomes.

3. One of my top priorities will be to take a close look at Vermont’s expenditures on information technology -- the computer systems and software programs that power state government. I plan to conduct a performance review to determine whether the state has proper controls in place to design, develop, operate and manage its information technology assets.

Information technology systems are important for two key reasons. First, Vermont taxpayers spend millions each year on IT projects. Second, Vermont’s IT systems are an important interface between residents and their government for everything from renewing a driver’s license to receiving a tax refund. IT systems are also important to fiscal functions and internal controls.

Vermonters deserve to know if the state’s IT projects are delivering improved performance and better service to its customers. Are taxpayers getting a good return on their investments? Given recent million dollar IT problems at the department of motor vehicles and with the judiciary, it is essential that safeguards, protocols, and best practices be put into place to avoid the pitfalls that seem to come up with major IT purchases.

I plan to conduct a high level review of policies and procedures as well as a closer look at projects with cost overruns or poor functionality. As auditor, I will be watching large systems contracts for services like IT, and significant investments like post-Tropical Storm Irene contracts. While every tax dollar is important, I want Vermonters to know that -- with limited resources -- my effort will be to maximize savings and improve performance on big-ticket items.
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