Toothless audits

Originally Published in the Frederick News-Post

One of the most egregious outrages of the financial collapse is that none of those responsible for it on Wall Street has been held accountable in a court of law.

A whole movement -- Occupy Wall Street -- grew out of the fact that crony capitalism allows a tiny few to reap vast financial rewards at the expense of the rest of the country.

If only some of that anger would be turned on state government's repeated abuses.

For years, the Office of Legislative Audits (OLA) has been churning out reports about malfeasance and misfeasance, laziness, waste and general bad management within Maryland state agencies. Often the office's reports find the same flagged behavior unchanged in multiple follow-up reports.

One recent report details how Maryland State Highway Administration officials disguised overspending; conspired with vendors to hide money in order to bilk taxpayers out of more; and shuffled money around within the agency inappropriately. In 2004 the OLA found that the same agency violated procurement rules by giving (without a competitive bidding process) a $750,000 contract to a company where a high-ranking employee's wife worked.

An audit of the Department of the Environment released earlier this month showed the agency circumvented procurement rules to give contracts to favored people and performed only a fraction of required site inspections. In the past few years, auditors have found state employees who used state computers to access porn thousands of times per week; thousands charged to state credit cards for personal items including televisions, clothes and video games; and identified millions in missing funds.

The people of Maryland have no reason to believe anything is done about those reports. Legislators express outrage, but do not require agency heads to remedy the situation within a specific time or lose privileges, dollars -- or their jobs.

And so OLA soldiers on with its work, relegated to being the CEO of trees falling in a forest that no one knows exists.

This is not to say its work is not important. On the contrary, it's essential to holding government accountable.

But agency employees should not be forced to spend time reporting about behavior that will not be corrected.

Some have speculated the state needs to budget more money for internal auditors within agencies. But there is no reason to believe those people will have more of a chance of changing a corrupt culture than whistle-blower Eugene Simmers, a longtime SHA employee who was forced to leave after he outed contractors filing false time sheets and overbilling the agency. He is vindicated now, but he paid a steep financial price for speaking out. Institutions protect themselves above all else. Look no farther than the Jerry Sandusky child rape scandal at Penn State for evidence.

Bad audits need to come with real financial consequences for agencies in terms of withheld operating funds. Agency heads should also be held criminally liable when their institutions repeatedly defraud taxpayers. Without those changes, OLA will remain political theater for those who hold power.