Auditors of Public Accounts
At a Glance
ROBERT G. JAEKLE and KEVIN P. JOHNSTON, State Auditors
Average number of full-time employees – 101
Recurring operating expenses - $7,851,000
Capital outlay - $66,000
The mission of the Auditors of Public Accounts is to:
· Determine whether state agencies complied with applicable state and federal legal requirements
· Determine whether state resources are properly and prudently safeguarded and used
· Attest to the fairness of the state’s financial statements and provide a certification thereto
· Perform the annual Statewide Single Audit required by the federal government
· Evaluate the state agencies’ economy, efficiency and effectiveness in using available resources
· Evaluate program results considering costs and benefits
· Ensure that all audit results are properly disclosed to management and the public
· Investigate whistleblower matters
The goal of the Office of the Auditors of Public Accounts is to serve the public interest regarding fiscal and compliance matters related to the State of Connecticut. To accomplish this goal the Auditors provide independent, unbiased and objective opinions and recommendations on the operation of the state government and the state’s effectiveness in safeguarding resources. The Auditors strive to assist state agencies in achieving effective fiscal management. Further, the Auditors report on the integrity of the state’s financial statements and whether federal funds provided to the state are used in compliance with applicable laws, rules and regulations. All reports have a wide distribution, which includes state officials, federal and state organizations, the media and the interested public. The Auditors, in addition, review whistleblower complaints in conjunction with the Office of the Attorney General.
Recommendations included in reports most frequently lead to benefits that cannot be quantified, such as new internal controls and management procedures put into place as a result of our audits. The benefits resulting from these improvements may be far more significant than any quantifiable savings that are identified. Nonetheless, some of our recommendations lead to documented cost savings and increased revenues. For example, during one of our performance audits of accounts receivable at the Department of Labor, we recommended that the Department amend a computer program in order to identify all claimants who were overpaid due to fraudulent activities on their part and to refer those claimants for collection of the overpayment through the State income tax refund intercept program. The error in the computer program discovered as a result of our audit was responsible for the omission from the tax intercept program of $7,664,209 of fraudulent claims. The prompt corrective action taken by the Department of Labor in regard to this will certainly lead to significant recoveries of the overpayments. A performance audit of the Department of Children and Families identified an annual loss of potential State revenue of approximately $8,180,000. The Department made subsequent improvements which will likely significantly reduce the annual loss of potential revenue. In addition, our review of unclaimed costs eligible for 50 percent Federal reimbursement at the Department of Mental Retardation resulted in the recovery of some $625,000 by that Department.
In addition our office publishes its own website on the Internet (http://www.state.ct.us/apa). A key feature of this website is that it provides for the electronic distribution of our audit reports via the Internet. Accordingly, members of the public and other interested parties who have access to a computer may now down load, for viewing and/or printing, copies of reports issued by our Office. In addition, general information about the operations of our Office can also be found on this website. It should be noted that further implementation of Internet technology by our Office is planned during the coming year.
The work of this Office is evaluated annually by representatives of the various Federal Inspectors General’s Offices and, every three years by an independent accounting firm. The latest such independent accountant review, conducted in the Spring of 2003, commonly referred to as a peer review, resulted in a very favorable unqualified opinion of the Office’s system of quality control to ensure conformance with professional standards.
This Office, together with four other states and the United States General Accounting Office, assisted the Legislative Auditor of the State of Louisiana in producing an evaluation guide for security in the transportation industry. This evaluation guide was developed to assist auditors and transportation personnel in assessing security of transportation assets and operations. This guide is a valuable tool for auditors and management alike.
Our Higher Education audit group continues to provide audit certification to financial statements of the University of Connecticut, in connection with the “UConn 2000” program and to the Uconn Health Center. Such audits are in lieu of contracting out for such services. In addition we have continued to offer our services for special audits required under NCAA rules and foundation audits, upon request, as permitted by Section 4-37f, subsection 8 of the General Statutes. Two special audits were performed during the 2002-2003 fiscal year.
Section 3-37, subsection a of the General Statutes requires the State Treasurer to submit a final audited report to the Governor and the Investment Advisory Council on or before October 15 of each year. We continue to provide our certification of the Treasurer’s Annual Report on this very short timetable. In addition, in connection with our audits of the Offices of the State Comptroller and State Treasurer, we are continuing to provide special audit services in connection with the Comprehensive Annual Financial Report, the Combined Investment Funds and the Short-Term Investment Fund. Other requests for audit services continue to be met in a professional and timely manner without the need for outside professional assistance.
During this past year (2002-2003), our staff has increased the use of Computer Assisted Audit Tools (CAATS) because of the increasing predominance of large and complicated computerized systems. This technology can be used to increase productivity, improve audit effectiveness and efficiency, and reduce dependence on agency EDP personnel. CAATS has been used by our staffing performing various audit procedures including: data analysis, tests of details of transactions, tests of balances and compliance tests of information systems ’general controls.
Significant changes in governmental accounting and financial statement presentation have required adjustment of our audit plan for the State’s general-purpose financial statements. These major changes were implemented in Connecticut beginning in the 2001-2002 fiscal year and therefore were subject to audit in the 2002-2003 fiscal year. Our first audit under the major changes noted above was successfully accomplished.
In addition, in the coming year our Office will continue to monitor the new core financial and human resource management systems. These systems called “CoreCT” are scheduled to be implemented in the 2003-2004 fiscal year. The financial system will be operational effective July 8,2003 with the payroll scheduled to come on line in the fall. Our entire auditing staff will need training in the use of these systems therefore, scheduling and accomplishing this training and adjusting our audit procedures where necessary are major challenges for this Office in the coming year.
Although financial-compliance auditing continues to be the principal responsibility of this Office, the mission of the Auditors’ Office also includes an examination of performance in order to determine the effectiveness of an agency in achieving its expressed legislative purpose. Our established Performance Audit Team devotes its time mainly to performance auditing, usually focusing on a particular program administered by a state agency or agencies. Further, we have emphasized performance audits by allocating more time to our regular audit crews to perform performance reviews during their audits. During the 2002-2003 fiscal year twelve performance audit reports were issued. In addition there were 25 reviews of a performance area included in regular agency audit reports.
During the 2002-2003 fiscal year, the Office issued 60 audit reports and special reports. These included the twelve performance audits, two special audits, 44 financial related audits of various state agencies, our annual report to the General Assembly and the Statewide Single Audit Report for the State of Connecticut for the fiscal year ended June 30, 2001. This latter audit is required as a condition of the state receiving almost $5,000,000,000 in federal financial assistance.
A total of 13 matters were formally reported to the Governor, Legislative Program Review and Investigations Committee, and others, under the provisions of Section 2-90 of the General Statutes. In addition, numerous less serious matters such as minor acts of vandalism were reported collectively by memoranda. Some 99 Whistle Blower complaints were investigated and some of them were covered in the 13 formal letters to the Governor. Assistance was rendered to members of the General Assembly as requested by them.
A total of 376 recommendations were included in the 60 audit reports and special reports issued during the year. These reports also included a review of the implementation of recommendations made in the prior audits of the agencies audited in 2002-2003. Implementation follow-up procedures, in addition to agency responses to the Auditors’ audit findings and recommendations, include reviews by the Comptroller, the Office of Policy and Management and the Legislative Program Review and Investigations Committee. Agencies implemented 58 percent of the prior audits’ recommendations.
This Office in all staff appointments, promotions and training observes the principles of equal employment opportunity. Intensive efforts to recruit minority members have been continued.