Auditors of Public Accounts
At a Glance
ROBERT G. JAEKLE and KEVIN P. JOHNSTON, State Auditors
Average Number of Full-Time Employees – 103
Recurring Operating Expenses – $8,119,000
Capital Outlay – $79,000
The mission of the Auditors of Public Accounts is to:
· Determine whether state agencies and quasi-public 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 Auditors of Public Accounts operate under provisions contained in Sections 2-89 through 2-92 of the General Statutes. As provided for in Section 2-90 of the General Statutes, this Office is charged with the responsibility of auditing the books and accounts of each officer, department, commission, board, and court, of the state government, as well as all state-aided institutions and certain quasi-public agencies created by act of the General Assembly. In addition, under Section 4-61dd of the General Statutes this Office is responsible for reviewing all whistleblower complaints filed against the state and reporting the results of our reviews to the Attorney General.
In accordance with this Office’s statutory authority, it is the goal of the Auditors of Public Accounts 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. As previously noted, the Auditors also 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 or increased revenues. For example, during a recent audit of the of the Department of Social Services, we recommended that the Department establish controls to identify and report Medicaid provider overpayments after finding that such provider overpayments resulted in the Department overcrediting the Federal government by some $782,000 during the audited period. In addition, during a recent audit of the University of Connecticut our staff recommended that the University hire a State employee to fill the position of Chief Information Officer, rather than employ a consulting firm to fulfill this function, in order to realize some $250,000 in annual cost savings. Finally, during a recent audit of the Department of Environmental Protection we recommended that procedures be established to ensure the proper rental of State forest buildings and collection of rent thereon from Department and non-Department employees. It was estimated that approximately $1,000,000 in rents were not collected by the Department over a five-year period.
In addition, our Office maintains its own website (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 with Internet access may download, for viewing and/or printing, copies of all audit reports issued by our Office. General information about the operations of our Office can also be found on this website. It should be noted that further utilization 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.
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 University of Connecticut 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. Three such audits were conducted during the 2004-2005 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 15th 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. For example, on June 14, 2004, the Governor, after being informed of transaction irregularities at the Department of Transportation’s Bureau of Public Transportation, requested that our Office conduct a special review of the financial, contractual and processing employees employed by that Bureau. Our report on that review, which contained ten recommendations, was issued on October 25, 2004. In addition, on November 8, 2004, the Commissioner of the Department Motor Vehicles, after it was disclosed that certain employees of the Department were illegally selling drivers’ licenses to illegal immigrants and other ineligible drivers, requested that our office conduct a special review of the Department’s drivers’ license and identity card functions. Our report on that review, which contained fourteen recommendations, was issued on May 5, 2005.
In recent years, 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 staff in performing various audit procedures including: data analysis, tests of details of transactions, tests of balances and compliance tests of information systems ’general controls.
During the past couple of years this Office also spent a great deal of time and resources familiarizing its professional audit staff and business office staff with the new core financial and human resource management systems, which were implemented by the state during the 2003-2004 fiscal year. These new systems are collectively referred to as “Core-CT”. The financial system became operational on July 8, 2003, while the human resource system came on line on October 28, 2003. Extensive training in the use of these systems was provided to all staff members during this past two years. The challenge during the 2004-2005 fiscal year was to audit, for the first time, financial statements of the State of Connecticut that were prepared utilizing financial data captured on the state’s new Core-CT accounting system. Because of problems the State Comptroller has encountered with this new accounting system, however, preparation of the state’s financial statements for the fiscal year ended June 30, 2004, has been delayed. As a result, it is anticipated that our audit of these financial statements will not be completed until September 30, 2005.
In order for this Office to better meet the audit challenges presented by the state’s aforementioned implementation of the Core-CT computer system, this Office has decided to expand the staffing of our Information Systems Audit Unit. This has allowed the Unit to not only fulfill its normal audit function, but to also serve as a source of technical, educational, and training support for our staff on various Core-CT implementation issues that have arisen.
This Office in all staff appointments, promotions and training observes the principles of equal employment opportunity. To this end our professional auditing staff has been and will continue to be hired and promoted through a competitive selection process.
Information Reported as Required by State Statute
Sections 2-90, 2-92, and 4-61dd contain the various reporting requirements applicable to the Auditors of Public Accounts. A description of the reports issued by our Office pursuant to these provisions is described below:
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 or a specific state program in achieving its expressed legislative purpose. Our established Performance Audit Unit devotes its time mainly to performance auditing, usually focusing on a particular program administered by a state agency or agencies. During the 2004-2005 fiscal year a performance survey report on end-user satisfaction with the state’s new Core-CT computer system was issued. In addition, there were six reviews of a performance area included in regular agency audit reports.
During the 2004-2005 fiscal year the Office issued 47 audit reports and special reports. These included six special audits, 40 financial-compliance audits of various state agencies, and our annual report to the General Assembly. The Statewide Single Audit Report for the State of Connecticut for the fiscal year ended June 30, 2004, which would normally be issued by March 31, 2005, has been delayed an additional six months in order to provide the State Comptroller extra time to prepare the state’s financial statements utilizing financial data captured on the state’s new Core-CT accounting system. It should be noted that this latter audit is required as a condition of the state receiving almost $5,500,000,000 in federal financial assistance.
A total of 224 recommendations were included in the 47 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 during 2004-2005. Implementation follow-up procedures, in addition to agency responses to the Auditors’ audit findings and recommendations, include reviews by the Comptroller’s Office, the Office of Policy and Management and the Legislative Program Review and Investigations Committee. For reports issued during the 2004-2005, agencies implemented or otherwise resolved 56 percent of all prior audit recommendations.
During the 2004-2005 fiscal year our Office received 159 whistleblower complaints, which represents a record number for our Office. Despite this volume, assistance continues to be rendered to members of the General Assembly as requested by them.