In the wake of the Timpanogos Mental Health debacle, legislators and other state officials are scrutinizing state auditing practices like never before.
Recently the office of the legislative fiscal analyst surveyed all 120 state-funded local programs and found seven that are not required to undergo financial audits. They are federal procurement, housing development, Centers of Excellence, narcotics and law enforcement, liquor law enforcement, mineral lease distribution, and rural communities fire assistance.Legislators received the news this week and have requested further study to determine what needs to be done. Meanwhile, there's another gaping hole that needs filling.
Timpanogos Mental Health was audited, but its severe infractions weren't reported. Why not? The center selected its own independent auditor, who subsequently gave it a clean bill of health despite numerous irregularities.
The state audited the audit but never suspected trouble because the problems had been omitted by the certified public accountant the center itself had hired.
Until now, the government has allowed state-funded local agencies to select their own auditors from accredited accounting firms, assuming that all accredited firms could do the job and that agencies could better identify the best local firm for the job than could the folks at the state office building.
But the time may have come for this policy to change, and state officials are realizing it.
The state could either hire enough of its own auditors to do all the auditing or hire independent auditors itself so they will answer to the state, not the audited agency.
Would this change ensure completely accurate financial audits? Not as long as the human element is in the tally sheet. But local hiring of independent auditors is one leak that can and should be plugged.