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Testimony of Auditor Suzanne M. Bump in Support of her Agency’s Accountability Agenda 

BostonTestimony as prepared for delivery of State Auditor Suzanne Bump before the Joint Committee on State Administration and Regulatory Oversight:

Good morning Senator Pacheco, Representative Cabral and members of the committee. Thank you for allowing me to testify before you today in support of two bills submitted on my behalf by Senator Pacheco and Representative Danielle Gregoire. The bills are H.3155/S.2095,“An Act Improving Government Accountability,” and H.3156/S.2096, “An Act Improving the Internal Controls within State Agencies. They are a part of what we in the Auditor’s Office refer to as “the Accountability Agenda,” as they will indeed make government more accountable, and make our work more effective and efficient.

And, if they seem familiar to you, it is because you heard and favorably reported them to House Ways and Means during the last legislative session. Let me briefly review them for the benefit of members new to the committee.

These bills both reflect lessons I have learned during my 11 years as State Auditor; lessons about auditors’ time wasted by delays in gaining access to information they need in order to protect taxpayers and ensure agencies are fulfilling their missions to members of the public; lessons about how some arcane statutes can actually be sources of bureaucratic inefficiency; and lessons about how difficult it can be to convince state agencies to change behavior, even in the face of objective, independent analysis of poor administration.

Since the pandemic took hold, we have seen a historic amount of funding from the federal government flow to Massachusetts. Congress passed numerous rounds of relief, including the CARES Act and the American Rescue Plan (ARPA) to directly support state governments in their response and ongoing recovery. Through these relief packages and other federal emergency grant opportunities, Massachusetts state agencies and departments have received billions of dollars in funding to be spent now and over the next five years (under ARPA guidelines). The ability to oversee spending of these funds is critical.

Our bill, An Act Improving Government Accountability, would give our office the necessary leverage and authority as we carry out this important work.

First, it modernizes the work of the Auditor’s office. It recognizes that much has changed in the 170 years since the first state auditor, David Wilder Jr., took office. This measure seeks to address one of the most significant hindrances we face when conducting audits: timely access to information. The work of the Auditor’s office is often slowed by bureaucratic feet-dragging when we request information from auditees. These delays sometimes stretch on unnecessarily for months. Under this legislation, state agencies will have ten business days to respond to requests for information from our office. You’ll note this is the same standard that the legislature set for agency responses to public records requests.

In addition to timely information access, the bill provides for access to the complete set of information auditors need. Since paper files are no longer the chief sources of information about program spending and performance, the statute must be updated to ensure that state auditors have access to agencies’ electronic databases and information warehouses, whether they are on premises or in the cloud. Additionally, auditors must have direct access to the information in its native format.

The term native format refers to the datasets and systems as they are actively used by the auditee, rather than datasets that an agency creates, collates, or otherwise manufactures specifically for audit purposes. This also refers to physical files needed to conduct our audit work. This bill ensures we will have access to those physical files, rather than a memo summarizing those files or a database tracking those physical files. Having access to files in their native format, or near native format, reduces the risk of unintentional errors that could occur when an agency produces information in an alternative format and ensures our auditors can draw their conclusions based on original-source information.

These elements of the bill take on new urgency as the administration proceeds with the Business Enterprise Systems Transformation Program, referred to as the BEST program, which will be bringing together all of government’s financial and human resources data functions and moving them to the cloud. I sat on the Executive Steering Committee during its formative process and made our office’s data access needs clear (leaving before the issuance of the RFP and selection began, in order to avoid compromising the office’s independence). Notwithstanding that, access must be statutorily guaranteed, and this bill will do that. 

This bill ensures that our office has access to all relevant data that agencies possess, even data with personally identifying information or other highly sensitive content. The work of the Auditor’s office, whether it involves the activities of MassHealth or DCF, requires that we are able to analyze this information. We understand the responsibilities and commitment that come with this access. This is why we have implemented comprehensive training and security protocols to ensure we use this information properly and protect it adequately.

Obviously, even with the passage of our bill, federal privacy protections may still keep some information beyond our reach, and we will also still commit to the same privacy protocols observed by the audited agencies, but it is imperative that we update and strengthen our existing statute to overcome the delaying tactics we encounter regularly. This legislation will go a long way towards that goal.

The second major element of the bill is that it allows the Auditor’s office to more effectively use our resources, particularly the time and talents of our staff. This bill recognizes that the risks to taxpayers posed by small entities with limited budgets are not as significant as those posed by vast agencies with expansive missions and large budgets. This bill will enhance the risk-based approach to auditing which we initiated early in my tenure, in which our efforts are focused on the most vulnerable areas of activity, while still ensuring that every state agency is audited at least every five years.

Third, this bill will hold agencies accountable for addressing the issues identified in our audits. Again, early in my tenure we began to ask auditees to report back to us 6 months post-audit as to changes they have made in response to audit findings. Appropriately, due to the constitutional separation of powers, we cannot compel remediation efforts. We do believe, however, that statutorily requiring agencies with significant financial or operational deficiencies to develop corrective action plans and progress reports for submission to not just the Auditor’s office, but to the Governor and the Legislature will increase governmental accountability and transparency.

Finally, this bill updates the gender pronouns used in the Auditor’s office’s enabling statute to be gender-neutral. While this may be perceived as a minor and technical change, it is important that as the first female state auditor in the Commonwealth’s history, I leave the door behind me open to any person, of any gender, to pursue.

Modern. Effective. Accountable. These are standards by which our auditors evaluate the activities of government agencies and contractors, and it is in these areas that this bill will help the Office of the State Auditor better meet our mission and in the shorter term, better oversee the performance of state agencies and spending of the billions of dollars of COVID-related federal relief. My pursuit of these measures today is in the spirit of making government work better now and in the years to come. It is for these reasons that I ask that you support An Act Improving Government Accountability.

Next, I would like to briefly discuss another bill before this committee, An Act Improving the Internal Controls within State Agencies. This measure is one of the most straightforward proposals this committee will likely see this legislative session. And I’d like to acknowledge the Comptroller of the Commonwealth, William McNamara, and thank him for his support of this measure.

Currently, state agencies and departments must report to the Auditor’s office when funds or property goes missing or is damaged. This measure will first extend this requirement to include independent authorities, such as the MBTA, regional transit and housing authorities, which currently have no formal reporting mechanism for when funds or property go missing or is damaged.

Second, it allows the State Comptroller to establish regulations related to these reporting requirements, including a threshold at which agencies must submit these reports to our office. Today, whether an agency loses a quarter or a piece of property valued at a quarter-of-a-million dollars, this loss is treated the same, as is the paperwork, and must be reported by the agency, and processed and examined by my office. By allowing the Comptroller to establish regulations and a reporting threshold, it will enable agencies—including my own—to more effectively and reasonably use their resources.

Finally, this measure will direct the Comptroller’s Office to establish a training program for state agencies to help them develop and implement required internal control and reporting policies and procedures.

Here is one prime example of why this is necessary -- our office is currently assessing each state agency to determine if they have received COVID-related funding. As part of this review, we are examining whether the agencies have conducted a new risk-assessment and updated their internal control plan with the Comptroller to reflect new challenges posed by the influx of large amounts of new funding. Chief among oversight concerns is the proper use of the funding, but compliance is followed closely by cybersecurity risks. A training program offered by the Comptroller’s Office would assist in the identification of risks and allow state agencies to have strong internal control plans that address potential or unforeseen challenges posted by evolving modern day issues.

For these reasons, I ask that you also support An Act Improving the Internal Controls within State Agencies.

During my tenure in the Auditor’s Office, we have constantly worked to meet and exceed the highest national standards of government auditing. We understand that to be an effective voice for accountability, we must lead by example. These two measures, as part of our Accountability Agenda, will not only help us continue this record of excellence, but will put this office in the best possible position with much stronger standing and with greater ability to ensure government accountability for the next State Auditor.

I thank you for your consideration and am happy to answer any questions from the committee.