Oklahoma State Auditor asks for $683,000 one‑time appropriation, higher revolving‑fund cap to bolster forensic audits and staffing

The State Auditor told the House Appropriations and Budget — General Government subcommittee that the auditor’s office is requesting a one‑time appropriation of $683,000 for fiscal year 2026 to recover excise‑tax revenue that was incorrectly routed to counties and to support investigative audit work.

The request, presented during a budget hearing, also asked lawmakers to raise a statutory cap on the office’s revolving fund — a limit the auditor said has not been adjusted since about 2008 — and to provide resources to hire and retain forensic auditors and other staff amid a surge in audit work tied to pandemic relief funds.

Why it matters: The State Auditor’s office oversees financial audits of state and county entities and conducts forensic investigations that prosecutors use in criminal cases. The auditor told the committee that an increase in federal grant dollars and problems in state procurement and reporting have multiplied the office’s workload, produced millions in questioned costs, and created thousands of unbilled forensic hours that strain the office’s capacity.

State Auditor’s presentation and request The auditor said the office’s appropriated revenue was about $4.5 million in fiscal year 2024 and about $4.7 million in fiscal year 2025. For fiscal year 2026, the office requests a one‑time correction of $683,000 tied to gasoline excise taxes the auditor said “were incorrectly sent to the counties” in fiscal years 2022 and 2023 instead of to the auditor’s office as intended by prior legislation. The auditor said those misrouted taxes totaled $473,000 for those years and $210,000 in fiscal year 2024, leading to the $683,000 ask.

The auditor also asked legislators to increase a statutory cap on the office’s revolving fund (the office suggested increasing the cap to $1.5 million or $2 million) to ease recurring cash‑flow and accounting burdens created when the fund approaches its current limit.

Workforce, billing and retention pressures The auditor told the committee the office now employs roughly 107 auditors across five divisions and described recruiting and retention challenges: state salaries are about 73% of pay at comparable regional state auditor offices, and the office’s billing rates are roughly one‑third what an outside CPA firm would charge, which the auditor said makes it difficult to retain staff who are attractive hires for private firms and other state agencies.

The office reported an improved turnover rate after last year’s appropriation increase (from 23% to 12% in 2024) but warned about an upcoming wave of retirements among senior managers and directors.

Forensic backlog, unbilled hours and recoveries The auditor explained that forensic auditors often assist law enforcement, help build prosecutorial cases and testify in court, producing substantial unbillable hours because municipalities and other local entities sometimes cannot afford forensic rates. “The results is thousands of unbilled hours to the state provided by our forensic team,” the auditor said.

The auditor reported the office has helped recover $20 million to date and said work could lead to an additional $30 million in recoveries. The office also said pandemic relief funds increased audit workloads dramatically — estimating the auditing of those funds added the equivalent of 8 to 10 full‑time employees — and that questioned costs reported to date have increased from roughly $5 million pre‑COVID to about $30 million now.

Single audit findings and procurement concerns The auditor told the committee the state’s single audit workload rose because of additional federal pandemic funds and cited concerns with procurement and financial reporting at the Office of Management and Enterprise Services (OMES). The auditor said OMES authorized purchases without competitive bids in some cases and that the attorney general requested an investigative audit of OMES’ procurement and contracting practices. The auditor warned delayed or incorrect reporting of financial information had nearly put the state’s bond rating at risk when a late comprehensive financial report had to be completed to meet a September deadline.

Questions from lawmakers Representative Gannon asked about the citizen petition process for requesting local audits; the auditor described the statutory requirement as 10% of registered voters (as of the last general election) for the petition at the local level and explained the office assigns staff to assist concerned citizens to reduce unnecessary investigative audits. Vice Chairman Roberts and Representative Fugate pressed the auditor to clarify the excise‑tax shortfall and how the revolving‑fund cap affects operations.

What the auditor did not specify The auditor did not provide a name in this hearing transcript; references are to the office by title. The presentation included several dollar amounts and workload estimates supplied by the auditor; where the auditor provided rounded or aggregated figures (for example, questioned‑cost totals and estimated additional recoveries), the article reports those as presented.

Looking ahead The auditor said the request for the one‑time $683,000 and statutory language cleanup to ensure future excise taxes are routed correctly are priorities for the current session, and asked for lawmakers’ assistance. The office also signaled it will continue to work with OMES and law enforcement on existing investigative audits and single‑audit issues.