Nevada controller backs bill to create state Office of Inspector General to audit recipients of public funds

The Nevada state controller on Monday urged the Assembly Committee on Government Affairs to create a Nevada Office of the Inspector General with authority to audit state agencies, local governments and private organizations that receive public money.

"This office would have broad powers to audit any entity, and that includes state agencies, local governments, and also private sector entities, including non profits that receive money directly from the state or any federal grant money subject to single audit requirements," Controller Andy Matthews told the committee while presenting Assembly Bill 33.

The bill, Matthews said, is meant to fill a gap he described between existing performance auditing — focused on outputs — and the forensic auditing capacity the state lacks. "An inspector general is an official that's responsible for overseeing and promoting accountability and integrity within government agencies and other entities that receive public money," Matthews said, adding that independence for the office is "absolutely critical." The proposal would place the inspector general in the unclassified service and initially create three positions: inspector general, deputy inspector general and a special counsel, with additional staff hired as resources permit.

Why it matters: Supporters argued the office would improve oversight and public trust by identifying waste, fraud and abuse and recommending process improvements. Several pro‑bill witnesses, including policy groups and partisan organizations, told the committee that states with independent inspector generals have achieved recoveries and efficiency gains. Opponents — chiefly local governments and associations representing cities, counties and hospitals — argued the bill would duplicate existing oversight and create new costs for local jurisdictions.

Scope and appointment process: Under the bill as presented, the controller would submit three to five candidates for inspector general. The attorney general would vet candidates, and confirmation would require unanimous agreement of a three‑person panel composed of the controller, the treasurer and the lieutenant governor. Matthews said the bill incorporates peer review by the Association of Inspectors General and contemplates consulting the legislative auditor to reduce duplication.

Protections and limits: Matthews and Chief Deputy James Smack said the bill includes whistleblower protections and a hotline for confidential reporting; Matthews directed committee members to sections 13, 16 and 22 for details. He also said the bill provides for impeachment of the inspector general for misfeasance or malfeasance and allows contracting with outside investigators and accountants when needed and when funds permit.

Public testimony: Dozens of callers and a handful of in‑person witnesses testified in support, including Nevada Policy (Anahit Baghshetsyan), the Nevada Republican Party and the Libertarian Party of Nevada. Supporters emphasized transparency, independent review of nonprofits that receive public funds, and whistleblower protections. Testimony in opposition came from the Urban Consortium, the Nevada Association of Counties and the Nevada League of Cities, which argued counties and cities already undergo audits and the bill would duplicate those functions and impose costs.

What it does not do yet: The committee did not take a vote on AB33 at Monday's hearing. Matthews acknowledged the office would not replace internal audit divisions or the legislative audit functions and said the intent is for the inspector general to be complementary and to refer matters outside its capacity to other agencies when appropriate.

Where things stand: Committee members asked about staffing, independence if the office were housed in the controller's office, and how the office would prioritize work across many potential audit targets. Matthews said the position would be statutorily independent even if administratively housed within the controller's office, and that resource constraints would require the inspector general to prioritize work and potentially contract out specialized services.

The committee adjourned the AB33 hearing without a formal vote; the bill will move through the Legislature if the committee elects to advance it in subsequent business.