Committee orders subpoenas for local officials after repeated audit findings; directs LSO to request performance audit of LSO

The Management Audit Committee on July 9 voted to subpoena officials from several local entities after Department of Audit staff described cases in which audit findings remained unresolved over multiple years.

Justin Chavis, director of the Department of Audit, and Rich Cummings, administrator for the Public Funds Division, told the committee their office issues reports showing repeated deficiencies in internal controls, segregation of duties and financial reporting in some small towns and special districts. "We give them a few years because, sometimes what ends up happening is depending on the issuance of our audit, we have to give them time to develop that—s fixes," Cummings said when asked about follow-up timelines.

The committee voted to subpoena the Riverton Recreation District No. 25 and the Fremont County Clerk; it also subpoenaed the mayor, clerk and treasurer of the Town of Bear River and the mayor, clerk and treasurer of the Town of Manderson to appear before the committee to explain unresolved audit findings. The subpoenas followed public testimony and Department of Audit reports that identified multiple outstanding findings in recent audits of those local governments.

Department of Audit staff emphasized limited enforcement authority. "Statutorily, there really isn—t a specific requirement in terms of how regularly we go back and conduct an audit of a particular entity," Director Chavis said. He and Cummings explained the office can increase monitoring, require more frequent reporting and label entities high-risk for future audits, but that withholding funds is limited by statute to late census reporting and that criminal referrals require evidence of criminal conduct.

Separately, committee members debated oversight of the Legislative Service Office. After extended discussion about who audits the auditors and where auditing authority should reside, the committee voted in roll call 9-2 to direct the Legislative Service Office to request that the Department of Audit perform a performance audit of LSO (motion sponsor: Senator Smith). Committee members also approved a separate request to draft legislation that would move the Public Funds Division (local-government audit function) under LSO for committee consideration.

The committee—s actions are procedural tools to compel testimony and obtain more information. Department of Audit staff said they will provide the requested historical audit records for the named entities and coordinate follow-up work; LSO will be asked to send the formal request for a performance audit of the LSO to the Department of Audit.

Provenance: Department of Audit presentation and follow-up discussion begin at 01:00:20 in the transcript (public-funds division testimony). The roll call directing LSO to request an audit of LSO begins at 01:31:40 with Senator Smith's motion and the roll call recorded at 01:42:38.