Legislation that largely sailed through the Senate to give the state auditor the authority to examine the records of state contractors is hung up in a House committee over those contractors’ concerns.
Rep. Mike McCarthy, D-St. Albans, chair of the House Committee on Government Operations and Military Affairs, said this week that committee members heard too many disagreements among witnesses over basic aspects of the bill to feel comfortable setting a vote.
“If we can’t come up with a compromise between where the bill is now and what some of the folks, who have brought up very legitimate concerns, have raised, I don’t see passing a bill out this year,” McCarthy said.
The prospects for progress grew even worse on Thursday with the launch of an impeachment inquiry into two Franklin County officials, a process which involves McCarthy’s committee and will siphon its attention.
Proponents say that S.9 would restore an essential power to the Office of the State Auditor that was stripped away last summer by the Vermont Supreme Court.
The state auditor — officially titled the Auditor of Accounts — is an independently elected position described by the state constitution with a list of duties that includes monitoring the performance of state government agencies and their use of state taxpayer funds.
Current Auditor Doug Hoffer has contended that his office’s independence from the administration is compromised without the ability to directly access the records of private contractors.
State agencies spend more than $1 billion annually contracting with private entities to complete their work. The court ruling placed review of a substantial portion of the annual budget beyond Hoffer’s office’s reach, as the administration could simply block access to records, he said.
“If this (bill) doesn’t pass, it means that effectively, in these circumstances, I have to get the permission of the governor to do my job,” Hoffer said last week. “I don’t think that’s what the (state’s) founders intended.”
Over a decade in the position, Hoffer said, he has regularly requested and received records to review from state contractors.
But the House committee heard from organizations representing contractors, bankers and health care providers who argued the bill gives the auditor new authority that would prove time-consuming and costly to their members.
“It’s very clear the auditor has the authority to go to a state agency and request documentation,” Chris D’Elia, president of the Vermont Bankers Association, told the committee. “This changes that standard. It allows the auditor to go directly to a contractor.”
Devon Green, a lobbyist with the Vermont Association of Hospitals and Health Systems, said the bill would create two systems of oversight for contractors, one by the agency itself and the other by the state auditor.
“We could have the agency setting up goals that are completely different than what the auditor thinks performance is, and that creates a lot of confusion, unpredictability and litigation,” Green said.
The bill would limit Hoffer’s audits to records related to a contractor’s performance of contract work.
State law currently requires the office to perform all of its audits according to the requirements of Generally Accepted Government Auditing Standards, produced by the federal government and sometimes referred to as the “Yellow Book,” to receive funding.
Hoffer directed committee members to the laws of 12 other states, including Massachusetts and New York, which explicitly give those states’ equivalent the power to audit contractors.
The need resonated with Mike Fisher, the state’s health care advocate, who serves in that position under a state contract with Vermont Legal Aid.
“It seems obvious to us that in order for the auditor to protect state dollars, taxpayer dollars, they have to be able to follow those monies to a private contractor that is working on behalf of the state,” Fisher told the committee in testimony.
Hoffer was skeptical that he and the groups opposed to the legislation would ever find common ground.
“Those who testified in opposition to this bill are lobbyists representing very large economic and politically powerful interests,” he said. “On any given day, their agenda may or may not coincide with the best interests of the state.”
