October 23, 2014
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CPAs have issues with plan to eliminate Bureau of Audits
CPA's say fraud could be on the rise

Under Governor Lincoln Chafee’s budget proposal for FY2013, the Bureau of Audits, which provides internal auditing functions for the state’s government, would be eliminated, says Rhode Island’s CPA’s.

Christine Hunsinger, press secretary for Governor Lincoln Chafee, said the Bureau would not be abolished, but instead consolidated into an Office of Management and Budget.

“We want to be more efficient and transparent,” said Hunsinger, who said the move isn’t to cut costs, but to ramp up productivity.

But those at the Rhode Island Society of Certified Public Accountant (RISCPA) don’t agree.

“The proposal would undermine transparency, accountability and the crucial internal audit function of the State,” said Robert Mancini, Executive Director of the RISCPA in a statement.

RISCPA said the consolidation would strip away the most important qualifier of the Bureau: it’s independence. By folding the Bureau into another office, the team of auditors would essentially be auditing themselves.

The Bureau of Audits currently provides an independent appraisal of financial efficiency for the Executive Branch of Rhode Island’s government. They are an internal audit and management advisory service that reports their findings to the Governor and Director of Administration.

The Bureau helped to return $13.3 million to the state in settlement money from civil cases following its forensic audit of the Rhode Island Resource Recovery Corporation.

“If approved, Governor Chafee is sending a message that accountability isn’t a priority,” said Martha Conn Hultzman, RISCPA Board President in a statement. “At a time when Rhode Island is looking to cut wasteful spending, the Bureau of Audits provides an independent eye to identify those problem areas and potential remedies.”

RISCPA is now publicly opposing the change to the Bureau, saying it could mean extraneous spending and fraud will slip through the cracks. They say the current proposal would transition the Bureau into the non-auditing entity and is concerned that audit reports, should they be made, would not be made available to the public.

“If we gut the state’s internal audit function, the day-to-day watchdog function for the taxpayers will cease to exist,” said Ernest Almonte, RISCPA Past President and former RI Auditor General in a statement. “Eliminating the auditing function would make it easier for individuals to commit and get away with fraud.”

Hunsinger said Rhode Island is one of very few states that does not have an Office of Management and Budget. She says the creation of the office, which will fall under the umbrella of the Department of Administration, will ramp up efficiency.

A report released by the State Integrity Investigation earlier this month gave Rhode Island a “C” rating on it’s corruption risk report card. Rhode Island ranked 10th out of 50 states, and was given a “B+” rating on the internal auditing section. If the Bureau of Audits was eliminated, the State Integrity investigation said the state’s overall score would drop to a D, and Rhode Island’s rank would fall to 33.

The Bureau of Audits currently has a staff of 10, and sources are saying that some of those CPA’s would be in danger of losing their jobs should the Bureau be eliminated.

Still Hunsinger said it’s hard to tell if any employees would lose their jobs or if they would simply change positions.

“Most employees would be folded into the new office,” she said.

Sources are quick to point out that no where in the budget proposal does it say that personnel on staff of the Office of Management and Budget would require the same certifications the CPA’s of the Bureau of Audits currently hold. Without those certified auditors, some worry that no audits will be performed. Hultzman thought Chafee might be making this move to consolidate personnel costs, but Hunsinger said that isn’t the case. Currently Hultzman and RISCPA are reaching out to legislators to combat the proposal.

“We know it’s just a proposal,” said Hultzman in an interview last week, “We’re communicating with our [1,900] members and encouraging them to testify against it.”

RISCPA plans to testify against the bill in both the House and the Senate.

“Eliminating the Bureau of Audits, a key tool in preventing corruption, would be a grave mistake,” said Mancini.


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