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NEW: R.I. CPAs Oppose Chafee Proposal to Abolish Bureau of Audits

Wednesday, March 07, 2012

 

The Rhode Island Society of CPAs (RISCPA) announced its strong opposition today to Governor Chafee’s proposal to abolish the Rhode Island Bureau of Audits. Under the Governor’s proposed FY2013 budget (House Bill 7323, Article 4), the Bureau, which provides the internal-audit function for all of state government, would be entirely eliminated.

“Eliminating the Bureau of Audits, a key tool in preventing corruption, would be a grave mistake,” said Robert Mancini, Executive Director of the RISCPA. “The proposal would undermine transparency, accountability and the crucial internal audit function of the State.”

The Bureau of Audits performs the auditing function for the Executive Branch of the State Government. It provides an independent appraisal and evaluation of the effectiveness of financial and operational controls through objective analyses, evaluations and recommendations. In the past, the Bureau has identified tens of thousands of dollars of inaccurate billings through periodic audits of state vendors, which were subsequently recovered by the state. Additional internal audits have also improved operations, increased compliance, and helped ensure a more transparent processes across state agencies.

“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. “Eliminating the auditing function would make it easier for individuals to commit and get away with fraud.”

Under the Governor’s proposal, the Bureau of Audits and some of its current positions would be folded into another, non-audit, agency. In addition, the Office of the Auditor General, which currently reports to the legislature not the Governor, would pick up some of the functions, creating potential separation of powers issues. The state has already reduced the size of its audit workforce in the past few years, creating increased pressure that in turn could result in mistakes and misappropriation. There is no mention in the proposal of public disclosure of the audit reports or if any would be created.

“If approved, Governor Chafee is sending a message that accountability isn’t a priority,” said Martha Conn Hultzman, RISCPA Board President. “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.”

The RISCPA is an active member of the professional association for the Rhode Island Bureau of Audits and provides access to knowledge and resources. The American Institute of Certified Public Accountants, the Association of Certified Fraud Examiners, the Government Finance Officers Association and the Association of Government Accountants all consider internal audit to be a critical function in the control system of an organization. Additionally, the chief of the Bureau of Audits for the State is a CPA and follows established professional standards.

In the coming weeks and months, the RISCPA will testify against the proposal at budget hearings for both Chambers. In addition, the RISCPA will urge its over 1,900 members to call their local legislators to speak out against the bill. The Society’s Government Relations Committee and Executive Director, Robert Mancini, have already communicated with the Board and its members, providing information and urging all to oppose the Governor’s ill-conceived idea.

 

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