Comptroller to Apprise Governor, Lawmakers on Follow-Up Audits

New law calls for comptroller to report on how public agencies have responded to major audits and loop legislators and state’s chief exec in on the results

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The State Comptroller’s office has had such success uncovering millions of dollars in
waste, a law has now been enacted to make sure the Legislature and governor get updates on how public agencies are responding to the audits.

The legislation won widespread bipartisan support from lawmakers. Gov. Chris Christie and legislative leaders are already notified of the audits.

The law sets a three-year deadline for the comptroller, which by law must perform a follow-up review of the agencies it audits. Reached on Friday, a spokesman for the Comptroller’s office said the agency will have no problem complying with the legislation.

The sponsors of the legislation meanwhile, also praised Christie for taking action to enact the policy change, which they say will give leaders in Trenton the best information available as they write laws to police government spending and protect against inefficiencies.

Created 10 years ago by then-Gov. Jon Corzine in response to growing concerns about ethics lapses and corruption, the comptroller’s office has broad power to review public agencies at all levels of government. By law, the comptroller has the authority to audit agency finances, examine the efficiency of government programs, and scrutinize government contracts.

Rooting out waste and abuse

The comptroller is also empowered to investigate misconduct, waste, and abuse, including in the state’s Medicaid program. It’s also required to perform random audits of the executive branch, and all entities exercising executive-branch authority, as well as public institutions of higher education, independent state authorities, local governments and boards of education.

The office has conducted several noteworthy investigations over its 10-year history, uncovering pension and welfare abuses at the state level, Medicaid fraud, and even criminal activity at the local level. The comptroller’s audits have also led to the adoption of several new laws, including a measure just enacted by Christie that is designed to better control mandatory fees imposed on New Jersey college students.

By design, each comptroller serves six-year terms that do not match up with the four-year terms of each governor, an offset that is supposed to give the comptroller more independence than other cabinet-level officials. The current comptroller is Philip James Degnan, a former federal prosecutor who has also served as the executive director of the State Commission of Investigation. Degnan, appointed by Christie in 2015, is the son of former Attorney General and Port Authority chairman John Degnan, and he is the third person to hold the office, following Matthew Boxer, a Corzine appointee, and Marc Larkins, another Christie appointee who served in an acting capacity following Boxer’s tenure.

Investigate, audit, and monitor

In addition to establishing the power to investigate and audit government agencies, the original law creating the state comptroller’s office also called for the agency to keep monitoring the public agencies that it audits to ensure they are complying with any recommendations that were made as part of the initial audit. But while the results of the audit itself are sent to the governor and lawmakers for review, the original law did not set up a requirement that the results of the follow-up reviews also be sent to the governor or lawmakers.

The bill seeking to establish that new requirement and to set up a three-year deadline for a report on the follow-up reviews to be provided to the governor and legislative leaders was originally introduced in the Legislature in 2014. It passed the Assembly last year by a 73-0 margin, and the legislation was approved in a 37-0 vote earlier this year in the Senate. Christie then signed the measure into law last week.

Jeff Lamm, a spokesman for the comptroller’s office, said the new law for the first time sets up a statutory timeframe for the agency to follow as it conducts follow-up reviews of the government entities that are audited. But he predicted the agency will have no problems working with the new, three-year standard.

“In terms of compliance, it’s not an issue,” Lamm said.

Assemblywoman Gabriela Mosquera, the bill’s primary sponsor, said it’s important as part of their overall mission to ensure government accountability that both the legislative and executive branches be given the follow-up information about progress government agencies are making in the wake of comptroller’s office audits.

“The people of New Jersey deserve to know that these agencies are making the best use of their hard-earned money,” said Mosquera (D-Camden).

Assemblyman Jamel Holley, another primary sponsor of the legislation, also suggested the reports on the comptroller’s follow-up reviews will lead to better policymaking in Trenton.

“New Jersey can maximize the efficiency of state agencies only if the individuals in a position to shape policies governing those agencies have the information they need to make good decisions,” said Holley (D-Union).

“In the same way that legislative leaders receive reports on initial audits, they also should receive reports on subsequent reviews,” he said.