There’s no time like the present to abolish the office of state auditor and inspector. It’s one of those obsolete state offices created 100 years ago that should have been eliminated when the offices of state mine inspector and the commissioner of charities and corrections were abolished.
The only authority the state constitution gives the state auditor is auditing county treasurers. All other duties of the state auditor come from the Legislature, which can easily take them away.
Most of our governmental entities in Oklahoma are audited by independent and professional certified public accountants, as they should be. CPA firms have to meet the highest standards of professional responsibility, particularly since the adoption of the Sarbanes-Oxley Act, following Enron’s demise.
CPA firms audit every governmental entity in Oklahoma, such as municipalities, school districts and state agencies, except for the few that have been reserved for the state auditor.
The incumbent state auditor, Jeff McMahan, is neither a certified public accountant nor a public accountant. The antiquated requirements for the office were set in the state constitution a century ago, when only three years’ experience as an “expert accountant” was sufficient. He is not qualified under state law to issue reports on financial statements but for the fact that he got elected state auditor.
But the best reason for abolishing the office is to take politics out of the process of auditing our governmental functions. Prior analyses of McMahan’s contributions in both of his campaigns show that most of his funds come from persons associated with entities that he either audits or regulates.
Yet no one audits the state auditor to see what favoritism and accommodations, if any, result from these contributions. In addition, McMahan has received campaign contributions from employees in his state office through its payroll deduction system.
To further his political fortunes, the state auditor often grandstands his audits. The most notorious was the PutnamCitySchool District’s last audit by petition, which was headed by McMahan as a field auditor under former State Auditor Cliff Scott.
McMahan’s findings were so off-base that the district had to take the state auditor to court to vindicate itself. But the damage was already done in an audit-waiving press conference in which the media got the audit before the district had an opportunity to review it and respond.
Governmental investigative audits should be initiated by law enforcement professionals such as the attorney general and the district attorneys who are schooled in the law. These professionals then could engage the assistance of forensic accountants when the need arises. The auditors then would report back their findings to the law enforcement professionals who would determine if laws have been broken.
Instead, the state auditor currently often aggravates the situation by grabbing headlines with his own legal conclusions before referring the audit findings to the proper law enforcement authorities for review and action, if any.
The Legislature also has made the state auditor the licensor and regulator of abstract companies under the Oklahoma Abstractors Law.
Most every profession in this state is regulated by its own specific commission or association. There is no reason why the abstractors should be any different. Yet, they are subjected to the highly partisan state auditor’s office for their licenses and regulation.
This control by the state auditor highly politicizes the title abstractors, as demonstrated by the campaign contributions McMahan receives from persons associated with title abstracting. Let’s free them from the politics of the state auditor’s office.
With the current cloud over the office and a political balance in the Legislature, now is the perfect time to streamline state government with the elimination of the office of state auditor and inspector.
Bleakley is publisher of Oklahoma Gazette. His former law firm represented PutnamCity during the referenced audit.