State Auditor Addresses Chamber of Commerce

State Auditor Suzanne Bump

State Auditor Suzanne Bump was in Medford on Wednesday afternoon for a Chamber of Commerce Luncheon held at Salvatore’s. Bump is pictured with Medford Chamber of Commerce President Frank Call, Mayor Michael McGlynn, Representative Paul Donato, and Past Medford Chamber of Commerce President Rick Caraviello. Courtesy photo.

The following are Bump’s remarks to the Chamber:

Good afternoon and thank you for having me here today. Thank you, Mayor McGlynn, for that introduction. Thanks also to Rick Caraviello and Frank Call who made this possible, and Rep. Carl Sciortino who honors me with his presence.

I spent many years as a chamber board member, and I respect the work of chambers to strengthen community as well as support business growth.
I am here to talk to you about the work I am doing and my vision for what this office can achieve for you – as taxpayers and as consumers of government services. To me, it’s about integrity and public confidence.

The first thing I want you to know is that I love this job. It’s hard for most people to get excited about internal controls, eligibility determinations, IT contingency plans, but if you want to make sure government is spending your tax dollars well, you need someone in government who sees the value in focusing on these topics. And I do.

When the governor and the legislature decide to spend money on something, anything, I believe there is an implicit promise – that your dollars will be wisely spent. It is my job to ensure government makes good on that promise.

So, I follow the money being spent in government – and I ask, “how much did you spend, how did you spend it, and how did you do?”

Whether the spending is on caring for kids, building a bridge, or running the convention center, I want to see that the money is well spent.

Now, let me tell you how I’ve been putting these words into action.

First, if our work is to be taken seriously, my office needs to model the behavior it expects from the rest of state government. That is why my first act was to seek a peer review by a team of auditors from across the country.

Then, I released a plan to address a number of serious deficiencies they identified and to achieve excellence in auditing. This month, 20 new auditors started. They were trained in auditing according to generally accepted government auditing standards, and the veteran auditors got refresher training.
We also initiated a continuous professional development program. That is because I want my auditors to be able to do more than just audit through a rotation of state agencies. I want them to focus on the areas of the greatest potential risk to taxpayers.

So, for instance, we now are reviewing the entire field of business tax breaks – not because I think any particular one is bad, but because tax policy has an impact on our state’s economy and on the Commonwealth’s revenue picture.

The state gives up more than two billion dollars every year to business tax breaks. Maybe that is a good thing, because maybe it actually stimulates economic activity and job creation. But, we have found that, for more than a billion dollars worth of tax breaks, there are no measures of success. We don’t actually know what benefits we, as a Commonwealth, are deriving.

In most of these cases, there is no approval process of a company’s eligibility for the break, since most simply exist in the tax code; there is little DOR auditing; and, no periodic review for adherence to the goals of the breaks; there is just the hope that jobs will be created or industries will be made more competitive.

So, I want to know, as does the public, what benefits we get from our various tax credits, exemptions, and other incentives.

Let’s think strategically. Which tax breaks really do help us grow the economy? Should some be expanded? Should any be repealed? Our further analysis will help make this clear and help the legislature get it right in terms of tax policy.

Medicaid spending is an area where we are doubling down on identifying abuse and fraud. Since it accounts for more than 30% of state spending, we monitor it constantly. Our auditors are continually incorporating the latest data mining techniques in their work.

They sift through literally millions of transactions to find providers whose billings are out of line with the health profiles of their patients. Already this year we have uncovered $4.3 million in potential fraud among dental providers, and these cases have been referred for possible prosecutions and recoveries.

Another example of audits impacting tax dollars comes from a set of audits of several education collaboratives in the state.

Education collaboratives are supposed to encourage cost-effective, regional approaches to serving school-age students with special needs. Our audits, released last month, complemented several others that had been done previously – audits with serious findings and which suggested that were governance and accountability problems with this system – but nothing had been done at any level of government to address these systemic issues.

So, this time when we released audits, we identified the common threads among them, and also provided recommendations for reform, which we are working on now with the department of education and the legislature.

I recite the steps I have taken not to brag – well, maybe just a little – but because I want you to understand that underlying all my actions in the office has been and will continue to be a determination to get it right for the taxpayers and for those who are supposed to be the beneficiaries of government services.

Our work on the education collaboratives provides the clearest example yet of my vision for this office – to use audits to identify and remedy systemic problems, ones that waste money and undermine public confidence, so we can make government work better.

My definition of better government is government that is more efficient, more effective, more accountable and more transparent.

So, that means my job isn’t just about the numbers. It is also about values and bringing change to people’s lives.

Here are some ways our audits make an impact on the human level.

Teacher Qualifications

I just mentioned the audits of education collaboratives. Among the audit findings were truly serious things like board members and staff using public funds for golf outings and trips to the Kentucky Derby, abuse of the public pension system, school superintendents using collaboratives as slush funds to pay for things their local school districts couldn’t or shouldn’t pay for, and the failure of collaboratives to rebate excess funds to the local schools districts.

But at the Merrimack Collaborative, where the most egregious abuses occurred, they also were using uncertified teachers. 70% of their educators lacked required licenses, and there were no performance measures to hold the educators accountable.

So, while the management was spending money on things that aren’t allowed, they were failing to spend money on properly credentialed staff for their students. Kids who need the most attention and guidance weren’t getting the type of instructors the law required. That is changing now at this collaborative, but it will take a comprehensive overhaul of the system governing collaboratives to keep it from happening again.

Unnecessary X-Rays

Our work can also serve a public safety and public health role.

I mentioned before that our office is using advanced technology to review millions of records and find abuse and fraud in Medicaid. Some of the $4.3 million we’ve identified this year came from dentists who were submitting claims to MassHealth for procedures never performed – obviously, that is very bad.

What is even worse however is that some dentists were actually performing procedures that weren’t needed –subjecting otherwise healthy kids to multiple unnecessary X-rays, greatly in excess of the guidelines of the American Academy of Pediatrics.

This is horrifying. These audits have exposed several dentists. They serve as warnings to others and, we hope, will spur state agencies to take a closer look at the effectiveness of their own oversight.

District Courts – Equal Justice

An audit can also identify an action or failure to act which actually constitutes a miscarriage of justice.

In my first few months on the job, several audits of district courts came across my desk with the same finding. At a number of courts, not all of the required probation fees were being collected. That is because some judges decided not to implement an increase in probation fees, because they thought it was unfair. They refused to collect it, even though a good portion of the money was used to run their courts, and the court administrators didn’t detect it because they lack an accounts receivable system.

Now, I am not a prosecutor, but it seems to me that some judges were violating the law as well as not collecting monies owed. They were also failing to ensure that justice was being meted out fairly. Justice should not depend on which court administers your case. A punishment that is ordered should be followed uniformly across the state, according to the law.

Closing

There are two sides to the coin of auditing in state government. On one side is the money; on the other side is the public. Government auditing combines a pursuit of integrity and a commitment to public accountability that I find exciting and rewarding. Recognizing the importance of and the potential in paying attention to both sides of the coin is how the office can truly make government work better.

So, I now hope to hear some ideas and advice about how to improve my office and seek improvements in government as a whole. Thank you for inviting me to be with you today. I’ll be pleased to take any of your questions.

This entry was posted on Wednesday, September 21st, 2011 at 3:49 pm and is filed under Business News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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