In investigating, inquiring, and examining into the administration, operations, or activities of the institutions, no specific authority is conferred on the Governor or agency to effect changes in their management, functions, or internal affairs. In general, the information obtained is utilized by such officer or agency in connection with enforcing phases of fiscal control, including supervision of disbursements in 9 States-Connecticut, Iowa, Massachusetts, Minnesota, New York, Rhode Island, Texas, Washington, and Wyoming-the results of the investigations are made the basis of recommendations submitted to the Governor or transmitted to the legislature. The State Director of Finance, Budget, and Business in Washington must make confidential reports of his findings to the Governor. Chapter IV. Control Over Post Auditing of Financial Accounts of Institutions THE POST AUDITING of the financial accounts of the institutions constituted the principal method of State central fiscal control over them prior to the recent reorganizations of State financial machinery. With these reorganizations resulting in the establishment of systems. of control over appropriations before and after made by the State legislature as presented in the two preceding chapters, post auditing was continued in all the States. The chief change effected by the reorganizations was that in the case of a number of the States the same State central executive officers made responsible for the new systems of control were also vested with the power over post auditing. Legal provisions of the States in providing for post auditing commonly prescribe that a thorough examination or inspection shall be made of the accounts, books, records, vouchers, warrants, and other financial documents of the institutions as to their correctness at periodical intervals of time. Hence, the examinations or inspections are conducted by the State central officers after the receipts have been collected and after the expenditures have been made. The institutions are required to surrender or exhibit their books, accounts, and other financial records upon demand to the State officers. In some States the statute provides that the officers shall not give prior notice to the institutions when the post audits are to be made. State officers vested with control over post auditing.-The State officers vested with control over post auditing vary from State to State. Because of the large amount of labor involved in conducting examinations of the financial accounts of the various institutions and State governmental units, a number of examiners, assistant examiners, or inspectors serve under these officers in most of the States. Such examiners or inspectors are generally certified public accountants or qualified professional accountants. In table 10 is shown the particular State officer vested with this control in each of the 48 States. The table likewise indicates for each State the intervals of time when the post audits must be made. Attention is called to the fact that in some of the States, the State officer's control over post auditing does not apply to the State University or the State agricultural and mechanic arts college. Responsibility over the post auditing of the accounts of such institutions in these States is vested in their governing boards. On the other hand the State central officer has control over the post auditing of other types of institutions within these same States. 36 Table 10.-State central executive officer vested with control over post auditing of financial accounts of the institutions in the several States and intervals of time when post audits must be made Kansas.. Kentucky... State inspector and exam iner. Intervals of time when post audits must be made Not specified by statute. Once during each calendar year. At least once a year and as At least annually. Once each year or when Governor in his judgment deems necessary. At least oncee year and more frequently if possible. At any and all times. Do. At least once a year. State assistant budget di- Annually or oftener, if re rector. quired by Governor. Once each year and at such times as required by Gov ernor. Massachusetts. --- Governor and council and At any time by Governor and State auditor. council; annually by State auditor. Governor and State audi- At any time upon order of Michigan---- Missouri.... Governor; at least once a year by State auditor general or oftener when deemed necessary. Once each year. At least once a year. Governor and State auditor. At any time when Governor in Table 10.-State central executive officer vested with control over post auditing of financial accounts of the institutions in the several States and intervals of time when post audits must be made-Continued Oregon..... State auditor.. _do_... Governor and State auditor. Auditor of State....... State examiner and inspec- Intervals of time when post audits must be made At least once each calendar year. At such times as Governor and At least once in every 2 years. Not specified by statute. Secretary of State as State At least once each year and at auditor. Pennsylvania... Governor and State auditor general. Rhode Island... State comptroller... South Carolina... State auditor__ South Dakota Texas Utah.... Washington.... Wisconsin__. Wyoming... Director of audits... any time head of institution At any time upon call of necessary. At least twice each year and when ordered by State Budget Commission. At least once a year. At any time on order of Gov ernor; not less than once each fiscal year by State comptroller. Governor and State auditor. At any time by Governor; State auditor. - - State auditor_ _. State examiner... annually by State auditor. At least once a year. Annually and at such other times as Governor directs. At least once a year. Control over post auditing of the institutions is vested in the State auditor or an officer of similar title in approximately one-half of the States, according to the information in table 10. There are nine States, however, in which the State comptroller exercises this control. In a number of these States, the comptroller is a new State financial officer created by the recent State fiscal reorganizations and is subject to the direct authority of the Governor. The post auditing is under the control of the director of the State Department of Finance or the State budget director in four States, such positions also having been established by State fiscal reorganizations. In eight States, a special State officer, such as State examiner, inspector, or supervisor of public accounts, controls the post auditing. It will be noticed that the legal provisions of a number of the States. vest certain control over post auditing in the Governor as well as the regular State officer designated to perform this function. For example, the Governor in Florida, Missouri, North Carolina, North Dakota, and Virginia, has the right to arrange for special post audits of the institutions at any time. Outside public accountants may be employed in these States by the Governor for this purpose. In five other States Georgia,' Michigan, Pennsylvania, Tennessee, and Texas-the Governor whenever he deems necessary is empowered to direct the State auditing officer to make special post audits in addition to the regular post audits. There are three States-Alabama, Idaho, and New Hampshirewhere the State officer controlling post auditing serves under the immediate supervision of the Governor. The State auditor in South Carolina is required to make post audits of the institutions when advised to do so by the State Budget Commission of which the Governor is a member. Of special interest is a statute in New Mexico which specifically authorizes the governing boards of the institutions to employ accountants to make post audits of their financial accounts whenever deemed necessary or desirable. Intervals of time when post audits must be made.-The intervals of time when the post audits must be made vary among the States, as further shown by table 10. The most common interval of time is annually or at least once a year. This interval of time has been adopted by 30 or approximately 63 percent of the States. Three States require that the post audits be made at more frequent intervals, namely quarterly or semiannually, while two States provide for post audits at longer intervals, such as once every 2 years. The post audits in five States may be made at any and all times or from time to time at the discretion of the State auditing officer. Legal provisions of three States stipulate that they shall be made at such times as the 1 In Georgia the State auditor must also make special post audits whenever directed by the appropriations committees of senate and house. |