I am the representative for House District 38 in Miles City. One of my interim committees is the Legislative Audit Committee, the only one required by the Montana Constitution. As a member of this standing committee I am charged with the responsibility of reading all the audits done by the independent Auditors of the State Audit Department.
The Audit Committee meets in Helena five times a year and studies the audits presented to us, this time there were 17 audits. The auditor in charge of the audit explains the findings and the department is given the right to respond, including what they have done to correct problems brought out in the audit, since they have seen the audit before it is available to anyone else.
During the Audit Committee meeting held on June 23 and 24 in Helena, we heard the 2014 audit of the Montana Department of Administration. For the first time in memory, the Bullock administration department was given an adverse report —the worst report possible.
Contrary to what you might have heard or read, this report is not just a “fluke” or a matter of a spreadsheet error. One error was a billion-dollar overstatement of depreciation of state property. Another error was a $62 million federal grant that was never accounted for in the report.
An additional 123 serious errors were found by the auditors. Some were corrected but the vast majority were not and that is a problem. We were told not to rely on the figures in the Montana state report since they were so inaccurate. The problem seems to stem from lack of internal controls and accepting the shoddy work by the CPAs of the state.
This audit is done every year and the 2013 audit was a qualified report — the second worst report possible. The accounting for the state of Montana has gone from bad to worse and if the figures are not accurate for 2014 how can the report for 2015 be relied on since the figures used to compile 2015 reports are based on the year end reports for 2014?
With the two consecutive years of bad reports it seems obvious to me that the Bullock administration has a serious accounting problem. I am calling for the Bullock administration and Sheila Hogan, Administration Department director, and Dan Villa, budget director, to give me more information before any decision is made on the issue.
If additional information is forthcoming, I will advise you of such information. This is an issue that should concern every taxpayer of Montana.
Representative Ken Holmlund (R-Miles City)