Who’s Watching?

Beth Wood is a Certified Public Accountant in her fourth term as North Carolina’s elected State Auditor. She is a long-time public servant with nearly 30 years of auditing experience, having worked in the Auditor’s Office for nearly 10 years before her election in 2008 and also in the State Treasurer’s Office. Before that, she worked for several companies in the private sector.

Beth is the first woman elected State Auditor in North Carolina. Through her work as State Auditor, Beth has worked to strengthen and improve state government. By focusing in the areas of Medicaid, Transportation, Cares Act Spending, and Information Technology, her administration has identified hundreds of millions of taxpayer dollars in wasteful spending. These audits have resulted in legislation to improve the oversight and efficiency of state government, earning her o)ce the nickname of the “Taxpayers’ Watchdog.”

At first blush, this may seem like a boring topic. But I think many of us were pleasantly surprised and interested in hearing what Beth had to offer. She did start off by saying that she does not audit tax returns. Apparently that is a question she gets a lot!

North Carolina has an annual budget of roughly $46 Billion and all of that money comes from the citizens (tax payers). About $21 Billion is sent to Washington DC but we do receive some benefits for doing that. Much of that comes back in the form of grants. But it is important to note that the only eyes and ears that we the people have watching our state government and holding them fiscally responsible is the State Auditors office. This is an incredibly important role!

The State Auditor’s office does several kinds of audits for different purposes. It is important to note that they also have limited budget and staff so they are not able to audit every agency every year. So, unfortunately, it is just not possible for them to find everything that is wrong or wasteful. Given the circumstances, though, they have found and corrected some pretty big issues over the years.

The types of audits that are done generally have the purpose of determining that the accounting system of the agency is “accurate enough” to enable the organization to make quality business decisions. They are not combing through every dollar to squeeze out as much efficiency as possible, even though we would probably be glad if they could.

One of the reasons that these audits are important to the agencies themselves and our state overall is that they are used to determine our Bond Rating. Currently, North Carolina has a “AA” Bod Rating which is the highest rating possible. This also allows us to borrow money at the lowest interest rates allowed and we are one of 14 states with this bond rating. So, in a very direct way having these audits done regularly is valuable in and of itself to keep our costs down on borrowed money.

The State Auditor’s office audits the money we get from Washington DC in the form of grants. This is called a “Compliance Audit”. There are also “Performance Audits” done on a rotating schedule of agencies. The Performance Audits are focused on finding “waste” in the agency budget. Beth provided some really interesting examples of these like the Department Of Transportation which had some horrible accounting practices which lead to millions of dollars being wasted. This one was so bad that the NC Legislature passed some new laws to prevent this kind of waste from happening again and it also resulted in new Secretary of Transportation, a new Chief Operating Officer and a new Chief Engineer as well. There was a second example of the Department of Education which had developed a series of online courses did not meet the standard of rigor required and did not even contain all of the required material for the subjects presented. This was another case where the NC Legislature needed to step in and take action. The Department of Education was forced remove the guarantee and correct all of the courses until they met the standards as evaluated by a third party team of subject matter experts.

If you believe that there are financial issues with a government agency there is an investigative unit and a Hotline that you can call to report any concerns you have. Federal financial issues will definitely be investigated. Currently the agency has 31 queued investigations and 26 of those are for small municipalities like Apex. She did not say if Apex itself was one of those (for the record).

We did ask if the Wake County Public School System had ever been audited and she indicated that it has not been done by her office.

As mentioned previously, this turned out to be a very interesting program and there were a lot of really good questions at the end which Beth handled very openly. Everything she shared is a matter of public record and can be found on the North Carolina Office of the State Auditor website. And there are links on this web page for the Hotline described above and a sign up for instant notification when any reports are published by the office. This would be an excellent way to stay informed!