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State examiner wants higher Indiana audit fees

December 1, 2014

State Examiner Paul Joyce is pressing Indiana lawmakers to increase the daily fee for state audits, warning that his office needs more staffing to properly scout local government entities for fraud.

Joyce, who heads the State Board of Accounts, wants the daily rate his agency charges local governments for an audit increased from $45 to $175. He recently told the State Budget Committee that his agency lacks sufficient staffing and isn't meeting its responsibilities under state law to monitor municipalities, school districts and other government entities.

Joyce told top House and Senate lawmakers on the panel who will help craft Indiana's next two-year budget that his agency is unable to audit the extracurricular accounts of school districts due to its staffing limitations, the Evansville Courier & Press reported Saturday.

"That's where you would have fraud happening in local school corporations. We don't have the people to audit it," Joyce told the committee.

He added that audits for some government entities are more than five years behind schedule and "something needs to give" because those audits need to be done.

Sen. Luke Kenley, R-Noblesville, expressed concern that the agency wasn't auditing school districts' extracurricular accounts. He said lawmakers need to find a solution because the audits are critical to the "good operation of government."

"We don't want to ever compromise our integrity all the way up and down the line," he said.

Kenley said the General Assembly, which begins it budget-writing session in January, needs to either change the requirements of how often audits are performed or provide the State Board of Accounts with the resources it needs to comply with the law.

Joyce is proposing that his department be permitted to audit governments based on their risk, instead of the strict schedule currently required by Indiana law.

He said the increased auditing rate he's proposed would allow his office to hire 105 more field examiners and would provide "enough money" for it to perform its responsibilities.

Joyce also said he's made plans to work with lawmakers to ensure heightened confidentiality during the audit process. That effort follows an incident earlier this year in Evansville in which a city councilwoman released an audio tape of a closed-door meeting with state auditors she had secretly recorded.

Proposed legislation would close what Joyce has called a loophole in state law highlighted by the Evansville case.

Current Indiana law requires examiners involved in a state audit to keep confidential the information shared during the process or face a possible Class A infraction or $10,000 fine. Joyce's proposal would extend that requirement to council members or other public employees involved in compiling an audit.

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