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Internal oversight is not working

The biggest cost of mismanagement is the loss of public trust

With newsworthy allegations of financial mismanagement at three state agencies in just the last month, it might surprise some to learn that many state agencies have internal oversight offices.

Clearly, these offices aren’t working as well as they should.

Since mid-June, we have seen reports the Environment Department might have to repay $6 million in possibly misspent federal grant money, the Human Services Department cut off payments to 15 behavioral health care providers that might have defrauded the Medicaid program, and the State Auditor ordered a special audit of the Public Education Department, which recently has both miscalculated special education spending and might have to repay the federal government $34 million and misallocated funds for high-risk students, shorting some and overpaying others.

If it looks like a mess, that’s because it is. And that’s your money getting such cavalier treatment.

The repercussions of the sloppy handling of taxpayer money are far-reaching. Obviously, it’s just plain wasteful and often the money cannot be recovered. Sometimes the issue never comes to light, and even when it does, agencies must invest substantial time and resources into repairing the problem. In almost every case, services suffer. In the case of the recent behavioral health debacle at the Human Services Department, the agency’s action could leave hundreds of patients without care. It is still unclear if the fraud allegations – made not by the department’s own inspector general but by a contract auditor – will stand up or justify the extreme response of cutting off payments to the provider. (The behavioral health providers accused of fiscal mismanagement have filed a lawsuit against the state, seeking an injunction to regain funding so they can remain in operation.)

But the biggest cost of financial mismanagement is the loss of the public’s trust. Many are already suspicious of our government, and incidents like these just confirm those suspicions. Yet, most agencies, even those embroiled in these controversies, are primarily charged with providing essential services to those most in need. It is essential that government is both transparent and accountable.

While most of the cabinet agencies have an inspector general, internal audit or quality assurance office, those offices, rarely sanctioned by state law, are often buried within the department. In many departments, these oversight functions report directly to the same people responsible for the financial management of the agencies – administrators who have a vested interest in keeping mistakes quiet. To be effective and truly responsive to the public, these offices need to be in statute and independent, and have the resources to be effective.

For the last several years, I have introduced a bill which would bring greater accountability to state government. This last session, along with Chairman Luciano “Lucky” Varela, I worked on a bill that would create the Offices of Inspector General in many agencies to investigate spending in the executive, public schools and state colleges – by any recipient of public money – and report to the Legislature. This office would be created in the same spirit of the Congressional Government Accountability Office. It would not duplicate, but complement, the work of the State Auditor and the evaluation team at the Legislative Finance Committee. It would absolutely increase the transparency of how our taxpayer money is spent.

Although these proposals have failed so far, legislators will continue to work on a plan to create independent oversight. It is critical to ensuring the public’s money is not wasted, that the people of New Mexico receive all the services they pay for. Failure to do so is a violation of the public’s trust.

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