Missouri state auditor granted new authority over local governments

Starting Wednesday, under House Bill 2111, which Gov. Mike Parson approved in July, the Missouri state auditor will have the authority to conduct audits of local and municipal government organizations, including larger counties like St. Louis and Jackson, where most of Kansas City is located.

Missouri State Auditor Scott Fitzpatrick performs official inspections of the state government’s programs and fiscal operations. Its audits examine financial accountability, waste, fraud and whether government programs are achieving their purposes and operating efficiently.

Missouri’s new bill is intended to cut through bureaucratic tape and allow the state auditor to bring new accountability to smaller municipalities, including cities, fire districts, road districts and ambulance districts.

“What we found over the years is that a lot of the fraud is in those smaller political subdivisions, because they have fewer internal controls, they have fewer employees, and they’re just in an environment that makes it easier for people to steal money,” Fitzpatrick told StateScoop in a recent interview. “House Bill 2111 will give us the ability to initiate audits of those political subdivisions, which we currently cannot do unless we get a petition from the citizens of the of that area.”

In May, a statewide audit found that cybersecurity training was not being consistently implemented across Missouri state agencies. However, the auditor’s assessment and recommendations only applied to state agencies that weren’t governed by the state technology department, but that were required to complete monthly security awareness training.

Previously, the Missouri state auditor’s office only had the authority to conduct audits of local government operations if investigations into whistleblower complaints found credible evidence of misconduct, and even then, a collection of public signatures was required to trigger an official audit.

Fitzpatrick said that during initial reviews whistleblower complaints to determine credibility, some agencies were uncooperative with his office, refusing to turn over records or respond to questions. In those instances, he said, there was not much more his office could legally do, so the onus remained on the citizens who’d filed the complaints.

“It just seemed like a ridiculous thing to ask people to do if they’ve identified potential fraud and government that has been deemed to be a credible concern, to then tell them that, ‘Hey, you need to now go gather a bunch of signatures from your the people that live in your area in order to get us access to the city or whatever it is so we can do this audit,'” Fitzpatrick said.

‘A good idea?’

Missouri’s whistleblower hotline yields hundreds of tips from citizens and government employees each year. They can choose to remain anonymous, but legislators often wanted their names entered into the public record for transparency — a requirement Fitzpatrick fought to change.

Fitzpatrick said his office originally filed to expand the powers of the state auditor in 2023, but received pushback from lawmakers who were concerned the bill would have led the state to abuse its power.

Jim Townsend, director of the Levin Center for Oversight and Democracy at Wayne State University in Michigan, told StateScoop he understands that argument.

“In some cases, a state auditor can be very helpful in in providing more resources to review financial performance and operational performance, but it depends,” Townsend said. “[Government] resources are limited, so I guess you have to ask yourself, is having another layer of auditing always a good idea? Is that the best use of resources?”

Townsend said the efficacy of the Missouri state auditor’s new authority to initiate audits of local governments will depend on how the state’s legislature uses the information produced by these audits.

“Just having a lot of information, having audit reports on your desk, doesn’t necessarily mean that the public is going to be really well served. It’s the legislature’s job to dig into any problems,” Townsend explained, likening the issue to dental hygiene. “If problems are allowed to fester, a toothache can turn into a root canal.”

Allies, not adversaries

Townsend said expanding the Missouri auditor’s authority highlights the need for more collaboration between government agencies, officials in charge of overseeing them, and lawmakers, in order to create an environment of allies rather than adversaries.

“Government is really big, really complex in the modern world. There needs to be a lot of communication, and audits are an important part of that conversation,” Townsend said. “The agency that you’re overseeing needs to feel like they’ve got a partner in the legislature that’s taking responsibility with them for serving the public, instead of an as a situation where it’s adversarial.”

Despite last year’s concerns, this year, the Missouri state legislature passed the bill unanimously.

“The reality is there’s no shortage of things that need to be audited, and we’re not looking for unnecessary audit work. That’s not a good use of our resources,” Fitzpatrick said. “So we’re going to use this authority judiciously and make sure that we’re focusing the limited audit resources we have on where they’re going to be most effective.”