More Indiana audits planned with local government fees boost

The state auditing agency would hire about 100 more field examiners to review spending by local governments and school districts under a plan being considered by Indiana lawmakers.

The proposal, presented Tuesday to the House Ways and Means Committee, would see the daily audit fees that the State Board of Accounts charges local governments increase from $45 to $175.

State Examiner Paul Joyce said budget cutbacks in recent years have forced the agency to perform audits less frequently than required by state law and that some local governments haven't been reviewed in five years. The increased fees would bring in an estimated $7 million that would allow the agency's number of auditors to grow by nearly 50 percent, he said.

Joyce told the committee that about one-third of local government units aren't being audited annually or biannual as required by law and that only the financial records of school district — and not individual schools — are now being reviewed.

Joyce said he believed the fee increase was necessary. "The addition of this will allow me to accomplish 100 percent of what's been put on me to do," he said.

Rep. Ed DeLaney, D-Indianapolis, questioned why the state was charging local governments more for the auditing service rather than accepting the responsibility of ensuring the integrity of public spending.

Ways and Means Committee Chairman Tim Brown, R-Crawfordsville, said he believes the additional examiners are needed and that the increased fees for local governments are reasonable so that their staffs make effective use of the auditors' time.

"I think there's something to be said that you have some accountability within this system to be prepared and be responsible stewards of the money," Brown said.

Matthew Greller, executive director of the Indiana Association of Cities and Towns, said the state audits are important for helping maintain transparency and public trust. He said it would be much more expensive for local officials to hire outside accounting firms to conduct audits.

"We feel like the increased fee, while fairly substantial, is one that is important and one that's probably worth it in terms of making sure that we're in good position financially and that we get those regular audits," Greller said.

A separate bill being considered by legislators would give the Board of Accounts the authority to set an audit schedule for local units based a variety of risk factors rather than every certain number of years.