Starting Wednesday, the Missouri State Auditor will have the authority to conduct audits of local and municipal government organizations, including larger counties such as St. Louis and Jackson, where most of Kansas City is located, under House Bill 2111, which Governor Mike Parson signed into law in July.

Missouri State Auditor Scott Fitzpatrick conducts official audits of state government programs and financial operations. His audits examine financial accountability, waste, fraud, and whether government programs are achieving their goals and operating effectively.

Missouri’s new bill is designed to cut red tape and allow the state auditor to hold smaller municipalities, including cities, fire, highway and rescue districts, more accountable.

“We’ve found over the years that a lot of the fraud occurs in these smaller political subdivisions because they have fewer internal controls, they employ fewer people and they’re in an environment where it’s 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 these political subdivisions, which we currently cannot do unless we receive a petition from the citizens of that area.”

In May, a statewide audit found that cybersecurity training was not implemented uniformly across Missouri state agencies. However, the auditor’s assessment and recommendations applied only to agencies that were not under the state’s technology agency but were required to complete monthly security awareness training.

Previously, the Missouri State Auditor’s Office was authorized to conduct audits of local government activities only when investigations into whistleblower complaints revealed credible evidence of wrongdoing, and even then, a public petition was required for an official audit.

Fitzpatrick said that when he first reviewed whistleblower complaints for credibility, some agencies did not cooperate with his office and refused to release records or answer questions. In those cases, he said, his office cannot legally do much more, so the onus falls on the citizens who filed the complaints.

“It just seemed ridiculous to me to require people who have identified potential fraud and a government that is considered a credible problem to then tell them, ‘Hey, you now need to collect a bunch of signatures from the people who live in your area so we can get access to the city or whatever so we can do this audit,'” Fitzpatrick said.

“A good idea?”

Missouri’s whistleblower hotline receives hundreds of tips from citizens and government employees each year. They can remain anonymous, but lawmakers often wanted to add their names to the public record for transparency reasons – a requirement Fitzpatrick had pushed to change.

Fitzpatrick said his office had originally sought an expansion of the state auditor’s powers in 2023, but faced resistance from lawmakers who feared the bill would lead to the state abusing 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 providing more resources to review financial and operational performance, but it depends,” Townsend said. “(State) resources are limited, so I guess you have to ask yourself, is an additional layer of audit always a good idea? Is that the best use of resources?”

Townsend said the effectiveness of the Missouri State Auditor’s new authority to initiate audits of local agencies will depend on how the state legislature uses the information obtained through those audits.

“Just having a lot of information and having test reports on the table doesn’t necessarily mean that the public is really being helped. It’s the job of the legislature to deal with all the problems,” Townsend explained, comparing the issue to dental hygiene. “If problems don’t go away, toothache can turn into root canal treatment.”

Allies, not enemies

Townsend said the expansion of the Missouri auditor’s powers demonstrates the need for greater cooperation among government agencies, the officials charged with overseeing them and lawmakers to create a climate of allies rather than adversaries.

“Government is really big and really complex in the modern world. There’s a lot of communication that needs to happen, and audits are an important part of that communication,” Townsend said. “The agency you’re overseeing needs to feel like they have a partner in the legislature that shares responsibility with them to serve the public, rather than a situation where there’s confrontation.”

Despite last year’s concerns, the Missouri State Legislature passed the bill unanimously this year.

“The reality is there is no shortage of things to audit and we are not looking for unnecessary audit work. That would not be a good use of our resources,” Fitzpatrick said. “So we will use this authority prudently and make sure we use the limited audit resources we have where they will be most effective.”