The Delaware State Auditor says findings show a failure of the office to meet statutory requirements.
Kathy McGuiness said mandated audits were not finished, while the office performed work on audits not required under state statutes.
The report comes as McGuiness faces criticism over not ordering an audit of a charter school. Charter school audit practices have been criticized, due to financial irregularities that have surfaced over the years.
The overall audit of the office was performed by the national firm of Baker Tilly.
“This report paints a picture of an eroded office when I began my administration,” McGuiness stated in a press release. “Baker Tilly has given me nearly 60 recommendations. I am taking a hard look at all the recommendations with the goal of making your Auditors Office a best-in-class organization to best serve Delaware’s taxpayers.”
According to McGuiness’ release, Baker Tilly’s review of issued reports from the past five fiscal year found that the office never met its statutory obligations. Between 2014 and 2018, from 24 to 51 percent of the fiscal year reports completed were for non-mandated audits, while mandated audits were not completed.
The release stated that “no information was available to determine how non-mandated audits were selected for inclusion in the fiscal year engagement plan.”
The release noted that the office did not perform a risk assessment that other state auditors use in dealing with requested audits.
McGuiness stated the office is developing an audit plan based on a comprehensive risk assessment.
McGuiness stated that long-running criticism that the office was understaffed, with documentation indicating that it has operated at fiscal 2008 staffing and funding levels.
McGuiness added, “Since the beginning of my administration, my focus has been on resetting this office and making it relevant to Delawareans. In six months, this office has made huge strides. With new staff and a different structure, I believe this office is on the right track.”
McGuiness came under fire recently for refusing a request to audit the Odyssey charter school near Wilmington. She later said the school was scheduled for an audit. Charter schools receive state funds based on the number of enrolled students.
Legislation requiring state audits of charter schools has been introduced in the General Assembly but is stalled in the House. Delaware Public Media reported that McGuiness does not believe the legislation is needed, citing an upcoming audit for the charter school.
The elected office of Auditor of Accounts had long been held by Thomas Wagner who did not seek re-election in 2018. Wagner was appointed to the post in the late 1980s after his predecessor Dennis Greenhouse became New Castle County Executive.
He went on to be elected and reelected but after a quarter century in office decided not to seek re-election in 2018.
Click here to view the report.
