copyright the Chronicle 10-31-2012
by Joseph Gresser
Of all the offices voters will fill in statewide voting on November 6, it likely that the one most citizens know least about is the position of auditor of accounts.
The race for this obscure job has taken on a higher profile this year, at least in the Northeast Kingdom, because Vince Illuzzi, who has long served as a state senator representing Orleans and Essex counties, is giving up his seat to run against Doug Hoffer for the job.
Despite any increased interest in the contest, it is likely that most voters have only a vague idea of what duties the winner will have to perform. One might assume that the auditor checks the books of state government to make sure everything adds up.
But, according to both Mr. Illuzzi and Mr. Hoffer, that assumption is not quite correct. In fact, that task has for some years now been performed by an accounting firm with which the state contracts. At present the multinational firm, KPMG, has the state’s accounting business.
In telephone interviews both candidates said that it makes sense to have KPMG or a similar company check over the state financial statement and the “single audit” required by the federal government to keep track of funds sent to the state from Washington.
The reason, the two men agreed, is that regulations covering the reporting of federal funds change every year and a large company that works for several states can more easily handle the burden of keeping abreast of those changes than can a small office in Vermont.
Mr. Hoffer said it might be possible to have a couple of employees in the auditor’s office assigned to follow those changes. But, he asked, what would happen if they decided to look for a different job and took their knowledge with them?
As things stand, the two major audits take up about half of the budget of the auditor’s office, $1.8-million. The other half of its money, and the majority of the department’s attention, goes to what are called compliance audits.
According to Mr. Hoffer, that shift took place during the terms of Ed Flanagan in the 1990s and was part of a national trend among state auditors who started to take a closer look at the efficiency of government agencies and programs.
Both Mr. Illuzzi and Mr. Hoffer said they would continue to focus the energies of the auditor’s office on compliance audits. Each agreed that such audits are essential to make sure that money is spent in the way intended by the Legislature, and to find ways to make state government more efficient.
Mr. Illuzzi pointed to recent press accounts concerning a new computer program intended to run the state’s court system. The program, which he said cost around $3-million, is not working as expected.
An investigation of how that program and the non-functional $17-million information technology system at the Department of Motor Vehicles were purchased might help avoid similar wasteful spending in the future, Mr. Illuzzi said.
While the state can try to recover some of the money paid out for these systems, he said, it may be difficult to recover much for a variety of reasons.
Both Mr. Illuzzi and Mr. Hoffer argue that he would be the better person to carry out such investigations.
Mr. Hoffer points to his experience working as a consultant with the auditor’s office during the time Mr. Flanagan held the position. He said he is temperamentally suited to the job, and is “hardwired to never go beyond the data.”
He acquired that trait while working for Burlington’s Community Economic Development Office during the administrations of Bernie Sanders and Peter Clavelle. In that time he had to make many presentations to community groups about controversial projects.
By never venturing beyond where the figures took him, Mr. Hoffer said, he was able to establish the kind of credibility that allowed for fruitful discussion and eventual compromise.
Unlike Mr. Illuzzi, who was something of a political prodigy when he first won election to the state Senate at age 27, Mr. Hoffer admits to being a late bloomer.
He said he dropped out of high school after his family moved from an affluent area in Connecticut to Florida, and he was unable to deal with a radically different culture. Mr. Hoffer traveled around and took various jobs, including a three-year stint as maitre’d of Alice’s Restaurant in the Berkshires. (This was the same restaurant made famous by the Arlo Guthrie song, but some years afterward.)
From there Mr. Hoffer earned admission on full scholarship to nearby Williams College at age 29. He went on to study law at the Buffalo campus of the State University of New York.
Mr. Hoffer said he never intended to practice law, a decision that allowed him to take courses that interested him, rather than those that would allow him to pass the bar exam.
He said that in his studies he kept coming across references to programs in Vermont that he found interesting, and after graduation he applied for a job working for the city of Burlington.
After Peter Clavelle left office, Mr. Hoffer was offered a position in the auditor’s office by Mr. Flanagan.
He said he rejected the job because he didn’t want to commute to Montpelier, but accepted work as a consultant. Mr. Hoffer said he has continued to work as a consultant since then.
Mr. Hoffer said he is interested in the position of auditor because he is a number cruncher who is able to ask good questions, not because he is interested in a stepping-stone to a higher office.
If elected, Mr. Hoffer said, he would work to make the auditor’s office more transparent, for instance by posting the cost of each audit along with the money saved as a result.
Mr. Hoffer said that under the incumbent, Tom Salmon, the auditor’s office has spent $2.4-million to conduct 15 audits, an average of $158,000 per audit.
“That is the equivalent of two very well paid staffers working for one year on a report,” Mr. Hoffer said.
Although he acknowledged that the average gives only a rough idea of what the actual cost of each investigation was, Mr. Hoffer said he thought the office could be run more efficiently.
Mr. Hoffer said the cause might be “scope creep,” a condition under which the area examined by an audit expands as the person conducting it looks into new areas that may be interesting to her, but not worth the time being spent on them.
He said that the auditor should be involved in every investigation into spending, but that sometimes an agency’s own auditors can do the job without the auditor’s office duplicating their efforts.
Mr. Hoffer said that it might save money to have follow-up audits conducted in-house rather than by KPMG. He said that when an audit uncovers a problem in a federally funded program, a follow-up is required to make sure that it has been properly addressed.
KPMG charges about $165 an hour to do this work, Mr. Hoffer said, far more than they get for the initial audit. But the parameters for how the agency ought to be handling its money have already been set, and the follow-up does not require the same kind of expert knowledge that the initial audit does, he added.
Senator Illuzzi, citing his lengthy experience in state government — he has served Orleans and Essex counties in the state Senate since 1979 — said his deep knowledge of state government would help him to make sure spending is being done as intended by the Legislature.
He also said that, because he is so well known in state government, his investigators would not be met with suspicion and hostility in departments undergoing a compliance audit.
Asked about why he decided to seek election as auditor, Mr. Illuzzi said he decided early not to run for re-election to the Senate. He said he was considering running for attorney general when Mr. Salmon called him and told him he did not plan to run again.
Mr. Salmon said he thought Mr. Illuzzi would be well-suited to the job, and persuaded him to seek election, Mr. Illuzzi said.
Mr. Illuzzi said that though he is able to get along with everyone in state government, he is very willing to take opposing stands when he believes he is correct.
He said former Governor Jim Douglas was not happy when he called for closing down a state office building in Bennington when workers there became ill, but the building was shut.
Mr. Illuzzi also said he fought to have a majority of the board of the Vermont Electric Company, which oversees transmission lines in the state, represent the public after Green Mountain Power bought Central Vermont Public Service. He said that he didn’t win that battle, in which Governor Peter Shumlin took the opposite side, but the percentage of public members on the board was increased as a result of his work.
He said the auditor’s work is all about trying to help the government adopt best practices.
“My motto has always been: We can do better. If we trust each other and pull in the same direction that will happen.”
contact Joseph Gresser at [email protected]