- George Washington, 1798

In Florida's 2008 Legislative Session, legislators will vote on House Bill 165 and Senate Bill 498 which modifies requirements for Agency Inspectors General.  I believe that the independence of Agency Inspectors General may be harmed by this legislation.  This article outlines my concerns about the impact of this bill.

Background

There are 31 Inspectors General created by Florida Statute. There are other Inspectors General in state government, the Miami-Dade School Board and the university system that are appointed without statutory mandate but have similar duties. Of the 31 statutorily created Inspectors General, 16 are appointed by an Agency Head under the supervision of the Governor. The duty of Agency Inspectors General is to serve in a position of public trust as an agency watchdog and ambassador for good government. Part of the effectiveness is the deterrent factor of having an independent Inspector General with broad authority. 

What is behind the bill?  A contractor with the state expressed dissatisfaction with an inspector general's report and has gained support under the auspices of what I characterize as Apple Pie and the American Way, but the legislation cripples Inspectors General in the state.  What is next?  Local Government Auditors? Auditors around the globe?

Potential Impacts

It is my opinion that this legislation vitiates the work of Agency Inspectors General and creates a fear of censure. I believe it would result in reduced reliance and trust placed on Inspector General findings by Agency Heads, the Chief Financial Officer, the Auditor General, the Federal Government, and the People ultimately sacrificing public trust and government accountability. I believe that Agency Heads will approve Inspector General work plans based on their appetite and budgets for litigation.  

1) Impairs Independence of Inspectors General

Florida Statutes and Professional Standards including the International Standards for the Professional Practice of Internal Auditing, Government Auditing Standards and Quality Standards for Offices of Inspectors General including investigations and inspections govern the ethics, conduct, and processes of our work. These standards specify that our work must be free from actual or perceived impairments so that we may objectively and independently audit and investigate government programs and programs funded by the state. Independence and objectivity without fear of censure are fundamental principles by which we serve and inform our Agency Heads and the Governor of the State of Florida in the interests of the People.  

In my opinion, imposing fees on Inspectors General and raising the bar for our findings from the reasonable person test to perfection creates added opportunity for litigation.  This may constitute an external impairment that violates the professional standards of Internal Auditors and Inspectors General that would require disclosure in every report by an Inspector General. The legislation lessens the ability of the Agency Head to obtain undiluted and independent information.     

2) Creates a Chilling Effect on Agency Watchdogs 

This bill subjects the findings of an Inspector General to review and question beyond what is already in place.  As such, I believe this debases the findings and renders Inspectors General. This bill could deter Agency Executives from referring matters to the Inspector General in fear of fees and costs for the agency.  As such, it neutralizes the deterrent effect of an Inspector General's presence in an agency.  

3) Imposes Significant Fiscal Impact 

The bill creates a significant fiscal impact that includes fees and costs for Governor's Agencies of $50,000.  This legislation will create a tremendous workload and additional costs for the Office of the Chief Inspector General (currently 8 FTE's). The hearing process itself will also be costly and time consuming. 

I predict that all contractors will avail themselves to this process to delay agency action.  I believe the added workload will create a significant bottleneck in the Chief Inspector General's Office and cripple our ability to address matters of other importance or as directed by the Governor.

4) Creates More Government

The bill, as it is currently written, subjects all contract-related audits or investigations to an evidentiary hearing by a Hearing Master [an undefined title in any state law] appointed by the Agency Head and the Chief Inspector General. In my opinion, this interferes in the agency's final action, subordinates the Agency Head to an outside Hearing Master and results in added litigation risk to the state.

The bill would mandate communication on contract deficiencies between the contractors and the Inspector General rather than the Contract Manager or Legal Counsel. This improperly involves the Inspector General in management's responsibilities that further violates independence standards of the Inspector General.  I expect added time and effort by the Agency General Counsel to defend the agency and its Inspector General.  

In addition, the bill holds contract-related decisions or actions of an Agency Head in abeyance pending review.  

This bill further increases the involvement of the Chief Inspector General in agency affairs by requiring the Chief Inspector General to co-appoint Hearing Masters for every contract-related finding by an Agency Inspector General under dispute and requires added review of Agency Inspector General reports.  I think this would be impossible to do with the existing two staff members.    

The bill mandates that the Chief Inspector General adopt policies and procedures for the Executive Office of the Governor that impact the agencies under the direct supervision of the Governor.  This may constitute improper rulemaking and creates confusion for those contracts that are not under the direct supervision of the Governor as to what redress they may have. 

5) Creates a Conflict of Interest for the Chief Inspector General

Specifying the post-audit or investigative review by the Chief Inspector General, may create a conflict of interest for the Chief Inspector General.  Specifically, it restricts the ability of the Chief Inspector General to provide technical support and advice to Governor's Agency Inspectors General during the course of an audit or investigation that may be formally reviewed for sufficiency by the Chief Inspector General or hearing officer appointed by the Chief and the Agency Head.

6) Exceeds Available Due Process

As written, the bills require a review by an outside hearing master, an entirely new legal term not elsewhere addressed in statute, and I believe is redundant to existing due process, administrative remedy and to the already specified jurisdiction of the Chief Inspector General to review agency matters.  

The bill does not specify the number of times that a report may be disputed, does not preclude the contractor from seeking redress through other venues, and does not provide for who has final authority.        

I believe this bill creates a new and untried due process for contractors that can be manipulated by the contractor to intentionally delay agency action through an untested process that is thus far undefined.  Even with the cap of fees and costs to $50,000, the threshold will create additional liability exposure for state.  

7) Sets National Precedent to Impede Accountability   

In my opinion, this bill is an attempt to impede the independent fact-finding of Inspectors General - an international precedent.  

In addition, this bill contradicts what is happening at the national level.  At the national level, Inspectors General were recently afforded by the United States House of Representatives, I think it was 404 votes to 11, greater autonomy and protection from political retribution under the law appointing Inspectors General to a seven year term of office and removal only for cause, independent budget authority for greater autonomy, and, in past legislation, authorized specific criminal jurisdiction.    

CONCLUSION

I strongly believe that his legislation is a step backward for Florida Government and will undoubtedly have a detrimental effect. I believe this legislation runs counter to the core values of this Governor's administration.  I can only visualize the incredulous look on other's faces when they learn that, with the assistance of the Legislature, a contractor not happy with an Inspector General report was able to dictate standards for the Inspector General community. I plan to advise the Governor, if these bills come across his desk, do not sign.  

In the event you wish to comment in support or objection to the legislation, please send your comments to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it or write to any Florida Legislator or the Governor.

The email address is a non-state email, but since it pertains to public business is likely subject to Florida Sunshine Laws. However, it is paid for with personal non-state funds.   

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