Sign Missouri Banking Confidentiality Agreement Computer

Industry sign banking missouri confidentiality agreement computer

Thank You Brenda it's a pleasure to be here today I soon as I was elected auditor I meet Lee came here and got a couple of briefing from the show-me institute on issues that are important i read your literature all the time and you've been a great resource for me during my tenure as state auditor back in nineteen seventy the state auditor took on a new role up until that point the auditor generally issued when they audited an agency of border a commission about a two page on it that was basically a financial statement on it under the books balanced it's basically what happened but kit bond was auditor back then and he thought we ought to do something a little more we ought to be look for more accountability in government we ought to do what are called performance audits and see if the government officials are actually doing with their charge to do not just if the books balanced and over the last forty years and there have been increasing numbers of performance audits done and in fact now in all 50 states the state auditors do performance audits 38 of the states appoint their auditors or comptroller's and in totally 12 are they actually elected but in all 50 states they do performance audits that means now that an auditor is no longer just an accountant balancing of books but what we are as the taxpayer watchdog we try to find fraud waste abuse and corruption in government but there is a limit on our authority under the Missouri Constitution it's very clear what we look to see is if a person charged with expending public resources is acting one within their constitutional authority to within their statutory authority three within their regulatory authority for are they following their own internal policies and procedures that they have set out for themselves and five are they in accordance with sound business practices and published accounting principles that's what we look at so we will look to see for example if the Department of Insurance and division of finance is auditing banks and we go in to audit the division of finance we don't decide well did they make a mistake when they said this Bank was solvent or not solid that's way beyond our authority we are not experts in banking but what we will look at is for example they have a checklist of 15 items they're supposed to examine when they determine if a bank is solid what we'll look at is did they look at all teen items and we'll report on that so if we try to have objective standards when we do performance audits rather than subjective standards and we never tell the Department of Mental Health how to cure mental health or whether banks are healthy or how to educate children what we look at is our people acting within their authority and are they acting responsibly and according to sound financial principles the state auditor now has an expanding role the legislature over the years has given us more and more audits to do we now audit every state agency board and commissions so we'll look at the Department of Economic Development the Department of Agriculture look at the various commissions for tax credits and the other other areas I'm actually sitting on a couple of the conditions which is a conflict we're trying to get that eliminated this year and we also audit the 648 judicial circuits around the state we audit the 89 counties that don't have their own auditor we audit 522 school districts around the state and then we also audit elected officials statewide elected officials and we're about to release our audits of the Missouri House and the Missouri Senate so it's a wide-ranging list of authorities the only area we don't have original jurisdiction over is political subdivision so if there's a fire district or a city where there's a problem the only way we're allowed to part of those under the laws if there's a petition of the voters and there's a very set formula on how many signatures they have to have based on how many people in that political subdivision voted in the last gubernatorial election but we do get a lot of petition audit the city of Marshfield and bolivar recently submitted a Savannah up in northern Missouri submitted petitions and once we verify the petitions we actually put the petition audits at the very top of our list because that's direct representative democracy that's a voters who have gotten together they've taken the time to get the signatures they have grievances and concerns and you know I will always go or sometimes my deputy but usually me and personally deliver the results of those audits at a town hall meeting in a given year we'll do anywhere between 100 and 150 audits we have 60 to 80 going on right now at any given time and what we do is we have some that were required to do by law and others that we do that I pick an artist in our discretion I'll talk a little bit about some of those so that's basically the overview what the state auditor does us I thought since there's some people in the room I might give a little background how I got to be state auditor and then I'll focus right immediately on some of the others who are doing and things I think that might be a particular interest to what the show-me Institute does because I do read all your literature I know there's a great interest in schools and tax credits and those issues not talk about what we're doing in that area I will say that I never in a million years thought that I would be state auditor I'm I'm from st. Louis County I went to st. Louis County Public Schools Clayton public schools my wife Cathy in seventh grade at why don't middle school up there in fact my son just graduated white on middle school I had the honor of showing him the actual room where his mother and father met each other he was 14 I said Thomas what do you think this is where mom and dad met me says the most disgusting thing he's ever seen typical a typical teenager and but my kids have gone through Clayton public schools my daughters at Mizzou right now my son is at Clayton High School as Brenda said I went east east to school then came immediately back and started working at bryan cave and as brenda nose and many other people who know my area of legal practice was corporate internal investigations and they almost always had an audit component to them so I work with accountants financial analyst did a lot of issues on cost and his charging government contracts but really what i did in the private sector ended up being very well suited for this job because it's remarkably similar to what i do is state auditor which is looking for corruption and abuse in state government as a brenda said i was chief of staff to jack damp work on the waco investigation and and then when he became US ambassador the united nations he called me from New York he had been sitting in a bulletproof car with John Negroponte II and in the downtown Manhattan and Negroponte he said you know the United Nations is kind of a hornet's nest it's very anti-american you got really watch out you've got to get a chief of staff you can really trust and it doesn't really matter what their background is just get somebody you can trust and Jack called me at bryan cave and and said Tom how would you like to be chief of staff to the US ambassador to the United Nations and I said well Jack I don't know anything about diplomacy and his response was neither do I and we'll learn together and so that's how i got into into the diplomatic world i spent time working for Jack his chief of staff there and then John Bolton care how I see him on Fox News a lot he became US ambassador to the UN and I thought he was going to throw me out most people bring their own chief of staff and he called me in his office and said I hear you have an anti-corruption and anti-fraud background doing Waco and private sector I said that's right I said I would like you to be my United Nations anti-corruption guy and that was during the middle of the oil-for-food scandal when Saddam Hussein was handing out bribes and kickbacks to UN officials and diplomats around the world and so I stayed on it was John Bolton's chief of staff and we exposed a massive amounts of fraud and corruption of the UN and actually got an independent audit committee put in because of it and I just continued the same sort of things I did at bryan cave at the UN and then when a job opened up his deputy director of the law enforcement division of the State Department I was given that job that's as Brenda says 4,000 people almost 80 countries 2.5 billion dollar budget I literally found myself next all none of this planned of course I was in the jungles of Colombia fighting the cocaine trade then I was in Guatemala City we had an anti-gang program there multiple countries in Africa fighting kleptocracy of the dictators there in Russia fighting organized crime syndicates and in the tribal areas of F Pakistan trying to put in anti-taliban programs that was very very exciting but we focused more and more on Afghanistan because Afghanistan produces ninety percent of the world's heroin it's almost a sole-source supplier of heroin to the world and it was a law enforcement problem which was my job in the State Department but it was more than that the Taliban takes about a ten percent cut off the top of the opium trade they were actually using the drug money to finance terrorist activities and in fact almost every major terrorist group in the world now finances their activities with drugs so I tell kids when I do anti-drug speeches it's not just bad for you in a health problem but you're actually financing terrorism when you buy these illegal drugs and that's true Hezbollah finances their activities with drugs the FARC in Colombia finances their activities and the Taliban those too so we had the Taliban being financed by by drug profits President Bush also got some alarming statistics about how corrupted the Karzai government was by the drug trade half the fields are controlled by the Taliban the other half are controlled by Pro Karzai forces and they also have been bad badly corrupted by the opium trade we used to go down and meet with police chiefs in remote areas of Afghanistan and their salaries would be like in US dollars in eighteen or twenty thousand dollars a year and they live in very modest means and then we go back to Kabul and they're building a three million dollar mansion in Kabul with fountains and and and plants and Gardens and sculpture gardens and very gaudy we used to call an architecture because it was all based on on drug money and so the last year so it got so I learnt also they were they were growing dope instead of wheat you get ten times the amount of money growing poppies you could for wheat and so there was food insecure in Afghanistan it got so bad being a military problem being a governance problem being a food and security problem in addition to a drug problem that they asked me and this was afraid honor we run the great honors of my life I was appointed the US ambassador for counter narcotics and justice reform in Afghanistan and spent my last tenure with the Bush administration trying to root out the drug trade and Afghanistan also helping them rebuild their judicial system so I got back to Missouri and I was teaching it at Wash U and one of the people in this room ambassador Burt Walker among others the suggested that maybe I apply to anti-corruption skills to my own home state and that's how I ended up running for state auditor and I was fortunate enough to win and immediately got into the office and found we have a great staff of about a hundred and twenty people many of them have been there back since when Margaret Kelly was auditor they are completely nonpartisan we operated totally I'm a conservative by nature but the office is operated on a totally non partisan basis so we never go after anybody of any political party and that's largely due to the fact of the balancing force of having auditors within their 20 or 30 years they've been in Republican and Democrat administrations they're a great group of people but I did do some reorganization of the office I hired Harry auto as the deputy state honor those of you know Harry is one of the most respected accountants in all of the Missouri I'm a lawyer by background he's an accountant about half of the auditors since world war two have been I had a law enforcement background like I do it about half of had an accounting ground but I wanted a deputy who was a respected CPA he was the former president of Missouri Society of CPAs and so we put a really good person there and I pulled the staff and I said what are the problems in this office how can we improve it first thing they said is sometimes we get an audit site and all the evidence has already been destroyed particularly weathers fraud or doesn't like going on we need to be able to get somewhere quicker so i form the auditors rapid response team hired a man named Darrell Moore who have been the greene county elected prosecutor seasoned veteran prosecutor for for 12 years to be the head of my rapid response team and now when we get credible allegations of fraud and combined with allegations that evidence may be destroyed we come in the next day with subpoenas and we secure the area we're able to find the Frog we've only this is something you only exercise under extreme circumstances in two years you've only actually authorized rapid responses twice once was in the city of st. Louis when there was an allegation that a tee a principal was inflating attendance statistics and this was a really sad story you may have read about there was a coverage around here this was a very very respected principal who had won a lot of awards largely because of her ability to improve attendance among inner-city school kids but we had three teachers come to us and say we fill out manual forms and then she enters into the computer and changes them all and she had gotten wind of this and they were saying she's already going around gathering all the manual attendance reforms and trying to destroy them so we went in we secured the area by the time we got there two-thirds of the attendance forms had already been destroyed but we were able to get one third of them and found a massive fraud going on dozens and dozens of examples of students who weren't even enrolled anymore who marked his present students who were habitually late with marked as president and and it was it was it was a proven to be that there was you would look at the Emanuel she would show the student was absent and you look on the computer record said they were present the whole time and and we were able to expose this unfortunate incident of fraudulently misrepresenting the improvement of school we we audit a lot of school districts I've made that one of my priorities is to audit school districts but there has to be honest reporting you know you can't have good you know feel-good stories that are not based on actual facts and that was one rapid response the other rapid response we did quietly and like tell you what it's about but yeah thing about it soon because of the issuing an audit and in that particular case we found blatant embezzlement tens of thousands of dollars stolen by an official and we were glad this was not anywhere near st. Louis this was way outside of st. Louis but we found that too so we put a rapid response team in place and because the career people said they thought we needed it the other thing we found was that a lot of times we don't get to audit an entity until ten years after we did it the previous time and somebody will get a bad audit and we'll go back ten years later and the same problems are in place so I asked what can we do to prevent people from just blowing off the audits and we're not we're not going to do it and what we decided to do was put in two new mechanisms first of all we now have a grading system everybody that gets audited gets an excellent a good affair for poor it's like a teacher a vcd and we publish very objective criterion what it takes to get excellent it's not me just sort of deciding what does it look good or not it's very we've never had a dispute in the office about whether somebody gets an excellent good fair poor because we have very detailed criteria about how you get that award but you can't believe first of all how much more cooperative the subject of the audit is when you know they're going to be graded it's a total it's like night and day that the auditors have told me because now they know one of the criterion for getting an excellent is you have to cooperate with the audit and so they can't get the highest grade unless they cooperate and that makes them unbelievably cooperative and and the other thing is we found that people were mischaracterizing her aunts so there might be one good thing haribol audit and the subject say look we got a great honor look what they said about us or the other way around sometimes the political enemy of the oddity might take the one bad thing and say it was a terrible weren't really overall it was a pretty good on it and we prefer give good on its rather than better so the grading system has taken all that subjectivity out of it and force people to be cooperative of what we're doing in the audits and that that was another thing i did directly in response to what the career auditors said we needed to do and then finally we put in the audit follow-up came now that you know you don't have to have IQ on them six you think well if somebody gets a bad audit maybe you ought to come back pretty quickly and see if they're improving no one had ever done that before so the same guy that does the rapid response team my sheriff I call him he comes back if you get a low fare so one of the c- or a poor on your audit we are back in 90 days to do another autumn to see if you implemented those commendations and if you haven't there's going to be another round of really bad press and I thought I actually thought the subjects of the audit would consider that heavy-handed and they won't like the idea of us coming back but we found the exact opposite for example when we audited pinelawn we found terrible problems with pine lawn they were almost everything wrong that you could find multiple findings adverse findings of misuse of money a waste of money and and the post-dispatch wrote an editorial after the audit came out and they said it's hopeless that city i'll just be unincorporated or combined with someone else they always get a battle off they'll never improve it and to our surprise a couple days later in editorial the city manager came and said no we are going to improve and auditor schwag is going to do a follow up on it and we welcome that follow up on it because you will see significant improvement 90 days from now and that follow up on it came in and then lo and behold they had implemented over sixty percent of our recommendations after 90 days and I think they'll get the rest of them in soon and we found that the the subjects of the audit when they get a bad on it they actually want the follow up because they want to show that they've been able to improve the quality of their performance so those were the things that we were able to do we also do preventive work I some of the worst odds we do our sheriff's their law enforcement people I have a law enforcement background I know you want to put the bad people in jail you don't want to do paperwork but we found terrible cases of missing money evidence not being handled properly in sheriff's offices so this week I gave a preventive course to all the new sheriffs who were just delighted about 40 of them around the state and said here is how to get a good audit and man they were taking notes and they understood and then they realized that it could be very detrimental to get a bad on it so we do preventive work we did we release the paper called the 10 steps to audit excellence here are ten most common findings and I go all around the state and deliver that to various groups County Treasurer's County collectors whatever here's what you need to do to make sure you get a favorable on it because we really don't like giving out bad grades I'm always happier when I give out a good on it you don't get as much media the media always wants to see a bad on it but when we give out four or five or six fairs or pores and row I'm like wow can't we find somebody to give a good or an excellent to I think it's really really important to do that I think out of the two hundred sixty artists I've issued I've only issued six excellence but we've done a whole lot of goods most of either in the gutter fair category but we think it's improved the way things have operated now because I have a law enforcement background I told the staff director Leo and I want my focus to be on on the number one thing I want to find if people are stealing taxpayer money crime embezzlement that's my first focus and we've been able to find out 12 instances of public officials stealing money since I've been auditor and that's a record by far and we're going to continue to do that we have a whole series of fraud indicator that our auditors required would look at so for example when they went into Schuyler County which is way up near Iowa it's almost not even in Missouri the collector there had not taken a vacation for 10 or 15 years that's the first indicator okay if somebody's not taking a vacation they don't want people to look at the books we noticed there was no segregation of duties she took the money in she deposited it cheating the bank reconciliations no oversight that's the second thing we look for for fraud indicators if number one and two or true we're looking is this person living beyond their means do they make forty thousand dollars a year and are they driving an $80,000 car we look at that that was checked off and then there's a series of things we go further and further and further down and usually if you get to about number six or seven it's all yeses that person is stealing money and it turned out this individual had stolen five hundred and seventy thousand dollars over a ten-year period from one of the poorest counties in Missouri and sometimes these people they get caught in their own world they're so used to running their own show after we confronted her with look you've stolen five hundred seventy thousand dollars she said can we keep this quiet so I can get another job somewhere that was a response I'm not kidding you and we said no we're reporting to the prosecutor she just pled guilty we found and it's amazing where people will steal money a lot of times they think for example a circuit court Cole County is the main circuit court in Missouri that's where all the challenges for the constitutionality of laws are fine right there in Jefferson City we found two clerks embezzling money in the Cole County Circuit Court they've also pleaded guilty so you never know where the embezzlement work will occur water patrol someone was stealing fishing license money I was only three thousand dollars but it was a public servant who is abusing abusing the public trust so I've made anti-corruption one of the hallmarks everyone try to do because obviously in the kit that you can find more examples of waste and more money in waste and so we do a lot of looking into that but I think the worst thing you can do as a public officials to steal taxpayer money so that's sort of been my my number one priority in that situation we also look for the next thing we look for our massive wastes of money so for example when we did an audit of the Kansas City Public Schools we found that we asked for inventory tags for all their computers 2.4 million dollars missing worth of computers no record I mean these are things people can walk off with laptops and iPads and things like that and as a result of our audit they agreed to put tracking devices and now for all their electronic equipment so if it's stolen they can figure out exactly where it is and figure out who stole it so we look for massive waste this was not an instance a fraud they just didn't know where it all went and we were able to help that they also get out 2 million dollars worth of gift cards to students and they had no record of who they gave them to or for what purpose this was supposed to be a reward for academic excellence but they couldn't even prove that they give them to the good students so we said that needs to be improved we did our statewide single part which is the audit of all the federal money that comes into Missouri when you hear about our 24 billion dollar budget in Missouri you think that's Missouri money actually only eight or nine billion of us from Missouri taxes the rest comes from the federal government and we also audit all the federal funds that are coming into Missouri and again when the stimulus money came in for example and I operate a nonpartisan office I think people know how I feel about the stimulus money but we just wanted to make sure it was being properly spent we found that state agencies could not even account for over seven hundred million dollars of that money we they couldn't even tell us what was what they were doing with it and so we reported that and we found that to be a serious funding we found that the low income housing energy assistance program that the contractor that was charged with getting it out could not tell us what happened with over six hundred thousand dollars the money we think there will probably be an investigation without their made that maybe another embezzlement so another really important part of our job is not only to audit the money that comes into the state from state taxes but we are charged and legally required to audit all the federal money that comes in also and that's actually our single biggest out of the year usually we're auditing fourteen to sixteen billion dollars worth of money and every year we find amazing abuses of the program this year we're going to look into for example the electronic benefit card the cards they use for welfare payments we had some tips and these have been made public so I'm not revealing any confidential information that some of those were being cashing in vegas casinos at the at the buffet well that's a complete illegal use of the cards so we're going to be looking into whether there's fought in that program too so it's very important not only to look at the state programs but the federal programs because they account for more than two thirds of the money that's coming into the state and we look into that as well I thought there was some honest I can talk to you about that are of particular interest to this group we ought to tax credit programs I've read a lot about when you all do with tax credits and again I think people some people in this room know what my personal opinion is on tax credits but I really don't talk about it my job is to see if there is a tax credit program is it being effectively used so we looked at the quality jobs tax credit you may have read about that audit we released it about six months ago this is a program that when it was formed and it's had bipartisan support they claimed it would produce 45,000 jobs over about a ten or eleven year period well that number was then reduced to twenty six thousand dollars but when we actually audited the program we found that it had only produced about 7,000 jobs and yet they were still representing it as a 26,000 job program and again I'm not going to say whether it's a good idea or a bad idea but we want people to have accurate information when they assess whether this program should continue and I think we did the state of service by pointing out that the number of jobs that have materialized under that program are way way less than we're represented the other thing we found is they depend entirely on the employers for reporting there's no oversight so even that 7,000 number is based on what the employer said they created in terms of jobs there was very little activity a little bit but not much to make sure did they actually create those jobs or did they close one facility and fire a bunch of people and then open a new facility and then get the quality jobs tax credit well really it's a wash and but they created 100 new jobs here but they lost a hundred jobs there there was not a lot of oversight to make sure that those types of issues were looked into we all did the public defender Commission I know there's been some interest here on that issue you know a lot of the public defenders have now said that they are going to stop taking cases because there's an overload and the Missouri Supreme Court held recently that the Sixth Amendment right to counsel does not require you get a public defender it requires effective assistance of counsel so the public defenders are highly overworked they can turn away cases because they won't be affected in their in their representation they did not hold that that that there's a new unilateral right to refuse any case so what we looked at was when they're turning away cases is it based on objective data is there really evidence that they are overworked and what we found were huge flaws in the way they calculate their caseload and how much work that's going on for example their standards for how many hours will be needed for a case where developed in 1973 can they haven't changed him now think about the way a criminal case has changed since 1973 in 1973 if you had two or three people working around the case around around the country and you had briefed you have to drive your to meet you have to go with a hard copy the brief you have to retype the brief you to refile everything can be done electronically now you can't judge how much how many hours are going to be taken to do a murder case based on the fact that in 1973 all briefs were written and done manually and people to drive around to get into each other we have electronic communications now there was no DNA evidence in 1973 that's one of the main ways one of the main sources of time in a case there was no way to calculate whether that's saving money or saving timer or costing more time so we found that the first problem with the way they calculate their caseload is it's based on standards that are 40 years old and they're completely irrelevant the other thing we found was a huge mathematical problem when they calculate how many hours they need to do a case they assume an attorneys working 2080 hours a year when they calculated how many hours are available for a case they assume an attorneys working fifteen hundred dollars a year well do the math they'll always be overworked under that circumstance and we pointed out that mathematical problem so the result was again we don't take a position on whether public defenders are overworked or not overworked but what we want is accurate data so that an accurate can be made and when the audit came out to the credit of the public defenders they asked for a meeting with me they brought their lawyer in from Washington been said we'd like to use your audit as an example why we need some funny to get better and more reliable statistics they concurred in the finding they stopped refusing cases you may have read about that that just had a cup happened a couple of days ago and that's based on the audit because there really wasn't objective evidence that they were overworked they may be overworked that actually may be true but we said we're not going to give it we're not going to agree to that assumption unless you provide much much more accurate data to prove that a couple of other areas that we thought were of interest were on the tax credit side I'm going to do two new tax credit on its this year which i think that show-me Institute will be very interested in the brownfield tax credit there have been a lot of allegations of misuse of that tax credit over the past few years and we're going to do that and then the low income housing tax credit is another one we're going to be looking at very very soon another thing I did rather looking a tax credit program I also looked at this past year the Department of Economic Development due diligence process for awarding tax credits and what we found was well you always know there's a problem when as soon as we started the audit they revised their due diligence procedures so that's a pretty good indication that they knew were there was something wrong but what we found was a very very disturbing lack of due diligence so for example in the man tech plant up in moberly were tens of millions of dollars were lost because there was supposed to be the Chinese were supposed t build a sweetener factory there we found that very basic due diligence diligence had not been done in that program they hadn't looked at for example the person said he had access to eight million dollars in cash they didn't ask for what bank isn't in where is that cast they just assume that was true there was no credit check done on the history of the company they claimed that they had a functional plant in China no one bothered to determine if that actually was true because there actually wasn't a functional plant in China they claimed they had patents on a special sweetening a product but no one and that got a patent lawyer Impala said are these really valid patents and are they for this product or not it wasn't actually true and so they revised their due diligence procedures while we were doing the audit but even then we found for example a lot of shady companies are run by shady people and when one company goes under they form a different shady company so what they hadn't done was looked at the financial background and fraud history of the principles of the companies so even now we've asked that they changed that one company may have no bad credit history because the people who are running it were bankrupt in for other companies previously just not in this company yet so we've actually asked that they significantly improve their due diligence procedures for awarding tax credits another thing we found is problems with the stacking of tax credits a developer if they can get all the tax credits lined up correctly for every one dollar they invest in a property they can get three dollars and 24 cents worth of tax credits with that and then take and those are transferable so they can rehab a building get their three dot 24 spend a million get three point two four million out of it they don't have to have a single tenant because they can sell that tax credit somebody else make a huge profit now sometimes those tax credits are sold at a discount so they don't always get the whole three point two four million depends on when the tax credit is redeemable but they'll still be guaranteed a profit regardless if they have a single tenant or created really much in the way of any kind of a job so we ask that that be reconsidered as well and hopefully with these audits the legislature which has been fairly inactive on tax credits over the past few years will improve the quality of those programs and reduce them if it's if it's necessary the last area I wanted to talk to you about before I take questions is the initiative petition process in addition to doing audits my office writes the fiscal notes for any initiative petition that's going to go to the voters and I want to give you some background on that the way it works is the petitioner the one that wants to do the initiative petition I know a lot of people in this room have been involved in those actually they submit the language that they want to change the constitution or a statute to the Secretary of State and the reason people want to do this usually is because they can't get the legislature to do anything and you remember early on I told you that I really value petition audits because that's direct representative democracy and I think initiative petitions and the voters is the same thing and they deserve a very very high level of deference but it has to be done right and there have been some problems with the process what they do is they submit the line they want to change in the Constitution the Secretary of State and my office then has 20 days to prepare a fiscal impact statement what we do is we send out an email to all state agencies or boards and we also take unsolicited comments or analyses from any outside interest lobbying group special interest group that has an opinion on that we often meet with them and what we're supposed to do during that 20-day period is come up with a range of the cost so if this proposal is implemented it could result in for example include increased revenue to the state of up to ten or twenty million dollars or if it doesn't go well it could result in a decrease in revenue of 50 to 100 million dollars the fiscal impact statement is very important because voters will look to see is this going to cost the state money or is it can help money and often it will affect people's vote so it's a very very important process but over the past ten years it's become almost a cottage industry for lawyers and lawsuits about these fiscal impact statements as well as the actual ballot language that's been issued let me give you some statistics in 2004 there were 16 initiatives petitions submitted to the auditor's office two of them made the ballot and there were no lawsuits about the language in 2006 there were 41 initiative petitions for lawsuits and three got on the ballot in 2008 55 petition submitted 11 lawsuits and three got on about 2010 105 initiative petition submitted 31 lawsuits and three got on the ballot and this past election cycle a hundred of my love fishing 146 petitions to do fiscal impact statements we were sued 50 times and only two made the ballot so in 2004 there were 16 submitted no lawsuits and two made the ballot last year 146 submitted 50 lawsuits and still only two made the ballot that suggests to us the process is broken we spend more time in court sometimes than we do doing audits and so we propose some changes to that process which will make sure that frivolous initiative petitions are weeded out one way to do that is for example to require a thousand sponsoring signatures you have to go out get a thousand signatures before you can even submit it and the other thing we did is we took it all the way up to the Supreme Court on the challenges my fiscal note it's supposed to be upheld as long as it is fair and sufficient we were sued 50 times last cycle and one trial judge held that I didn't even have the constitutional authority to write a fiscal note and another one held that I have to consider all data relevant to the fiscal impact including data that is not submitted to my office during the 20-day period while our point was number one clearly it should be constitutional my authority is anything relative the expenditure and receipt of public monies well the fiscal impact of a ballot issues it would relate directly to that and if I do have to consider information outside the 20-day period it would encourage people who oppose the initiative petition to hold back information from my office then I issue the impact statement then they sue and say well he didn't consider all this information so we took it all the way up to the Missouri Supreme Court and we got a 6-1 favorable decision and and very broad language which we were very pleased about that said a plain reading of the powers a new me enumerate in this provision permits the order to engage in a review of past present and future receipts it's clearly within his authority constitutionally and he does not have to consider anything that is not submitted during the 20-day period so the rules are now very clear the opportunity to see our office is drastically reduced and we're hopeful now that with the new legislation that will weed out frivolous initiative petitions and with the understanding that we have wide discretion how we do this that people work with the system so if you're involved in an initiative petition I actually know there's some people in the room who are rather than sue me come meet with me during the 20-day period I never turned down a meeting I will consider all of your data it will be considered when we write the fiscal note and it's going to be very very hard to challenge the result of that fiscal note now because the wide authority the supreme court granted us in that process I think that possibly the best part about being stayed on well I'll say two things the first best part about being state auditor are doing some of the little audits that nobody hears about so we get a petition from Clarksdale Missouri or Mountain Grove or Indian Point or neosho and we go in there and we do that on it and we find significant problems neosho had a 12 million dollars worth of debt they didn't even know about it's a small town there underwater Clark still have the same problem several hundred thousand tiny town of 400 people and I what I do when we're done with others I go into a town hall probably a little bigger than this 50 100 200 sometimes 500 people will show up and I go through and say here's what we need to do to get your community back on track gets no media but the people are so happy we've brought them back to solvency their cities are back in several cases we can say oh really back on the road to fiscal health and I think I get the most pleasure you know my audit of Governor Nixon gets a lot of press but my out of the Clarksdale is the one that's in my heart that's the one I really like to do because I feel we'd really help people and then the second best thing about being auditors I don't have to be a lawyer any one of my friends like me a whole lot better you know I mean it's funny because that trial lawyers don't have the best reputation I was I was a heaven dinner with a friend of mine not too long ago and he had been sorted through the wringer with the trial lawyers a lot of bad things have happened to him and he was a we were this restaurant he said really lot i see an atomic trial lawyers they're a bunch of complete jerks and he said it was a guy the next table leaned over and said I resent that comment and I said what are you trying said no I'm a complete jerk that's the reputation that we have it's so nice to be away from that at least for a while thank you for having me here today and I happy to answer any of your questions yes jump question your department before you got that sound like it was a mess and who was who was the auditor that I got to be careful here my predecessors were Susan Monty and Claire McCaskill and Margaret Kelly and a lot of there were some really good audits that came out of those offices but what I found was that it sort of had been on automatic pilot for a long time and people hadn't thought things have changed in state government there's a lot more money around there's a lot more potential for abuse and all I did was pull the career people and say how can we improve it in the grading system and the rapid response team to fall all came out of that yes since we don't know who your successfully is there any procedure for auditing the office of Honor yes that's a very good question because we do need to be on it we are audited every four years by the Missouri House and Senate and that one it just came out recently and it was very favorable and then we also engage in what's called peer review i will send five of my auditors to Oklahoma or Massachusetts doing all of their office then they will send five of their audits to audit ups so we get audited twice every four years and I'm happy to say we've had good clean audits both times good question yeah other yes at the tongue you've been great in auditing the tax credit issues that Missouri has and maybe has more deeply than any other state New York Times has just done a three part series of front-page series editorial in the New York Times today about tax credits tax incentives generally one aspect of this and it's a key aspect in Missouri's tax increment financing and it's mostly at the local level so you haven't done much in auditing yet you mem tech which you talked about 35 million dollar loss to the taxpayers the citadel just one small project supposed to be small project in Kansas a 34 million dollar fiscal note on a project that never was completed never was even started and convicted felons are getting part of the 34 million dollars in the city of Kansas City st. Louis City st. Louis County Kansas City Missouri from an assessed value point of view diverted or debated more taxes than any other cities or counties political jurisdictions in the United States can you audit the stuff at the local level there are limitations on our Authority a lot of times it will require petitions there's a political subdivision is getting a tax right we do have authority to audit TD DS transportation development districts and a few others but it one thing I'm trying to give us a good question because my authorities are very mixed for example I can audit any school district I want but no fire department I can audit state tax credits but a lot of the local tips I do not have authority unless there's a petition one piece of legislation we have pending which we hope you all support is to harmonize all that and give me broad authority to audit for example all such programs but right now there are limitations on my ability to do those local programs significant limitation in Kansas I mean I have a specific interest in this because I'm the director of the library grass city and our budgets being creamed by the by the city and warden all this tax increment financing what kind of a petition do we need how many signatures do I need well it's it's a sliding scale and it's based on the size of the political subdivision that's an issue the percentage of people that voted in the last gubernatorial election it can be eight percent ten percent twelve percent and what we can do is if you tell us this political subdivision we can assess how many people are in it and we can send you the exact number of voters that we need to sign you know we found that some people this happened in rockwood and a couple other places when they hear they have to petition it through other hands that we can't do it but really the threshold is not that bad if you if there's some resources put behind it usually you can get the number of signatures necessary to the petition if you'd like to contact the office we can give you all the information now that you might like to know the TDD that was just created for Kansas City to build the trolley I was was deliberately created so that fewer than a thousand people voting in the TDE action inches commit two hundred million dollars of the city's money Wow now that is something i do have you know like yeah i do have the authority audit TV news but it's a very the legislature over the years has given us different authorities and different bills and no one is ever because it's one legislature than ten years later it's another one no one has made an effort to really harmonize and say what should the odds are really doing why would the order have the authority to do this not that it that's one of our areas particularly in local government and political subdivisions there's a move right now for example to give us authority to audit museum districts which you do not have the authority to do and there's been a lot of controversy about museum districts and and we have no ability to audit those those museum districts right now other questions young couple days given the big election of the resulted in the police department coming back as a city as a listen what was the last time the same was Metropolitan Police Department which until recently was a state agency when were they last audited and when was the last time the city of st. Louis was on the board of commissioners we audit every couple of years we just did the Kansas City Police for and we'll probably do the st. Louis one soon the city of st. Louis was last on into by a petition on it they got a number of signatures for the whole city about 22 I thought it started three years ago and the results were released two years ago other questions yes yeah Tom I wonder with your department if you have a figure like the amount of money that was saved and or how much fraud and cod or is her way to numerically demonstrate the results it's a good question when it comes to embezzlement we can identify exactly as we know we know exactly how much money it was stolen so for example the first years I think we found one point four million dollars worth of embezzled money when it comes to other things it's hard to say so we found 700 million an untracked stimulus money doesn't mean it was wasted just means no one can tell us what was being done with it so that becomes harder to determine how much money we say so we try to keep some metrics but in some cases just by the nature of the audit it would have to b an estimate or we can't say for sure how much money we save the taxpayers again sometimes its prospective too so for example with the gift cards that money was all out the door the two million dollars in Kansas City of the gift cards but they discontinued the program after the autumn so we knew we save money going forward we just don't know how much money we say Tom when you find like there's a large sum miss stimulus money is that the end of it it's missing we don't know where it went what are the concert well what we do is we usually audit and then they immediately run to try to show us how how they handle the money that's what happened some of this money was in the Department of elementary and secondary education and so it's all been very well spent say well you can't show us where any of it was spent well we are reporting has a one year lag time we're like well if there's a one year lag time it's too late to fix anything that's wrong because by the time you tell us what happened it's already been spent all the money's already been spent so they've agreed to revise those and not have the one year like I'm about us no further up front we always try to find a constructive solution to those problems but that was one example how that work yes 0 0 technology corporate investment small start-up companies does anybody of your group ever looked to see whether any of the investments pay off we are going to release our audit of empty seen about three months yeah so we're looking at that right now good question individual know if your results oh that's a good question do all WWE mo govt has every audit published on it when it comes out and we tried for them for the bigger more more publicly visible ones like that one to do a press release in a press conference they'll probably be some media about that but you always can look at any of our audits on our website auditor mojo they're always posted there yes you said you'd like to do performance odds and and also that we can fair amount of money every time you it comes with requirements and reporting in tourism do any of your audits look at the cost of compliance for accepting that money as a whether that was a good no we don't we go and the reason we don't is that the federal statute that requires we ought of that money that's not needless to say they don't want us looking at that and so I don't have any legal jurisdiction to do that unfortunately I'd love to be able to do that but but I don't we don't because obviously the cost of regulations want to because business killers there is but they don't allow us to look at whether their regulations are right only whether our people are compliant with them yes I tell me the website again you mentioned on w wo de term of audit or go and then we keep watch on the website think back 10 or 15 years so you can look at almost anything we've done for a long time any other questions tom thank you thank you for having you