THE BUZZ: SC roads agency panel accused of caging its watchdog

An arm of the commission that oversees the state Department of Transportation leashed its own watchdog.

That was a key finding in a Legislative Audit Council report last week that chastised how the state’s roads agency spent money and picked projects.

The Transportation Department commission’s audit panel revised its chief internal auditor’s job description last year, restricting his authority to review potential wrong-doing, the legislative report said.

That move compromises the independence of the one office that should be, well, independent, a report by the Legislative Audit Council said.

A clash between the Transportation Department’s Auditor Paul Townes and the Transportation Commission emerged last year.

At the time, commission vice chairman Mike Wooten said the agency’s internal auditor should be more focused on finding efficiencies than being a cop.

That is not how an internal auditor can work best, Brad Hanley, a manager for the Legislative Audit Council told a S.C. House panel last week.

“The internal auditor is there to help protect the agency and the agency’s assets,” Hanley testified.

But Wooten, now the commission chairman, told The Buzz last week the transportation commission does not interfere with the auditor.

“There’s not been one instance where he’s asked to do an audit that we’ve turned him down,” Wooten said.

Still, the report found the Transportation Commission audit panel changed the auditor’s office role requiring that:

▪  The panel approve audits before they are released to legislative committees.

The problem? This change allows the subcommittee “to prevent any audit it chooses from being released to the public, including those that might be unfavorable to the department,” the Legislative Audit Council report said.

“There’s no support for holding up those reports and picking and choosing which one the commission wants to release,” Hanley told the House panel.

▪  The chief internal auditor’s office must consult with the transportation commission on audit topics and timing.

The problem? According to an international auditing organization, internal auditors should be independent, the legislative report said.

▪  The chief internal auditor’s office must report fraudulent activity to the transportation commission audit panel, instead of investigating the complaints itself.

Any information is then forwarded to the Inspector General’s office, which screens the tips.

However, the Inspector General’s office finds most of the complaints do not involve fraud, so they send them back to the transportation agency managers for investigation, the legislative report said.

The problem? “Since the incident occurred under management’s responsibility, department heads may be reluctant to conduct aggressive investigations and find wrongdoing in their own departments,” the report said.

The Legislative Audit Council report proposed solutions, including having the General Assembly put into law that the Transportation Department commission cannot curtail the independence of the chief internal auditor’s office.

In other words: Unleash the watchdog.

This story was originally published April 9, 2016 at 7:43 PM with the headline "THE BUZZ: SC roads agency panel accused of caging its watchdog."