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Maryland Politics
Posted at 01:29 PM ET, 03/22/2012

Md. Republicans seek to withhold funding from deficient agencies

Maryland Gov. Martin O’Malley (D) has graced the cover of Governing magazine and received plaudits nationwide for instituting performance-based management systems in state government.

Under O’Malley, the state has launched Web pages tracking pollution levels in the Chesapeake Bay, expenditures of federal stimulus funds and just about everything in between.

But following a series of audits showing repeat accounting problems and other deficiencies in state agencies, Maryland Republicans are using this year’s budget process to charge that O’Malley’s administration has failed to take stock of one of the most important measures of all — whether Maryland’s government is wasting money.
Maryland’s House of Delegates began debate Thursday on the state’s nearly $36 billion budget plan (Mark Gail - The Washington Post)

With virtually no ability to influence the budget that Maryland Democrats will pass, Republicans perennially seek to at least tie up the process for days with proposed amendments and floor debate.

This year, Republicans in both chambers have added a new twist, proposing amendments and bills to withhold at least a token amount of $100,000 from agencies if the state’s Office of Legislative Audits finds repeat problems over several years.

“When we don’t have appropriate control over the money they’ve got, I find it very hard to tell my taxpayers they need to pony up more money,” said Del. Gail Bates (R-Howard), the sponsor of one such amendment, during floor debate.

Del. John Bohanan Jr. (D-St. Mary’s) argued state agencies struggling to do more with fewer employees should not be penalized.

Although House Republicans’ effort failed Thursday, a bill with bipartisan support in the Maryland Senate would take money away from state agencies that continually receive audits with findings of waste, fraud and abuse — forcing them to “shape up,” said Senate Minority Leader E. J. Pipkin (R-Cecil), who presented the bill to the Budget and Taxation Committee on Wednesday.

“We seem to be in a continual loop,” Pipkin said, referring to agencies that do not fix problems cited in their audit reports. The Office of Legislative Audits conducts an audit of each agency, except for those in the legislative branch, at least once every three years.

Under the bill, which Pipkin co-sponsored with Sen. Roger Manno (D-Montgomery), an agency with three or more repeat findings in its audit would see its operating budget drop by up to 5 percent each fiscal year until the problems were addressed.

The bill is also cross-filed in the House, where it has only Republican sponsors.

Pipkin said the bill is largely a response to last year’s audits of the Maryland State Highway Administration, which uncovered potentially criminal ethics violations and instances of agency officials hiding millions of dollars in unspent funds.

“There’s an appetite for reform because the audits have been so damaging,” Pipkin said.

A review completed last June found that a manager at the agency expedited contracts for companies that had donated money to a golf tournament in which he had a financial interest. In another finding, a former employee who was involved in awarding contracts to a particular firm was hired by that company within 12 days of retiring from the agency.

A follow-up audit accused agency officials of hiding overspending and evading oversight by redirecting more than $11 million from 10 contracts to unapproved projects.

Manno said he became aware of the bill in the House when he saw its lead sponsor, Bates, describing it on television. “I said, ‘Wow, that’s a great bill.’ ”

Manno approached Pipkin and asked whether he would be interested in introducing the bill with him in the Senate. Pipkin, Manno said, replied with an incredulous “Really?”

Rooting out government waste is usually seen as a Republican cause, and Manno said some Democrats have “teased” him about his support for the bill. But he said the proposal makes sense and deserves a hearing, even if it faces long odds in the Democrat-controlled Maryland legislature.

“If you’re serious about curbing waste, fraud and abuse, you have to support measures like this, even if only for the purpose of having a hearing to examine the issues and where the problems are,” he said.

He added the bill should not be seen as directed at O’Malley. “It’s not targeted at any particular administration. It could be an Ehrlich administration, it could be an O’Malley administration, it could be a Pipkin administration,” he said.

Pipkin pointed to other examples of mismanagement from the past year, such as an audit of the Department of Health and Mental Hygiene that found the agency potentially sent up to $2.5 million in Medicaid funds to dead people. And an audit of the Child Support Enforcement Administration revealed the agency failed to collect more than $1.7 billion in child support payments over three years.

Pipkin said he has offered the legislature “a menu of policy options” to target waste and abuse in state agencies.

Last week, he argued before the Budget and Taxation Committee for the creation of an elected state inspector general, whose office would investigate “waste, mismanagement, misconduct, abuse, fraud and corruption” in state agencies.

As an alternative, he also introduced a bill that would establish such an office solely within the Department of Transportation — the agency with the most damaging audits. Some state agencies, including the Department of Health and Mental Hygiene, already have an inspector general’s office.

By Greg Masters and  |  01:29 PM ET, 03/22/2012

 
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