Kicking Controls Out the Window

Private accounting firms count things. They can tell us money was spent and the books were balanced. But their reports won’t tell us about how the money was spent and whether or not the spending was in students’ and taxpayers’ best interest.

Since its creation in 1966, financial audits are a primary responsibility of the Legislative Audit Bureau. In the past two years, the LAB completed 26 financial audits – including the audit opinion of the Comprehensive Annual Financial Report (CAFR) of state operations.

In a recent letter to the Co-Chairs of the Legislative Audit Committee, State Auditor Joe Chrisman explained: “In conducting financial audits, LAB follows professional auditing standards issued by the American Institute of Certified Public Accountants, as well as generally accepted government auditing standards issued by the Comptroller General of the United States.”

The LAB financial auditors adhere to the same standards as private firms. They are required to be independent and sharpen their skills and knowledge through continuing education. Every three years the National State Auditors Association subjects the LAB to peer review. State law prohibits any meddling or outside influence with audit investigations and protects whistleblowers with strong confidentiality rules.

The LAB has extensive experience auditing the over $6 billion annual UW System budget.

Over the last 8 years or so the LAB reported on the following: how the UW allocates state tax money and tuition to campuses; the process followed to assess the financial reporting of entities like the UW Foundation and the Wisconsin Alumni Research Foundation (WARF); overpayments for retirement contributions and health insurance (some of the health insurance contributions were for employees no longer with the UW); audit differences including financial reporting errors by the UW System; changes in financial activities of the UW including an increase in unrestricted net assets; and internal controls.