When an “External” Audit Is an “Internal” Audit

If the Federal government audits a grant given to the State of Illinois, wouldn’t you consider than an “external” audit?

How about when the Illinois Auditor General was auditing all the RTA contracts with providers of mass transportation?

Would you consider that an “external” audit?

Drawing closer to home, if McHenry County made a grant to a local unit of government, say a township, would you consider than an “external” audit?

There is a section in the Freedom of Information Act that allows, but does not require local governments to hide the results of internal audits and management audits.

This is where the good stuff is found.

But, we as mere taxpayers are considered inferior creatures.

Only the elected members of the Animal Farm are to be trusted to know if what has been found deserves to be referred to law enforcement officials.

The two-legged creatures say, “Trust us.”

If anything is wrong, they’ll fix it.

That line of logic has not appealed to me since Jimmy Carter was President.

McHenry County Auditor Pam Palmer was asked by Deputy County Administrator John Labaj to audit agencies receiving senior services grant funding.

That’s what a reply from Nunda Township Road Commissioner Mike Lesperance’s Freedom of Information Officer Cathleen Plodzien wrote the Illinois Attorney General’s Public Access Bureau after I appealed the denial to see the audit.

Notice that I did not ask for a copy from County Auditor Palmer.  She was clearly doing an “internal” audit for the County Board.  (That the County Board keeps it secret is a matter you might want to take up with County Board members, if you would like to take a look at the audit.)

I asked for a copy of the audit from the Nunda Township Road District.

Just in case it had been shared.

You can read the Nunda Township Road Commissioner’s letter to the Public Access Division of the Attorney General’s Office below:

Nunda Audit FOI Appeal Reply 1Nunda Audit FOI Appeal Reply 2Nunda Audit FOI Appeal Reply 3
Here’s how West’s Encyclopedia of American Law, edition 2 (Copyright 2008 The Gale Group, Inc. All rights reserved.) defines “internal audit:”

Internal Audit

An inspection and verification of the financial records of a company or firm by a member of its own staff to determine the accuracy and acceptability of its accounting practices.


When an “External” Audit Is an “Internal” Audit — 10 Comments

  1. Typical government.

    Anything that could shed a negative light on their impeccable image will be hidden if at all possible.

    Image before transparency.

    Taxpayers pay for internal audits and management audits.

    Taxpayers should be able to see the results of the internal audit.

    What is the legitimate excuse for local governments refusing to provide copies of internal audits and management audits?

  2. Apparently the Nunda Township Highway District is trying to hide some less than flattering facts about the Nunda Township Highway District’s senior busing program.

  3. External, internal, what does it matter?

    We are not poor creatures; we are the boss!

    They are our employees.

    The boss needs to engage the employees.

    We, the people need to demand integrity from all of our employees across all platforms.

  4. We hear so many bad things about government.

    Sometimes government actually works right and it makes you proud to be an American.

    We don’t hear enough about those cases.

    Twenty years ago, I was involved in the Orange County (California) bankruptcy.

    It was, at the time, the largest municipal bankruptcy in the nation.

    And Orange County hired a corporate bankruptcy attorney who did exactly what he was hired to do: He used every technical trick in the book so one of the wealthiest counties in the country could default on its debts.

    And he was winning in court.

    Then the legislature stepped in.

    And, straight of the civics books I read as a high school freshman (a class they should bring back), both the Democrats and the Republicans came together in the California legislature, said, “That’s not right” and made changes to the law, making clear to Orange County that, one way or another, they WERE going to pay their creditors.

    Closer to home, last year MCC hired a firm that runs health clubs to “advise” MCC to double their class space (the existing space is used less than half of the average school day) AND build a big, fancy health club, and to “advise” MCC that the health club would be SO PROFITABLE, it would pay for the whole thing!

    It was hogwash, but that “opinion” from an “expert” was sufficient to permit MCC to sell property-tax backed bonds WITHOUT A REFERENDUM.

    And, again, just like in my civics book, our local legislators said, “That’s not right”, and they changed the law.

    For that action, Republican state Rep. David McSweeney, and Republicans senators Pam Althoff and Dan Duffy, who sponsored the bill, will have my eternal gratitude.

    They did the right thing, the honorable thing, and there was nothing personally in it for them.

    They could have sat on their hands — but they didn’t!

    We need more McSweeneys, more Althoffs, and more Duffys.

    Similarly here, it’s time for our local representatives to change the law about “internal” audits.

    Audits by the state and by the federal government of local programs should be made public.

    Management letters issued by local auditors should be made public.

    There are some good people in the legislature, such as McSweeney and Althoff and Duffy, who should shepherd a bill through the legislature fixing this “audit” problem.

  5. The County Board, of course, could release any audit or management letter provided them. So could McHenry County College or any other government.

    Grafton Township released its management letter when Linda Moore was Supervisor.

  6. Good point Cal, now why wouldn’t they do just that.

    It would be so simple.

  7. Reading Cathleen Plodzien’s response to this, it is obvious that it was prepared by an attorney.

    With his ongoing fight with the county over his violation of the county storm water code, Mike Lesperance sure seems to be relying a lot on the advice of legal counsel these days.

    This guy needs to go back to whatever it was he was doing before he decided to enter “public service.”

  8. Cal, have you asked Duffy or McSweeney or Althoff to introduce a bill to make it mandatory for governments to make all audits public, including management letters?

    I would love to see you ask them explicitly and see how they respond.

Leave a Reply

Your email address will not be published.