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Review blasts auditor’s office

Bump dismisses 27 employees, demotes 12 others

By Noah Bierman
Globe Staff / May 6, 2011

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The state auditor’s office, charged with ensuring that government does not waste taxpayer dollars or stray from its mission, fell woefully short of its own professional standards, with improperly trained and inadequately educated staff who failed to warn other agencies of fraud risk, according to an independent review released yesterday.

The findings, which covered the final 18 months of Auditor A. Joseph DeNucci’s administration, prompted the current auditor, Suzanne M. Bump, to fire 27 employees and demote 12 yesterday as she promised to revamp the office.

The review from the National State Auditors Association faulted the office for failing to comply with professional government standards on audit planning, staff competence, documentation, and reporting. Bump said one member of her transition team had never previously seen an adverse review from the association, which conducts peer evaluations of government auditors, in more than 40 years of auditing experience.

The release of the report also casts a shadow over the career of DeNucci, a revered figure among state Democrats who endorsed Bump before he retired in January after 24 years in the elected job.

Bump, while distancing herself from DeNucci by firing his employees and reorganizing his office, declined to criticize him directly during a press conference at her office yesterday.

“These were serious flaws,’’ Bump said. “But I must emphasize that their existence does not mean that the office’s work was without merit.’’

But DeNucci lashed out at his successor.

He also said that Bump, a fellow Democrat, would not have won the election without his endorsement.

He said his office had done more than 5,000 audits that improved state government. DeNucci added that he prided himself on never firing anyone.

“There are a few of my good workers that I asked her to hold on to, and she didn’t,’’ he said in a phone interview.

“Whatever I did was fine, but she didn’t appreciate it and doesn’t appreciate it, and this proves it. It’s crazy.’’

Yesterday’s staff changes were not the first for Bump. When she first took office in January, she announced that 37 employees would be laid off, retire, or leave for other reasons.

Bump said yesterday that the outside review of the office was her first order of business as she attempts to modernize it.

The office, which has 226 employees after yesterday’s firings, has an annual budget of $16.8 million. Bump said she will now post 20 job openings on her website.

Among the review’s findings:

■ The auditor’s office had no minimum education requirements. Five of 23 employees sampled had no bachelor’s degree, which will become a requirement for new hires. Some employees had gaps of as much as two decades between reviews of their job performance. The training of staff to follow professional standards for audit work “has been insufficient.’’

■ Three audits reviewed by the panel were missing forms documenting that the auditor has no conflicts of interest, and the office lacked a policy to address potential conflicts of interest when they arose.

■ In 12 of 15 performance audits of other state agencies examined, DeNucci’s auditors failed to adequately assess the risk of fraud or develop procedures to detect fraud, even when the risk was high.

■ In some instances, DeNucci’s auditors did not adequately document their work, failing to show on paper how they reached their conclusions.

Bump said that state auditors’ offices are supposed to be audited by outside experts every three years and that DeNucci’s administration had gone 15 years without outside scrutiny.

“I’m sure Auditor DeNucci is going to be somewhat chagrined,’’ said Bump, who warned DeNucci about the audit’s findings on Wednesday, the eve of its release. ‘

‘It’s a result of the fact, I think, that there hasn’t been a review in some time.’’

Bump said DeNucci’s office did good work, paving the way for criminal prosecutions in some cases, and that he was probably comfortable with those results and, therefore, did not seek an outside review.

“I still have enormous respect for the work he has done over his career,’’ said Bump. But she added that much of her staff “are feeling a bit dispirited’’ about the results of the audit.

DeNucci was furious. He said the audit Bump obtained was politically motivated.

“I’m hearing that she wants to run for governor some day, so good luck to her,’’ DeNucci said.

Will he endorse her for that job? “No!’’ he said.

One former employee said he had been told that holdovers from DeNucci’s tenure were unceremoniously dismissed.

“One guy was walked out the main door of the auditor’s office by a state trooper; he felt like a criminal,’’ said the former employee, who declined to be identified.

“The guy who was let go had worked in the office for more than 24 years, before DeNucci even got there. He was a good worker.’’

In addition to firing 27 people, Bump said she had initiated new employee job reviews, training, and other changes intended to raise professional standards. Bump also promoted two employees.

“We are reforming virtually every aspect of the state audit office,’’ she said. “This office will not receive another adverse report while I am state auditor.’’

Mike Bello of the Globe staff contributed to this report. Noah Bierman can be reached at nbierman@globe.com.