Bill would penalize officials who fail to hand over records to legislative auditors 

Proposed legislation making its way through the Montana Senate seeks to clarify the responsibility that state agencies have to provide certain information to legislative auditors, an apparent test case in the strength of constitutional boundaries between the legislative and executive branches. 

Senate Bill 73, which passed out of the Senate State Administration committee on a unanimous vote Jan. 27, is in response to an increasingly pronounced tension between the legislative auditor and state agencies over what information should be made available for review, bill sponsor Sen. Tom McGillvray, R-Billings, testified earlier this month. 

“There’s been occasions in the last three, four, five, six years, and they’ve become more frequent, where agencies of state government have delayed, put off, obfuscated and essentially delayed the auditor in getting information long enough to the point where that information is no longer valuable, it becomes stale,” McGillvray told the committee. “We don’t know what’s happening with that information. Is it being deleted, is it being shredded?”

The bill stipulates that state agencies have a duty to aid the auditor’s office whenever it “requires the inspection, examination, or audit of books, accounts, activities, and records.” 

Further, it clarifies that the auditor may — subject to any privileges provided by law — have access to just about any records, in whatever format, of a state agency. And when state officials don’t hand over records, they’re subject to penalties under the state’s official misconduct statute, which can lead to suspension and termination. 

“We ultimately don’t think we’ll ever have to use that penalty, but it’s there in case an agency of state government just won’t give the information that’s necessary,” McGillvray testified. 

Of all the Legislature’s committees, only the legislative audit committee is mandated in the Montana Constitution. The committee hires a legislative auditor, reviews that auditor’s reports on the functions and finances of state government, and communicates the results of those audits to the public and the rest of the Legislature. 

Collectively, the audit division and audit committee have an important — indeed, required — responsibility, McGillvray said. 

“The Legislature is responsible to the taxpayer to be sure the agencies in state government are following the law, doing what we have legislated them to do, and that they are responsible in using the money we have appropriated to them,” he testified. 

That the Legislature’s audit responsibility is established in the Constitution and not just statute is an important distinction, said Angus Maciver, the current legislative auditor. 

“For the audit division, the importance of being able to audit independently of the other branches of government is derived … from that decision in 1972 to assign audit as a constitutional responsibility of our branch of government,” he testified. “The issues in SB 73 would probably be different if we were only talking about statutory authority…but we are not. We are talking about how the Legislature operates as a co-equal branch of government.”

Having the same level of access to information as other branches of government “is the only way we can form evidence-based opinions about government finances and operations,” he added. 

McGillvray later clarified that he’s not aware of any instances in which a state agency tampered with information subject to an audit. But delays and disagreements over what should be produced, he said, have occurred. 

Take, for example, a 2022 audit of the Montana Department of Public Health and Human Services’ distribution of the federal Child Care and Development Fund. At the beginning of the audit, the division requested access to e-mail addresses of parents participating in a scholarship program to obtain their direct input, according to the audit report. DPHHS declined, stating that it did not have the families’ permission and citing technical issues with its aging computer system. Other options it provided “would not have allowed us to independently verify the accuracy and completeness of the information in accordance with Government Auditing Standards,” the audit report said. 

Ultimately, DPHHS agreed to provide the information after consulting with the Montana Attorney General’s Office. But five months elapsed by the time the audit division received the data it requested, the report said.

“During this time period, we could not determine whether the underlying data or any other system attributes were altered. As a result, we had limited ability to test the reliability of the data,” the report continued.

Privacy concerns often form the basis of the conflict between auditors and state agencies. In the hearing on SB 73, an attorney for the Montana Department of Administration, Don Harris, testified against the proposal, arguing that it creates a “sweeping front door to access personal information.”

“When lawyers have conflicts between two different legal duties, like the duty to provide information to the auditor and the duty to maintain confidentiality under federal law, we really only have one choice: We have to go to court. A lawyer can’t decide which law to follow…we have to follow all the laws,” Harris said. “The problem in my point of view with Senate Bill 73 is it removes that gray area where lawyers operate, where there’s space for us to work with the auditor to resolve some of those conflicts between audit law and federal privacy laws and the constitutional right to privacy.”

For example, he said, the department has in the past reached an agreement with the auditor’s office to provide some state health plan information while omitting the names associated with individual plans or treatments. The bill, Harris said, would make that kind of negotiation impossible. 

But representatives from the auditor’s office said that the bill isn’t expanding the scope of information that it can acquire from state agencies, just clarifying the responsibility of those agencies to comply. The laws requiring a biennial audit of the state employee health plan have been on the books since 1989, Maciver said. He said the division takes confidentiality seriously, removes personal information whenever possible and only requests whatever is necessary. 

Nevertheless, personal information is sometimes a part of the division’s work. That’s why HIPAA, the federal health information privacy law, has specific exemptions for audits, Maciver said. 

McGillvray added an amendment to the bill to ease concerns of the administration, he said. 

McGillvray, Sen. Steve Fitzpatrick, a Republican attorney from Great Falls, and the audit division negotiated with the governor’s office leading up to the vote on the bill last week, Fitzpatrick said. 

The amendment, which passed by unanimous vote, clarifies that the new language “may not be construed as authorizing the publication or disclosure of information prohibited by law” and does not waive any privilege provided by law. Additionally, the amendment says that officials are only guilty of misconduct if they fail to produce records that they possess. In other words, Fitzpatrick said, the audit division can’t “badger” officials for documents they don’t have.

“I can’t tell you how many times I’ve been accused of not producing something I don’t possess,” Fitzpatrick said.

The bill awaits a pair of votes on the Senate floor. If it passes, it will make its way to the House.