State Auditor faces primary challenge, Republican opponents
The office of State Auditor might be the most unnoticed, misunderstood agency in the state, but the job is tremendously important — keeping track of how the state’s agencies spend their money. Longtime Auditor Beth Wood, a Democrat, has a primary challenger for the first time this year. The winner of that Democratic Primary Election will face one of two Republicans in November.
The Smoky Mountain News: What, exactly, is the role of auditor in state government and how does that affect taxpayers?
Tim Hoegemeyer: So the office of the state auditor is charged by the [state] Constitution and by laws to make an accounting for review of all money within the state budget to see that it has been spent effectively and efficiently, according to law and the purpose for which it was earmarked.
That's a pretty big job. And knowing if money was spent effectively and efficiently would certainly be of interest to taxpayers. The office also in their audits and investigations makes recommendations on how it could be improved if it wasn't used effectively and efficiently, so the auditor's office does financial statement audits, which look at a financial statement for an entity to see whether it was, the industry term is called "fairly presented," which means does it reflect the truth? Does that financial statement reflect the truth?
Anthony Wayne Street: The office is charged by the [state] Constitution with serving as the watchdog of the public purse to review how our hard-earned tax dollars are spent. That is the people's money that our state legislature spends. A government doesn't generate — well, people do — government only redistributes our wealth. So it should be of prime importance to all tax paying citizens to learn how and where their tax dollars are being spent, invested. And as state auditor, I hope to work with public education to tell people all that I can find without talking bad about my opponent, because I have no axe to grind with [Hoegemeyer]. I am more of the average working man, taxpaying citizen. He's spent numerous years working for [Wood] in Raleigh and, according to Raleigh News & Observer, after he announced he was running, she sent him over to work under Josh Stein, the attorney general. So from what I had been able to learn about the man, most of his years of working, his career years, have been spent working in the bureaucracy in Raleigh — which the majority of us are not part of. So I think I have more in common with the average everyday working men and women of our state.
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Luis Toledo: Every taxpayer contributes to the state government, to the federal government, and then the legislature allocates and decides how it wants to spend that money. As a state auditor. my job would be to make sure that the money is accounted for and that we're removing fraud, waste and abuse. Also a state auditor would be conducting audits that bring value and improve government operations so that they're more effective for the people. So it is basically trying to maximize accounting for the money, the taxpayer's money.
I worked there for four years and I conducted groundbreaking work that was innovative and creative. It had never been done before in the state and it was creating value. When I look back over the past four years, I feel like the current state auditor has been there for a long time, and I think of this impact of complacency, I see the number of audits has decreased and I don't find that acceptable. I also think that the types of audits that are being done don't really connect with the priorities and the issues affecting our scope. I could point to anybody in the state and ask them, “Hey, what is the top issue, your biggest concern in our state?” They would give a topic and I pretty much guarantee that if somebody goes to the state auditor's website, they will not find an audit or an investigation covering that area. And that's what I have a problem with.
Beth Wood: So every year, state government — the department of health and human services, transportation, your universities, community colleges — every year state government spends $43 billion and that's billion with a B and, and they're spending that money to run our state government. Those are by and large, your tax dollars, and $22 billion of the $43 billion are coming in directly from your pocket into Raleigh. That’s state income taxes, sales tax, corporate taxes, gas taxes. Another $21 billion is coming out of your pocket and going to Washington, D.C., and then making its way back to North Carolina in the form of grants — food stamps, Medicaid, money to build roads, bridges, money for students to go to college on student financial aid. So while the governor and the General Assembly are appropriating these dollars on a budget, state agencies are spending these dollars.
The State Auditor's office is the only agency that's auditing how your tax dollars are being spent. In a nutshell, it's the only agency in state government who's overseeing how your $43 billion tax dollars are being spent.
The biggest issue in the primary for me is the misleading statements of my opponent. The state auditor's office is the external auditor. There's a big difference between an internal auditor and external auditor. The State Auditor's office is the external auditor for the citizens of North Carolina. We perform financial statement audits, we perform IT audits, performance audits, federal grant audits. The bottom line is everything that we find can only be corrected by the agency and the Governor or the General Assembly.
SMN: And why should voters choose you in this primary election, and then again in November?
Wood: Because of a lot of things that we've done over the last 11 years. We had produced in my administration irrefutable findings. Given what I told you, that we can't make people fix the things that we find wrong, you've got to make a case that what I find is wrong. Whether it's wasteful spending or some other impact you've got to be able to make the case that this is wrong. It's so critical to the citizens of North Carolina. It's got to be fixed and your findings have to be irrefutable — meaning that whoever you audited cannot argue with you. So, we have built a number of things over the last 11 years that show for the first time in the history of the agency. Every audit and every investigation has a budget. Every audit, every investigation have deadlines. Every audit investigation has incremental budgets and deadlines. We also have put in a three-tiered vetting process so that once the supervisor finishes an audit, there's a level above them that makes sure that there is evidence, all of the evidence, and every rock has been turned over to ensure that what that supervisor says is wrong is truly wrong. And then it goes through another vetting process to ensure that before we report to the Governor and the General Assembly, what we found that it is absolutely vetted and then we turn it over to the agency and say, “Here's what we have found. Prove us wrong. If you can't prove us wrong, then you're required to move forward with a corrective action plan.” Never in the history of the agency has it ever produced irrefutable findings to the point that nobody can argue with them because if people can argue with them, nobody's going to know what to fix.
So I plan every year. There's a lot of routine audits that we have to do. And then there's a number of discretionary audits we are trying to do to look for wasteful spending. I only have 16 auditors and that discretionary audit, looking for wasteful spending, we have got to make every man-hour count. So we have everybody being held to performance metrics. In other words, you better meet your budgets and your deadlines and you have to show up to work and charge at least 80 percent of your time to a productive audit. You can't dump time into the audit recklessly because it's got a budget and deadline, right? And you have to show up to work 80 percent of the 2080 hours that the taxpayers pay you for in order for us to meet our audit objectives that we lay out for the entire year.
Now my opponent's out there telling everybody that we haven't held state agencies accountable. I can't. I don't have the authority or the jurisdiction, my opponent is telling everybody “I've got 23 years of audit experience in government, experience in state government,” and is telling everybody that he's been in the State Auditor's office and he's an auditor, when in reality he's only been in the state auditor's office three years. Half of that was a staff auditor and half of that was as a supervisor. He's saying that he's made recommendations to the General Assembly. Well, nobody in the state auditor's office is making recommendations to the governor or the General Assembly. That gets done through an audit.
So the biggest issue is understanding what the state auditor’s office does, the competencies, the skills, the expertise. That's needed to lead that agency to be an independent objective, nonpartisan agency. We can't push policy. We can't push any kind of policymaking, so the biggest issue in this race are a lot of the misconceptions that my opponent is throwing out there are things he will do if he's the auditor, when in reality it's never going to be allowed. State statute, federal regulations or auditing standards won't allow it.
Toledo: I think that there are many important critical issues that are not receiving the attention that they should be. That's why I'm running. I want to run and basically become state auditor so that I can set a vision and priorities in critical areas that the state auditor's office is going to look into, and then we can make good recommendations to the governor, to the legislature. That is all evidence-based work. This line of work is not about issuing opinions. This is about conducting work that is just evidence-based, that is based on data. And I want to do that because right now that's not being done. I feel when it comes to the difference between me and my opponent [Wood] is vision and over the amount of time that my opponent has been in office, they have shown that their vision is not gonna change. Their approach is simply to conduct the audits that are required and to be reactive.
I feel like the existing current approach will continue, and I think that's just to the detriment of the people who are not receiving value. It's also a detriment within state government operations. I see myself as a public administrator. That's what I've been doing since I joined the military. Since then, I've just been focused on what can we do to improve government for the people. It is the type of work that is behind the scenes, but it's critical because we already know that government does not always receive the proper investment, proper funding. There's budget shortfalls everywhere, so we've got to make sure that we are doing the best that we can with what we got.
Street: I'm a fiscal conservative, and [Wood] has been accused, by numerous people that I have talked with, of being very liberal minded. She's currently serving her third term. I would like to see a change of hands. There should probably be term limits on that, like there is on the Lieutenant Governor's office. And as a fiscal conservative, I'd like to see a much more fiscally conservative approach to reviewing the state budget. When I say that I am a fiscal conservative, I think that's something that should apply to both Republicans and Democrats. Everyone should be concerned about how effectively, efficiently and conservatively their own tax dollars are being spent. There's no hatred in my heart for anyone of the different political persuasion or party from myself. I intend to see that the state auditor's office works and serves the best interest of everyone, regardless of their partisan beliefs. Regardless of who I have the chance to talk to, I intend to travel the state, and I intend to use this office as a bully pulpit to apply pressure to our state legislature to see and remind them that they have a solemn duty to invest our tax dollars in the most efficient, effective and conservative manner as is possible. That will provide the most amount of return to the investors.
Hoegemeyer: I'd say the biggest issue that I go around talking about is that I believe that there could be greater cooperation between state agencies. The law says that the auditor's office is to coordinate the audit efforts of all the state. I believe that there could be more cooperation in promoting good governance and fiscal responsibility. That is one thing that I'm promoting. Another thing is that right now, the way that the auditor's office — and I know this because I was in the auditor's office for 12 and-a-half-years — the way the auditor's office looks at allegations of fraud, waste and abuse and [has] looked for fraud and abuse is a passive way to look for it. They rely solely on tips through the hotline. And I believe that we could proactively look for areas where fraud or waste is occurring in state government, and we can do that through working sources and looking for it that way, but also in looking at analytics. I think that we need to point the limited resources the auditor's office has towards bigger, more impactful audits. Rather than building relationships across state government that would help foster good governance, [Wood] has taken those relationships in the opposite direction and she's not shared the vision I share to be proactive and going after fraud, waste and abuse. Basically, the things I've shared, they were formed by working in that office for 12-and-a-half-years. Ten or 10-and-a-half years [were spent working] under her and seeing that those things needed to be done but weren't being done. First and foremost, it's an office that needs to be independent, even if we do run with an R-D bias. And I think anyone who understands that office knows that I think an “R” needs to be there because it brings a special fiscal conservancy and a desire to promote fiscal responsibility.
Auditor
Democrats
Luis Toledo
Age: 35
Residence: Raleigh
Occupation: Audit manager and adjunct professor of public policy at Elon University
Political experience: Unsuccessful campaign for State Senate
Beth Wood (i)
Age: 65
Residence: Raleigh
Occupation: CPA
Political experience: Three-term state auditor
Republicans
Tim Hoegemeyer
Age: 50
Residence: Fuquay-Varina
Occupation: Attorney, former general counsel to the state auditor
Political experience: First campaign
Anthony Wayne Street
Age: 38
Residence: Holden Beach
Occupation: Small business owner construction/trucking/land development
Political experience: Two-time Brunswick County Soil and Water Board member
