This is an archived article that was published on sltrib.com in 2012, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

I have been director of Salt Lake County's Internal Audit Division for 12 years. The elected auditor has changed three times since the resignation of county auditor Craig Sorensen. This created a power vacuum that has been insidiously seized upon over the past six years and created the perfect storm to dismantle the auditor's office and shift powers to the mayor and county council.

Historically, these powers provided auditors the ability to watch over the financial integrity of the county by providing a healthy check and balance.

Results achieved in Salt Lake County over past decades speak for themselves: The county's AAA bond rating; awards for excellence in financial reporting and budget presentation; and audits, examinations and investigations that assisted policy makers in improving controls and identifying areas where taxpayer dollars could be saved.

Until now, the Utah Legislature mandated this separation of powers between auditors and county governing bodies. However, Senate Bill 124 provides authority for every county governing body to exercise exclusive powers over budgeting. This includes designating the "budget officer" as the county commission, the county executive or the county council, depending on a county's form of government.

In the past, auditors have been the "budget officer" charged with setting a tentative budget for submission to the county executive and legislative bodies for proposed changes and adoption. The auditor also monitored expenditures each year. These important checks and balances are removed under SB124.

The bill also allows county councils or commissions to delegate "an accounting service" to the county executive or an elected office or department "in accordance with good management practice." This power, coupled with the mushy guideline of "good management practice," provides wide latitude to county executives to control accounting practices.

Finally, the bill allows auditors to conduct performance audits, but only under supervision of the county legislative body or county executive. This provision will have a dampening effect on the independence and objectivity of auditors.

Sen. Curt Bramble's Revenue and Taxation Committee introduced this bill in response to Salt Lake County Auditor Greg Hawkins' attempts to clarify with the County Council the auditor's statutory powers. This resulted in litigation to resolve the auditor's powers. However, the bill is retaliatory and overreaching because it applies not only to counties of the first class (Salt Lake County), but to auditors' powers in every county.

The bill's sponsors aim to improve the efficiency and effectiveness of government, but likely at the sacrifice of budgetary and fiscal transparency and clearly defined checks and balances. In this environment, perpetration of fraud and abuse is facilitated.

According to a 2010 study by the Association of Fraud Examiners, the median loss due to executive-perpetrated fraud is $723,000. The ACFE points out three factors that facilitate fraud and abuse:

Pressure: Elected officials may feel significant pressure from political allies, campaign contributors and constituents to make good on their pledges. Pressures build when a real estate development comes along, or a payment to a consultant has to be split to come under the level that requires additional approval. Pressure can cause otherwise rational, honest persons to act against their better instincts.

Opportunity: The opportunity to misuse public funds is enhanced where internal controls are weak and easily overridden, and where roles are unclear and powers and duties are not separated. The separation of powers between the auditors and county executives was designed to dampen the opportunity for abuse of executive power.

Rationalization: Elected officials are often in a continual, time-consuming effort to raise campaign funds. Often, their compensation is disproportionately low when compared to the time and effort to get elected and the demands of the office. So, rationalizing a misuse of funds becomes easier.

SB124 could set the table for fraud and abuse by stripping away fundamental checks and balances provided to auditors over the budget, accounting, and audit functions. This could create a power shift that Utah and Salt Lake County citizens may live to regret.

Jim Wightman is director of the Internal Audit Division of the Salt Lake County Auditor's Office.