Overview
The Massachusetts District Attorney Association (MDAA) did not monitor District Attorney’s Offices’ use of the ADA Retention Fund. This placed the fund at risk of undetected misuse. In fact, some offices did not spend all of the money allocated for this purpose. Although the Legislature might not include such retention funding in future years, MDAA must develop appropriate monitoring controls to ensure that any future funding is properly administered.
During our audit period, MDAA entered into contractual agreements called Interdepartmental Service Agreements (ISAs)4 with each District Attorney’s Office. The ISAs required each office to use funds that were appropriated by the state Legislature to improve the retention rate of Assistant District Attorneys (ADAs) with more than three years of experience by providing them with additional compensation. However, in fiscal year 2015, three District Attorney’s Offices (Hampden, Northwestern, and Norfolk) used a total of $113,000 of retention funding to offset budget cuts imposed by the Commonwealth instead. Because it had not monitored the use of the money, MDAA was not aware that this had happened.
In addition, not ensuring that District Attorney’s Offices used their ADA Retention Fund disbursements to provide additional compensation to ADAs may have had a negative impact on retention. Sixteen experienced ADAs left these three offices during fiscal year 2015. The loss of ADAs also results in increased workloads for the remaining ADAs, which can affect how quickly investigations can be completed.
Authoritative Guidance
Section 6.03(6) of Title 815 of the Code of Massachusetts Regulations states,
Seller Departments [in this case, the District Attorney’s Offices] are required to provide whatever progress, programmatic or expenditure reports to the Buyer Department [in this case, MDAA], as specified in an ISA. Even if reports are not specified, the Seller Department is required to provide a detailed accounting of all expenditures.
In addition, Section 8 of the ISA Form that each District Attorney’s Office was required to complete in conjunction with MDAA for each fiscal year during our audit period stated, “As requested, a report will be submitted to MDAA by each District Attorney by the end of [each fiscal year’s] accounts payable period reflecting the remaining funds not utilized as allocated.”
Since MDAA was charged with the administration of the funds for each office, it should have established a mechanism to ensure that they were used only for their intended purpose.
Finally, the General Appropriation Acts for fiscal years 2015, 2016, and 2017 (Chapter 165 of the Acts of 2014, Chapter 46 of the Acts of 2015, and Chapter 133 of the Acts of 2016, respectively) specified that District Attorney’s Offices were to use the money they received from MDAA through the ADA Retention Fund for the sole purpose of providing monetary incentives to retain ADAs with more than three years of experience.
Reasons for Issues
According to management, MDAA believed that its administrative responsibilities were completed once the funds in question were allocated to each of the 11 District Attorney’s Offices. As a result, MDAA had not developed policies and procedures to properly monitor how these funds were used, such as requesting that each District Attorney’s Office provide it with a detailed accounting of all expenditures related to this funding.
Recommendations
- If the state Legislature continues to provide funding for retaining ADAs with more than three years of experience, MDAA should develop policies and procedures to monitor these funds to ensure that they are used only for their intended purpose.
- MDAA should obtain reports from all of the District Attorney’s Offices on a mutually agreed-upon schedule to monitor how these funds are being used.
Auditee’s Response
In response to this finding, the president of MDAA provided the following comments:
I am concerned the audit has failed to recognize the relationship between the 11 District Attorneys and the MDAA. The Executive Director works for, and at the direction and pleasure of, the 11 Massachusetts District Attorneys. (See MGL Chapter 12, section 20D.) The District Attorneys do not work for or answer to the Executive Director of the MDAA. That said, I believe the lack of understanding of the relationship leads to faulty conclusions in the audit. Further, the auditors did not pursue or investigate the history and rationale given by the Legislature when they funded, not only those two accounts, but also the Drug Diversion and Education Fund. The Legislature has a long history and relationship with the MDAA, often using the agency as a "pass-through" entity to facilitate the funding of mutually agreed-upon priorities like the ADA Salary Reserve and Retention Funds and special programs for which they support, such as heroin and opioid education and prevention programs. The decision to provide funds to each office is the prerogative of the Legislature and Governor who have supported these policy initiatives. Historically, the Legislature has entrusted that the monies appropriated would be fairly distributed based upon a plan and formula devised by and approved by members of the MDAA (District Attorneys). The Executive Director plays no role other than implementing the plan and formula approved by the District Attorneys and complying with mandated reporting requirements set forth in the budget language. . . .
It is the Legislature that approves funding and decides how they wish to meet their funding goals. In this instance, the goal was to assist the District Attorneys in raising the pay and retaining ADAs who are often the lowest paid individuals in the courtroom. The District Attorneys, Legislature, and Governor have long worked together to achieve this goal of compensating ADAs at a level of [National Association of Government Employees] Counsel I. The auditors fail to recognize that . . . the state's 11 District Attorneys are constitutionally independent elected officials. The District Attorneys answer to the voters and are not employees or subservient to the Executive Director of the MDAA. The Legislature required the District Attorneys, through the MDAA, to disperse the money through a fair formula approved by them. The Executive Director was required only to report that formula and disbursement to the Legislature. The Executive Director of the MDAA is not authorized by the District Attorneys, statute, or budget line item to supervise the spending of these appropriated funds. In fact, MDAA’s role was limited to sending a report to the Legislature of the formula of how the money was divided. The MDAA supports our offices mainly in IT and training, and we are very grateful for the work they do; it does not have oversight of individual spending decisions made by the state's 11 District Attorneys. The audit inaccurately and unfairly makes conclusions that are not supported by fact or law.
The audit raises the issue that the Hampden, Norfolk and Northwestern District Attorneys’ Offices did not spend the funds for salary retention in fiscal year 2015 in accordance with the stated purpose of the Legislature. Nothing could be further from the truth. The three offices made independent executive decisions that were financially prudent to revert the money to the General Fund. In FY15, the state was faced with a budget deficit and the Governor and Legislature required all state agencies to make a mid-year cut to help balance the state's budget. The DAs were required to cut 1.79% mid-year. Each District Attorney's Office had the independent authority to determine how to make the cuts to achieve that goal. In order to reduce the cut to each office’s main office appropriation, the District Attorneys collectively voted to revert the entire Drug Diversion Fund, an account created by the budget and placed within the MDAA. Each District Attorney’s Office received a financial credit from the Executive Office of Administration and Finance (A&F) equal to their share determined by a formula approved by the MDAA’s members. In the case of the Retention Funds, eight District Attorneys had committed the monies and three offices had not yet made their distributions. The three District Attorneys’ Offices, including mine (Norfolk), chose not to spend our share of the Retention Fund. The Office of Administration and Finance also credited those amounts towards our goal of cutting 1.79% of our annual budget. It was both financially prudent, and clearly within the statutory authority of each District Attorney to revert the money. If we had distributed the money within our offices, a small number of ADAs would have received pay raises or bonuses, while others could have been facing furlough or lay-offs in order to meet the required cuts. This would have had a detrimental effect on our retention efforts as well as caused morale issues within the ranks. The Executive Director of MDAA does not and did not have the authority to make or interfere in decisions made by each District Attorney. . . .
I believe the other eight DAs, if given the opportunity, would have made the same decision if they had not already dispersed the Retention Funds to their ADAs. It would have been near impossible to take those funds back from some of the lowest paid attorneys in state government once they had received the money. The audit conclusion does not make sense given both the constitutional and statutory powers of the DAs and the auditors’ failure to recognize prudent budget decisions to balance the state budget. . . . If one were to believe the audit findings then all 11 offices should be cited for spending 1.79% less than the amount originally set forth in the state budget. The conclusions reached are nonsensical and illogical.
Despite the auditors’ misunderstanding of the relationship between the District Attorneys and the MDAA, the District Attorneys have agreed to voluntarily send the MDAA an interdepartmental service agreement (ISA) compliance certificate for each of the shared funds distributed by MDAA. The ISA compliance certificate’s purpose is to certify the funds were distributed within each District Attorney’s Office in full accordance with the budget line item language, or to notify the MDAA that some or all of the funds would be reverted, along with the reasons for the reversion. The MDAA would maintain such certificates and provide them, as requested, to the Legislature and the Executive Office of Administration and Finance and the Auditor for further review.
Auditor’s Reply
During our audit period, MDAA and each District Attorney’s Office entered into ISAs that required each office to use funds that were appropriated by the state Legislature to improve the retention rate of certain ADAs. Although these agreements did not require MDAA to supervise the use of these funds by District Attorney’s Offices, they did allow MDAA to implement reporting requirements that would enable it to monitor whether the funds were used for their intended purposes. Specifically, as noted above, Section 8 of the ISA Form that each District Attorney’s Office was required to complete in conjunction with MDAA for each fiscal year during our audit period stated, “As requested, a report will be submitted to MDAA by each District Attorney by the end of [each fiscal year’s] accounts payable period reflecting the remaining funds not utilized as allocated.” Further, state regulations call for organizations such as the District Attorney’s Offices that expended the funds to provide a detailed accounting of all expenditures under this kind of agreement. Had MDAA received a detailed accounting of the use of this funding—including the fact that three District Attorney’s Offices elected to use some of it to offset budget cuts rather than to increase the salaries of some ADAs—its use would have been more apparent to the Legislature. Because it had not monitored the use of the money, MDAA was not aware that this had happened.
Contrary to what MDAA asserts in its response, through discussions with MDAA officials and a review of applicable statutory and regulatory requirements, as well as the ISAs that MDAA entered into with each District Attorney’s Office, the Office of the State Auditor was fully aware of what the Legislature wanted MDAA’s role to be in the administration of this funding. Further, we do not necessarily agree with MDAA’s assertion that remitting funds that were targeted for the retention of the ADAs in question was the most fiscally prudent decision. When budgetary cuts are implemented, each agency can decide how to implement the cuts. For example, some agencies simply implement cuts across all of their operations rather than targeting funding for a specific area. Alternatively, one could argue that applying the budget cuts to one group of people might have a more negative effect—especially on the targeted group—than spreading the cuts across all operations.
Finally, while we believe it is a prudent decision for each District Attorney’s Office to provide MDAA with compliance certificates regarding the funds in question, we believe it would create more transparency if MDAA requested that each District Attorney’s Office provide it with a detailed accounting of all expenditures related to these funds.
| Date published: | April 24, 2018 |
|---|