The Massachusetts General Court - Finding 1

The Senate and House of Representatives did not ensure that their respective chambers’ annual financial audits were completed, filed with required recipients, including the Office of the State Auditor,62 or made available to the public in accordance with their respective chambers’ own rules.

Overview

Regarding the rules governing proceedings of the Senate (Senate Rules) and the House (House Rules), Senate Rule 13C and House Rule 85A provide for an annual fiscal year audit of the Senate and House financial accounts, respectively. To determine whether and to what extent the Senate and House are ensuring that their annual financial audits are completed, filed with required recipients, and made available to the public in accordance with their respective chambers’ own rules, we reviewed the Massachusetts General Court website and noted that the Senate financial audits for fiscal years 2021 and 2022 had not been posted for the public. On July 26, 2023, we requested the Senate and House financial audits for fiscal years 2021 and 2022; however, the Senate and House refused to participate in this audit. Accordingly, the Office of the State Auditor (OSA) determined that the Senate and House did not ensure that their respective chambers’ annual financial audits were completed, filed with required recipients, including OSA,⁶³ or made available to the public in accordance with their respective chambers’ own rules.⁶⁴ As noted in the “Post-Audit Action” subsection of this report, the Senate financial audit for fiscal year 2021 has since been completed and posted on the Massachusetts General Court (General Court; Legislature) website.

In the absence of Senate and House financial audits for fiscal years 2021 and 2022, we reviewed the financial audits for fiscal year 2020 (2020 financial audits) in order to gain an understanding of Senate and House financial audits. We found that these financial audits, in fact, contained limited financial information, consisting of the following:

• a Statement of Available Resources and Expenditures—Statutory Basis (see Appendix E), containing appropriations and expenditures amounts and the difference reflected as a balance forward; and
• a Combining Schedule of Available Resources and Expenditures—Statutory Basis (see Appendix E), indicating the balance forward from the prior fiscal year and the allocation of the amounts between the respective chambers’ appropriation codes.⁶⁵

No other financial information is included in the 2020 financial audits—the amounts are not itemized and the Notes to Financial Statement (see Appendix E) provide only a general description of amount categories.⁶⁶

Further, although the 2020 financial audits reference an additional issued report under the heading Other Reporting Required by Government Auditing Standards (see Appendix E), describing the testing of internal controls over financial reporting and compliance and the results of that testing, the additional report does not accompany the financial audits and is not publicly available. According to Paragraph 6.42 of the Government Auditing Standards: 2018 Revision (2018 Yellow Book) of the US Government Accountability Office, this separate report should include the following:

A description of the scope of the auditors’ testing of internal control over financial reporting and of compliance with provisions of laws, regulations, contracts, and grant agreements. Auditors should also state in the report(s) whether the tests they performed provided sufficient, appropriate evidence to support opinions on the effectiveness of internal control and on compliance with provisions of laws, regulations, contracts, and grant agreements.

Additionally, Paragraph 6.43 provides, “If separate reports are used, the auditors should make the report on internal control and compliance available to users in the same manner as the financial audit report to which it relates.”

If the Senate and House do not ensure that their respective chambers’ annual financial audits are completed, filed with required recipients, and made available to the public, then they are not in compliance with their respective chambers’ own rules. This contributes to a lack of transparency and limits the public’s ability to hold the Legislature accountable with respect to Senate and House financial transactions and processes. The financial audits that do exist lack financial information and internal control reports. 

Authoritative Guidance

Senate Rule 13C states the following:

The Senate Committee on Rules shall provide for an annual fiscal year audit of all Senate financial accounts to be conducted by a certified public accountant experienced in auditing governmental entities. The clerk shall notify the members when the audit is available. A copy of the audit shall be filed with the Senate Clerk and the State Auditor, copies shall be made available upon request by any member of the Senate or the general public and posted on the general court website. 1985; 2003; 2015; 2017; 2021.

House Rule 85A states the following:

The House Business Manager, with the approval of the Counsel appointed pursuant to [House] Rule 13B, shall provide that outside, independent audits of House financial accounts be conducted for each fiscal year upon receipt of the fiscal year end appropriation activity with balance report from the comptroller of the Commonwealth. The audit shall be conducted in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. The House Business Manager shall provide the independent auditor with requested documents for such audit. A copy of such audit shall be filed with the Clerk of the House and said copies shall be made available to the members and the general public upon request. The procurement of an independent auditor pursuant to this rule shall not be subject to [House] Rule 87.

Adopted Jan. 11, 1985, Amended Jan. 20, 2011; Jan. 30, 2019.

The Declaration of the Rights of the Inhabitants of the Commonwealth of Massachusetts in the Massachusetts Constitution states the following in part:

All power residing originally in the people, and being derived from them, the several magistrates and officers of government, vested with authority, whether legislative, executive, or judicial, are their substitutes and agents, and are at all times accountable to them.⁶⁷

Reason for Issue

During the course of this performance audit, we determined that the Senate and House financial audits for fiscal years 2021 and 2022—the fiscal years closing during the performance audit period—were not available because they had not been completed as required by Senate Rule 13C and House Rule 85A, respectively. The Legislature refused to participate in this performance audit; therefore, we could not obtain a reason why the financial audits for fiscal years 2021 and 2022 had not been completed, filed with required recipients, or made available in accordance with the applicable rules, or why the financial audits contain limited financial information and do not include the internal control reports.

Recommendations

1. The Senate and House should ensure that their respective chambers’ annual financial audits are completed in a timely manner, filed with required recipients, and made directly available to the public to increase transparency and the public’s ability to hold the Legislature accountable with respect to Senate and House financial transactions and processes.
2. The Senate and House should ensure that their respective chambers’ annual financial audits contain more detailed financial information, such as itemized appropriations, revenues, and expenditures, supported by written documentation, to increase transparency and the public’s ability to hold the Legislature accountable with respect to Senate and House financial transactions and processes.
3. The Senate and House should include the separate internal control reports referenced in Senate and House financial audits with their respective chambers’ annual financial audits, which should be made directly available to the public to increase transparency and the public’s ability to hold the Legislature accountable with respect to Senate and House financial transactions and processes.

Auditee’s Response

The Massachusetts General Court was given the opportunity and refused to participate in this audit. 

Auditor’s Reply

We continue to make ourselves available to the Massachusetts General Court and encourage it to comply with Section 12 of Chapter 11 of the Massachusetts General Laws, to help make government work better.

63.      See Id.

64.      See Senate Rule 13C; House Rule 85A.

65.      See footnote 55.

66.      This is contrasted by the detail provided in the Statement of Financial Affairs of the General Assembly audit report as released by Pennsylvania’s Legislative Audit Advisory Commission (last accessed September 30, 2024).

67.      See Article V of Part the First of the Massachusetts Constitution; see Staats, Comptroller General; see footnote 40.

 

Date published:	October 21, 2024