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Auditors seek access to confidential tax records when reviewing whistleblower complaints

  • by Keith M. Phaneuf
  • January 31, 2012
  • View as "Clean Read" "Exit Clean Read"

The legislature’s top watchdog office is seeking access to confidential state tax information to assist in processing whistleblower complaints filed by state employees.

Auditors John G. Geragosian and Robert M. Ward also used their first annual report to lawmakers on Tuesday to recommend overhauling how agencies report lost funds, tightening competitive bidding rules and closing a loophole that allows retirees to collect full pensions and state-funded salaries.

Geragosian and Ward, who assumed leadership of the legislature’s top watchdog office one year ago, also reported that their agency has cut a backlog in employee whistleblower complaints by more than half since 2009.

Section 2-90 of the Connecticut General Statutes, which spells out the general powers and duties of the auditors, grants access to confidential tax information when auditing state agencies.

But the auditors wrote that when conducting investigations under the state Whistleblower Act, “the commissioner of revenue services has denied our office access to this same taxpayer information” citing the privacy restrictions that govern tax filings.

Geragosian and Ward also noted that although their office has access to confidential tax information in connection with agency audits, it nonetheless is required by law to keep that tax data private. “Furthermore, if our office fails to protect this information, we are subject to the same penalties as would apply to the” Department of Revenue Services.

The department had no immediate response to the auditors’ report.

One of the largest state employee unions, Council 4 of the American Federation of State, County and Municipal Employees, expressed some initial reservation about the proposal. “We would have a certain degree of concern about having tax records available,” Council 4 spokesman Larry Dorman said, adding that the union would analyze the auditors’ report.

Sen. Gayle Slossberg, D-Milford, co-chairwoman of the legislature’s Government Administration and Elections Committee, said her panel would review the report, but hadn’t yet studied the recommendations released Monday afternoon.

The Whistleblower Act requires the auditors to review confidential complaints from state employees alleging workplace corruption, unethical practices, mismanagement, gross waste of funds, abuse of authority, other violations of state law or regulations and dangers to public safety. Certain types of complaints also are submitted to the attorney general’s office for review.

The system has come under criticism in recent years from the auditors’ office, state employee unions and from many legislators as a backlog of whistleblower complaints peaked at 243 in 2008.

Geragosian and Ward’s predecessors, Kevin P. Johnston and Robert G. Jaekle, had recommended to legislators last January that a new agency be created to review these complaints, arguing that the auditors’ office lacked the resources.

The legislature responded last spring by adopting a measure granting the auditors broad discretion to reject complaints while also expanding whistleblowers’ protections.

Geragosian and Ward have a report on the status of the whistleblower system due out this week.

But they noted in their annual report that the backlog of cases, which still stood at 241 in 2009, fell to 161 in 2010 and had dropped to 115 by 2011.

“Our office has made significant strides in resolving the number of outstanding whistleblower complaints over the past two years,” the auditors wrote.

Other recommendations in the annual report include:

  • Streamlining agency requirements to report unauthorized, illegal or unsafe handling of funds or other state resources. Geragosian and Ward wrote that these reports currently vary greatly. Social service agencies that spend huge amounts of federal money “may have erroneous benefit payments that can take place on a regular basis, although they are often recouped.” Other, more routine losses, are sometimes not reported and remain undiscovered until that agency’s next audit.
  • Limiting the executive branch’s authority to waive competitive bidding requirements. Agencies normally are required to competitively bid for personal service agreements costing more than $20,000. But the Office of Policy and Management can waive this requirement under several conditions, including when it deems that the cost of a competitive process outweighs the benefits, or when it decides that a contractor with special capabilities is needed The auditors wrote that this is “an often-used condition … that could conceivably be argued to exist for any personal services agreement.”
  • Closing a loophole in state law that allows retired state employees receiving a full pension and other retirement benefits also to work without restriction at state-aided institutions such as the American School for the Deaf, the Connecticut Children’s Medical Center and the Connecticut Institute for the Blind. Current law prohibits state agencies from rehiring retired workers for longer than 120 days without a waiver from the governor’s budget office.

 

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