Good morning Senator Hinds, Representative Cusack and members of the Joint Committee on Revenue.

Thank you for allowing me to testify before you today in support of H.2858/S.1877, An Act to Improve Oversight of State Government. This bill is one of several my office has filed in this session; it is part of what we are calling “The Accountability Agenda.” Each of the bills seeks to strengthen the accountability and oversight abilities of the Auditor’s Office. This legislation, which this committee voted out favorably last session, would remove a statutory provision that prohibits the State Auditor from accessing tax records maintained by the Department of Revenue (DOR) and used by other agencies in the course of business.

I recognize the sensitive nature of tax records. At the Auditor’s Office, we take great pains to protect the confidentiality of all the data we access and use, and this bill would subject the office to criminal penalties for unlawful disclosure of tax information. Recognizing the responsibilities that come with access to this information, we have implemented stringent data use, access and protection policies, and regularly conduct staff training for cyber security and sensitive information access to ensure these policies are being followed. Our auditors already are entrusted with access to even more sensitive information, including criminal records, Medicaid claims data and other sources of personally identifiable information (PII) and personal health information (PHI). Some staff in the Auditor’s office, those in the Bureau of Special Investigations access similar information every day, and they also have access to tax records – but auditors do not.

Massachusetts is among only a handful of states that denies access to this information to state auditors. As State Auditor for the last 10 years, I can unequivocally say that this prohibition hinders my office’s ability to provide adequate accountability and oversight of one of the primary functions of DOR – the administration and collection of taxes in the Commonwealth.

Since my taking office, we have issued three audits of DOR that have identified deficiencies primarily related to the department’s IT infrastructure, but we have been unable to answer many other questions related to DOR’s program administration. For example, we will be able to examine DOR’s collection of child support payments – something as you may recall has been a significant problem at the agency in the past. We will be able to examine DOR’s process for garnishing wages and tax refunds of individuals who have tax liens or are delinquent on child support payments. It will also make it possible to assess whether DOR is holding corporations that are tax-delinquent accountable, and to determine whether DOR is properly remitting to cities and towns the local option tax revenues that are collected.

These are just a few of the many DOR activities we could audit, but let me emphasize an important point; what it explicitly will not do is allow the Auditor’s office to audit tax returns. That is not the job of the Auditor, nor should it be.

Recently, my team performed an analysis of our completed audits during my tenure that, at the time, could have been conducted more effectively if we had been able to access tax records. In total, we found 26 audits that would have benefitted from this level of access to tax information. Examples of these included:

• Twelve audits of district courts that looked at the collection and waiver of mandatory probation fees by the District Court Department. If tax return information was available, OSA staff could have verified if district courts were properly administering the fee waiver process.
• Four audits of Medicaid Enrollment Centers. The OSA could have used tax information to assess the effectiveness of MassHealth’s income verification process at these centers.
• Two audits of the Committee for Public Counsel Services. OSA could have used income tax information to see if individuals who have been assigned a public defender were in fact indigent and therefore financially eligible to be provided with state funded legal counsel.

This measure, as part of our Accountability Agenda, will not only help us in our oversight work, but will put this office in the best possible position with much stronger standing and with greater ability to ensure government accountability for the next State Auditor.

I thank you for your consideration and am happy to answer any questions from the committee.