Government auditors are faulting longtime Secretary of State Bill Gardner. Among other things, they say Gardner’s office doesn’t exert enough control over the 40 million dollars it collects from state businesses. Auditors also question Gardner’s use of state money to pay for a federal program, and his habit of hiring relatives of top managers.
Auditors presented lawmakers with 30 observations about the secretary of state’s office, 10 of which they termed “material weaknesses.” Richard Mahoney is Audit Director for the legislative budget assistant.
“The lack of an effective system of internal controls puts the department’s objectives of achieving efficient and effective operations, reliable financial reporting and compliance with laws and regulations at significant risk.”
Auditors described Gardner’s operations – which employ more than 100 staffers -- as too often ad hoc, with unwritten policies on risk assessment, and fraud reporting. They also questioned the Secretary’s handing of money from the federal help America vote act, or HAVA. Specifically his use of 1 million dollars from HAVA to improve a state building, and his decision to spend almost 3 million dollars in fees collected from corporations, on computer upgrades related to HAVA.
"These HAVA it expenditures should have been charged to the department to the federal HAVA program, funded 95 percent by federal funds. These transfers reduced funds that otherwise would have been available to the general fund by 2.9 million dollars. We recommend the department reverse all of these transfers."
While secretary of state Gardner took in the audit presentation from the front row, he left it to his subordinates to field lawmakers’ questions. David Scanlan is Bill Gardner’s top deputy.
"We recognize that there are thing we can do to improve our operations. And in many respects certain things mentioned in the audit have already been addressed."
But Gardner did speak to the press afterwards. He said he welcomed the suggestion that his department hire a financial manager.
"It’s a valid point and it’s something that there is no question it would be helpful."
But Gardner was less pliant when it came to the question of HAVA. He noted that current law allows him to spend fee –generated revenue on computers and that he’s also required him make the state’s HAVA allotment of 16.5 million dollars, last for at least 20 years. Gardiner added that New Hampshire has spent less of its HAVA money than any other state’s that’s complied with the law, which he says was no accident.
"We are close to having more money now than what we’ve got, so that fund is still there. But we were determined, and I said I want you to treat this like poison, so you don’t take much of it."
Gardiner’s argument is that relying on HAVA money could weaken the state’s ability to maintain the first in the nation primary. While that’s an open question, most on the Fiscal Committee seemed willing to cut Gardner a healthy amount of slack. Ken Weyler is a republican from Kingston.
"There were no identified problems that you could say where’s the 50 thousand, or why did you do this or that. And they’ve got such a reputation among everyone,that no one ever doubts."
But not all lawmakers were so free of skepticism. Senate President Sylvia Larsen noted that she expects Gardner to follow through on the auditors suggestions…….. House Finance committee Chair Marjorie Smith, meanwhile stressed that Gardner’s job is at least as big as his reputation.
"He has a powerful personality of which we take great advantage in trying to maintain NH’s postion in terms of Presidential primaries. But the responsibilities of the secretary of state are much larger than elections.”
Smith adds that she expects lawmakers to take up aimed at tightening some of the secretary of state’s operations.
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