CHEYENNE — Wyoming special districts and small towns would face stiff penalties if they fail to provide the state with annual audit reports required by law.
This the heart of the Legislature’s Management Audit Committee’s latest attempt to ferret out fraud in government spending.
The committee, controlled by the right-wing Freedom Caucus, voted to have a draft bill prepared that would block errant local government entities from getting their share of sales and use and lodging taxes for three years if they fail to submit their audit reports as required.
The bill, which may be introduced at the 2027 legislative session, expands and toughens an existing weak and limited law that has seen little use.
Last year this committee received considerable attention when it broke tradition and subpoenaed local government officials to appear before the committee regarding budgets and audits.
The legal action did not settle well with the locals who said they would have attended gladly, if only asked.
This year, a number of officials representing counties and state organizations attended — without a subpoena, as one official pointed out.
The committee vote on the proposed tax withholding bill during a during a late-June meeting was not unanimous.
Sen. Chris Rothfuss, a Laramie Democrat and one of only two Democrats on the committee, voted no, claiming the move was “inappropriate.”
“It’s the people’s money,” he said. “It’s punishing the public” for the failure of local government officials.
Other committee members said they had to do something, because the lack of audits and control makes fraud easier
Department of Audit officials told of how the problem of compliance has grown larger over the years.
Wyoming has nearly 700 special districts and small towns. Yet 78 percent of them are in non-compliance with audit reporting requirements, many of them repeat offenders.
Meanwhile there currently is a national shortage of accountants, while accounting firms are turning down government audits for more profitable private business audits.
Professional Certified Public Accountant (CPA) audits are expensive.
One example is the small town of Hudson in Fremont County. It has a budget of $400,000 and had to pay $18,000 for a professional audit.
Many of the smaller towns and districts had long-term employees who tended the books and were familiar with the entire operations. When they retired, adequate replacements could not be found.
The committee devoted considerable time hearing the testimony Christopher Williams, who filed a formal complaint against Johnson County officials for failing to produce an audit in nine years.
Williams, who has an accounting background, was the leading plaintiff in a lawsuit filed last year by several residents of Johnson County against county officials over the audit problem.
Both the district court and the Wyoming Supreme Court denied the lawsuit on grounds Williams and the other taxpayers had not demonstrate legal standing — “tangible” proof of impact — to bring the legal action.
After hearing Williams' details and more discussion, the committee co-chairman, Sen. Dan Laursen, a Powell Republican, brought it all to a halt.
“This is killing me,” Laursen said. “I think we should ask Johnson County to come and tell us what is going on and explain the nine years of failed audits.”
The committee agreed to ask — not subpoena — the Johnson County officials to attend the next meeting in August to present their side.
Contact Joan Barron at 307-632-2534 or jmbarron@bresnan.net
