AS OBAMA STATED WHILE CAMPAIGNING, IT WILL TAKE PROGRESSIVE TAXATION TO REVERSE WEALTH INEQUITY CAUSED BY MASSIVE CORPORATE FRAUD AND CORPORATIONS NEED TO PAY THEIR FAIR SHARE!
'Ms. Mizeur's pledges to more than double the minimum wage by 2022, mandate paid sick leave for all workers and allow local jurisdictions to levy a 1-cent surcharge on the sales tax to fund school construction could prove too big a shock to the economy'
I will look at Maryland's current cast of governor's race characters just to talk about progressive taxation. Let's look at Mizeur who is being touted as being liberal when she is in fact neo-liberal----two opposites! She sounds liberal when she speaks of doubling the minimum wage yet running on having a $15 an hour wage in 2022 is outrageous! The Living Wage right now is $15 and by 2022 it may well be $22. So, this is absolutely a slap in the face to low-wage workers and those fighting for a return to a first world economy. Remember, our economy is stagnant for, among other things, the fact that the low wage workers have no disposable income to be consumers. So a return of a strong middle-class and low-wage earners that can support themselves and family all spurs the economy. The impoverishment now is what has the US stagnant waiting for that growing middle-class overseas!
Mizeur wants a 1cent surcharge on sales tax to fund school building. Sales taxes are regressive, not progressive as it is the middle/lower class that spend all their money on purchases while the upper class spend much of their wealth on investments. So, Heather is coming right back to the people who have been hit hard by O'Malley and his EXCESSIVELY REGRESSIVE REVENUE FEES, FINES, TAXES, AND GAMBLING AGENDA! Remember, we could fund all school rebuilding by simply recovering the billions of dollars yet owed the state from financial fraud. Rather, we are maxed up the wazzoo in Wall Street financial instruments handing hundreds of millions more to the banks that owe us! Even if we ignore banks, the corporate fraud is enormous! Tax them for infrastructure development!
BUT THEY WILL LEAVE!!!!!!! GOOD! WE WANT CORPORATE CITIZENS, NOT CORPORATE WELFARE!
'Attorney General Douglas F. Gansler would cut the corporate income tax rate to 6 percent and would raise the threshold for inheritance taxes from $1 million to $5 million. He, like Mr. Craig, has promised tax breaks for pension income'.
Raise your hand if you see that corporate tax evasion has ruined this country.....EVERYONE!!!! The bigger a corporation gets the more it evades. So, we want small businesses that get tax relief and big businesses that pay a strong tax rate. If they leave, we will replace that work with lots of small businesses now won't we! So, we want global corporations to leave because they are corporate rule. If they stay they need to pay! Ending subsidies in the form of tax breaks, donation restriction, and corporate welfare subsidies. We don't even have to raise corporate taxes right away as just enforcing existing law will bring in needed revenue.
'raising income taxes on high earners should be approached with caution because it would also ensnare many small businesses that file under the personal rather than corporate income tax system'.
If I hear one more time this mantra about small businesses as individual filers I will implode. We heard in the 2010 tax reform issues that basically extended all of Bush tax cuts that we needed to go to $450,000 to meet the promise of 'no tax hikes on the middle-class'.......HELLO!!! THAT IS NOT MIDDLE-CLASS AND IT IS NOT SMALL BUSINESS. So, thinking that raising taxes on high-income earners.....$250,000 and above would ensnare small businesses is crazy. The numbers of small businesses falling into this category, $250,000 - 450,000 has proven to be a small percentage.
What we must do is stop all of the tax evasion from tax categories like s-corp and b-corp by simple oversight and enforcement! Keep in mind this is all stuff that can be done by the governor's office with no Assembly involved. If the Comptroller will not do it appointed oversight can!
WOW! All that talk on tax and not one hit on the gorilla in the room..MD has so much tax evasion and fraud from corporations and the wealthy that we could fund the budget for years by just recovering that tax fraud. Imagine if taxes from s-corportation shareholders was actually collected or if corporate tax breaks were actually audited? Billions would come back from auditing just that over a 10 year period. Health industry fraud is billions each year. Property tax exemption violations in the hundreds of millions. WOW, would that be tax reform or what?
Do you know that the greening tax breaks overseen by LEEDs loses 1/2 of these taxes to fraud and that LEEDs is known to be as duplicitous as SEC in allowing the fraud? Billions would come back from just holding that agency accountable! Do you know that private non-profits are being used to funnel corporate donations to those same corporations projects giving tax breaks for the donation that comes back to finance the development? There are hundreds of millions waiting to come back from that fraud.
I could go on forever, but we see that the tax reform MD needs will start with oversight and enforcement directed at corporations and the rich. From there, we need to view tax reform progressively since MD says it is progressive and that means multiple tax brackets at the top of income scale for both individuals and business.
Business and the governor's race Our view: All the candidates want to improve the business climate, but some would jeopardize the state's strengths in the process
11:37 a.m. EST, November 7, 2013 Baltimore Sun
Though the three Democrats and three Republicans considered the top contenders to replace Gov. Martin O'Malley disagree about plenty, they are unanimous in their opinion about one thing: Maryland's business climate needs improving. Del. Heather Mizeur, the most liberal candidate in the race, got into the act this week with a plan to cut income taxes for the vast majority of Marylanders and to provide corporate tax credits for small businesses, among other proposals. Even Lt. Gov. Anthony Brown has implicitly acknowledged that business has not had a sufficient voice in the administration of which he has been a part; he recently launched a statewide listening tour to hear from business owners and seek ways to make the state more business friendly. But what exactly the candidates have in mind when they pledge to improve the business climate varies widely.
On the Republican side, the contest between Harford County Executive David Craig, Del. Ron George and businessman Charles Lollar is largely over which taxes to cut, how much and how fast. Mr. George, who features a link on his website listing 74 taxes and fees Mr. O'Malley increased (he counts rather liberally), wants to cut the corporate income tax from 8.25 percent to 5.75 percent and cut the top personal income tax rate from 5.75 percent to 5 percent. Mr. Lollar says he would reverse the O'Malley sales tax increase (dropping the rate back to 5 percent) and eliminate the estate tax. Both Messrs. George and Lollar would repeal the state-mandated stormwater fee (which they call the "rain tax") and reverse this year's gas tax increase. Mr. Craig has made a blanket pledge to "reduce or eliminate any tax or fee that is impeding job growth," which includes all the items mentioned above and then some. None of the Republicans specify how they would make up for the lost revenue or which specific programs they would cut to compensate.
All three Democrats acknowledge that Maryland's taxes need reform to improve our business competitiveness, but their zeal to cut taxes is certainly less fervent. Ms. Mizeur has provided the most detailed proposal on taxes so far and it is decidedly nuanced. She would raise marginal tax rates on income over $150,000 (or $225,000 for joint filers) to finance cuts for those who make less. And she would enact "combined reporting" — a corporate tax system designed to prevent multi-state companies from shifting income to states with lower or no corporate taxes — and use the proceeds to finance credits for small businesses. Attorney General Douglas F. Gansler would cut the corporate income tax rate to 6 percent and would raise the threshold for inheritance taxes from $1 million to $5 million. He, like Mr. Craig, has promised tax breaks for pension income. Mr. Brown has said the least about taxes so far but has pledged to reform the tax code.
More broadly, though, the difference between the candidates is that the Republicans all argue to one degree or another that Maryland has gone severely off track and needs a fundamental shift in its governance. The Democrats do not. The GOP candidates' argument is that Maryland will become more competitive if the cost and role of government is reduced. They are right to be asking whether the state's tax and regulatory structures are hurting the economy, but the idea that the state should drop its philosophy of investing in high-quality education, infrastructure, health care and other amenities is not only unrealistic, it would play against Maryland's greatest assets.
It's worth noting that taxes went up during the O'Malley administration largely for two reasons. The first round, in 2007, was designed to pay for the massive commitment to K-12 education the state made by adopting the so-called Thornton school funding plan in 2002. Subsequent increases allowed the state to maintain that commitment, and to all but eliminate college tuition increases, even as the nation endured its worst recession in decades. Despite those efforts, the state's projected revenues still fall short of projected expenditures by about $400 million next year. The second major reason the state raised taxes was the Maryland's backlog of transportation needs. That led to this year's gas tax hike, which was a long-held priority of the business community. If the economy continues to improve, some tax cutting may be feasible during the next governor's term, but reversing the O'Malley legacy on taxes also means reversing his legacy on education and undoing perhaps his only accomplishment that was roundly cheered by business groups.
That's not to say that the Democrats have all the right answers. Though some of her proposals on taxes and encouraging the high-tech economy are intriguing, for example, Ms. Mizeur's pledges to more than double the minimum wage by 2022, mandate paid sick leave for all workers and allow local jurisdictions to levy a 1-cent surcharge on the sales tax to fund school construction could prove too big a shock to the economy. Moreover, raising income taxes on high earners should be approached with caution because it would also ensnare many small businesses that file under the personal rather than corporate income tax system. Mr. Gansler's ideas so far have been focused on reviving the manufacturing sector — certainly a worthy and necessary goal but one that is insufficient in an age when services dominate the economy. Mr. Brown's attention to the issue of business competitiveness is welcome, and he has set an appropriately balanced tone, but he hasn't offered many specific proposals yet.
Despite the doomsday talk from some candidates about Maryland hemorrhaging jobs across its borders, the state is in better shape than most when it comes to recovering from the recession. But the sequester and government shutdown underscored just how big a threat the instability in the federal government is to Maryland. As the candidates flesh out their ideas in the coming months, voters need to look for someone who can address what is holding back the state's economy without jeopardizing what gives it strength.
I cannot stress how this report should be the #1 topic for all Maryland candidates for office. Please note that O'Malley scoffed at this as simply an administrative error. Also note that right after the economic collapse from massive corporate fraud the Maryland Assembly changed the statutes of limitation for fraud against a business to 3 years from 5 years----they made it harder for individuals to seek justice. But, this is not retroactive and it does not include fraud from government coffers!
IF A CANDIDATE DOES NOT CARE THAT YOUR TAX REVENUE IS STOLEN AT WILL-----DO NOT ELECT THEM!!!!!
Maryland Corruption Risk Report Card
Rank among 50 states: 40th
Overall grade: D-
Click a category to see detailed scores and notes.
Public Access to Information F view
Political Financing C view
Executive Accountability F view
Legislative Accountability F view
Judicial Accountability D+ view
State Budget Processes C- view
State Civil Service Management D- view
Procurement D- view
Internal Auditing C+ view
Lobbying Disclosure D- view
State Pension Fund Management F view
Ethics Enforcement Agencies D view
State Insurance Commissions F view
Redistricting D- view
In Maryland’s “clubby” Capitol, there’s little transparency, procurement policies are byzantine, and audit results are often ignored. Read more from SII State Reporter Christian Bourge
Watchdogs: D.C. Area Governments Need Work On Transparency Aug 15, 2012 State Integrity news for Maryland and Virginia from SII partner WAMU:
If "sunlight is the best of disinfectants," as former Supreme Court Justice Louis Brandeis once wrote, local lawmakers may need a refresher on the importance of government transparency. The State Integrity Investigation gave failing grades to both Maryland and Virginia when it came to the public's access to information.
Maryland ranked 46th out of 50 states and Virginia ranked 49th. While the District was not included in the survey, the mayor's administration faced sharp criticism this summer when it proposed weakening D.C.'s public records laws and broadening the range of documents that may be exempt from disclosure.
This is a typical audit of revenue oversight------each audit shows complete disregard to standards and in Baltimore it is worse. Just rebuilding these departments for oversight of corporate tax revenue would net billions for the state! Do we pick on businesses only----of course not, but we know that is where the most neglect lies!
Audit Finds Problems with Maryland's Income Tax Collector Current Stories:
Posted on September 10, 2013
By Charlie Hayward, for MarylandReporter.com
ANNAPOLIS -- The agency that collects most Maryland taxes had lax controls over granting tax credits and refund checks, and in one case issued a $101,000 refund that wasn’t due, state auditors found. The comptroller’s Revenue Administration Division also had computer programming errors and did not adequately protect sensitive taxpayer information, according to an audit report prepared by the Office of Legislative Audits.
Four of the auditor’s findings were problems identified in previous audits.
Responding to the audit findings, Comptroller Peter Franchot said, “We will be able to realize significant improvements in our ability to process these credits in the future due to improvements in technology. The legacy tax processing system did not allow for electronic transmission of supporting documents and schedules,” resulting in a “very labor-intensive process.”
Maryland’s Revenue Administration Division collects state taxes and fees including withholding taxes, estimated taxes, sales and use, motor fuel, alcohol, tobacco, estate, inheritance taxes and others. RAD processes tax returns from individuals and business throughout the state.
The division collected $20.4 billion in 2012, of which $4.3 billion was remitted to the 23 counties, Baltimore City, and 168 incorporated cities and towns.
Tax credits not verified
Maryland residents who pay income tax to other states can receive tax credits against Maryland taxes if they include documentation such as a copy of the other state’s tax return with their Maryland tax forms. RAD verifies credits using different procedures for paper and electronic returns.
The auditors found a 17% error rate on a sample of paper returns; some returns did not have the required documentation and one refund was overpaid by $101,000 because of an error in processing the credit.
The auditors also found RAD’s verifications of electronic tax returns’ credits was deficient because RAD did not verify credits in a timely manner or verify the legitimacy of credits per its policy; and did not double-check its verifications.
Social Security numbers not verified, computer program errors
RAD doesn’t have procedures to ensure that dependents’ social security numbers reported by taxpayers on their individual income tax returns are valid. RAD has been trying to develop effective procedures but so far has not implemented controls due to technical difficulties. This is a repeat finding from an audit three years ago.
RAD uses a computer program to identify tax returns with missing documentation such as W-2s. However, the auditor found almost 3,000 deficient tax returns that RAD failed to identify because of computer-programming errors.
Problems controlling refund checks
The auditor found problems with controls over mailing refund checks as well as deficiencies over processing refund checks returned by the Post Office.
The Revenue Administration Division issued approximately 738,000 refund checks totaling $758 million during 2011. RAD uses a log to document the number of checks sent to the mailroom and the number of checks mailed. The auditors found this log wasn’t always used and also found the log showed unexplained differences; checks received by the mailroom did not match the checks mailed.
The Post Office returns millions of dollars of refund checks to RAD every year because addressees are unknown or the mail was undeliverable. RAD employees research problems one-by-one and usually can re-mail the checks or void them and send replacements. However, RAD:
Keeps track of refund checks via several different logs that track different actions in a manner such that overall control of the re-issued refund checks can’t be easily assured or audited. This was a repeat finding.
RAD mailed about 26,400 checks ($35 million) between August 2009 and June 2011 without fully verifying their propriety.
Manual adjustments to taxpayer accounts not double-checked
RAD’s computer records of taxpayer accounts sometimes require manual adjustments to correct information. The auditor tested 15 adjustments and found seven that reduced taxpayer liabilities by $28 million but were not reviewed as required.
Sensitive taxpayer information not fully protected
The auditor identified 75,219 tax records from electronic filings including names and social security numbers that could have been stolen by unauthorized individuals if the server on which they were stored was hacked.
The auditor also found that RAD maintains substantial safeguards over taxpayer information, but recommended three areas where controls could be improved. This was a repeat finding.
Incompatible duties and late verifications of alcohol and tobacco tax collections
Alcohol and tobacco tax collections received in the mail totaled approximately $30.5 million during 2012. The auditor found one employee responsible for processing alcohol and tobacco tax collections that had incompatible duties allowing him/her to possibly perpetrate and conceal theft of checks. This was a repeat finding. The auditor also found that deposit verifications either were not performed on a timely basis or not done at all.
Charlie Hayward recently retired after 30 years’ experience with performance, IT, and financial auditing of a wide variety of government programs and activities. He can be reached at hungrypirana(at)verizon.net.
Below you see Chicago and an activism that took the time to do the math. Chicago/IL and Baltimore/MD are the same as regards fraud and corruption so this article reveals the problems and solutions with these business tax credits called TIF. We have had many media exposures to TIF violations and know they are full of fraud. Simply auditing these business tax credits would bring back billions state-wide.
I want to emphasize that when these TIFs are given and contracts signed, if a corporation is not in compliance the contract can be voided so all of these tax breaks for decades do not necessarily need to stand!
Widespread non-compliance with TIF district reporting requirements
29 Apr 2013 | Brian Costin
Tax Increment Financing, or TIF, districts are a controversial economic development tool – and there is no concrete evidence they actually work. In fact, a study from professors at the University of Chicago and Lake Forest College showed that Illinois communities with TIF districts “grew substantially slower than non-adopters.”
By law, TIFs are intended to promote economic development in blighted areas.
But the Chicago-based Tax Integrity and Fairness (TIF) alliance calls TIF districts “slush-funds typically used for corporate welfare and political back scratching.”
A new concerning TIF development is the fact that these special districts aren’t complying with state reporting requirements.
An April report from the Illinois Comptroller’s office shows municipalities all over the state are failing to meet state reporting standards.
The TIF Non-Compliance Report shows that as of April 16, 2013, 152 municipalities were in violation of state law, and statewide there were 531 non-compliance violations.
This may be an incomplete look at the problem because the comptroller’s website only released a report for the 2010 through 2012 fiscal years. Many communities show habitual problems in not providing their TIF district reports to the state comptroller and have failed to report three consecutive years. It is possible that many municipalities have failed to report for much longer than the past three years.
According to state law, 180 days after the end of a fiscal year municipalities in charge of TIF districts must file a report with the comptroller’s office, and to all taxing districts overlapping the TIF district. The comptroller then must post the TIF reports online within 45 days of receiving them.
The requirements of the report include:
• Amendments to a redevelopment plan
• Audited financial statements
• Executive and legal statements certifying compliance with state TIF law
• Description of property purchased
• Itemized list of all expenditures
• List of intergovernmental agreements
• Information regarding contracts with third parties
Without proper reporting it is impossible for the public to hold taxing bodies accountable for their decisions. A lack of transparency is a recipe for fraud, waste and abuse of taxpayer dollars.
State reforms are necessary to fix this problem.
Suggestions for reform
Unfortunately, there are no penalties for communities that don’t comply with Illinois TIF law. Essentially, communities only receive a light slap on the wrist when they fail to comply. This must change.
TIF law should be reformed to include strong penalties for communities failing to provide their TIF reports to the public on a timely basis.
If the comptroller finds that an annual TIF report is more than 90 days late, the offending municipality should be prohibited from issuing any new bonds or approving any new expenditures for anything other than compiling or filing its TIF reports.
If an annual report is filed more than 180 days late, TIF districts should face stiff financial penalties. If a TIF district were to have its tax increment base adjusted by its rate of inflation for each year they failed to file a report, we likely would see compliance rates improve dramatically.
Additionally, municipalities should be required to post annual TIF reports on their own website as soon as they are filed with the comptroller. Local residents footing the tab for TIF district spending are much more likely to visit their municipality’s website than the comptroller’s.
TIF district reporting non-compliant communities
Maryland has so much health fraud it is unbelievable. As we listen to Maryland politicians call for cuts to entitlements it makes one sick to the stomach that these pols watch as the fleecing of these entitlement programs happen each year in the billions. I showed how Maryland avoids Medicare oversight and there is probably tons of fraud there as well. We need this back into Federal Trusts and state coffers. Remember, the state meets Federal funding so loses are to both.
We had an audit with the Federal Housing Authority that found fraud throughout this system as well.
DO YOU HEAR ANY OF THESE CANDIDATES TALKING ABOUT ALL OF THIS?
Analysis: Federal audit questions state spending on several programs
July 25, 2013 at 11:33 pm
By Charlie Hayward For MarylandReporter.com
An outside audit of how the state of Maryland spent almost $13 billion it got from the U.S. government found significant problems in some of the programs the state runs with federal dollars.
MarylandReporter.com frequently covers audit results published by the state’s Office of Legislative Audits. OLA’s audit work is similar to internal audits done in the private sector.
A different kind of audit—known as a “Single Audit” and equivalent to an external audit—covers all federal money spent by the state of Maryland. These annual audits are performed by an outside CPA firm hired by the state comptroller. After the comptroller accepts the audit report, it is sent to the federal government.
The latest audit report, performed by SB & Company LLC of Cockeysville, covers $12.8 billion spent by the state during fiscal 2012 that originated from federal coffers. Audit results are used by federal agencies to monitor the state’s compliance and spending. By law, the federal government can respond to audit exceptions by requiring the state to return misspent money or money the auditors cannot find due to bad records.
Serious deficiencies in fiscal 2012 findings
The 2012 single audit found several significant deficiencies, defined by the federal government as “important enough to merit attention by those charged with governance.” The most serious deficiencies included:
1. Beneficiaries of Medicaid and the Children’s Health Insurance Program (CHIP) could not be verified to be eligible for assistance under the prevailing regulations. The auditor sampled 60 participant files and four files either couldn’t be located or the eligibility determinations were otherwise deficient (7% deficiency rate.) Medicaid and CHIP are administered by Maryland’s Department of Health and Mental Hygiene (DHMH), which is required to keep a file for each beneficiary that objectively demonstrates eligibility determinations and supervisory approvals.
2. Beneficiaries of the Temporary Assistance for Needy Families (TANF — what used to be called “welfare”) could not be verified to be eligible for assistance under the prevailing regulations. The auditor sampled 60 participant files — 10 files couldn’t be located; and 50 files evidenced deficiencies with participant income verifications (100% deficiency rate.) This program is administered by Department of Human Resources (DHR).
The auditor found that the high number of missing files “prevented the audit of the requirement.” In other words, the audit firm could not do the work it was contracted to perform because of the department’s poor recordkeeping.
3. Beneficiaries of Adoption Assistance could not be verified to be eligible for assistance under the prevailing regulations. The auditor sampled 60 participant files and four files evidenced deficiencies regarding participants’ eligibility (7% deficiency rate.) This program is administered by the Department of Human Resources.
Problems at University of Baltimore and Coppin State
4. At the University of Baltimore, 23 out of 40 students sampled were incorrectly classified as enrolled part-time or full-time when in fact they had withdrawn from school (58% deficiency rate.) This inaccurate reporting went into a database used by the U.S. Department of Education for managing student loan repayment dates, grace periods, and deferments.
5. At Coppin State University, 40 out of 40 sampled students withdrew from classes and thus took zero credits, but 15 were incorrectly reported as attending half-time, 23 were incorrectly reported as attending full-time, and two were incorrectly reported as less than half-time (100% deficiency rate.) This inaccurate reporting was entered into the same federal database for loan administration described above. (The university system has appointed an interim president to revamp the administrative structure at Coppin after a task force found massive problems there.)
6. At Coppin State, 14 of 40 students received student loans or grants, but the university was unaware those students dropped or withdrew from class, causing the university to keep rather than return $20,000 to the U.S. Department of Education.
Unresolved findings from prior years
The state has longstanding difficulties with satisfying the auditor that program beneficiaries are in fact eligible for assistance. Shortcomings over the years cross multiple federal programs administered by several state agencies. This year’s single audit report describes a variety of unresolved findings, many repeated over several years and one of which dates back to fiscal 2004.
The findings correspond with questionable eligibility of beneficiaries for Medicaid, CHIP, TANF, Foster Care, Adoption Assistance, Low-Income Home Energy Assistance Program, and student aid. These programs are administered by the departments of Health and Mental Hygiene and Human Resources and by state universities. The auditors reported several types of problems: Files were lost or incomplete; files contained inaccurate information leading to improper assistance; and secondary approvals of initial eligibility determinations were absent.
Another longstanding problem area involves inadequate inventory control over food stocks provided by U.S. Department of Agriculture. This weakness has existed since at least 2010 without being resolved. USDA delivers surplus food commodities to the control of DHR, which in turn offers foodstuffs through 22 organizations throughout the state. The auditor describes a concern for “abuse, including fraud” that can’t be detected due to lack of inventory control. The auditor seems to be worried about the possibility for theft by those who have physical custody of the food rather than beneficiaries. During fiscal 2012, this program involved $4.2 million of food distributions by DHR.
Another finding involves state scholarships under the TANF program that the state awarded under the rationale that “post-secondary educational attainment by State residents decreases the incidence of out-of-wedlock births by raising the ‘opportunity cost’ of having children outside of marriage. Studies also show that professional careers (often the product of higher education) delay fertility.” The auditor questioned this spending ($43 million) in its 2010 audit, and the finding is unresolved.
Federal aid to Maryland growing fast
Maryland’s recent budgets show a historical trajectory upwards. From 2007 to 2014, overall costs of operating Maryland government have increased 30% (or 3.5% compounded annually.) Revenues to pay for government come from many sources; primarily income taxes, sales taxes, lottery, borrowing, and the federal government. Taxpayers may be surprised to know the federal government is the state’s largest source of revenue—paying for almost 30% of the cost of Maryland’s operations.
It also may surprise some that state revenues from the federal government are rising at a much faster rate than any other revenue source. Federal aid to the state will rise from $6.5 billion to $9.8 billion in the eight years ended June 2014—increasing almost 51% (approximately 6.1% compounded annually.)
Some programs are clean, but some of the largest have longstanding problems
The audit did not detect any deficiencies in many large federal assistance programs being managed by the state, including programs relating to infrastructure and research & development. However, the programs where the state has had longstanding difficulties include some of the largest and most costly social programs in the state. Medicaid and TANF, for instance, were $4.1 billion and $222 million, respectively, in FY 2012. It’s also important to note that the audit was not designed to determine the total dollars that were unsupported or misspent, and the state has no way to quantify this.
Longstanding problems in programs where the state must document participant eligibility determinations are not unique to Maryland. The more people who become eligible for assistance and the larger the programs get, the more cumbersome the programs are to administer and audit. And so a certain level of payment errors can be expected, in Maryland and across the country.
Charlie Hayward recently retired after 30 years’ experience with performance, IT, and financial auditing of a wide variety of government programs and activities. He can be reached at email@example.com.