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Court rules to restrict Vermont auditor's oversight of state contractors

The exterior of the Vermont Supreme Court building on State Street in Montpelier.
Matthew Smith
/
VPR File
A recent ruling from the Vermont Supreme Court substantially restricts the role of the state auditor. The office no longer is guaranteed access to the financial information of contractors hired by state agencies, like OneCare Vermont.

A few years ago, State Auditor Doug Hoffer asked to see the payroll records of a large health care organization called OneCare Vermont. That’s after he noticed a more than $3 million jump in their budget for salary and benefits from one year to the next. He was curious about why.

But Hoffer never got the information he wanted, because OneCare refused to send him detailed payroll information. So he sued.

The case made its way up the Vermont Supreme Court and last week, the justices sided with OneCare. They said the state auditor’s office is not guaranteed access to the records of any private contractors for state agencies, unless the state auditor is explicitly mentioned in the contract.

That decision reverberates far outside the bounds of the payroll records of one company. State agencies pay outside organizations hundreds of millions of dollars each year, on everything from paving roads to housing inmates in out-of-state prisons and providing mental health services.

“That, to me, is really an existential threat to the value and purpose of this office.”
Doug Hoffer, state auditor

“What that does is say, ‘OK, we are basically carving out a substantial part of all the money spent by state government from your purview,’” Hoffer said. “That, to me, is really an existential threat to the value and purpose of this office.”

His office conducts performance analyses of different government programs, to provide a check on whether taxpayer dollars are being used effectively. He says this ruling hamstrings his ability to do his job, because contracting work is so much more commonplace than it used to be.

“It is ludicrous to think that it was the intent of the Legislature when they wrote that language, now decades ago, to say, 'well, it’s OK to get stuff from state entities but not from contractors,’” Hoffer said. “I think they just didn’t even think about it.”

In this case, the court noted that there’s already a state agency responsible for financial oversight of organizations like OneCare — the Green Mountain Care Board.

"[The law] plainly gives the board authority to review OneCare’s financial records, but it does not mention the auditor,” the judges wrote in their decision. “We presume this omission was intentional.”

Information like OneCare’s budget and executive salaries is laid out on the Green Mountain Care Board’s website.

"[The law] plainly gives the board authority to review OneCare’s financial records, but it does not mention the auditor. We presume this omission was intentional.”
Vermont Supreme Court decision

And Vicki Loner, the CEO of the company, says they are already highly regulated compared to their peers.

"We are part of an association called the National Association of Accountable Care Organizations,” she said. “I do not know of any of them that has the amount of oversight that we have here in Vermont.”

“We really felt like this could be precedent setting to have the state auditor be able to audit anybody that has a contract with the state of Vermont,” Loner added. “If the Supreme Court and the trial court hadn’t dismissed the case.”

Hoffer argues that his office is independent in a way the Green Mountain Care Board, and other state agencies, are not. The board is tasked with promoting the concept of OneCare to reduce health care costs, in addition to regulation.

“The whole point of an independently elected State Auditor is to hold state agencies accountable,” he wrote in a statement.

He plans to work with state legislators and the Scott administration to give his office back the authority to do that job.

“We have to,” he said.

Lexi Krupp is a corps member for Report for America, a nonprofit national service program that places journalists in local newsrooms to report on under-covered issues and regions.

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Lexi Krupp is a reporter covering the Upper Valley and Northeast Kingdom.
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