Neb. bill would require review of small agencies

LINCOLN, Neb. (AP) - Small state agencies in Nebraska would have to undergo outside financial reviews under a measure introduced Monday in response to questionable expenses at the Nebraska Abstracters Board of Examiners.

The proposal would end the current state practice of allowing small agencies to review themselves before a formal state audit, with approval from the state Department of Administrative Services. It would apply to agencies with fewer than seven full-time employees.

In June, State Auditor Mike Foley’s office reported a series of questionable and possibly illegal expenditures and accounting practices at the board.

Auditors said the board increased its annual application fee beyond what was allowed in state law and contracted with the board’s director for personal use of a state-owned laptop, including a plan to buy it inexpensively after three years. The audit also found a $100 meal for two people who were neither board members nor employees, and a nearly $200 reimbursement to the director for candy, soft drinks and a gift card. The director gave the items as gifts to other state employees, according to the audit.

“The committee believes this reflects badly on the board and on state government as a whole, even though the dollar amounts are relatively small,” said Sen. John Harms of Scottsbluff, chairman of the Legislature’s Performance Audit Committee, which sponsored the bill.

In a written response, the board said it would comply with all state regulations in the future and promised to rescind the computer agreement.

Staff members for the Performance Audit Committee later learned that the Department of Administrative Services was planning to rescind the board’s authority to pre-audit its own expenses.

Harms said the bill would have a limited impact on state agencies. Of the 19 non-code agencies with fewer than seven employees, only four conduct their own financial reviews, including the abstracters’ board.

Non-code agencies are not subject to the governor’s direct control; governors appoint board directors, but not the executive director.