News: CJ Exclusives

State Controller’s Independence Valued

Like many states, N.C. tries to insulate office from politics

When state officials realized they had a clogged and inefficient criminal justice data system following the 2008 murder of former UNC-Chapel Hill Student Body President Eve Carson, they turned to the state controller’s office for a solution to the problem.

The controller’s office earlier had shown expertise with complicated systems with its work on the state’s Beacon system, which integrated the state’s payroll and human resources databases, so the agency was a natural choice to create a new system that would make critical information flow more smoothly to court and law enforcement officials.

“What I absolutely believe in my heart is that you and I are living in a safer environment today because of the work that the state controller’s office did in building that data application system and making it available for the law enforcement community,” said State Controller David McCoy, who took office in September 2008.

Before the murders, officials couldn’t go to one place to look up judicial and criminal information about a defendant or suspect. Officials believe that had information been readily available, one of Carson’s killers — Demario Atwater — would not have had the opportunity to kidnap and kill the UNC student.

Atwater had been arrested for violating probation on a breaking-and-entering charge, but when he appeared March 3, 2008, in Wake County court, Atwater’s file — which indicated he also had violated probation on a weapons charge and should have been incarcerated — was sent to the wrong courtroom. The statewide computer system in use at the time did not reflect the weapons violation, Atwater’s court date was rescheduled for the end of March, and he was released.

Atwater and Laurence Lovette Jr. killed Carson two days after Atwater was freed. Both are serving life sentences for murdering Carson. Lovette also was charged in the January 2008 murder of Duke University graduate student Abhijit Mahato and is awaiting trial.

The General Assembly called on the Office of the State Controller to develop the Criminal Justice Law Enforcement Automated Data Services program — more commonly known as CJLEADS — primarily because of the office’s history with the Beacon system, said Kay Meyer, CJLEADS program director.

“I think it was the logical place,” Meyer said. In addition, as a more objective third party, the controller’s office would be in a better position to build the data system to encompass all the information and make it accessible to workers in the judicial system, corrections system, and law enforcement, Meyer said.

The CJLEADS database is updated nightly, providing real-time information on outstanding warrants, probation statuses, court orders, corrections information, and other law enforcement data.

The state controller’s office sits in a building on Bush Street in north Raleigh, near the Capital Beltline. It employs about 200 people, and has accounting functions that supplement but don’t duplicate the duties of the state’s other top financial officials.

A 2010 report by the General Assembly’s Program Evaluation Division found that consolidating the controller’s office into other agencies would deliver some savings to taxpayers. However, the legislative researchers concluded that consolidation would sacrifice the office’s independence.

When the idea of merging the functions of the controller’s office into another department was floated in 2011 during former Gov. Bev Perdue’s government consolidation efforts, State Auditor Beth Wood suggested it would be unwise to take that office out of the loop of financial accountability.

“The state auditor’s office is the external auditor for the state’s books,” Wood said. “It would never work for you to put [the controller’s] function in my own office, because I would be auditing my own books.”

“I think having that statewide internal control set-up kind of helps reduce the opportunity for fraudulent activities,” said Tom Newsome, chief deputy controller. “There’s really no duplication of activity. They are sequential activities that take place.”

Financial management dispersed

Five agencies perform budget and financial management functions in state government. In addition to the state controller’s office and state auditor’s office, there are the Office of State Budget and Management, The Department of the State Treasurer, and the Department of Revenue.

The heads of two of those offices — auditor and treasurer — are elected statewide. Beth Wood is the auditor and Janet Cowell is the treasurer. Two other agency heads are appointed by and serve at the pleasure of the governor. They are Revenue Secretary Lyons Gray and State Budget Director Art Pope.

The state controller, who serves a seven-year term, undergoes a different selection process. He is nominated by the governor and must be confirmed by the General Assembly before taking office.

“It’s extremely good to have that seven-year term and have some stability in financial reporting, Newsome said.

Wood agreed that the seven-year term, along with confirmation by the legislature, gives the controller some insulation from politics.

“He is independent from influence from accounting things, moving numbers around where they shouldn’t be,” Wood said.

The division of responsibilities in state government gives the Office of State Controller primary oversight in cash management, cost allocation, internal controls, payroll, and administering the accounting system. It also puts together the state’s comprehensive annual financial report.

Information from the controller’s office is readily available in formats accessible to both executive and legislative branches of government.

Other departments have their primary roles too. The Department of Revenue collects taxes. The auditor’s office primarily conducts financial and performance auditing. The State Treasurer’s office performs banking functions, investment management, unclaimed property, debt management, and oversees the state’s retirement system. The Office of State Budget develops the governor’s budget and executes the budget after it is passed by the General Assembly and signed by the governor. The budget office also oversees federal and other grants.

States use a variety of methods to select their controllers. In 15 other states, the controller is appointed by the governor. The controller is appointed by a department head in 19 states, is elected by the voters in 14 states, and is chosen by the state legislature in one state —Tennessee.

In 11 states, including North Carolina, the controller’s office is independent or freestanding. The controller’s office is in the finance department in 23 states. Other states house it in either their finance, administration, or auditor’s offices.

Barry Smith is an associate editor of Carolina Journal.