Opinion ID: 2102198
Heading Depth: 1
Heading Rank: 3

Heading: The Legislature Authorized Perfomance Audits

Text: Like the Constitution, the General Municipal Law neither explicitly authorizes nor explicitly prohibits performance audits. Unlike the Constitution, however, the General Municipal Law provides certain particularity as to the State Comptroller's powers. Sections 33 and 34 expressly authorize the Comptroller to examine the accounts of all municipal officers to inquire into the financial condition, resources and method and accuracy of [the] accounts of any municipal corporation, and to examine into its financial affairs. Clearly these powers go beyond the verification of financial records and internal controls. As noted in Ronan v Levitt (42 AD2d 10, 12, lv denied 33 NY2d 514), interpreting analogous statutes, courts of this State have been extremely liberal in construing legislation designed to provide a system of financial checks and balances, particularly in the area of governmental agencies and public authorities. [3] The history of the statutes, moreover, unambiguously demonstrates that the Legislature expected the State Comptroller might conduct audits into the effective use of State funds by political subdivisions. In signing the 1971 amendments to the General Municipal Law that added New York City (as well as Buffalo and Rochester) to the statute's reporting and auditing requirements, for example, the Governor noted that [u]niform Statewide audits of all levels of local government required by the bill can provide a great contribution to efficient and economic administration and use of the taxpayers' dollar (Governor's Mem of Approval, Bill Jacket, L 1971, ch 20, reprinted in 1971 McKinney's Session Laws of NY, at 2605). As the Governor had observed in seeking that legislation, sixtythree cents of every tax dollar [the State collects] goes back to the local governments to help them meet their responsibilities, and it is the State's responsibility to see that performance standards set by the Legislature in connection with    State-supported services are lived up to by local government (1971 Public Papers of Nelson A. Rockefeller, at 60). The Division of the Budget, in recommending that the Governor sign the bill, echoed the sentiment that the Comptroller's audits would enable the State to fulfill its responsibility to insure the efficient and effective use of the City's funds and help promote efficiency in their financial administration (Mem of Div of Budget, Bill Jacket, L 1971, ch 20). As a final argument, the City notes the explicit authority of the City Comptroller, under the City Charter, to conduct such audits, urging that the Legislature did not intend to duplicate those powers. That argument is flawed. First, the provision upon which the City relies was enacted by the people of the City, and as such obviously did not displace the State Comptroller's authority under General Municipal Law §§ 33 and 34. Second, there is nothing to suggest that the State Legislature intended that performance audits of the City would be conducted exclusively by the City Comptroller. Indeed, in 1985, the Legislature established the Office of the Deputy Comptroller for the City of New York as a permanent division within the Office of the State Comptroller, unambiguously evidencing its intention that the State Comptroller have the power to inquire into the operations of the City and its agencies irrespective of the City Comptroller's coextensive powers (see, Executive Law § 41-a). Finally, the City concedes that the State Comptroller is authorized to conduct financial audits of City agenciesa duty similarly assigned by the City Charter to the City Comptroller. We therefore hold that by enacting General Municipal Law §§ 33 and 34, the Legislature authorized the State Comptroller to conduct performance audits of political subdivisions of the State, including the City. Having determined that performance audits of political subdivisions, including the City, lie within the Comptroller's authority, we conclude on a note of caution. Before us, the City objects to the subpoenas only insofar as they permit the Comptroller to conduct performance audits. The City does not more particularly challenge the proposed examinations that triggered this litigation. We therefore have no occasion to pass on the specifics of the proposed audits or address any other issues that might, in individual instances, circumscribe the authority we recognize today. Accordingly, the order of the Appellate Division should be affirmed, with costs. Order affirmed, with costs.