Research: Topics: Environment: Preliminary Guide to Environmental Sources

Preliminary Guide to Environmental Sources

Department of Audit and Control

Current Functions. Under the direction of the State comptroller, chief fiscal officer of the State, the Department of Audit and Control is responsible for administering the accounts of the State. The department carries out this responsibility by paying the State's bills and payrolls; auditing all revenues, receipts, and claims against the State; auditing the records, accounts, and financial and management practices of all State agencies and institutions; supervising the fiscal affairs of all units of local government in the State; reviewing the financial plans and fiscal and management practices of New York City; investing State funds and issuing bonds and notes; administering the State's retirement and social security agencies; administering the State's cash flow; and providing fiscal legal advice for State and local government agencies.

Organizational History. This department traces its origin to 1625 when New Netherland authorities appointed a schout-fiscal to examine the accounts at New Amsterdam. In 1658, a Board of Audit consisting of the director general, receiver general, and a council member assumed auditing responsibilities. After the English took control in 1664, the auditing function was carried out by an auditor general appointed by royal authorities. However, the colonial assembly, established in 1683, gradually asserted greater control over fiscal matters. The responsibility for fiscal matters continued to be divided between royal officials and the elected assembly until the American Revolution.

During the early days of the Revolution, the Provincial Congress chose auditors from among its own members and in mid-1776 appointed an auditor general. The first State constitution of 1777 created an Office of State Treasurer to collect and disburse revenues as authorized by the legislature but did not mention an auditor. However, an auditor general was appointed under a clause providing for the appointment of "other officers."

In 1782 (Chapter 21, Fifth Session), the legislature established the office of auditor to assume responsibility for settling the State's accounts. In 1787 the auditor assumed the duties relating to collection and commutation of quit rents previously carried out by the treasurer. In 1788, the auditor was directed to settle accounts with the United States and certain other states.

To avoid conflicts between the auditor and the treasurer, the legislature established the Office of Comptroller in 1797 (Chapter 21), combining the auditor's power to audit and the treasurer's power to pay into one chief fiscal officer. The comptroller assumed all duties of the auditor and certain powers of the treasurer, including drawing up payment warrants, investing the State's funds, and borrowing money on the credit of the State. The comptroller was appointed by the Council of Appointment until the 1821 constitution provided for election of the comptroller by the legislature. Under the 1846 and subsequent constitutions, the comptroller was elected in a general election.

The comptroller was designated a member of the Board of Commissioners of the Land Office in 1801 and was directed to sell lands for payment of delinquent State taxes. When construction of the canal system began in 1817, the comptroller was appointed to the Board of Commissioners of the Canal Fund and later to the Canal Board. The commissioners of the Canal Fund were responsible for managing the debts and funds of the State's canals. The Canal Board, comprised of the commissioners of the Canal Fund and the canal commissioners (responsible for canal construction and repair), exercised overall supervision over the State's canal system. The comptroller remained a member of the Land Board until it was reorganized in 1926, and of the Canal Boards until they were abolished in 1926.

The comptroller examined the financial affairs of banks from 1843 until the creation of the Banking Department in 1851. From 1849 until the creation of the Insurance Department a decade later, the comptroller regulated the organization and operation of insurance companies. Beginning in 1865, State-supported hospitals and charitable institutions were required to report on their financial condition to the comptroller, and in 1873 the comptroller was empowered to examine the financial affairs of prisons and various other State institutions. In 1880 the comptroller was authorized to initiate a system of collecting taxes on corporations. The comptroller assumed the duties of the former office of canal auditor in 1883. Beginning in 1905, municipal divisions of the State were required to adopt uniform fiscal reporting systems and to file annual reports subject to examination by the Comptroller's Office.

In 1910 (Chapter 149) State agencies were required annually to submit a proposed expenditure plan to the comptroller, who then forwarded recommendations to the Assembly Ways and Means and the Senate Finance committees. This was the forerunner of New York State's executive budget process. In 1913 the comptroller's auditing powers were strengthened by a law (Chapter 342) requiring agencies to adopt a uniform system of accounting and fiscal reporting, to verify purchases and services, and to obtain the comptroller's prior approval of all contracts over one thousand dollars. In 1920 (Chapter 741) a State employees retirement system was established under the administrative control of the comptroller.

The 1925 constitutional amendment reorganizing State government placed the elected comptroller at the head of a new Department of Audit and Control and assigned the office the duties of auditing all vouchers before payment, auditing the accrual and collection of all revenues and receipts, and prescribing accounting methods necessary to perform these activities. The 1926 law establishing the Department of Audit and Control (Chapter 614) transferred responsibility for the canal debt sinking fund from the commissioners of the Canal Fund to the comptroller. The comptroller's responsibility for licensing private detectives, auctioneers, steamship ticket agents, and theater ticket brokers was transferred to the Department of State. The new Department of Taxation and Finance, which absorbed the duties of the former State treasurer, was given the comptroller's former responsibility for administering revenue-collecting activities. This responsibility included activities under any law related to direct State taxes; duties of the comptroller concerning land taxes and land sales for payment of delinquent taxes; and custody of State employee retirement funds.

In 1975 (Chapter 219), the duties of the welfare inspector general, relating to investigation of complaints of abuses, fraud, or violations of the welfare system, were transferred to the Department of Audit and Control. Another law that year (Chapter 868) directed the comptroller to assist the Emergency Financial Control Board in carrying out its responsibilities relating to New York City revenues, expenditures, and indebtedness. In that year, the new office of the State Deputy Comptroller for New York City was established as a part of the department to fulfill this mission.

DEPARTMENT OF AUDIT AND CONTROL (1927- )

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