In re: Subpoena Request of Kathleen McGuiness, Delaware State Auditor of Accounts ( 2022 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
In re: Subpoena Request of :
Kathleen McGuiness, :C.A. No. N21M-08-003-CAK
Delaware State Auditor of Accounts :
Submitted: July 15, 2022
Decided: August 10, 2022
Upon Motion to Quash by Delaware Department of Health and Social Services
DENIED
MEMORANDUM OPINION AND ORDER
Luke W. Mette, Esquire, Armstrong Teasdale LLP, 300 Delaware Avenue, Suite 210,
Wilmington, DE 19801, Christopher P. Lynett, Esquire and Bianca A. Valcarce,
Esquire, Armstrong Teasdale LLP, 2005 Market Street, Floor 29, One Commerce
Square, Philadelphia, PA 19103, Attorneys for Delaware Office of Auditor of Accounts.
Joanna S. Suder, Esquire, Deputy Attorney General, Carvel State Office Building, 820
North French Street, 6th Floor, Wilmington, DE 19801, Attorney for Delaware
Department of Health and Social Services.
KARSNITZ, R.J.
I. BACKGROUND
A. Facts and Procedural History
By letter dated May 4, 20211 the Delaware Office of Auditor of Accounts
(“OAOA”) requested that the Delaware Department of Health and Social Services
(“DHSS”) produce a fifteen-point list of items over a three-year period2 from DHSS’s
Division of Medicaid and Medical Assistance (“DMMA”) in connection with a
performance audit of Medicaid eligibility (the “Audit”). OAOA stated the objectives of
the Audit were to determine “whether DMMA is complying with federal and state
requirements, has effective internal controls, and incorporates data integrity throughout
the program.”3
By letter dated June 3, 20214 DHSS requested clarification as to OAOA’s
authority to conduct the type of audit requested. Specifically, DHSS asked the Auditor
to provide the following:
1. the statutory authority under which OAOA can conduct a performance audit
of Medicaid eligibility;
2. the statutory authority under which DHSS can share specific Medicaid
participant information, and the connection between that authority and 31 Del.
C. § 1101;
1
Exhibit B to Motion to Quash Subpoena (Trans. ID. 66865014).
2
Id.
3
Id.
4
Exhibit E to Motion to Quash Subpoena (Trans. ID. 66865014).
2
3. an explanation as to why the annual Statewide Single Audit is insufficient to
meet the OAOA request;
4. whether OAOA would be conducting the Audit or hire outside auditors to
assist;
5. an explanation as to why Audit & Recovery Management Services (“ARMS”)
is insufficient to conduct a performance audit of Medicaid eligibility; and
6. an explanation as to why the Medicaid Integrity Program (“MIP”) unit of
DMMA is insufficient to detect fraud and abuse with oversight from the
Centers for Medicare & Medicaid Services (“CMS”).5
By letter dated June 22, 2021,6 OAOA responded that it had such authority under
various sections of Title 29, Chapter 29 of the Delaware Code, as more fully discussed
below.
By letter dated July 30, 2021,7 DHSS advised OAOA that, although DHSS did
not believe that OAOA had the statutory authority to compel the release of all the items
requested, DHSS would provide the following:
1. Screenshots from the federal Medicaid Budget and Expenditure
System (“MBES”) showing funding and expenditures during the
audit period;
2. Copies of the annual Statewide Single Audit, Payment Error Rate
Measurement (“PERM”), and Medicaid Eligibility Quality Control
(“MEQC”) reports and corrective action plans for the audit period;
3. CMS approved verification plan describing data sources used in
eligibility determinations;
4. Organizational charts for DHSS and DMMA;
5
Id.
6
Exhibit F to Motion to Quash Subpoena (Trans. ID. 66865014).
7
Exhibit G to Motion to Quash Subpoena (Trans. ID. 66865014).
3
5. Medicaid State Plan and Delaware Social Services Manual (website
links) and copies of DHSS/DMMA administrative notices issued
during the audit period; and
6. Description of staff training program and copies of staff training
materials.8
On August 4, 2021, OAOA filed a Complaint for Issuance of Subpoena (the
“Complaint”) directing DHSS to produce the requested documents.9 The Complaint
asserted that OAOA’s subpoena power to compel production of documents was
provided by statute under 29 Del. C. §2910.10 This Court issued the subpoena (the
“Subpoena”) on August 4, 2021.11
On October 13, 2021, counsel for DHSS informed the Court that the parties had
exchanged communications regarding the basis for various items requested in the
Subpoena.12 After meeting and consulting on October 19, 2021, October 25, 2021, and
October 28, 2021, on November 1, 2021 counsel for DHSS informed the Court that the
parties narrowed the issues to be presented to the Court at a hearing on November 2,
2021 to three:
1. Whether OAOA is legally permitted to receive the Personally
Identifiable Information of Medicaid beneficiaries in connection
with the proposed Audit;
8
Id. DHSS further advised “We will endeavor to provide these to you by August 31, 2021. We will
continue discussions with our legal counsel to evaluate your remaining requests.”
9
Complaint.
10
Complaint ¶ 2.
11
Subpoena Duces Tecum (Trans. ID. 66820467).
12
Letter from Ann C. Cordo, Esquire to the Court (Trans. ID. 67010811).
4
2. Whether OAOA is legally permitted to have two employees
receive read only access to the entire State Medicaid system for
the purpose of conducting the Audit; and
3. Whether OAOA has legal authority to conduct a performance
audit of DHSS in the manner and scope specified in the
Subpoena.13
B. Motion to Quash
On August 19, 2021, DHSS filed the Motion to Quash Subpoena (the
“Motion”)14 under the Superior Court Civil Rules.15 On October 26, 2021 OAOA
filed its pro se Response to the Motion to Quash.16 On November 2, 2021, the Court
held a hearing on the three issues described above and took the Motion under
advisement.17 On January 6, 2022 the Court directed that the parties submit
simultaneous briefing on one threshold issue: does OAOA have the authority to
conduct a performance audit of Medicaid eligibility, a question of first impression
in Delaware.18 Specifically, the Court instructed the parties’ briefings to address
the following:
1. statutory construction (given that the term “postaudits” is not defined,
and the term “performance audit” does not appear in Title 29);
2. the Ohio statute referenced by DHSS – Section 117.19 in Revised
Title 1, and any other relevant Ohio statutes;
3. case law construing/discussing Section 117.19;
13
Letter from Ann C. Cordo, Esquire to the Court (Trans. ID. 67058362).
14
Motion to Quash Subpoena (Trans. ID. 66865014).
15
Super. Ct. Civ. R. 45(c)(3)(A)
16
Response to Motion to Quash Subpoena (Trans. ID. 67046014).
17
See Trans. of Motion to Quash Subpoena (Trans. ID. 67078753).
18
Letter from the Court dated January 6, 2022 (Trans. ID. 67214766).
5
4. statutes in other states addressing or relating to the scope of a State
Auditor’s authority and/or definitions of “postaudit” and
“performance audit;” and
5. any other authorities supporting the parties’ respective positions on
the issue of OAOA’s authority and the scope of the Subpoena.19
DHSS and OAOA, through counsel,20 filed their Opening Briefs on March 25,
2022. DHSS filed its Reply Brief on April 14, 2022. OAOA filed its Answering Brief
on April 14, 2022. On May 27, 2022 counsel for OAOA filed two supplemental exhibits
to its Opening Brief.21 I held oral argument on July 15, 2022. This is my decision on
the Motion.
II. STANDARDS OF REVIEW
A. Quashal
The three rule-based grounds for me to quash the Subpoena are if it:
(i) fails to allow reasonable time for compliance,
(ii) requires disclosure of privileged or other protected matter and no
exception or waiver applies, or
(iii) subjects a person to undue burden.22
DHSS has not argued that it was not given a reasonable time to comply with the
Subpoena. It has stated that the Subpoena requires the disclosure of certain Personally
19
Id.
20
Until February 21, 2022, OAOA proceeded pro se in this matter. OAOA retained counsel only after
the Governor’s Office and the Delaware Department of Justice (“DOJ”) agreed that, due to a DOJ
conflict, OAOA could retain special outside counsel. The briefing schedule was subsequently
extended.
21
Letter from Luke W, Mette, Esquire to the Court (Trans. ID. 67668518).
22
Super. Ct. Civ. R. 45(c)(3)(A)
6
Identifiable Information with respect to Medicaid beneficiaries, but the parties have
apparently worked around that issue and reached an accommodation.23 Nor has DHSS
asserted an undue burden, other than to acknowledge the fact that delivery of the
Subpoena items would require time and effort and that the requests were duplicative of
those of other government bodies. Nor does DHSS argue that OAOA does not have
subpoena power, which is expressly granted to OAOA by the statute.24 At oral
argument, I advised DHSS that, if it had traditional Rule 45 issues, it could present them
to me at any time.
Rather, DHSS argues that the Subpoena should be quashed because OAOA “does
not have authority to conduct the Audit.”25 OAOA correctly states that, by invoking
Rule 45, DHSS bears “the burden to establish a fact-based objection” to show the
Subpoena should be quashed.26 Since OAOA argues that DHSS has not met that burden,
OAOA also argues that the Motion should be denied on that basis alone. However,
regardless of the vehicle by which it was raised, I will consider and decide the authority
issue.
B. Statutory Construction
23
The parties reached agreement in principle (before counsel was retained by OAOA) for the delivery
of several Subpoena categories.
24
29 Del. C. §2910.
25
Mot. ¶ 5.
26
Del. Dep’t of Fin. v. AT&T Inc., 239 A.3d 541, 556 (Del. Ch. 2020), aff’d, 253 A.3d 537 (Del.
2021).
7
The question of whether OAOA has the authority to conduct the proposed
performance audit of Medicaid eligibility, discussed below, is one of statutory
construction. When faced with a novel question of statutory construction, I “must seek
to ascertain and give effect to the intention of the legislature as expressed in the statute
itself,” and should “give the statutory words their commonly understood meanings.”27
“The ‘most important consideration for a court in interpreting a statute is [the language]
the General Assembly used in writing [the statute].’”28 When analyzing a statute, it is
presumed that “the General Assembly purposefully chose particular language, and the
court will therefore construe statutes to avoid surplusage if reasonably possible.”29
When a statute is found to be clear and unambiguous, the plain meaning of the
statutory language controls.30 “The fact that the parties disagree about the meaning of
the statute does not create ambiguity.”31 Rather, a statute is ambiguous “only if it is
reasonably susceptible to different interpretations, or ‘if a literal reading of the statute
27
Kofron v. Amoco Chems. Corp., 441 A.2d 226, 230 (Del. 1982).
28
Salzberg v. Sciabacucchi, 227 A.3d 102, 113 (Del. 2020) (quoting Boilermakers Loc. 154 Ret. Fund v.
Chevron Corp., 73 A.3d 934, 950 (Del. Ch. 2013)); Taylor v. Diamond State Port Corp., 14 A.3d 536, 542
(Del. 2011) (“[T]his Court's role is to interpret the statutory language that the General Assembly actually
adopt[ed], even if unclear and explain what [the Court] ascertain[s] to be the legislative intent without rewriting
the statute to fit a particular policy position.”).
29
Id. at 117 (citing Sussex Cty. Dep't of Elections v. Sussex Cty. Republican Comm., 58 A.3d 418, 422
(Del. 2013).
30
Chase Alexa, LLC v. Kent Cty. Levy Ct., 991 A.2d 1148, 1151 (Del. 2010) (citing Dir. of Rev. v.
CAN Hldgs., Inc., 818 A.2d 953, 957 (Del. 2003).
31
Id. (quoting Centaur Partners, IV, v. National Intergroup, Inc., 582 A.2d 923, 927 (Del.1990).
8
would lead to an unreasonable or absurd result not contemplated by the legislature.’”32
C. Weight Given to Agency Interpretation of Statute
In reviewing the propriety of the Subpoena under Title 29, Chapter 29 of the
Delaware Code, I am mindful of the Delaware Administrative Procedure Act’s
deference to OAOA’s interpretation of its own enabling statute, which authorizes the
Subpoena:
The Court, when factual determinations are at issue, shall take due account of
the experience and specialized competence of the agency and of the purposes
of the basic law under which the agency has acted.33
As this Court recently stated:
The Court engages a de novo review of a board or agency's statutory
interpretation but “may give appropriate deference to an agency's
application of its own rules or regulations.”34
32
Id. (quoting Dir. of Rev. v. CAN Hldgs., Inc., 818 A.2d 953, 957 (Del. 2003).
33
29 Del. C. §10142(a).
34
Ripple v. Delaware Board of Nursing, 2022 WL 2967227 (Del. Super. July 27, 2022); see
Matter of Scottish Re (U.S.), Inc., 273 A.3d 277, 296 (Del. Ch. 2022) (noting further that “[w]hat a
court applying Delaware law cannot do is defer to the agency's interpretation ‘merely because it is
rational or not clearly erroneous’ ”) (quoting DiPasquale, 735 A.2d at 383); see DiPasquale, 735 A.2d
at 383 (a court “may accord due weight, but not defer, to an agency interpretation of a statute
administered by it”); see also State Farm Auto. Ins. Co. v. Mundorf, 659 A.2d 215, 220 (Del.
1995) (“Although the interpretation of a regulation is ultimately a question of law for a court to decide,
substantial weight and deference is accorded to the construction of a regulation enacted by an agency
which is also charged with its enforcement.”).
9
Thus, although I will not completely defer to OAOA’s interpretation of its enabling
statute, but rather consider it de novo, I will accord due weight to OAOA’s interpretation
of the statute administered by it.
III. ANALYSIS
A. Title 29, Chapter 29
Title 29, Chapter 29 of the Delaware Code sets forth the powers, duties, and
obligations of OAOA.
1. Duties -- §2906
The duties of OAOA are set forth in 29 Del. C. §2906(a):
The Auditor of Accounts shall conduct postaudits of all the financial
transactions of all state agencies. Insofar as possible the audits shall be
made no less frequently than biennially.35
2. Scope -- §2907
The scope of OAOA’s audits is set forth in 29 Del. C. §2907:
(a) The audits shall be sufficiently comprehensive to provide, but not
limited to, assurance that reasonable efforts have been made to collect all
moneys due the State, that all moneys collected or received by any
employee or official have been deposited to the credit of the State and that
all expenditures have been legal and proper and made only for the purposes
contemplated in the funding acts or other pertinent regulations.
(b) The audits shall be made in conformity with generally accepted
auditing principles and practices.36
35
29 Del. C. § 2906(a).
36
29 Del. C. § 2907.
10
3. Contents -- §2909
The contents of OAOA’s audits are set forth in 29 Del. C. §2909:
(a) The Auditor of Accounts shall file written reports covering the
Auditor's postaudits with the state agency concerned, the Governor, the
General Assembly, the Attorney General and the Director of the Office of
Management and Budget; and, if the Auditor deems necessary, the Auditor
may present special reports to the General Assembly for consideration and
action.
(b) The audit reports shall set forth:
(1) Whether all expenditures have been for the purpose authorized in the
appropriations therefor;
(2) Whether all receipts have been accounted for and paid into the State
Treasury as required by law;
(3) All illegal and unbusinesslike practices;
(4) Recommendations for greater simplicity, accuracy, efficiency, and
economy; and
(5) Such data, information and recommendations as the Auditor of
Accounts may deem advisable and necessary.37
4. Subpoena Power -- §2910
OAOA’s subpoena power is set forth in 29 Del. C. §2910:
(a) In connection with other powers of the Auditor of Accounts, the
Auditor shall have the power to administer oaths and compel the
attendance of witnesses and the production of documents by the filing of a
praecipe for a subpoena with the Prothonotary of any county of this State.
37
29 Del. C. § 2909.
11
(b) A subpoena issued under this section shall be effective throughout this
State.
(c) Service of such a subpoena shall be made by any sheriff of this State
by serving the person to whom it is addressed personally or by leaving it
at such person's usual place of abode with a person of suitable age and
discretion residing therein.
(d) Failure to obey a subpoena shall be punishable under the Rules of the
Superior Court.38
At the heart of the instant dispute are DHSS’ and OAOA’s different
understandings of OAOA’s powers under Chapter 29. Considering OAOA’s duties
under §2906(a) and scope of audits under §2907, DHSS argues that OAOA’s authority
is limited to conducting audits of financial transactions which have already occurred,
with the objective of ensuring that the transactions were proper and legal. 39 To support
its argument, DHSS notes that the term “postaudit” is not expressly defined in Chapter
29 or any other part of the Delaware Code. DHSS uses the Merriam-Webster Dictionary
definition of “postaudit” (“an audit made subsequent to the final settlement of a
transaction”), DHSS argues that statutory authority only exists for OAOA to conduct
audits after the final settlement of financial transactions, and does not expand the scope
of OAOA’s powers to include “performance audits” of the nature it seeks in the instant
38
29 Del. C. § 2910.
39
Opening Brief of DHSS, at 3-4 (Trans. ID. 67428579).
12
matter.40 In both its Opening Brief and its Reply Brief, DHSS argued that “performance
audits” are not “postaudits” under 29 Del. C. § 2906(a). Only at oral argument on July
15, 2022 did DHSS argue that “performance audits” are not “postaudits of financial
transactions,” although “performance audits” are “postaudits.” This is the first time
DHSS relied heavily upon the italicized phrase. To me, the Medicaid transactions are
financial transactions.
Conversely, OAOA contends that when read in its entirety, including the broad
contents of a postaudit under 29 Del. C. §2909, the statute provides it with broad
auditing powers, including the power to conduct performance audits such as the one in
dispute.41 According to OAOA, Chapter 29 grants OAOA “broad powers to conduct
audits, prepare and submit auditing reports, gather information, and make
recommendations and special reports as it deems advisable and necessary.”42
DHSS uses several principles of statutory construction to support its argument.
First, DHSS argues that the language of 29 Del. C. § 2906(a), by describing OAOA’s
duties specifically as conducting “postaudits,” and by failing to include the term
“performance audit,” the legislature designated a narrow scope for OAOA’s authority
and, by implication, excluded any other types of audits not listed in the language of the
40
Id. at 4.
41
Opening Brief of OAOA, at 9-10 (Trans. ID. 67428577).
42
Id. at 11.
13
statute.
Second, DHSS argues that, where general words (29 Del. C. § 2907) follow the
enumeration of particular classes of persons or things (29 Del. C. § 2906(a)), the general
words will be construed as applicable only to persons or things of the same general
nature or class as those enumerated.”43 “[S]uch a rule is based on the obvious reason that
if it was intended that the general words should be used in their unrestricted sense, no
mention would have been made of the particular classes.”44 Thus, argues DHSS, if the
legislature had meant for the term “postaudit,” or the scope of such postaudit, to have a
more general meaning, including the term “performance audit,” it would not have
followed it with specific classes all relating to financial transactions.
DHSS further argues that the generally accepted accounting principles and
practices applicable to OAOA45 (contained in the “Yellow Book”) differentiate between
financial audits and performance audits. A financial audit is an assessment of financial
statements and results, and a postaudit of financial transactions is a particular form of a
financial audit.46 A performance audit, by contrast, is an “objective analysis, findings,
43
Donaghy v. State, 100 A. 696, 707 (Del. 1917).
44
Id.45
29 Del. C. § 2907(b) expressly states OAOA audits “shall be made in conformity with generally
accepted auditing principles and practices.” These principles and practices are set forth in the U.S.
Government Accounting Office’s (“GAO’s”) Government Auditing Standards 2018 Rev. (Apr. 2021),
(commonly referred to as the “Yellow Book”).
46
Yellow Book §1.17.
14
and conclusions to assist management and those charged with governance and oversight
with, among other things, improving program performance and operations, reducing
costs, facilitating decision making by parties.”47 Thus, DHSS argues that the Yellow
Book definitions confirm that a performance audit is not a financial audit, and the
Delaware statute permits OAOA to perform only postaudits of financial transactions, a
particular form of financial audits, and precludes OAOA from performing performance
audits.
To me, this argument is unnecessarily convoluted, and the language of the
Delaware statute is clear: a postaudit is an audit of a transaction or transactions after
the fact, and a performance audit is a form of postaudit. This is exactly what we have
here. The statute is not reasonably susceptible to different interpretations, and a literal
reading of the statute does not lead to an unreasonable or absurd result not contemplated
by the legislature. This reading gives effect to the intention of the legislature as
expressed in the statute itself, and gives the statutory words their commonly understood
meanings. The most important consideration for me in interpreting the statute is the
language the legislature used in writing the statute, and I have assumed that the
legislature purposefully chose this particular language. Thus, it is unnecessary for me
47
Id. §1.21.
15
to use a surplusage of extrinsic accounting industry references48 and the law of other
jurisdictions. Since the statute is clear and unambiguous on its face, the plain meaning
of the statutory language controls. The fact that the parties themselves disagree about
the meaning of the statute does not in and of itself create ambiguity.
Although I find no ambiguity in the clear language of the statute, my reading is
buttressed by several other factors.
B. Legislative History
I have considered the legislative history of the statute.49 OAOA was established
by the General Assembly in 1783.50 In 1829, OAOA’s duties and powers were expanded
to include making an annual report including, inter alia, “any information relating to the
funds of the State, which he shall consider ought for public good be communicated to
the General Assembly.”51 In the 1900s before 1963, the Auditor of Accounts was a
member of the Permanent Budget Commission, a body “empowered” by the legislature
to “[a]udit, inspect and examine the accounts and the affairs of and the records of
any other agency of this State.”52 This broad authority allowed the Commission to
48
I note that nothing in the Audit appears to be inconsistent with the standards set forth in the Yellow
Book.
49
Chrysler Corp. v. State, 457 A.2d 345, 351 (Del. 1983) (finding legislative history relevant if the
“[s]tatute is ambiguous and requires interpretation”).
50
Act of June 21, 1783, ch. 106, 1783 Del. Laws 22.
51
Act of Feb. 6, 1829, ch. 187, § 4, 1829 Del. Laws 377, 370–81.
52
Permanent Budget Commission Act of 1939, § 4(a), 42 Del. Laws 437, 437.
16
collect “information in any manner pertinent to the fiscal affairs of this State … in such
form as it shall prescribe for the purposes of this Act.”53
In 1963, the legislature abolished the Budget Commission and divided its powers
between OAOA and the Budget Director (now known as the Office of Budget and
Management). In doing so, the General Assembly amended Section 2906 and
specifically explained that “[a]ll of the rights, powers, and duties relative to
postauditing, fiscal investigations, and preparation and submission of audit reports”
previously ... vested in the Budget Commission are hereby transferred and conferred
upon the Auditor of Accounts.”54 The legislature likewise provided the Budget Office
with authority related to “pre-auditing, authorization of payments, control of receipts
and other related matter.”55
To facilitate OAOA’s ability to obtain “information in any manner pertinent to
the fiscal affairs of this State,” the legislature has consistently maintained OAOA’s
subpoena power, first granted in 1783 at §2 and now codified in §2910.
C. Historical Practice
I have also considered past practices.56 In 2014, OAOA conducted and
53
Id. § 4(b), 42 Del. Laws at 437–38.
54
Act of May 20, 1963, ch. 39, sec. 11, § 2906, 54 Del. Laws 140, 144–45.
55
Id. § 10, 54 Del. Laws at 143.
56
Athey v. Hercules Inc., 985 F. Supp. 441, 451 (D. Del. 1997) (finding parties’ “past practices”
relevant to assigning meaning to ambiguous term).
17
submitted a Performance Audit of Means-Tested Eligibility Entitlement Programs to
the Governor of Delaware.57 The then-State Auditor referenced Chapter 29 and stated
that OAOA conducted the “performance audit” in accordance with generally accepted
government accounting standards (“GAGAS”) under the Yellow Book.58 Indeed, the
stated objective of OAOA’s 2014 performance audit was “to determine the State’s ability
to manage and monitor the eligibility of recipients of entitlements and ensure adequate
controls are in place to help prevent fraud.”59
OAOA has conducted other performance audits.”60 Each year the Delaware
Secretary of Finance submits the Annual Comprehensive Financial Report (“ACFR,”
formerly “CAFR”) “[t]o the Citizens, Governor, and Members of the Legislature of the
State of Delaware,” and under the heading “Independent Audit” states that OAOA
“performs periodic financial and compliance audits of various State … agencies.”61
In 2020, OAOA conducted an investigation into allegations of violations of
57
Performance Audit of Means-Tested Eligibility Entitlement Programs (Mar. 11, 2014).
58
Id.59
Id. at i.
60
See generally OAOA Performance Audit Spreadsheet (including a 2018 Delaware Career and
Technical Education Performance Audit, a 2019 Pension Death Master File Performance Audit, two
Fiscal Year 2018 Higher Education Procurement Card Performance Audits, and twenty school district
Criminal Background Checks Performance Audits for the period 2014 to 2019); see also How is
Delaware Using Consultants? (OAOA Performance Audit of Division of Facilities Management
consulting contracts from 2009 to 2010, pursuant to Chapter 29); Mariner Middle School Band
Boosters (OAOA Performance Audit of student activity funds from 2009 to 2010, pursuant to Chapter
29).
61
See, e.g., Secretary of Finance 2021 Report Cover Letter at vii.
18
Delaware law by the Controller of Delaware’s Department of Insurance (“DOI”),
following an internal complaint regarding certain business practices of the Controller.62
The scope of work for that investigation included examining possible violations of
Delaware law, the State of Delaware’s Budget and Accounting Manual (“BAM”)
(including specifically BAM’s internal control requirements), and state policies
regarding acceptable use and information security.63 The cost of that investigation was
billed to DOI.64
D. Other Jurisdictions
This Court requested briefing on other states’ auditor authority and definitions of
“postaudit” or “performance audit.” The National Association of State Auditors,
Controllers and Treasurers (“NASACT”) publishes an annual summary of auditing in the
states.65 The briefs fully discussed statutes in Alabama, Hawaii, Idaho, Illinois,
Michigan, Missouri, New York, Ohio, Pennsylvania, Washington, and Wisconsin, and
contained a tabulation of the statutes in all jurisdictions.
46 states expressly authorize the state auditor (or similar official) to conduct
62
See generally Department of Insurance Improper Activities of Controller (OAOA Investigation into
credential sharing, unauthorized use, check deposits, purchases, refunds, internal controls, and travel
made by DOI Controller from July 1, 2017, through October 31, 2019).
63
Id.64
Id.65
NASACT, Auditing in the States (2021) at 1–2.
19
performance audits by: (i) using the term “audit” instead of the term “postaudit”;
(ii) providing a broader definition of postaudit; or (iii) expressly authorizing
performance audits. DHSS argues that since Delaware is one of only four states that
does not have this scheme, it follows a fortiori that the legislature did not intend for
OAOA to conduct performance audits. I disagree. The statute speaks for itself, as
discussed above.
IV. CONCLUSION
For the foregoing reasons, the Delaware Department of Health and Social
Services’ Motion to Quash the Subpoena of the Delaware Office of Auditor of Accounts
is DENIED. If DHSS has residual issues or concerns under Rule 45, it is free to bring
them to my attention.
IT IS SO ORDERED.
/s/ Craig A. Karsnitz
cc: Prothonotary
20