By BURNELL HEINECKE
Editor of Heinecke News Service, based in the state capital, he formerly served 10 years as bureau chief there for the Chicago Sun-Times.

It cost Illinois millions to learn the need for an independent postaudit agency

THE YEAR was 1956. Illinoisans were reeling at the magnitude of the scandal. State Auditor of Public Accounts Orville E. Hodge, who was presumed to be the public watchdog on fiscal matters, turned out to be a fox in the chicken house. Hodge had stolen $ 1.5 million of state funds and misused at least another $1 million to his benefit.

The three-man panel which investigated the scandal concluded:

"The refrain 'Who takes care of the caretaker's daughter while the caretaker's daughter is taking care' has rung painfully upon the eardrums and seared the minds of the citizens of Illinois since June of this year when the sensational and almost unbelievable news first began to break in the public press" (Jenner-Morey-Rendleman Report and Recommendations to the Illinois Budgetary Commission, Dec. 4, 1956). As a result of the scandal a number of major reforms were recommended in the report.

One of the first reforms was the creation in July 1957 of the Legislative Audit Commission (LAC) — a bipartisan body assigned by the legislature to review audits of the state agencies under one or more of the elected executive officials. Prior to 1956, audits were commissioned by the state auditor of public accounts, but then the audits were turned over to the agencies audited, filed with the Budgetary Commission, and that was the end of it. But the auditor never commissioned an audit of his own office. Only when funds were reduced to an alarmingly low level by the siphoning off of office appropriations, did it become suspicious to inquiring reporter George Thiem.

Another of the crucial reforms recommended in 1956 was the separation of the check-writing function of the auditor of public accounts from the post-audit (reviewing) function. The latter was to be performed by an auditor general. He was to be appointed by the legislative branch, but he was an appointee of the governor until 1973 after the new Illinois Constitution made the change, and the legislature implemented the provision.

From its creation in 1957 to the present, the LAC has proved itself to be the watchdog agency envisioned by the three investigators who recommended its creation in their 1956 report. The three investigators were Albert E. Jenner, Jr., past president of the Illinois Bar Association; the late Lloyd Morey, who was then former president and comptroller of the University of Illinois; and the late John S. Rendleman, who was at that time legal counsel to Southern Illinois University. They shared the responsibility of probing not only the magnitude of Hodge's crime, but also the weaknesses in the governmental structure that made it so easy for dishonest individuals to pluck and loot funds under their control. The men wrote their recommendations in a report to the Illinois Budgetary Commission, but were teamed as investigators by executive appointment. Morey was appointed by Gov. William G. Stratton to replace Hodge as state auditor in mid - 1956. Atty. Gen. Latham Castle named Jenner and Rendleman as special assistant attorneys general to join Morey in the overall probe.

One of the major findings of the Morey-Jenner-Rendleman report was the virtually unchecked autonomy of operations that existed for elected officials such as Hodge. Time and again the report strongly supported the concept of accountability of all departments, agencies and elected officials to the legislature.

Agencies and departments should have the responsibility for pre-audit of vouchers going to the auditor of public accounts for payment, the panel said, but then the postaudit function should rest with a legislative panel. The philosophy of checks and balances inherent in our form of separate branches of government, the report suggested, mandates legislative overview of expenditures of appropriations that have been determined by the peoples' representatives — the legislators.

Former Sen. W. Russell Arrington (R., Evanston), who served on the LAC from its beginning in 1957 through 1972 (the year when he was incapacitated by a stroke), recently recalled the obstacles to the appointment of a legislative auditor general. Arrington noted that the creation of the LAC itself was no problem, but that Gov. Stratton and a majority of the legislators balked at the idea of appointment of the auditor general by the legislature. Arrington recalled that he and the late Paul Powell, then the driving force on the Democratic side, finally agreed that Stratton should have the power of

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appointment; but that once appointed, the auditor general would be responsible to and report to the LAC and not the governor.

Despite the fact that the manner of selecting the LAC members assured Republicans overwhelming control at the outset and for many years thereafter, Arrington noted that Powell wholeheartedly supported the proposed legislation and helped secure its enactment.

At present, the commission has a policy of rotating the chairmanship between Democrats and Republicans, and membership is evenly divided between the two parties.

Describing the original apprehensions, Arrington noted: "Everyone thought they'd hate the commission, that it would be a spy. But I think we demonstrated from the first that we meant business, that we were not going to be political, and they came to respect it perhaps more than any other commission. Our whole approach was not to hurt people, but to help them in their agencies, in seeing that they stayed in line with what they were supposed to be doing." As one veteran commission member has observed, the feeling that the commission must justify its existence has passed.

Arrington served as LAC chairman for many years, even as he worked his way up to the powerful position of president pro tempore of the Senate.

One of the men who served as executive director of LAC in the Arrington years observed that Arrington's demeanor as a member and chairman of the LAC was completely opposite his role as leader of the Senate: "Some of the commission members from the House, who had heard of Arrington as a tyrannical, tough dictator on the Senate floor, were absolutely astounded when they worked with him on the commission — to find that he approached his commission responsibility as an equal with the others — completely willing to abide by the wishes and the desire of the majority without dictating policy." Reporters observed the same paradox: Arrington was absolutely assertive on the Senate floor, but was unwilling to suggest "what the guys will want to do" on an audit commission matter.

Because of the Hodge scandal, much of the original thrust of the LAC's overview was directed at the fiscal integrity of the agencies or departments under audit. Since the State of Illinois was then on biennial budgeting schedules, by the time the audit of a department was completed and reviewed by the LAC, it was not unusual for another biennium to be drawing to a close.

In practice, as an audit report was received from private auditing firms by the auditor general, the report would then go to the department covered by an audit for the department's comment on the findings. In recent years, the auditors have become increasingly responsive to pinpointing problems for both the auditor general and the commission. Part of the pressure for pinpointing specific problems came from the press as it uncovered practices and procedures in various offices which violated statutes such as the new Purchasing Act enacted after the Hodge scandal. Veteran LAC members such as Arrington and Sen. Fred J. Smith (D., Chicago) and former Sen. Robert W. Cherry (D., Chicago) would question the auditors who had not reported what the press had pointed out.

Something else was in play. It was what John Day, the present executive director for LAC and former staff member of the Senate Democratic Appropriations Committee, likes to call "the power of coercion." When Arrington or Cherry found some director or head of an agency hedging on a request to meet an auditor's recommendation for change or corrective steps, Arrington's face would turn red; he would puff heavily on his cigar, generating a mushroom cloud of smoke over his head. Then he would curtly remind the director to be back next month with better answers or there might be "hell to pay" when his appropriations bill next came before the Senate. Men such as Dick Viar, who served more than 15 years as executive director for the commission, as well as Day and Arrington, emphasize that the function of the commission is not investigatory. In fact. Day stresses, if the commission or the auditors find something illegal that could lead to prosecution, the matter is promptly turned over to proper authorities. One of the items in the audit commission's reports that Arrington always pointed to with pride was each report's concluding summary of savings achieved for the taxpayers as a result of commission proceedings. When Arrington stepped down in 1972 that sum stood at $10 million. The staff has not updated the running total in recent years, although Arrington wishes they would. With Robert Cronson in office as the first legislatively appointed auditor general, there has been a step-up in program audits and other methods designed to test whether departments are properly carrying out their assigned missions. Some of the clashes the commission has had with Gov. Dan Walker's legal counsel and several of his directors, Arrington believes, were skirmishes based on the governor's misunderstanding of the overall role of the commission. Cronson noted that after due consideration, Walker's legal counsel William Goldberg, backed off from a directive to agency heads not to supply material to the auditor general until Goldberg had approved the material. Perhaps, someone suggested, Goldberg had gone back to read the Morey-Jenner-Rendleman report.

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