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Galloway accuses state board of hindering how her office handles audits

  

JEFFERSON CITY, Mo. — Auditor Nicole Galloway sued the State Board of Accountancy Wednesday, arguing it misinterpreted state law that could hinder how her office publishes reports or works with law enforcement. The move is a continuation of the fight between the Democratic official and Republican Senator Josh Hawley

The issue stemmed from a complaint Hawley filed with the state board last year after Galloway audited the Attorney General’s Office from his tenure in that office. 

According to the lawsuit, the board offered a settlement agreement which absolved Galloway of any wrongdoing from Hawley’s complaints but contended auditees are “clients” and information from her office’s audits should not be released with their consent. 

The State Auditor’s Office publishes its audits for the public to view — including the report that covered Hawley’s Attorney General’s Office. 

In her lawsuit, Galloway contended the board has misinterpreted state statute in a way that would allow auditees, such as government entities, to be able to hinder just what information is included in a publicized audit report. 

“Allowing this disciplinary action to continue risks the license of every certified public accountant of the State Auditor’s Office and has a chilling effect on every audit and public report issued by the office, including mandatory state and local government audits, petition audits that are requested by Missourians, audits as requested by the Governor, audits requested by law enforcement, and audits initiated because of complaints of public corruption, fraud, waste, or abuse in government through the Auditor’s Whistleblower hotline,” Galloway’s lawsuit said

Galloway argued that giving an auditee the ability to pick what information goes into a public audit could hinder investigations as certified public accountants would have to choose between reporting on their findings or potentially having their license disciplined. She also contended it would not be “likely” that those found to be out of compliance would be willing to have that information publicly disclosed. 

“The Board’s intended action is not only a severe threat to the transparency of state and local governments, it undermines the constitutional and statutory law that require reliable and independent government audits and a public report,” the lawsuit said. 

The lawsuit was filed in Cole County Tuesday. 

A spokesperson for the Missouri Department of Commerce & Insurance, under which the Board of Accountancy is housed, said she had not seen the lawsuit and could not answer further questions. 

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Galloway’s office asked the court to consider the word “client” as defined in state statute does not apply to entities subjected to an audit by her office and to affirm her office is not required to get the consent of an auditee before certain information is included in a report. 

The lawsuit also said: “The Board’s decision to assert authority over state audits calls into question whether the State Auditor and her representatives may continue to provide support for law enforcement.” 

In its response to Hawley’s complaint, the Board of Accountancy said it had disciplinary powers set forth in Chapter 362 of the Revised Statutes of Missouri (which relates to professional licensure) rather than those in Chapter 29 (which is specific to the state auditor position). 

Hawley and Galloway have publicly sparred over the past two years. Galloway published an audit in 2020 regarding his time as attorney general, alleging a number of issues with payroll, expense reporting, and vehicle usage logs. Hawley, in turn, criticized Galloway’s conduct during audits and the hiring of a former campaign manager for Claire McCaskill, his Democratic opponent in 2018. 

In a statement, the State Auditor’s Office said: 

“This began when Senator Hawley filed a frivolous complaint with the State Board of Accountancy after an investigation of improper governmental activity while he served as Attorney General. The Board of Accountancy absolved the State Auditor on all of Hawley’s baseless allegations after sitting on the complaint for more than a year. Then, acting on their own, the Board employed a dubious application of a state statute to allege that taxpayers should not have been allowed to see supporting evidence included in the audit.

 Never before in this state’s history has the licensing board for accountants asserted any authority over the powers and functions of the State Auditor. By attempting to control information available to the public, a board of gubernatorial appointees is interfering with the Auditor’s central role in enforcing government transparency and accountability. This cannot be allowed to stand. This office is turning to the Missouri courts to preserve and protect the constitutional authority of the State Auditor – current or future – as the taxpayers’ independent watchdog.”

In a tweet Wednesday afternoon, Hawley called on Galloway to resign from office. 

Galloway, the lone statewide Democratic official, is not running for re-election to the position. She said the board’s interpretation of the law could be detrimental to future state auditors.

Rep. David Gregory, a Republican running for the auditor seat, repeated the resignation call said Galloway should “apologize” to both Hawley and taxpayers.

“For years, Nicole Galloway has abused the Auditor’s Office to advance the political agenda of the Woke Left, which included a taxpayer-funded political smear of Senator Hawley,” Gregory said. “When I am state auditor, one of our first jobs will be to clean up the mess Nicole Galloway is leaving, restore faith and trust in the office, and investigate abuse, corruption, and reckless spending on behalf of Missouri taxpayers.”

This story has been updated to include Rep. David Gregory’s response.