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Dear Comptroller Lierman,
Thank you for your service to Maryland. I’m a CPA who started the nonpartisan organization Truth in Accounting (TIA) over 20 years ago with the sole mission to reveal governments’ true financial condition. TIA has analyzed Maryland’s audited Annual Comprehensive Financial Reports since 2009 and was recently engaged by local media outlets to review the state's audited financial statements. And because the Office of the Comptroller is a signatory to the accuracy and completeness of the data presented in those reports, we have questions we believe Maryland taxpayers deserve answered. Please respond by Tuesday, August 25 at noon.
Who chose the auditor?
How was the auditor chosen? A bid or no-bid contract? Who were the bidders?
How much does the audit cost the taxpayer?
Is the cost comparable to the previous auditor?
Can you explain the audit procedure and attest to the auditor's rigorous standards?
Would you be willing to sit down with the auditors and us to go through the financial statement line by line to give the taxpayers full transparency?
We have analyzed thousands of financial audits and find disclaimers of opinion to be troubling.
Although the state’s 2025 ACFR had no disclaimers of opinion, the contingency section noted that a prior year's disclaimer against The Maryland State Unemployment Fund related to compliance with federal regulations had not been remediated at the time of the report's publication. What is the current status of the MSUF?
Furthermore, in the 2025 ACFR, the auditor states: “In our opinion, based on our audit and the reports of the other auditors, the accompanying financial statements present fairly, in all material respects…” This is a good result. However, most taxpayers believe the audit is meant to catch fraud or weak internal controls. Can you please explain the auditor's responsibilities to the taxpayer as explained in the Auditor's Responsibilities section of the ACFR: “Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists.”
Doesn’t this language accurately describe the limited nature of the audit?
Given the auditors are not required to:
- Perform a forensic investigation.
- Find every instance of waste, abuse, or small error.
- Guarantee that no fraud exists.
Does this make the audit meaningless?
We also find it concerning that the state does not have a robust collection of past ACFRs on the Comptroller’s website. In other states, we analyze reports going back years to allow year-over-year comparisons.
Our last two questions center on definitions of terms most people associate with business practices; we would like them explained to the taxpayer using the government’s definition.
- The term “structural deficit” is used regularly; please define it and explain why the state has one.
- What is the definition of an unrestricted net position deficit? What does it mean for taxpayers?
As our analysis continues, we will have more questions for you in the future. We also invite you to sit with us for an interview to explain the Annual Comprehensive Financial Report to the taxpayer line by line. Let us know a time that works for you, and we will set it in motion.
Comptroller Lierman, thank you for your time today. We look forward to your assistance in educating the public.
Sincerely,
Sheila A. Weinberg, CEO & Founder, Truth in Accounting