Wyoming State Treasurer Curt Meier’s office has repeatedly failed to produce legally mandated financial reports on time, raising transparency concerns, threatening the state’s creditworthiness and inhibiting the work of budgeters and state agencies. Now, frustrated lawmakers are trying to legislate a solution.
Sen. Mike Gierau, D-Jackson, illustrated his concerns to fellow senators by asking how much was in their bank accounts.
“How much money do you have?” Gierau asked on the chamber floor in support of Senate File 111 — Wyoming financial transparency act. “I bet y’all know, approximately.”
The inference of the Teton County senator’s question was that Wyoming, which possesses one of the 30 largest government-owned sovereign wealth funds in the world, can’t, at the moment, answer the question for itself.
Wyoming’s finances might be straight, Gierau said, adding there’s no reason to believe the treasurer’s books are cooked or inaccurate.
“But the question remains. We don’t know that,” Gierau said. “The treasurer doesn’t know that. No one knows that. That’s why I bring this bill, to shine a light on that.”
The legislation at issue, SF111, reflects frustrations among Wyoming’s bean counters, lawmakers and others. The state audit has been late for three straight years, causing some officials to worry about potential effects on the state’s bond rating and even its eligibility for federal funding.
The treasurer’s office has experienced “a breakdown in financial accounting processes and systems,” starting in mid 2019 — shortly after Meier assumed office — according to an independent consultant’s review of the agency’s performance.
“Many of the causes of the breakdown persist today and present potential for additional problems in the future,” the same consultants wrote in their February 2021 report. Minneapolis-based accountancy firm Clifton Larson Allen LLP produced the audit for the Wyoming State Loan and Investment Board, with a goal of providing recommendations to improve the state treasurer’s investment and financial accounting divisions.
Meier, who served 24 years as a Republican member of the Wyoming Senate before being elected treasurer, agreed that timeliness in producing financial reports needs improvement. In an interview with WyoFile, Meier graded his office’s accounting performance as subpar.
“Disappointing. A C-minus. Some people might think we’re lower,” Meier said. “I’m transparent. It’s not as good as we would like.”
Self-critique
Meier pinned that barely passing grade on himself. He contended there are situational and resource-related reasons for his tardiness: convoluted transactions, outdated tracking software and an accounting staff that’s too small and was poorly equipped for the task.
“We started with folks that didn’t necessarily have degrees in accounting,” said Meier, whose own degree from the University of Wyoming is in animal science. “Essentially all of our new hires have degrees in finance or accounting. We’ve increased the capacity of the office substantially, so I can’t throw my employees under the bus.”
Much of the language found in SF111, which is sponsored by Gierau, is repeated in the footnotes of the Wyoming Legislature’s general budget bill. If requirements in the standalone legislation survive, however, they will have more staying power than those in the budget, which will expire in two years.
The legislation would reinforce existing monthly reporting requirements, calling for monthly dissemination of the status of all state-fund distributions and transfers, plus all investment earnings, interest, dividends and realized/unrealized gains and losses for each investment pool under Meier’s oversight. The same batch of reports would be required separately for each investment manager under contract with the state treasury.
The bill would also require the treasurer’s office to report to lawmakers annually about steps taken in response to the 2021 consultant’s report recommendations. Additionally, the bill mandates the treasurer’s office to provide an accounting of all cash and investment earnings from all transactions to two legislative committees within 90 days of each quarter.
The quarterly reporting demand would be “impossible” to achieve, Deputy Treasurer Dawn Williams told WyoFile.
“The requirement implies that we are somehow withholding the report, and that is not the case,” Williams said. “It’s because of the nature of investments and when we receive the reporting.”
Williams cited accounting-staff shortages as a source of the agency’s struggles with meeting deadlines, an assertion that the February 2021 agency audit supports.
The state treasurer’s office financial accounting division has 13 full-time employees, according to the current organizational chart. An industry standard is to employ 2.5 back-of-the-house accountants for every investor, according to the consultants, but there are now 10 investors calling the shots with the $20-plus billion under Meier’s oversight. That means the Wyoming office’s current ratio of accountants to investors is 1.3-to-1.
“There are economies of scale and we are not recommending a doubling of Financial Accounting Division personnel, but clearly, an increase above current levels is required,” the consultants wrote.
Staffing woes
Funds to hire five more accountants and an additional oversight position are tentatively being allocated, Joint Appropriations Committee Chairman Drew Perkins, R-Casper, told the Senate while introducing the budget bill.
Gierau, also a member of the JAC, said the state treasurer’s office has the resources coming it needs to right its ship.
“Everything that helps the back of the house, including a chief operating officer, we gave them,” he said.
Katie Smith, who oversees the treasurer’s financial accounting division, said having a deeper staff would be “fantastic,” but won’t fix the office’s issues overnight.
It’ll take a “couple years,” to start seeing results, she said.
The proposed new chief operating officer position would bring external oversight to Meier’s office. The executive would be hired by, and answer to, another agency according to the budget bill. That new post, which costs $651,000 in the two-year budget, will be based at the state treasurer’s office, but be under the purview of the State Loan and Investments Board.
Deputy Treasurer Williams wasn’t welcoming of the outside assistance: “That’s problematic for us,” she said.
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