Audit and Control, Department of

The department traces its origin to 1625 when Dutch colonial authorities appointed a schout-fiscal to examine the accounts of New Amsterdam. In 1658, a Board of Audit consisting of a director general, receiver general, and a council member assumed auditing responsibilities. After the English took control of the colony in 1664, the auditing function was carried out by a royally appointed auditor general. Following its establishment in 1683, the colonial assembly gradually asserted greater fiscal control and fiscal responsibility continued to be divided between royal officials and the elected assembly until the American Revolution.

During the early days of the Revolution, the Provincial Congress selected auditors from its own membership and in 1776 appointed an auditor general. The first state constitution in 1777 created the Office of State Treasurer to collect and disburse revenues as authorized by the legislature, but did not mention an auditor. However, an auditor was appointed through a clause providing for the appointment of "other officers."

In 1782 (Chap. 21, 5th Session), the legislature established the office of auditor to assume responsibility for settling the State's accounts. In 1787, the auditor assumed what had been the treasurer's duties relating to collection and commutation of quit rents. In 1788, the auditor was directed to settle accounts with certain other states, as well as the federal government.

To avoid conflicts between the auditor and the treasurer, the legislature established the Office of Comptroller in 1797 (Chapter 21). The comptroller assumed all duties of the auditor and certain powers of the treasurer, including the power to draw up payment warrants, invest the State's funds, and borrow money on the State's credit. Originally appointed by the Council of Appointment, the comptroller was elected by the legislature under the 1821 State constitution. Under the 1846 and all subsequent constitutions, the comptroller has been chosen in the general election.

The comptroller was designated a member of the Board of Commissioners of the Land Office in 1801 and was directed to sell lands for payment of delinquent State taxes. When construction of the canal system began in 1817, the comptroller was appointed to the Board of Commissioners of the Canal Fund and later to the Canal Board. The commissioners of the Canal Fund were responsible for managing the debts and funds of the State's canals. The Canal Board, comprised of the commissioners of the Canal Fund and the canal commissioners (responsible for canal construction and repair), exercised overall supervision over the State's canal system. The comptroller remained a member of the Board of Commissioners of the Land Office until it was reorganized in 1926, and of the Canal Boards until they were abolished in 1926.

The comptroller examined the financial affairs of banks from 1843 until the creation of the Banking Department in 1851. From 1849 until the creation of the Insurance Department a decade later, the comptroller regulated the organization and operation of insurance companies. Beginning in 1865, State-supported hospitals and charitable institutions were required to submit financial reports to the comptroller and in 1873 the comptroller was empowered to examine the financial affairs of prisons and various other State institutions. In 1880 the comptroller was authorized to initiate a system of collecting taxes on corporations. The comptroller assumed the duties of the former office of canal auditor in 1883. Beginning in 1905, municipal divisions of the State were required to adopt uniform fiscal reporting systems and to file annual reports subject to examination by the Comptroller's Office.

Commencing in 1910 (Chapter 149), State agencies were required annually to submit a proposed expenditure plan to the comptroller, who then forwarded recommendations to the Assembly Ways and Means and the Senate Finance committees. This was the forerunner of New York State's executive budget process. In 1913 the comptroller's auditing powers were strengthened by legislation (Chapter 342) requiring agencies to adopt a uniform system of accounting and fiscal reporting; to verify purchases and services; and to obtain the comptroller's prior approval of all contracts over one thousand dollars. In 1920 (Chapter 741), a State employees retirement system was established under the administrative control of the comptroller.

The 1925 constitutional amendment reorganizing state government placed the elected comptroller at the head of a new Department of Audit and Control and assigned the office the duties of auditing all vouchers before payment, auditing the accrual and collection of all revenues and receipts, and prescribing accounting methods necessary to perform these activities. The 1926 law establishing the Department of Audit and Control (Chapter 614) transferred responsibility for the canal debt sinking fund from the commissioners of the canal fund to the comptroller. The comptroller's responsibility for licensing private detectives, auctioneers, steamship ticket agents, and theater ticket brokers was transferred to the Department of State. The new Department of Taxation and Finance, which absorbed the duties of the former state treasurer, assumed the comptroller's former responsibility for administering revenue-collecting activities. This included activities under any law related to direct State taxes, duties of the comptroller concerning land taxes and land sales for payment of delinquent taxes, and custody of State employee retirement funds.

In 1975 (Chap. 219), the duties of the welfare inspector general, relating to complaints of abuses, fraud, or violations of the welfare system, were transferred to the Dept. of Audit and Control. An additional statute (Chap. 868) directed the comptroller to assist the Emergency Financial Control Board in carrying out its responsibilities relating to New York City revenues, expenditures, and indebtedness. The office of the State Deputy Comptroller for New York City was established within the department to fulfill this mission. In 2003, the department established a Division of Investigations comprised of three offices: Office of Internal Audit, Office of Internal Control, and Office of Investigations. The new division's mission was to detect and investigate potential fraud committed against state agencies. Also in 2003, the Office of Intergovernmental Affairs and Community Relations was established with three subdivisions: Intergovernmental and Community Relations, the Citizen Action Center, and the Correspondence Division. The purpose of this office was to facilitate dialogue between the State Comptroller's Office and local governments and community organizations.