Good Afternoon Chairman Blair, Vice Chair Anielski, Ranking Member Clyde, and members of the committee.  Thank you for the opportunity to testify today in support of House Bill 10.  There is also companion legislation to this bill, now pending in the Senate, Senate Bill 6, sponsored by Senator Tim Schaffer.

First, I’d like to thank Representative Hagan for her leadership in sponsoring this very important piece of legislation, and Chairman Blair for scheduling today’s hearing.

Mr. Chairman and members of the committee, the necessity of this bill is rooted in the recurring problems identified in the financial audits we perform for the 5,800 local government entities in Ohio and in news reports throughout the state.  We presented these problems to the General Assembly and Representative Hagan and Senator Schaffer offered their leadership and ideas in the development of the legislation.

Simply put, House Bill 10 is designed to protect public tax dollars by increasing the accountability of fiscal officers in local governments.

The impetus for this Bill was a set of events which took place in the Stark County Treasurer’s Office where an employee, a subordinate of the Treasurer, stole nearly $3 million over the course of several years.  The former Stark County Treasurer was not executing the job responsibilities he was elected to provide which could have prevented the theft. 

Ohio law has long provided a method for removing elected officers under certain circumstances that place the public till in jeopardy.  In Stark County, the County Commissioners invoked the removal statue to remove the County Treasurer, who then appealed his removal to the Ohio Supreme Court. The Treasurer, in a series of legal actions, asked the Supreme Court to reinstate him and remove the person eventually elected to the office.  The Supreme Court concluded the removal statute was unconstitutional and the former Treasurer was reinstated.  The statute was found unconstitutional because a complaint must issue and a hearing must be held prior to the removal. 

The bill before you cures the defects with the current removal process and provides what I believe to be a careful, limited removal process for elected fiscal officers whose actions or inactions threaten the safety of public funds.

Fiscal Officer Accountability

The bill provides that a fiscal officer can be removed if there is clear and convincing evidence of reckless conduct, or a reckless failure to act.  There is also substantial due process to protect the fiscal officer from any attempted abuse of this new law. 

To start the process for removal contained in this bill, a written affidavit must be signed and submitted to the Auditor alleging the grounds for removal. A municipal fiscal officer complaint may be made by a majority of the legislative body (council).  For Counties, a County Auditor or a County Commissioner may start the process; for Townships, any 4 residents of the township may begin the process.  Any fiscal officer removed from office cannot hold office again for at least four years, and may not hold office even after four years if the fines and costs haven’t been paid.  The bill contains one uniform process of removal that encourages efficient governmental cooperation between the Auditor of State and the Attorney General while providing multiple levels of scrutiny for the evidence and sufficient amounts of due process for the fiscal officer in question.

Professional Development

The bill also requires township fiscal officers to undergo training for their positions.   The training provisions in the bill incorporate existing training programs and also provide a flexible delivery system for fiscal officer training programs throughout the state.  Township fiscal officers must complete 24 hours total in the first term, 16 hours of which must be completed in the first year.  The first 6 hours are provided and approved by the Auditor of State only; the remaining 18 are flexible - CPIM (certified public investment management) training already conducted by the Treasurer of State counts toward obtaining the 18 hours of education to be completed during the remainder of the term (4 years). 

As local governments are being asked to do more with less, it becomes even more important that all dollars are utilized efficiently.  In order to assist local governments, this bill increases the number of professional development training hours for our elected fiscal officers.  Fiscal officers will be better prepared, which will increase efficiencies and accountability of tax dollars.  Failure to complete the training will not disqualify a person from holding their elected position.  In order to incentivize the training, this bill allows for entities to purchase professional indemnity insurance when the training is complete.

I will note that we have worked with the Ohio Township Association, the Ohio Municipal League, The County Commissioners Association, the County Recorders, Treasurers, Auditors, and Prosecutors to formulate the contents of this bill.  These organizations are to be commended for their valuable input throughout this process.  Due to the ongoing amendment process in the Senate, House Bill 10 is not an exact reflection of Senate Bill 6, however the majority of the content is the same.

Chairman Blair, members of the committee, thank you again for the opportunity to testify in support of House Bill 10.  This important legislation will strengthen the stewardship of tax dollars and will increase local government accountability to tax payers.   I am happy to address any questions you have at this time.

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