Governor Carcieri and the General Assembly are being forced to make hard budgetary decisions. One of the most important proposals facing the General Assembly may very well be H-5453, sponsored by Rep. Victor Moffitt (R.-Coventry), to create the Office of Inspector General for Rhode Island.

Accountability is key to maintaining public trust in our democracy. Independent and nonpartisan inspectors general at all levels of government are entrusted with fostering and promoting accountability and integrity in government. They hold government officials accountable for efficient, cost-effective government operations and prevent, detect, expose and eliminate fraud, waste, corruption, illegal acts and abuse. A primary focus of an inspector general in Rhode Island will be the procurement of materials and services, particularly for major construction projects.

Nineteen states and the District of Columbia have inspectors general and so do dozens of federal agencies. In almost all cases, the savings generated by their offices has more than covered their costs. The Massachusetts Office of the Inspector General is the oldest state-level inspector general in the nation and was established in 1981.

In February 2002, state and local officials began the $235 million renovation and rehabilitation of the 22-story Leverett Saltonstall building in Boston. This relied in part on a $20-million loan from MassDevelopment, the quasi-public agency managing the project.

In an investigation, the Inspector General determined that the loan was unlike any note commonly used to fund such projects. The interest rate was set at 16 percent and interest was calculated on a compound basis. By the end of the agency’s 2006 fiscal year, roughly $17 million in interest had already accrued on the note. At year 25, when MassDevelopment anticipated the Saltonstall project to begin experiencing positive cash flow, roughly $800 million in interest would have already accrued. That would have all but erased any profits taxpayers would have gotten from the Saltonstall project.

In 2005, the Inspector General recommended MassDevelopment calculate the loan in simple interest and to cut the interest rate by half to 8 percent. As a result, the cumulative interest on the note in June 2027 will add up to $40 million, a savings of 95 percent, because of the inspector general’s intervention.

The Washington, D.C., Office of the Inspector General is made up of separate divisions specializing in audits, investigations, inspections, and legal matters. In fiscal year 2006, the Audit Division issued 41 reports with a potential monetary benefit of approximately $31 million. This potential savings is 10 times the annual budget for the inspector general’s office. The investigations division presented 66 cases to the United States Attorney’s Office and 14 cases to the Justice Department for prosecution. These cases resulted in restitutions, fines, and recoveries of over $745,000. The Medicaid Fraud Control Unit investigates and prosecutes Medicaid providers who engage in fraudulent billing practices. In 2006, it recovered $2.1 million for the Medicaid program, almost five times the cost of funding the unit.

Over the past quarter-century, inspectors general have saved taxpayers much more than the cost to maintain their office. With Rhode Island’s storied past of corruption and scandal, call or write your representative in support of bill H-5453 to create the Office of Inspector General in Rhode Island.

ROY PRUETT

Coventry

The writer is a board member of Operation Clean Government.