Butler was grilled on the issue Monday by Senate Appropriations Chairman Blake Tillery, R-Vidalia, and Senate Majority Whip Steve Gooch, R-Dahlonega, in an Appropriations meeting that at times became testy.
Griffin, who is appointed by the General Assembly, sent Butler a letter last month saying his office couldn’t complete the state’s annual Comprehensive Annual Financial Report without information it was waiting on from the Department of Labor. The reports are usually completed by Dec. 31.
The missing information, Griffin said, included some files on unemployment payments, cases of overpayments, fraud inquiries and appeals of the department’s initial decision to turn down claims.
In the letter, obtained by The Atlanta Journal-Constitution, Griffin warned that if he couldn’t get the information soon, he might have to include a “qualified opinion” in the report, essentially an indication in this case that he doesn’t have enough information to validate the accuracy of that section of the report.
That, Griffin wrote, “could potentially impact the state’s AAA bond rating” given out by national rating agencies. He said Butler, a former state lawmaker, understood the consequences.
“From your time in the General Assembly and as the Labor Commissioner you have played an important role in Georgia maintaining the AAA bond rating for over two decades,” Griffin wrote. “I am sure we can agree as those that have fiscal responsibilities in this state, we would hate to see that remarkable achievement fall under our watch.”
While obscure to most of the public, lawmakers brag about the AAA rating every chance they get, particularly the budget chairmen who never miss a chance to remind colleagues how important it is to save the state money when it borrows.
“The General Assembly has budgeted conservatively — in good times and bad — to build our reserve fund and protect our AAA-bond rating,” said Kaleb McMichen, spokesman for House Speaker David Ralston, R-Blue Ridge. “Our AAA bond-rating — the highest available rating — saves Georgia taxpayers money year after year.
“Speaker Ralston and the House will continue to protect that rating and fully expect all state agencies will meet their obligations to do the same.”
Butler’s agency — like labor departments across the country — was overwhelmed by unemployment claims when the COVID-19 pandemic hit in March. With hundreds of thousands of Georgians thrown out of work, the Department of Labor paid out more in benefits in less than a year — $17.3 billion — than it had in the previous 34 years combined while working with about half the staff it had a decade earlier during the Great Recession.
Butler said his staffers were working on dozens of unemployment projects last year and tried to get auditors all the information requested. A late request came in, and he said it was impossible to get auditors the information by the end of the year. But he said the data was delivered Friday.
Gooch said auditors were still looking for more information Monday.
“We do not want a qualified opinion on our audit,” he said.
Butler responded: “It’s been a smear campaign since the beginning. We did cooperate.”
Labor commissioner is an elected position in Georgia, and Butler’s post is on the ballot in 2022. If he decides to run again, he is expected to face stiff opposition. Many lawmakers were inundated by complaints from constituents about not getting benefits early in the pandemic, when Butler’s office didn’t have enough people to answer the deluge of phone calls. Some politicians are already making it known they are considering a run.
This isn’t the first time a delayed state financial audit has caused concerns.
Computer system problems in the Department of Community Health made it impossible for an independent auditor to validate the agency’s financial statements in 2003.
The agency’s audit dragged on until 2005, delaying completion of the state government’s comprehensive annual financial report. That delay led to the state’s decision to delay the sale of about $1.8 billion in bonds to fund building projects during a post-recession period when it was trying to create construction jobs.