State Auditor Nicole Galloway, D, says an audit of lawsuits and settlements involving the state have cost Missourians more than $115 million during a six year period. It also found installments out of a fund used to make lawsuit payments against the state were consistently higher than budgeted amounts.
Missouri Auditor Nicole Galloway
In fiscal year 2017, for example, the actual amount spent was more than $17 million higher than what was budgeted. These payments are funded by general revenue, which also funds services such as K-12 and higher education. Over a six year period, expenses from the fund totaled more than $79 million.
“The legislature is essentially budgeting by guesswork, often using the same figure year after year, ignoring a history of high legal expenses,” Galloway says. “Because schools and other state services compete for the same scarce state dollars, we must bring more integrity to the budgeting process.”
Galloway’s office also examined settlements and payments outside of the state settlement fund. In less than three years, these payments totaled another $36 million by 13 entities including state universities, the Department of Transportation and Department of Conservation.
Galloway says the Office of Administration, which administers the fund in partnership with the Attorney General’s Office, relies on an outdated system that lacks the ability to produce basic electronic reports. She says this makes it difficult to monitor the nature of the cases and identify if an agency is experiencing a high volume of a particular type of claim.
“A culture of workplace discrimination does not pop up overnight, but the current system makes it hard to track and then address these types of problems,” says Galloway. “With proper tools in place, the state would have the ability to identify and intervene, instead of blindly shelling out millions in taxpayer dollars and allowing inappropriate conduct to continue.”
Last winter, media reports surfaced involving a series of sexual harassment and discrimination claims about Missouri Department of Corrections employees. Reporting at the time showed a significant increase in payments and judgments related to employee discrimination between 2012 and 2016. The audit examined $4.2 million in Corrections Department legal expenses, 75% of which involved claims of employment discrimination.
The complete report is available here. Additional information about settlements outside of the Legal Expense Fund can be found here.