Missouri Auditor Nicole Galloway yesterday issued a scathing report of the state’s Small Business Regulatory Fairness Board, saying the organization is “not functional.”
Galloway, who visited Springfield Business Journal’s office prior to publishing
the audit, gave the board a “poor” grade, the auditor’s lowest rating indicating the need for immediate, significant operational improvements.
“This is the mechanism in our state law the citizens have to advocate for small business and it wasn’t working,” Galloway said, noting the board hasn’t been operational for several years. “This is a volunteer citizen board, so it is very important to have that oversight function.”
In January, the Small Business Regulatory Fairness Board described itself as operating at a “sub-par level,” prompting the audit. The report analyzed a two-year period.
The auditor’s office found the board has failed in its mission to provide input to state agencies on rules adversely affecting small businesses, largely due to a lack of participation.
The auditor’s office discovered only four seats of the nine-member board were filled, and all but one had an expired term. Additionally, the Missouri Department of Economic Development is required to provide a paid position to guide and oversee the board, but that role wasn’t in the agency’s budget.
“The audit report was pretty straight forward because the board wasn’t operational,” Galloway said. “They weren’t carrying out their duties as defined in the statutes.”
Missouri Small Business Regulatory Fairness Board Vice Chairman Scott George sees the audit as an opportunity to re-energize the board.
“We were pleased because it allowed us to shine a spotlight on the lack of support and how that was getting in the way of us doing our job,” said George, president of Mid-America Dental & Hearing Center in Mount Vernon. “The auditor’s report highlighted that.”
George said the lack of support from the DED, as well as the board being a low priority among lawmakers required to appoint members to it, contributed to its current state.
For audited organizations issued a “poor” rating, Galloway’s office typically performs another examination three to four months later. For the Small Business Regulatory Fairness Board, they’re giving it a year.
“It’s unrealistic to think this problem can be solved in a few months,” Galloway said. “This board needs the opportunity to succeed.”
In a statewide Gallup survey the Missouri Chamber of Commerce and Industry conducted for its Missouri 2030 strategic plan, only 16 percent of business owners said they were satisfied with how the state regulates business.
In a news release following the audit results, chamber President and CEO Dan Mehan said that low percentage now makes sense given the condition of the Small Business Regulatory Fairness Board.
“Our business community relies on this board to help protect small businesses from excess regulation,” Mehan said in the release. “I’d like to thank Auditor Galloway for making this a priority and I’d call on the governor and our legislative leaders to urgently address the deficiencies on this board.
“We must do everything we can to make sure small businesses can thrive and create jobs in Missouri.”
