Terri Lynn Land — September 17, 2014 at 8:24 am

EXCLUSIVE: Terri Lynn Land lost the state nearly $350,000 due to financial mismanagement as Secretary of State


In 2003, while Terri Lynn Land, was Secretary of State, Michigan received nearly $95 million under the Help America Vote Act of 2002 (HAVA). This money was targeted at improving election equipment, updating election technology, and addressing problems with provisional voting, voting information, statewide voter registration lists, and voters who register by mail.

In order to receive HAVA funds, states had to provide 5% of the award in matching funds. The tab for Michigan came to $4,155,814 which was approved by Michigan legislators. Under the rules of the HAVA, both the federal funds and the matching funds were to be placed into an interest-earning account where the magic of compound interest would significantly increase the pot of money available for improving our elections in Michigan.

However, Terri Lynn Land decided it wasn’t necessary to follow the rules. Instead of putting the money appropriated by the state legislature in the HAVA account, she deposited it in the Michigan Department of State’s (MDOS) general fund account. According to a report issued by the U.S. Election Assistance Commission following their audit of Michigan’s program, the state lost nearly $350,000 in earned interest due to Land’s decision to not follow the rules.

The state did not deposit required matching funds into the election fund prior to receipt of each of the four Section 251 distributions from the EAC. The state’s legislature appropriated the required matching funds, but retained the dollars in the general fund until a qualifying HAVA Section 251 expenditure invoice was received, at which time the state would contribute 5% of the total amount billed. The state had a matching fund requirement of $4,155,814, and, as of February 28, 2009, total payments of $3,002,555 had been applied against this total, resulting in a $1,153,259 shortfall of matching funds in the election fund. In addition, the HAVA election fund has lost interest which would have been earned if the matching funds had been deposited timely. The MDOS staff has calculated this interest total to be $348,956 through February 28, 2009.

Instead of just depositing the funds in the separate interest-earning HAVA account, the report says that Land’s staff “programmed their accounting system to automatically charge both the HAVA fund and the MDOS general fund to record Section 251 expenditures”. This ignored the intent of HAVA which was described clearly in the audit report:

The timely deposit of the state match and of monthly interest earnings [would have increased] the election fund balance upon which each subsequent month’s interest earnings is based, resulting in a compounding effect that adds additional funds to the program.

In response to the recommendation in the audit that MDOS pay back the $348,956, Land’s department responded that they had already spent nearly $2 million “in excess of its required maintenance of effort” and, therefore, didn’t need to pay the money back. The EAC eventually agreed with MDOS on this. However, because of the decision, even her chutzpah, you might say, to not to follow the rules as spelled out by HAVA, the HAVA account never earned the almost $350,000 in interest it would have if the rules had been followed under Land’s “leadership” of the MDOS, money that would have helped to offset the addition expenditures made by the MDOS for election system improvements.

Terri Lynn Land points to her time in office as having qualified her to be a U.S. Senator. However, examples like this show that her time in office didn’t prove her to be a good administrator or a good leader. In fact, thanks to her mismanagement and sloppiness, the State of Michigan lost money it would have had otherwise.

Research on this piece was provided in part by American Bridge, “a progressive research and communications organization committed to holding Republicans accountable for their words and actions and helping you ascertain when Republican candidates are pretending to be something they’re not.”

[Caricature by DonkeyHotey for Eclectablog. Adapted from: Wikipedia – State of MI]