August 9, 2014 in Opinion

Guest opinion: Use of administrative law judges under review

Troy Kelley
 

I have been criticized for my decision to not open a whistleblower investigation into a complaint made against the Office of Insurance Commissioner by one of its employees. The initial facts in the complaint, reviewed in the context of our office’s authority under the whistleblower statute, supported my decision. That decision was further bolstered by subsequent evidence that the employee had raised what was clearly a personnel matter, which is specifically exempted in the whistleblower statute, and by revelations about the employee’s own apparently inappropriate conduct.

While a whistleblower investigation of this particular situation was clearly not warranted, I believe that what is warranted is a larger, systemic review to determine if the practice by some state agencies of using in-house administrative law judges is good public policy. The internal conflict at the Office of the Insurance Commissioner notwithstanding, several obvious questions arise about the role of administrative hearings officers in state government. Can an administrative hearing process be considered independent if it is housed within an agency and reporting to the head of the agency? If these processes are truly meant to be independent, why house them within an agency, which could intuitively raise issues about independence and impartiality?

As a lawyer, I have dealt with administrative law judges in a professional setting, and as state auditor I see an opportunity to help our state function more efficiently and effectively. This is a complex state system and it’s time we took a look at how it’s performing.

I have already directed our performance audit team, under the investigative authority of Initiative 900, to begin preliminary evaluation and scoping of a performance audit examining state agency use of administrative hearings officers to rule on agency decisions.

The Department of Social and Health Services, for example, does not handle administrative hearings in-house, but through the independent Office of Administrative Hearings. On the other hand, the Office of Insurance Commissioner and the Department of Health conduct their administrative hearing processes in-house, presided over by their employees.

Why such differences in approach? Do the needs of these agencies vary that much? Can Washington citizens count on a fair and impartial hearing when they dispute state agency actions?

As in all performance audits, we will follow the facts. Our performance audit team will, based on objective research, data collection and analysis, establish the scope and direction of the audit. But it is logical to assume our initial research will include:

• The function of these officers, as defined by law, and the functional variance by agency.

• Independence and impartiality and the legal and ethical influence, if any, agency leadership may have over administrative hearing decisions/outcomes.

• Rationale for in-house versus external administrative hearing officers.

• Recourse available to those receiving adverse rulings.

• Cost differential, if any, between in-house and external administrative hearings.

• Best practices in other states.

Recommendations could eventually include proposed changes in law, requiring legislation.

Rather than getting drawn into an isolated he-said/she-said personnel conflict, I believe our office can more effectively use public resources to pursue answers to the high-level statewide issues raised by the current administrative hearings system.

Troy Kelley is Washington’s 10th state auditor. He was elected in 2012.


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