The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 6749 February 18, 1993 AUDITOR GENERAL: Access to the confidential files of a state agency for the purpose of auditing another state agency The Michigan Employment Security Commission may not restrict the Auditor General's access to the Commission's confidential employer files even when those files are sought by the Auditor General for the purpose of performing an audit of a state program or agency other than the Commission itself. However, the confidentiality provisions of section 11(b)(1) of the Michigan Employment Security Act are binding on the Auditor General and his staff and prohibit the further disclosure of the identity of any of the individuals or employing units named in those records. Thomas H. McTavish, C.P.A. Auditor General 201 North Washington Square Lansing, Michigan 48913 You have asked whether the Michigan Employment Security Commission may restrict the Auditor General's access to the Commission's confidential employer files when those files are sought by the Auditor General for the purpose of performing an audit of a state agency or program other than the Commission itself. By way of background, you advise that you are performing an audit of the Michigan Strategic Fund (MSF), a state agency located within the Michigan Department of Commerce. As a part of that audit, you have found it necessary to review a test of employer quarterly wage reports filed with the Michigan Employment Security Commission (MESC) for the period October 1, 1988, through March 31, 1992. You advise that access to these reports is needed in order to permit you to evaluate the job creation claims of MSF's economic development programs and is, therefore, essential to enable you to complete your audit of the MSF. The MESC acknowledges the authority of the Auditor General to inspect such records in the course of an audit of the MESC itself. However, in this instance, because the records are sought in connection with an audit of an agency other than the MESC, the MESC maintains that the Auditor General's constitutional and statutory authority does not apply and insists that the Auditor General must follow the MESC rules governing access to such information by all other state agencies. You express concern that these rules, inter alia, require formal MESC approval of both your access to the records and of your draft audit report. At the center of this disagreement is section 11(b)(1) of the Michigan Employment Security Act, MCL 421.11(b)(1); MSA 17.511(11)(b)(1), which provides for the confidentiality of the records of the MESC. That section provides, in pertinent part: Information obtained from any employing unit or individual pursuant to the administration of this act, and determinations as to the benefit rights of any individual shall be held confidential and shall not be disclosed or open to public inspection other than to public employees in the performance of their official duties pursuant to this act in any manner revealing the individual's or the employing unit's identity.... Subject to such restrictions as the commission may by rule prescribe, the commission may also make such information available to ... the departments of this state. Information so released shall be used only for purposes not inconsistent with the purposes of this act. [ Emphasis added.] Pursuant to section 54(d) of the same statute, MCL 421.54(d); MSA 17.558(54)(d), it is a misdemeanor to willfully disclose confidential information obtained under the act "for any purpose inconsistent with or contrary to the purposes of" the Michigan Employment Security Act. In requesting the MESC records at issue, the Auditor General plainly is not engaged in the performance of official duties pursuant to the Michigan Employment Security Act within the meaning of the first paragraph of section 11(b)(1) quoted above. Thus, if the Auditor General's sole authority for demanding access to such records were founded on the provisions of the MESC Act, the only apparent basis for that access would be the above quoted language in the second paragraph of section 11(b)(1) which conditions such access upon "such restrictions as the commission may by rule prescribe". The Auditor General, however, possesses entirely separate constitutional and statutory authority for demanding access to such records. The office of Auditor General is a constitutional office established in its present form by Const1963, art 4, Sec. 53, which provides in pertinent part: The legislature by a majority vote of the members elected to and serving in each house, shall appoint an auditor general, who shall be a certified public accountant licensed to practice in this state, to serve for a term of eight years.... The auditor general shall conduct post audits of financial transactions and accounts of the state and of all branches, departments, offices, boards, commissions, agencies, authorities and institutions of the state established by this constitution or by law, and performance post audits thereof. In carrying out this constitutional mandate, the Auditor General possesses and may exercise the following powers, as described in MCL 21.46; MSA 3.596: Upon demand of the auditor general, deputy auditor general, or any person duly appointed by the auditor general, to make the examinations herein provided, it shall be the duty of any and all officers of the State and county governments to produce, for examination, the books of account and papers of their respective departments, institutions and offices, and to truthfully answer all questions relating thereto. In connection with such examinations, the auditor general, deputy auditor general, or any person designated to make such examinations, may issue subpoenas, direct the service thereof by any police officer, and compel the attendance and testimony of witnesses, may administer oaths and examine such persons as may be necessary, and may compel the production of books and papers. The orders and subpoenas issued by the auditor general, deputy auditor general, or by any person charged with the duty of making the examinations herein provided, in pursuance of the authority in them vested by provisions of this section, may be enforced upon their application to any circuit court by proceedings in contempt therein, as provided by law. [ Emphasis added.] This statutory provision empowers the Auditor General "to demand for examination both the books of account and the papers of all state institutions" and extends to information which would otherwise be deemed confidential. Letter Opinion of the Attorney General (Auditor General Albert Lee, March 13, 1978, at page 3). See also, Letter Opinion of the Attorney General (Commissioner, Financial Institutions Bureau, Robert P. Briggs, February 18, 1972), and Letter Opinion of the Attorney General (Director, Department of Mental Health, Dr. E.G. Yudashkin, October 6, 1971). By means of this language, the Legislature has plainly authorized the Auditor General to review--and, indeed, to compel disclosure of--the MESC records here in question and to do so without regard to administrative rules and restrictions prescribed by the MESC. However, while MCL 21.46; MSA 3.596, provides the Auditor General with independent authority to examine the records of the MESC, the Legislature has not exempted the Auditor General from the general command contained in the first sentence of section 11(b)(1) of the Michigan Employment Security Act which prohibits all public employees from disclosing the identity of the individuals and employing units named in the records of the MESC. In reviewing these records, therefore, the Auditor General remains bound to respect this confidentiality and may not make any further disclosure of such identifying information. See, generally, MCL 421.54; MSA 17.558. See also, Letter Opinion of the Attorney General (Director, Department of Mental Health, Dr. E.G. Yudashkin, October 6, 1971). It is my opinion, therefore, that the Michigan Employment Security Commission may not restrict the Auditor General's access to the Commission's confidential employer files even when those files are sought by the Auditor General for the purpose of performing an audit of a state program or agency other than the Commission itself. It is my further opinion, however, that the confidentiality provisions of section 11(b)(1) of the Michigan Employment Security Act are binding on the Auditor General and his staff and prohibit the further disclosure of the identity of any of the individuals or employing units named in those records. Frank J. Kelley Attorney General