Eight of the largest state agencies lack an internal financial watchdog, Auditor Stacey Pickering said.

Pickering said legislation passed in 2003 requires agencies to establish internal auditing procedures but lawmakers have failed to provide funding to pay for it.

“If you’re going to identify internal waste, fraud, excess, poor management practices (and) efficiencies, it’s got to start with the internal audit program,” Pickering said.

Pickering ordered a review of 19 state agencies, not including community and four-year colleges, which found that 11 of those agencies either hired staff or outside consulting to conduct internal audits.

However, the agencies without auditors in place together control $14 billion of the state’s total $20 billion budget and oversee 18,000 employees, more than half the total.

The auditor’s office would still conducts periodic comprehensive audits as well as audits of federal funds.

Pickering said the Legislature should consider providing funding so that all agencies can comply with the auditing requirement and creating a centralized auditing agency under his direction or that of the Department of Financial Administration.