Speaking of performance audits, somebody should conduct one on the Seattle Times editorial board, who in the absence of competition from the Seattle P-I, seems all the more eager to just make stuff up as they go along.
The authority for performance audits was created by the people, through initiative. Legislators did not do it, and were never going to do it. Key legislators did not want to elevate Sonntag into a power that could affect their programs.
Yeah, but the problem is, the Legislature did pass performance audit legislation back in 2005, by a 75-22 margin in the House, 30-19 in the Senate, some three months before I-900 even qualified for the ballot. And while it didn’t give the State Auditor the autocratic control and dedicated funding source of I-900, Brian Sonntag and his office enthusiastically supported the bill at the time, testifying on its behalf.
I know. So did I.
Quibble if you want over the details of which legislation was more effective—one that gave the Auditor sole discretion over which agency gets audited, or one that has the priorities and agenda set by a Citizens Advisory Board—the Legislature did in fact give up JLARC’s control over performance audits, and it did so by an overwhelming margin.
Furthermore, the very notion that performance audits would never take place without a dedicated funding source and an all powerful Auditor, totally ignores reality. Indeed, 23 performance audits were conducted at WSDOT alone, between 1991 and I-900’s passage in 2005. 23!
Performance Audits at WSDOT: Inventory (as of April 2005)
- Washington State Ferries (WSF) Vessel Construction Audit, Booz Allen, 1991
- Environmental Organization Study, WSDOT, Transportation Commission, 1994
- Environmental Cost Savings and Permit Coordination Study, Legislative Transportation Committee, 1994
- Procurement Audit WSF, Federal Audit, 1995
- Department of Transportation Highways and Rail Programs Performance Audit, Joint Legislative Audit and Review Committee (JLARC), 1998
- Department of Transportation Ferry System Performance Audit, JLARC, 1998
- Public Private Initiatives Audit, Transportation Commission, 1999
- WSF Risk Assessment, Blue Ribbon Commission on Transportation 1999
- Standards Review Team Report to Governor Locke, Transportation Commission, 2000
- Triennial Review WSF, Federal Audit, 2000
- Performance Audit of the Washington State Ferry System Capital Program, Office of Financial Management, 2001
- Washington State Legislature’s Joint Task Force on Ferries, 2001
- Washington State Ferry System Capital Program, OFM-Talbot, 2002
- WSDOT Aviation Division Study, JLARC, August, 2002
- Statewide Agency Capital Construction Practices (limited scope performance audit), OFM – KPMG, January, 2003
- Statewide Agency Performance Assessment, OFM-KPMG, January, 2003
- Personal Services and Purchased Services Contracting, (limited scope performance audit), OFM, January, 2003
- Department of Transportation Highways and Ferries Programs Performance Measure Review , TPAB-Dye Management Inc (November 2004)
- Department of Transportation Capital Project Management Pre-audit, TPAB-JLARC: Gannet-Fleming (January 2005)
- Environmental Permitting for Transportation Projects Pre-audit, TPAB-JLARC (January 2005)
- Business Process Review of Environmental Permitting for Transportation Projects, TPAB-JLARC; currently underway, April 2005
- Business Process Review of Accountability Oversight Mechanisms and Project Reporting for WSDOT TPAB-JLARC, April 2005
- Review of Port Angeles Graving Dock Project TPAB-JLARC; planned as of April 2005
And those are just the pre-900 performance audits at a single state agency; that list doesn’t include the regular (but much less sexy) financial audits that have always been the primary responsibility of the State Auditor’s Office. Which raises another serious question about the Times editorial and the media coverage of this issue in general: if the Times actually understands the difference between a “performance audit” and a “financial audit,” they don’t seem willing to share that information with their readers.
They may both have the word “audit” in their name, but performance and financial audits are not the same thing. The latter is an objective endeavor conducted according to commonly accepted accounting standards. If a financial audit finds that there is $90 million missing on the books, somebody surely needs to be fired and/or prosecuted.
But a performance audit is a much more subjective, complex and less exact affair that may include the following elements:
(i) Identification of programs and services that can be eliminated, reduced, consolidated, or enhanced;
(ii) Identification of funding sources to the state agency, to programs, and to services that can be eliminated, reduced, consolidated, or enhanced;
(iii) Analysis of gaps and overlaps in programs and services and recommendations for improving, dropping, blending, or separating functions to correct gaps or overlaps;
(iv) Analysis and recommendations for pooling information technology systems used within the state agency, and evaluation of information processing and telecommunications policy, organization, and management;
(v) Analysis of the roles and functions of the state agency, its programs, and its services and their compliance with statutory authority and recommendations for eliminating or changing those roles and functions and ensuring compliance with statutory authority;
(vi) Recommendations for eliminating or changing statutes, rules, and policy directives as may be necessary to ensure that the agency carry out reasonably and properly those functions vested in the agency by statute;
(vii) Verification of the reliability and validity of agency performance data, self-assessments, and performance measurement systems as required under RCW 43.88.090;
(viii) Identification of potential cost savings in the state agency, its programs, and its services;
(ix) Identification and recognition of best practices;
(x) Evaluation of planning, budgeting, and program evaluation policies and practices;
(xi) Evaluation of personnel systems operation and management;
(xii) Evaluation of state purchasing operations and management policies and practices; and
(xiii) Evaluation of organizational structure and staffing levels, particularly in terms of the ratio of managers and supervisors to nonmanagement personnel.
A thorough financial audit requires an accountant, but to achieve its intended goal a performance audit requires professionals with some degree of familiarity and expertise in the functions being audited (that’s why, lacking such broad expertise in house, Sonntag contracts out performance audits to private firms), and perhaps most importantly, the full cooperation of the agency being audited.
Did a performance audit really uncover $90 million in wasteful spending at the Port of Seattle? Maybe. Hell, knowing the way the Port had been run, the auditors likely even missed a lot of potential savings. But these findings aren’t worth much more than a bullet point in a slanted editorial if the target agency perceives the audit as an adversarial process, and thus resists both the auditors and their recommendations.
Oh… and as for this hypocritical piece of tired, old rhetoric:
Under cover of recession, they have now erased the people’s vote on Initiative 900 and hobbled the auditor’s office.
The Times has no problem defunding the teachers pay and class size initiatives, and has advocated in favor of gutting I-937’s overwhelmingly popular renewable energy requirements. But “the people’s vote on Initiative 900” should somehow be inviolable? Gimme a fucking break.
I don’t see the Times shedding even crocodile tears for the tens of thousands of Washingtonians who will be denied basic health care under the recently passed draconian budget, or for the thousands of students who now won’t find a slot in our state colleges and universities. But force Sonntag to put off for a couple years yet another audit of Sound Transit, and we get an editorial crying for Gov. Gregoire to whip out her veto pen.
Personally, I’m a big supporter of performance audits. I blogged extensively on the subject in 2005, and slogged down to Olympia to testify on their behalf. (I also blogged and testified on behalf of performance audits for tax exemptions, a good government measure the Times couldn’t give a shit about.) But unlike the Times, I understand their limits.
Budgets are all about priorities. And if Sonntag really believes that investing in education or preventative health care produces less of a long term financial return to the state than investing in performance audits, he should save up his pennies and conduct the next performance audit on himself.
The main issue I have with Sonntag and performance audits is that the process itself needs to be audited to show that its benefits out weigh its costs.
I have had a small role in one or two of his audits. There were considerable costs on our side of providing the requested information. Some of it seemed more for show than reality. For example there was an effort to define the efficiency of teaching. That might be worth doing but no one has any idea how. Similarly, since my main fuinctions are in research, there was an effort to assure that grants funds were spent on the work described in the rgant, even though .. under OMB and NIH rules .. there is great flexibility in what work gets done with any grant and even though the NIH also has an intensive effort to assure fuiunds are properly used.
I would like to know if this model for audits has been shown to work i8n the private sector where, one presumes, there are greater efforts to control costs?
I am also very skeptical that this sort of thing is best done by any elected official. Accountability to the public IS a big deal, but the winds of politics are hardly an efficient way of assuring that the person running this is impartial and apolitical.
RE: Sonntag’s audit allies: Seattle Times, Everett Herald, Seattle Weekly, others
Several newspapers have rallied to Auditor Sonntag’s side concerning his passioned plea for Gregoire to veto the Democrat Legislature’s defunding of I-900’s performance audits.
SEATTLE TIMES: Save Sonntag’s audits — Gov. Chris Gregoire should veto the Legislature’s cuts to the office of the state auditor. The auditor’s work saves the taxpayers more than it costs them. … Under cover of recession, they have now erased the people’s vote on Initiative 900 and hobbled the auditor’s office. In a time of tight budgets — and this will not be the last one — the auditor’s work is needed more than ever.
http://seattletimes.nwsource.c.....ditor.html
EVERETT HERALD: Use veto to restore funding — The size of the cut carries an acrid air of vindictiveness … Gregoire is left with an all-or-nothing choice: leave the cuts in place, or veto them and restore the auditor’s previous funding level. The only way to restore faith with the voters is to do the latter. A veto would allow the auditor’s office to stay on track with planned performance audits and continue identifying savings, thereby bolstering taxpayer confidence. … Cutting the performance-audit budget by any amount is short-sighted.
http://www.heraldnet.com/artic...../705089915
SEATTLE WEEKLY: Auditor’s Cuts: Your Vote Revoked — Sonntag notes that the cuts actually violate government auditing standards and “should be vetoed for that reason alone.” Additionally, he says, “enacting this budget into law could have far-reaching consequences, such as affecting this state’s ability to properly account for billions of dollars in American Recovery and Reinvestment Act money that will be so important in getting the state’s families and economy back on their feet. Comprehensive oversight of these dollars is absolutely critical.” With her pen poised, the governor might ask herself what she’ll do when the day comes – and it will – that Washington taxpayers ask where all that stimulus money really went, and nobody answers.
http://blogs.seattleweekly.com.....revoke.php
KITSAP PENINSULA BUSINESS JOURNAL: Sonntag called the (performance audit defunding) proposals, “nothing short of an assault on what citizens expect the state to do when they gave us the authority and the funding stream to carry it out.” Whisteblowers like Sonntag aren’t very popular with elected and appointed officials who prefer operating in the shadows away from public scrutiny. This is hardball dirty politics — not to mention downright fiscal stupidity — at work. The legislature should not be allowed to get away with this assault on financial accountability.
http://kpbj.com/opinioneditori.....DT-01.html
WASHINGTON POLICY CENTER (INCLUDES SONNTAG’S LETTER TO GREGOIRE): State Auditor asks Governor to veto performance audit changes — The State Auditor’s Office sent Governor Gregoire a letter yesterday formally requesting that she veto changes in the budget to the performance audit program.
http://washingtonpolicyblog.ty.....nges-.html
EVERGREEN FREEDOM FOUNDATION: EFF urges Gov. Gregoire to veto legislature’s raid on performance audit funds — Initiative 900 performance audits have identified more than $3 billion in cost savings and unnecessary spending. Implementing these ideas would produce far more benefit to the state than the legislature can gain by raiding the performance audit account.
http://www.libertylive.org/blo.....st_id=1391
SJ @1,
You raise some important points. Performance audits come out of the private sector, where companies would audit their own operations in an effort to find new efficiencies and improve quality. An effective performance audit not only requires broad expertise by the auditor, it also requires the active participation and cooperation of those being audited.
Anybody who has been through one of these audits (I was involved in a similar process will documenting ISO certification of an employer) understands that the auditor’s costs are only the tip of the iceberg. It is very expensive and time consuming for the agency being audited.
The Seattle Times is not alone in defending Sonntag and I-900:
EVERETT HERALD: Use veto to restore funding — The size of the cut carries an acrid air of vindictiveness … Cutting the performance-audit budget by any amount is short-sighted.
http://www.heraldnet.com/artic...../705089915
SEATTLE WEEKLY: Auditor’s Cuts: Your Vote Revoked http://blogs.seattleweekly.com.....revoke.php
KITSAP PENINSULA BUSINESS JOURNAL: This is hardball dirty politics — not to mention downright fiscal stupidity — at work. The legislature should not be allowed to get away with this assault on financial accountability.
http://kpbj.com/opinioneditori.....DT-01.html
WASHINGTON POLICY CENTER (INCLUDES SONNTAG’S LETTER TO GREGOIRE): State Auditor asks Governor to veto performance audit changes — http://washingtonpolicyblog.ty.....nges-.html
EVERGREEN FREEDOM FOUNDATION: EFF urges Gov. Gregoire to veto legislature’s raid on performance audit funds —
http://www.libertylive.org/blo.....st_id=1391
Goldy & SJ–
I actually agree with you. PERFORMANCE Audit sounds impressive. So does FINANCIAL Audit.
But the qualifications of the people doing these audits is crucial…..as is the SCOPE of the Audit.
Frankly, I haven’t been very impressed with Sonntag’s FINANCIAL Audits. On local governments, they seem to allow the Bureaucrats to cover things up by CORRECTING so-called errors which were actually abuses of Public Funds. The citizens never see these sorts of things…emboldening future abuse.
The Audit Findings….most of them are obvious….but they rarely dig deep enough because the Auditor doesn’t have the time, expertise or desire. The basic desire is to make sure numbers are in the right boxes.
If folks in the private sector with Audit backgrounds don’t see much value in even the Financial Audit’s….then the Performance Audits are likely much, much less effective.
IN THEORY…Audits are a necessary part of protecting Public Funds. IN REALITY, they seem to be window-dressing with just enough ah-ha’s to make it seem like they are effective.
SJ is right, without the co-operation of the entity being audited, it’s pretty futile.
This is one of the biggest holes in Washington State Government….public confidence that we have adequate controls and accurate information to hold those in power accountable.
I don’t think the current system effectively does that.
OK…if we need to have someone to audit the auditors, who’s going to audit the auditors’ auditors?
At some point, you have to just bite the bullet and say a prayer that not everyone involved is incompetent or crooked.
Those who start with some expectation that an audit is going to magically reveal that everything is rotten to the core (as some conservatives seem to assume of government) or that it’s going to reveal that the situation isn’t as horrible as it appears to be (as many might have been keeping their fingers crossed about while waiting for the “stress test” results from the banks) is likely to be disappointed.
The conservative agenda in WA seems to be if they ca’t get elected to office, they can hobble its operation with BS things like ‘performance audits’.
The weakness in the very notion of performance autits is: Who gives a performance audit to the performance auditors?
The same question cannot be asked of financial auditors. They can easily be financially audited.
re 3: A person like yourself cannot perform government audits because you have the predisposition to hate government, so all of your findings would be colored with this pre-existing bile.
@3 Funny how imperfect management decisions are “inefficiencies” in the private sector but “abuses” in the public sector …
7 ‘Funny how imperfect management decisions are “inefficiencies” in the private sector”
…except when they’re rebranded as “innovations”.
Until KlyniKal Klown works for a public agency, he has no concept of what “abuse” is. You’d be surprised how many people think paying taxes entitles them to abuse government workers. When you’re on the getting end of it, you have to keep your mouth shut and serve your agency’s “customers” when you’d much rather sock them. Believe me, government work doesn’t pay enough to put up with this crap. I don’t see why anyone works. It isn’t worth it, so I don’t work. There’s no incentive to work, and plenty of reasons not to.
Goldy will not quit until the Seattle Times is a cheerleader for local government and liberal causes. He cannot stand that they have opinions that don’t fall in line with party doctrine.
That’s what this post, and his obsession with the Times is all about.
re: they have now erased the people’s vote on Initiative 900
Our state constitution states that after two years an initiative is fair game to be revised by the legislature. All that ensures is that the people get to vote on their representation first. These are the rules; we all know them; we all live under them. Complaining about it is nuts: if you want to change it, change the state constitution.
10 T
CLever way to avoid commenting on what Goldy’s post is ACTUALLY about #10: declare that it is about something else.
And mad props to anyone who would use ‘Oswald Spengler’ as a handle.
I bought Spengler’s The Decline of the West, started the first volume, and then soon died of thirst in the arid desert of his prose. Great concept, but don’t make me go back. Still a monumental intellect.
Shorty Goldy:
We librulz don’t want any accountability for our socialist programs!
9 My wife used to work for the Seattle/King Co. Health Department. Back when their clinics still offered travel immunizations, she had to put up with the business execs going overseas who’d show up in Armani suits and haggle over the price (which was about a fifth of anywhere else) and give her all kinds of shit about what human garbage she and all her co-workers were, how all poor people were freeloaders who should just crawl off and die somewhere, and how eeeevil the government was. She was often tempted to keep some dull needles on hand for these jerks, but never did so.
Shouldn’t the state auditor be required to be a CPA at least? What are Sonntag’s qualifications in that area? Don’t you need to have some education in audit procedures to be an auditor?
to: politically incorrect
here’s Sonntag’s bio from last fall’s voters’ pamphlet:
http://wei.secstate.wa.gov/oso.....26#ososTop
The Seattle Times is not alone in supporting Sonntag’s funding for performance audits:
EVERETT HERALD: Use veto to restore funding — The size of the cut carries an acrid air of vindictiveness … Gregoire is left with an all-or-nothing choice: leave the cuts in place, or veto them and restore the auditor’s previous funding level. The only way to restore faith with the voters is to do the latter. A veto would allow the auditor’s office to stay on track with planned performance audits and continue identifying savings, thereby bolstering taxpayer confidence. … Cutting the performance-audit budget by any amount is short-sighted.
http://www.heraldnet.com/artic...../705089915
SEATTLE WEEKLY: Auditor’s Cuts: Your Vote Revoked — Sonntag notes that the cuts actually violate government auditing standards and “should be vetoed for that reason alone.” Additionally, he says, “enacting this budget into law could have far-reaching consequences, such as affecting this state’s ability to properly account for billions of dollars in American Recovery and Reinvestment Act money that will be so important in getting the state’s families and economy back on their feet. Comprehensive oversight of these dollars is absolutely critical.” With her pen poised, the governor might ask herself what she’ll do when the day comes – and it will – that Washington taxpayers ask where all that stimulus money really went, and nobody answers.
http://blogs.seattleweekly.com.....revoke.php
KITSAP PENINSULA BUSINESS JOURNAL: Sonntag called the (performance audit defunding) proposals, “nothing short of an assault on what citizens expect the state to do when they gave us the authority and the funding stream to carry it out.” Whisteblowers like Sonntag aren’t very popular with elected and appointed officials who prefer operating in the shadows away from public scrutiny. This is hardball dirty politics — not to mention downright fiscal stupidity — at work. The legislature should not be allowed to get away with this assault on financial accountability.
http://kpbj.com/opinioneditori.....DT-01.html
WASHINGTON POLICY CENTER (INCLUDES SONNTAG’S LETTER TO GREGOIRE): State Auditor asks Governor to veto performance audit changes — The State Auditor’s Office sent Governor Gregoire a letter yesterday formally requesting that she veto changes in the budget to the performance audit program.
http://washingtonpolicyblog.ty.....nges-.html
EVERGREEN FREEDOM FOUNDATION: EFF urges Gov. Gregoire to veto legislature’s raid on performance audit funds — Initiative 900 performance audits have identified more than $3 billion in cost savings and unnecessary spending. Implementing these ideas would produce far more benefit to the state than the legislature can gain by raiding the performance audit account.
http://www.libertylive.org/blo.....st_id=1391
Looks like Sonntag doesn’t even have a Bachelor’s degreee and has no CPA.
Sonntag ran the elections office in Pierce County- the County Auditor. Before that he was the County Clerk. He has NO expertise to be doing performance audits. What he has is the support of the editorial boards in the state because he kisses their asses regularly and leaks the occasional bad findings in financial audits.
Sonntag is a politician. He is not qualified to perform or oversee performance audits.
I-900 looked impressive because voters thought they would get “better” government. Unfortunately, Sonntag manipulates the performance audits to make his dept look better than they really are. Much of what he considers savings are bogus.
I would support what initially was supposed to occur: a citizen’s board to oversee the performance audit process.
I would challenge anyone who supports Sonntag’s version of performance audits to really take a close look at what has been spent and what the returns to date have been.
So far: $1 million spent on an audit to tell the legislature to not run ferries as often to save money (imagine that!) a $2 million congestion “audit” that was written by a Heritage Foundation researcher (the recommendations between the Heritage white paper and SAO “audit” are strikingly similar . . .!)
http://www.heritage.org/Resear.....bg1995.cfm
http://www.sao.wa.gov/Reports/.....000006.pdf
Whereas I think that there is a lot to be gained from performance audits, they need to be done by someone who is not angling for higher office and has the necessary skills and a qualified staff in place to do so. The current SAO has neither. For the Times to lament that Sonntag’s budget has been cut (not how much has not even been spent) when people are being forced off of Basic Health is a testament to how poor journalism is and how screwed up priorites are.
Anyway, MrBill sums it all up very concisely–if this is to work, we need a citizen’s board or someone else involved. The status quo is not working. Until then, spending millions more on Sonntag’s bugdet is irresponsible.
If I wanted to audit government I would hire a private, professional firm to do it or set up a professional agency. Electing someone to do this is as idiotic as electing a sheriff, an elections supervisor, insurance commissioner, land commissioner, Port board, or judge.
If audits are good management then the auditor should be able to demonstrate that she has actually saved more than the costs of the audit.
21 – The Auditor does hire outside professionals who specialize in the area being audited. The relatively small staff from the Auditor’s office itself specializes in financial audits – for performance audits they need specific skills that vary from audit to audit, thus a need to contract.
Goldy, the audit of the Port made a pretty fundamental difference to getting them to open up and become more transparent plus reform how they run public contracts. That alone has more than paid for the overall program.
Was never in favor of Auditor having performance audit power. For me it was simple analysis of structural political power. With performance audit power the Auditor becomes the most powerful politician in the state by virtue of the ability to destroy or elevate any program he/she dislikes or hates. If you are a Department head you would be foolish to get on the auditor’s bad side; thus what the Auditor thinks, not the legislature, Governor, constituents or ‘stakeholders’ becomes the most important political question. I thought it was a bad idea when first proposed and have seen nothing to change my mind.
yellowdog D @22,
The audit of the Port was part of a series of public exposes that have helped push the Port toward reform (though not nearly as quickly as one would like.) It deserves some of the credit, but not all.
That said, it wasn’t a well executed performance audit by general standards largely due to the lack of cooperation between the Port and the auditors.
The point is, performance audits are not magical panaceas, and their findings are recommendations, not hard and fast numbers.
@22 ,,, For hire Auditors.
The issue that concerns me is not whether the auditor hires professionals for each task, the issue is whether an elected official with no obvious qualifications is able to determine what needs auditing and whether the audit is informative.
I actually think the issues is very simple. “We” created this office and decided to elect Mr. Sonntag. OK? Now, the main reason for having this office is to improve efficiency. Has it done so?
There are many other examples. Here at UW we have created a VAST system called “compliance.” The compliance is system is NOT directed at efficiency or honesty, it is intended to keep the UW out of legal trouble.
Some of these unfunded and unproductive mandates come from the left, some from the right.
On the left, many here supported the Death with Dignity suicide act. Based on experience in Oregon, it is likely that very few people in this state will benefit from the new law BUT complying with it is certain to require that the UW have someone or perhaps an entire office to determine when a suicide prescription is or is not legal. One reason I supposed that law was that the funds needed for compliance were not allocated and my fear is that those funds will cut into our already tottering health care system.
Examples from the right are just as bad. We have an elaborate system that subsidizes “alternative medicine.” This costs money and does essentially nothing that the existing, very competitive medical research system does not do anyway.
I would challenge anyone who supports Sonntag’s version of performance audits to really take a close look at what has been spent and what the returns to date have been.
If there really were any recommendations taht could be put into place and save the state money that have not been implemented, perhaps Mr. Sonntag should sponsor executive request to implment them.
Whereas I think that there is a lot to be gained from performance audits, they need to be done by someone who is not angling for higher office and has the necessary skills and a qualified staff in place to do so. The current SAO has neither. For the Times to lament that Sonntag’s budget has been cut when people are being forced off of Basic Health is a testament to how poor journalism is and how screwed up priorites are.
Anyway, MrBill sums it all up very concisely–if this is to work, we need a citizen’s board or another party involved–spending millions more on Sonntag’s bugdet is irresponsible.
The law provides for an audit OF the performance audit program. RCW 43.09.450