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.