Chalk Line

Performance Audit is a Valuable Tool

Will Stakelin
Government Affairs Director

In a prior Chalk Line article I wrote about the State Auditor's Office authority to conduct performance audits on state and local governments as a result of Initiative 900 (I-900) being passed by voters in November of 2005. The primary focus of the article related to performance audits planned for five Western Washington cities and their impact fee "process". However, I want to expand on the importance of the voter approved performance audits and the benefits to local jurisdictions.

The "mission statement" for the State Auditor's Office - posted on the agencies website states:

The State Auditor's Office independently serves the citizens of Washington by promoting accountability, fiscal integrity and openness in state and local government. Working with these governments and with citizens, we strive to ensure the efficient and effective use of public resources.

To ensure government is being efficient and effective with public resources I-900 requires performance audits consider the following nine elements:

1. Identification of cost savings.
2. Identification of services that can be reduced or eliminated.
3. Identification of programs or services that can be transferred to the private sector.
4. Analysis of gaps or overlaps in programs or services and recommendations to correct them.
5. Feasibility of pooling the entity's information technology systems.
6. Analysis of the roles and functions of the entity and recommendations to change or eliminate roles or functions.
7. Recommendations for statutory or regulatory changes that may be necessary for the entity to properly carry out its function.
8. Analysis of the entity's performance data, performance measures and self-assessments systems.
9. Identification of best practices.

Local elected officials should view these nine elements as "goals" in their efforts to be more responsive to taxpayers concerns about government waste and poor business practices.

An article published in The Olympian on August 11, 2007, entitled "County Commissioner at Odds with Audit Methods" - a County Commissioner said the audit is a time - and money - wasting "sting" (referring to a records request project) and that the performance audit conducted on Thurston County was "a breach of good faith, a waste of taxpayers' dollars, and we're not going to save any money". I-900 exists not to waste taxpayer's money, but to ensure government accountability to citizens and testing transparency in the process.

In an effort to make performance audits go more smoothly for local governments, the Governor's Office hired consultant Sterling Associates to prepare agencies for the audits. The consultant outlined several key elements for a successful audit process such as working with the auditor to diagnose problems, set a tone of openness and transparency, ask for best practices and proven solutions and enable the auditor to become the local jurisdiction's consultant.

I-900 authorized a dedicated funding source - 1/100th of one percent of the state sales tax - to pay for the audits. Local governments are not billed for the work and receive valuable consultative advice on ways to improve business practices, run more efficiently and identifying cost savings.

The performance audit process should be an incredibly valuable tool to local government for all of these reasons and more. Unfortunately, many local jurisdictions do not want an authoritative state office taking a critical look at their practices and measuring their performance.

Instead of using the system put in place by voters and using the auditor's as "consultants" local jurisdictions are becoming more and more dependent on hiring private consultants at a huge expense to taxpayers. These consultants charge a pretty penny to offer recommendations and solutions on local issues that apparently our local officials are not able to reach using local resources.

Thurston County Development Services is a prime example. The County hired a private consultant in the summer of 2007 to conduct an "assessment" of Development Services' business practices. The primary goal was to have the consultant analyze the department's process performance following the adoption of new fee recovery policies - 100% Cost Recovery Program. The "Business Process Assessment" recommended steps that could improve predictability, efficiency and collaboration of review.

As part of the Cost Recovery Program, the County hired another consultant to determine fee increases necessary for the County to recover 100% of ALL costs for ALL services provided by Development Services. As a result the County proposed fee increases in Land Use - Long Range Planning and Environmental Health that were astronomical.

The consultants for the County did exactly what they were paid to do. However, the County could have received "free" consultative advice on improving business practices and running more efficiently by embracing the performance audit concept, not private consultants, and working closely with users of the system to identify ways to improve and implement cost saving practices.