Performance Audit
in Washington
How I-900 affects local governments
Puget Sound Finance Officers Association, February 14, 2007
Jan Jutte
Director of Legal and Client Affairs
WASHINGTON STATE AUDITOR’S OFFICE
Overview
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Brian Sonntag’s vision
Definition of performance audit
Integration progress
Outreach
I-900 requirements
Performance audit process
Who, what, when, how
Status report
Questions and answers
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Brian Sonntag’s vision for performance audit
Conduct independent, constructive,
evidence-based audits that:
 Improve transparency
 Identify exemplary practices
 Report what is working and identify
opportunities for improvement
 Are valued and used as a
management tool
 Promote continual improvements in
quality, efficiency and effectiveness
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Definition of Performance Audit
An objective and systematic
assessment of the performance
and management of an entity,
program, activity or function in
order to:
 Provide information to improve
performance and operations
 Facilitate decision-making by parties
with responsibility to oversee or
initiate corrective action
 Improve public accountability and
transparency
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Integration of performance audits
Work done by the Auditor’s
Office:
 Financial audits
 Federal single audits
 Accountability (state and
local compliance/fiscal
integrity) audits
 Performance audits
 Fraud investigations
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Outreach efforts
 Citizen Outreach:
 Town hall meetings
 Focus groups
• Results posted on Web site
 Telephone surveys
 Survey posted on Web site
 Entity Outreach:
 Interviews
 Surveys
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Outreach efforts
Six top performance audit priorities
for citizens (not in order):
 Public schools
 Health care
 Transportation
 Social services
 Public safety
 Environment
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What we have learned from citizens
Outreach results revealed:
 Performance audit is not a silver bullet
 Governmental performance is about
accountability and transparency
 The feeling that state government
represents citizens’ interest is at a
record low
 Fewer citizens think taxes are relatively
high
 One-third think money is not well spent
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Initiative 900 requirements
Identify:
1. Best practices
2. Services that can be reduced or
eliminated
3. Programs or services that can
be transferred to private sector
4. Cost savings
Analyze:
5. Roles, functions and
recommend changes,
eliminations.
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I-900 requirements, cont.
6. Gaps, overlaps in programs or
services.
7. Feasibility of pooling technology
systems.
8. Departmental performance
data, performance measures
and self-assessment systems.
9. Recommend regulatory
changes that allow entity to
carry out its functions.
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Phases of a performance audit
 Outreach/research
 Notify entity of intent to conduct
audit planning and survey work
 Audit planning/survey work
 Develop audit objectives, scope,
methodology
 Notify top executive/entity of intent
to conduct performance audit
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Phases of a performance audit, cont.
Entrance conference with entity
Field work
Draft report
Pre-exit conference with entity
Receive comments from entity
officials
 Exit conference
 Final report issued
 Legislative body holds public
hearing within 30 days
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Performance audit reports
 Will be available on State Auditor’s Web site
and given to entity and legislative body
 Reports will contain:
Background, including results of outreach efforts
Objectives, scope and methodology
Recognition of exemplary or best practices
Opportunities for improvement
Fraud, illegal acts, violations of provisions of
contracts or grant agreements and abuse, if found
 Conclusions
 Recommendations
 Response from interested officials
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Who will perform your audit?
Local governments will be in contact
with:
 Chuck Pfeil, Director of Local
Government Audits
 Chris Cortines, Local Government
Performance Audit Coordinator
 Local government auditors
 Contractors, including subjectmatter experts, that may be hired
to conduct audits or provide
assistance.
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What will we be looking for?
Six performance audit themes:
 Public interest
 How dollars flow between state
and local governments
 Inherent, recurring challenges
 Matters that affect all agencies,
example – pensions or fuel
purchases
 Administration
 Capital project management
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When will local audits start?
Local government performance
audits we plan to issue by April
30, 2007:
 Educational Service District
Audit
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When will local audits start?
Local government performance
audits we plan to issue by June
30, 2007:
 Audit of public records systems
 K-12 Travel Practices
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When will local audits start?
Local government performance
audits we plan to issue starting
June 30, 2007 and continuing:
 Overtime practices
 Take Home Vehicles
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When will local audits start?
Individual Local Government
Audits Planned:
o Sound Transit
o Port of Seattle
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State Audits to be issued
State Audits that will be issued
soon:
o GA Motor Pool – later this month
o DOT Inventory/Project
Management (March/April)
o Collection of State Debt
(April/May)
o Health Care Licensing
(June/July)
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How are audits funded?
Performance audits of state and
local governments are not
billed to the entity. The audits
are funded from a small
portion of the state sales tax.
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What criteria will the Auditor’s Office use?
Chapter 7.28 of Yellow Book reads:
“Criteria are the standards, measures,
expectations of what should exist, best
practices, and benchmarks against which
performance is compared or evaluated.
Criteria, one of the elements of a finding,
provide a context for understanding the
results of the audit…In selecting criteria
auditors have a responsibility to use criteria
that are reasonable, attainable, and
relevant to the objectives of the
performance audit.
The following are some examples of possible
criteria:
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Criteria, cont.
o “Purpose or goals prescribed by law
or regulation or set by officials of the
audited entity
o Policies and procedures established
by officials of the audited entity
o Technically developed standards or
norms
o Expert opinions
o Prior periods’ performance
o Performance in the private sector, or
o Best practices of leading
organizations”
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How do criteria factor into the performance
audit process?
o Our auditors ask how the entity
measures its own performance.
o We determine whether we agree
or disagree with those
performance criteria.
o We ask whether additional
criteria or benchmarks are
necessary.
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What can you do to prepare?
 Get training/education on
performance measurements
 Developing meaningful
performance measures
 Model your program on other
entities that are leaders in
performance
 Take steps toward publishing
goals, measures, outcomes
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Performance Audit contacts
o Chris Cortines, Local Government Performance
Audit Coordinator
cortinec@sao.wa.gov
(360) 725-5570
o Chuck Pfeil, Director of Local Government Audit
pfeilc@sao.wa.gov
(360) 902-0366
o Jan Jutte, Director of Legal and Client Affairs
juttej@sao.wa.gov
(360) 902-0363
Web site: www.sao.wa.gov
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