Report reinforces need for performance audits

Citizens of this state gave the state Auditor's Office authority to conduct performance audits of state agencies and local governments with the passage of Initiative 900 in November of 2005.

A report just issued by state Auditor Brian Sonntag highlighting the status of performance audit recommendations to date reaffirms the value of the program and the need for audited government entities to implement those recommendations.

With the state budget in a crisis, it is more important than ever to identify cost savings, streamline operations, pool resources and identify public programs and services better provided by the private sector — all part of a performance audit program mission.

From February 2007 through June 30, 2009, performance audits have identified nearly $3.6 billion in cost savings, unnecessary expenditures and economic benefits. It’s a total dollar value that underscores how voters got it right when they approved the initiative.

The recommendations include 214 that have future cost savings or revenue opportunities associated with them, totaling nearly $285 million over five years. As of the end of June, 129 of those recommendations have been implemented or are on their way to full implementation. The recommendations taken to heart represent 84 percent of the total monetary value identified by the auditors.

A couple cases in point:

 • The state Department of Labor and Industries overhauled the way it goes about collecting claims benefit overpayments. Through Aug. 12, 2009, the department reported collecting $29.6 million in overpaid claims benefits and insurance reimbursements since it started using the best practices identified by state auditors. The department spent about $400,000 to implement the recommendations, clearly money well spent and repaid many times over.

 •  The Ferries Division of the state Department of Transportation saved $320,000 in fuel costs this past summer and fall by cutting low-occupancy ferry runs on the Port Townsend-Keystone route. The savings were achieved with a minimum impact on passenger service.

Unfortunately, the taxpayer will never recover some of the unnecessary expenditures identified by performance audits, including $97.2 million by the Port of Seattle and $5.1 million by South Transit. But the wasteful spending has been curbed and new controls are in place to keep it from happening again.

In most cases, the performance audits offer much more than monetary benefits.

For example, a 2007 performance audit of the state Department of Health made a number of recommendations on how to improve the way doctors, nurses and other health care professionals are credentialed and disciplined. Out of the audit grew five legislative proposals embraced by the 2008 state Legislature that authorized comprehensive criminal background checks of health care professionals. Public safety was improved through the improved scrutiny of the more than 300,000 health care professionals licensed by the state.

When the auditors identify improved management practices for one state agency or local government, it often has application for others. To that end, the auditor’s office has created an online database of best practices that is available as a resource for government employees and managers. The agency also conducted an audit of 30 government agencies to see how they respond to public requests for records on the Open Public Records Act. The recommendations that followed, including improved training for employees assigned to respond to public records requests, can be applied by all public agencies to improve their programs.

A total of 992 recommendations with nonfinancial benefits have grown out of the performance audits since the program’s inception. Nearly 90 percent of them have been adopted or are in the process of being adopted.

The adoption rates show that local and state governments have come a long way in their acceptance of this new type of audit, one that goes beyond legal requirements and fiscal accounting of a government entity and works toward a more cost effective, transparent way of doing the public’s business.