The normally staid and sober Washington State Auditor’s Office (SAO) is taking its case to YouTube and getting a bit prickly there, as the legislature moves toward adopting a supplemental budget that would result in a net cut of 74 percent in SAO’s performance audit funding for 2015 to 2017.
Deputy State Auditor Jan Jutte is interviewed by SAO Deputy Communications Director Adam Wilson, giving a 53-second “elevator” pitch – filmed in an actual Capitol elevator and posted to YouTube.
It’s not often you’ll see state agency personnel on YouTube calling actions of lawmakers “terrible” and “sad”, but Wilson does.
Then again, things have in the last year taken an odd turn at SAO.
The Office has been politically hobbled since State Auditor Troy Kelley was smacked with a 17-count federal indictment for alleged financial crimes against consumers through a business he ran prior to his election.
Much to the chagrin of Governor Jay Inslee and leaders of all four legislative caucuses, Kelley has refused to resign his office.
The focus in the new SAO video is on the $10 million lawmakers and Governor Jay Inslee propose to sweep away from the voter-approved performance audit program, in order to plug other holes in the off-year supplemental state budget.
The hit comes after a $12.6 million loss of performance audit monies for SAO in the big two-year budget approved last summer.
Together, the enacted and proposed cuts would amount to a 74 percent reduction in planned performance audit spending by SAO in the current two-year budget period, or biennium.
Confronting Lawmakers On YouTube
The total amount of the funding sweep “will really impact what we can do,” Jutte says in the video. Chimes in Wilson, “That is terrible; that is sad.”
Jutte issued a more serious plea to the State Senate in a letter last week, after its budget echoed those of the Democrat-controlled House and Democratic Governor Inslee on the $10 million cut to performance audits.
Don’t Divert Money From Government Accountability Work
Jutte wrote, “Sadly, I don’t think those who support diverting money the voters dedicated to government accountability fully understand the difference our Office makes for Washington.”
She continued, “Certainly any legislator demeaning our Office as ineffective, or worse, a ‘laughingstock,’ demonstrates a misunderstanding of our work and disrespects our 400-some professional staff members, who produce more than 2,200 audits a year,” Jutte said.
“I again ask legislators to preserve a program that makes public services more effective; but I am not optimistic their course will change. We are reviewing what government accountability work would have to be halted to accommodate the significant budget cuts we anticipate.”
Jutte stated the further cuts eyed by lawmakers means “reconsidering the many performance audits that the Legislature itself has directed us to perform, on topics from medical schools to alternative education to public records.”
For Taxpayers Including Business, Quantifiable Benefits
For businesses, consumers and property owners who pay taxes to help fund state government, SAO performance audits carry a quantifiable benefit.
SAO in a 2015 report said that “since we issued our first performance audit in 2007, governments report they saved about $1 billion and implemented 86 percent of our issued recommendations.”
Bill Weakening Audit Transparency Dies In Senate
A further threat to SAO was legislation which had advanced to the Senate this session. HB 2148 would have imposed a 60-day timeout on SAO publishing financial audits critical of local governments if findings were disputed. The bill would have also lessened SAO oversight of CPA firms who often do local government financial audits.
Testifying against the bill was Rowland Thompson, Executive Director of Allied Daily Newspapers of Washington, who told the Senate Accountability and Reform Committee that provision would be “a big problem” because a financial audit is sometimes done before a bond issuance when the fiscal health of the borrowing jurisdiction must be verified through the audit.
After a parade of testimony supporting the bill from CPA firms and local audit targets critical of SAO, committee chair Sen. Mark Miloscia (R-30) declined to call it for a vote in a hearing last week, effectively killing the measure for this session.
Miloscia has declined to step forward and advocate to Senate colleagues for nixing the latest sweep-away of performance audit funds, saying the agency lacks defenders now and there’s no way to separate its turmoil at the top from the value of the performance audit program.
SAO Warned By Miloscia To Step Up Its Game
Afterward Miloscia told SAO staff, “there’s a sentiment out there you have to improve…you have to get better. Next year, this bill will pass out of committee.” SAO needs to institute a formal complaint management system and better quality control systems, Miloscia told agency officials after the hearing.
“You’ve got a year, use it wisely,” he concluded. There was a not so subtle undercurrent to the remarks because Milosica is running for State Auditor in this year’s November elections, and could be their boss next year.