Regulatory Fairness Audit, Others, To Proceed As State Budget Is Settled

Regulatory Fairness Audit, Others, To Proceed As State Budget Is Settled
A series of state performance audits that had been threatened will now proceed, including one to examine potential regulatory burdens on business. Photo:

A series of state performance audits that had been on or near the budget chopping block will be saved. This includes one which will probe how well Washington state agencies are engaging with small businesses on regulatory impacts. It will evaluate the fairness of economic impact statements under the Washington Regulatory Fairness Act, when new rules are issued. The performance audit will be completed by year’s end before the 2017 legislative session begins, said Chuck Pfile, Director of State and Performance Audit for the State Auditors Office (SAO).

Other performance audits earning a reprieve include a dozen that will examine digital security at state and local government units, and ones probing:

  • why long-term care workers don’t complete training and certification;
  • business decisions in the Department of Corrections industries program;
  • cost efficiency of the state’s printing operations;
  • and a longitudinal study of Alternative Learning Experience programs and student outcomes in school districts around the state.

The accountability program rescue came yesterday as the state budget was finalized, and half of the $10 million in performance audits funds Governor Jay Inslee and lawmakers had originally targeted for shifts elsewhere, was saved.

Inslee Reverses Course On Performance Audit Cuts

In his proposed 2016 supplemental state budget Inslee aimed to sweep away the $10 million from the State Auditor’s Office (SAO). This came in early 2016 as current State Auditor Troy Kelley faced a 17-count federal indictment for alleged financial crimes prior to taking office, and after a $12.5 million hit to the voter-approved government accountability probes that Inslee and legislators had approved last year as the biennial budget was drafted. The total impact for the biennium to SAO’s performance audit fund would have been $22.5 million.

The House and Senate embraced the $10 million 2016 trim, adding in a few procedural twists.

But under continued pressure from Deputy Auditor Jan Jutte and accountability advocates, Inslee yesterday undid half of this latest cut with a veto as he approved the supplemental budget.

Audit Unit Lay-offs, Transfers And Demotions Avoided

The remaining $5 million preserved for performance audits in the current biennial budget will allow SAO to avoid the lay-offs of 10 employees, the transfer or demotion of 10 more, and several retirements, said SAO Audit Director, Pfile.

“We’re certainly very happy to be able to resume this government accountability work. It’s a big relief,” Pfile added.

Jutte’s Elevator Pitch

Figuring they had little more to lose, Jutte and SAO Communications Director Adam Wilson starred in a low-budget You Tube video produced in February to protest the latest proposed cuts to performance audit funding.

In the video, they are riding in an elevator in SAO’s Capitol campus office building and Jutte is giving an “elevator pitch” on the need to preserve performance audit funding.

According to a 2015 report issued by SAO, local and regional government and state agencies in Washington reported they had saved about $1 billion and implemented more than eight of every ten recommendations in state performance audits. SAO also performs accountability and financial audits and whistleblower investigations.

Recent state performance audits have covered topics including:

  • enhancing regulatory agency coordination;
  • overlap in workforce development programs;
  • complaint resolution, and fraud investigation, at the Department of Social and Health Services;
  • improving prison safety;
  • and improving criminal history databases.

One to be published in several weeks will examine the state’s electronic toll collection systems.

Under the 20-year tenure of State Auditor Brian Sonntag, which ended with his retirement in 2012, SAO’s stature and credibility as a government accountability watchdog grew.

However even under Sonntag, SAO was subject to performance audit funding raids by the legislature. Many state representatives and senators have never really supported the idea of independent oversight of their programmatic spending decisions.

The proposed sweep-away of $10 million more this year, though, turned out to be somewhat too much. The pressure ratcheted up to reverse the cut.

Jason Mercier of the Washington Policy Center reported that letters opposing the budget move came to Inslee from The Washington Finance Officers Association, the Municipal Research Services Association, and the City of Camas; and that editorials opposing it were published by the Seattle Times, The Olympian and the Spokane Spokesman-Review.

The state’s performance audit program was established by voters with approval of Initiative 900 in November 2005. It dedicated 0.16 percent of state sales tax revenues from the general fund to performance audits.


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