Bled, Broke and Disrespected: Tough Times For Washington State’s Auditor

"There's A Bipartisan Conspiracy To Keep The Auditor's Office Barefoot And Pregnant"

Bled, Broke and Disrespected: Tough Times For Washington State's Auditor
"Significant enhancements" in IT security for state agencies and local governments are just one of the benefits the Washington State Auditor's Office says its performance audit program has yielded. Photo: Chris Amelung

How bad have things gotten in Washington state for the embattled State Auditor’s Office (SAO)?

Really bad.

It’s not just that the current occupant, Democrat Troy Kelley, is under federal indictment and resisting calls from Democrat Governor Jay Inslee and legislators to step down.

Nor just that, plus the taking back last year by the legislature of $12.6 million in SAO performance audit funds from the biennial state budget – part of a stream of money voters approved 10 years ago via Initiative 960 specifically to ensure state programs are really yielding bang-for-buck.

Piling On The State Auditor’s Office

And it is not merely those several misfortunes plus the current piling on by Inslee and now the Democrat-controlled House, who each in their 2016 supplemental state budgets propose to yank another $10 million away from performance audits in order to help fill a budget hole. This would leave SAO with only 26 percent of its expected performance audit revenue.

No, it’s even worse.

HB 2148 to partially de-fang SAO – something that audit wonk and State Senator Mark Miloscia (R-30th) says has been an often-introduced, never-passed ploy in past years – is now actually advancing toward possible passage. It would weaken SAO oversight of outside CPA firm audits of local governments, and would mandate a 60-day discussion and reconciliation period before SAO financial audits of local governments could be published.

For the very steamed Deputy State Auditor Jan Jutte, the last best chance of recovering the threatened $10 million is her office’s planned appearance at the Wednesday morning meeting of the Senate Accountability and Reform Committee chaired by Milosica. He tells Lens that in considering HB 2148 he wants SAO to make the case for why it deserves to be trusted, and have the proposed $10 million budget hit reversed.

That’s something that in theory at least, could occur as the House and Senate work in coming weeks to resolve their respective budget proposals and the Governor’s.

And as it happens, Miloscia has a dog in this fight. Himself.

The now-Republian lost to Kelley in a three-way Democratic primary for auditor in 2012, and is running for the office again this year.

In fact, to talk to the senator, it distinctly sounds as if he’s still running against Kelley.

A ‘Show Me’ State Of Mind

Miloscia is in a “show-me” state of mind. In an interview with Lens, he said, “This is a signal. In hindsight, it’s exactly what happens in politics in the real world. Money leaves places where things aren’t working out so well.”

Due to Kelly’s indictment, SAO “is an embarrassment to everyone working in Olympia,” Miloscia added.

The stage for the Wednesday morning head-butt was set yesterday when Jutte threw down the gauntlet with a letter to House Speaker Frank Chopp (D-43rd) and House Minority Leader Dan Kristiansen (R-39th). She decried the proposed $10 million grab of performance audit funds removal.

Jutte wrote, “Such a loss of funds would mean stopping government accountability work now under way and contradicts RCW 43.09.470, which prohibits legislative bodies from impeding our independent performance audits…I am asking you to look beyond the controversy and financial pressures of the moment and consider the permanent institutions of our state.”

SAO is Supposed To Be ‘The Sheriff In Town’

House Minority Leader Kristiansen told Lens that in his own view, SAO “is supposed to be the sheriff in town,” making sure lawmakers and state government are within the law and accountable. “I do get concerned” that historically, “when the Governor and Legislature didn’t like what the State Auditor’s office was doing,” they have yanked performance audit funds. “Why this office, and not another bigger agency? Are we doing the citizens a disservice?” Kristiansen asked.

State Senator John McCoy (D-38th) said, “Performance audits are a valuable tool, but we’ve got to sit down and prioritize. The audit dollars are in the same mix as everything else.”

SAO spokesman Adam Wilson said the independent agency continues to do important work that identifies major potential savings or other problems in state government. In the last two years, he added, SAO performance audits have:

  • found that the state could have potentially recovered $4 million in one-month with something called a debt-offset program;
  • determined that the Department of Social and Health Services for each $1 spent on “early detection” fraud investigators, could save up to almost two-and-a-half times as much;
  • found that almost 10 percent of state computers for sale or declared surplus had confidential data still on them;
  • found one-third of the records used by the Washington State Patrol for background checks were incomplete or missing;
  • and prompted major IT security fixes “at multiple state agencies and local governments.

‘We Are In A Weakened Position And They Are Taking Advantage Of It’

“The sad thing is,” Jutte said in an interview, “it’s not about the value this office adds for the public. It’s about, we are in a weakened position and they are taking advantage of it.”

One longtime Statehouse hand said the latest moves on the SAO performance audit budget are part of a historical pattern tied to the uneasiness the auditor provokes in lawmakers. “There’s a bipartisan conspiracy to keep the Auditor’s Office barefoot and pregnant,” the source said.

MORE: State Auditor Takes Budget Beef To YouTube, Lens, 2/28/16



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