COMMENTARY

January 19, 2005

Performance audit veto lurking?

by Jason Mercier, Evergreen Freedom Foundation
Just when it started to look inevitable that comprehensive performance audits would finally become law, Governor Christine Gregoire's staff is now blurring that vision.

Despite claiming that "change is here and more is coming," Gregoire appears to be doing her best impersonation of former Governor Gary Locke. As governor, Locke routinely vetoed bills authorizing the state auditor to conduct performance audits of state government. Based on testimony provided by Governor Gregoire's office at two recent performance audit hearings, it appears that instead of "change," voters can expect more of the same.

Consider the following testimony (in italics) from Mary Campbell, speaking on behalf of Gregoire at both legislative performance audit hearings:

As you know, Governor Gregoire expressed her commitment to improving management, accountability and performance in state government in her inaugural address last week. The Governor agrees that citizens deserve accountability of public programs, and that public programs must continuously improve in quality, efficiency and effectiveness in order to increase the public trust.

So far so good; but wait, there's more.

This bill would schedule all state programs to be audited in turn against an extensive list of assessment criteria. Such comprehensive audits are very expensive. . . . And, in the end, we have no guarantee that a wholesale review of every agency will generate sufficient real savings to justify the cost.

Well, Texas isn't complaining about the $16 billion in identified savings since 1991 as a result of comprehensive performance audits. Nor is California, with its identified potential savings of $32 billion over a five year period. But those are just billions of dollars in identified savings, nothing to get too excited about—especially for a state that hopes to spend more than a billion dollars over forecasted revenue.

Many people say ‘government should act more like a business.' Although government does not have profit as its ultimate objective, we think we can learn from business about how to improve the way we manage ourselves. If top to bottom performance audits really delivered the returns that their proponents promise, we would expect to see businesses doing them! But what we found is that businesses do not use regular full performance audits to improve performance, or to save money.

Gregoire should remember that competition forces business to perform performance reviews every day to help streamline costs and increase productivity. Thankfully Sen. Jim Kastama (D-Puyallup), Chair of the Senate Government Operations and Elections Committee, had this response to the governor's business analogy: "When we look at businesses and their use of performance audits, it's the chair's opinion that often time the competitive nature of the business environment, unless you are efficient, you do not survive. In state government, we do not have that type of competition. Therefore you do need bench marking; you do need an independent source coming in and comparing the efficiency of that agency with like agencies in other states, for example."

...we are not sure that performance audits are the ‘silver bullet.' They might be part of a package, but we think that there are more cost-effective options to improve how public programs are managed now - and into the future.

While performance audits may not be a "silver bullet," they are more effective than the "blanks" now at the disposal of the state auditor to measure the performance of state government. It's unfortunate that Governor Gregoire appears ready to follow in former Governor Locke's footsteps and stand in the way of the state auditor conducting independent and comprehensive performance audits.

So much for "change is here."

Jason Mercier is a budget analyst for the Evergreen Freedom Foundation, a non-partisan, public policy watchdog organization, focused on advancing individual liberty, a free-market economy, and limited and responsible government.

Contact: Jason Mercier | Budget Research Analyst | 360.956.3482

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org