OPINION EDITORIAL

April 22, 2004

Performance Audits: Blueprint for Government Accountability

by Bob Williams & Jason Mercier
Imagine losing $261,000 worth of your company's property—laptop computers, cell phones, and digital cameras.

Perhaps if you had a long and trusted history, no record of negligent or criminal behavior, and a very good story, your boss might accept your explanation. He might allow you to pay back the amount missing or come to some arrangement.

But we all know the more likely result of this situation: a pink slip at best, and a criminal complaint at worst. Either way, there will be a price to pay. You will be held accountable.

Unless, of course, the corporate entity you happen to work for is Washington state, and your chief executive officer is Governor Gary Locke.

As evidenced by the state auditor's recent Statewide Accountability Report, the risk of tax dollars being mismanaged or stolen is still a serious problem. Among this year's audit findings:

• $5.8 million in employer workers' compensation premiums could not be accounted for.

• $1.3 million in Medicaid payments were provided to illegal aliens contrary to federal law.

• More than $700,000 in unemployment insurance benefits was paid to ineligible claimants.

• One agency lost $261,000 worth of equipment (laptop computers, digital cameras, etc.) and didn't report these losses as required by state law.

• Adequate criminal background checks on child care and early learning employee applicants are not being conducted.

These findings show some state agencies are not complying with state and federal laws, and others are reluctant to or incapable of accounting for the money and resources entrusted to them.

The Statewide Accountability (SAO) Report revealed the unsettling fact that many agencies were cited with multiple repeat findings. The Washington State Ferry system, for example, has been cited with the same audit finding for nearly two decades!

What is more disturbing is the fact that Governor Locke, Washington's CEO, has not commented on these audit findings, and no one has been held responsible. (Where is Donald Trump when you need him?)

Achieving efficient and effective management and operation of state government requires transparency and accountability in the management of tax dollars. The SAO report, as worrisome as it is, is just the tip of the iceberg. It only addresses violations of law and reporting standards. Imagine the potential savings to taxpayers if the state auditor was permitted to conduct comprehensive performance audits of state programs and agencies.

Performance audits consist of periodic reviews of the economy, efficiency and effectiveness of the policies, management, fiscal affairs, and operations of state government, conducted in accordance with the U.S. General Accounting Office Government Auditing Standards.

Similar performance reviews in Texas have saved taxpayers there $9 billion out of $19 billion in identified savings over the past decade.

Currently, Washington is the only state in the nation that prohibits the independently elected state auditor from doing the job he was hired to do without explicit legislative permission. This handicap is costing the state untold millions—if not billions—of dollars in potential savings. Thankfully, it can be easily remedied.

The scope of real performance audits should be established by the elected state auditor, not an unelected group of citizens appointed by the governor and legislature, as past legislative audit proposals would have mandated. To assure legislative action and participation (something currently lacking in regular audits), the auditor would forward findings to the legislature each year, and the legislature would annually report on the implementation status of the auditor's recommendations. Both the audits and the corrective action would be reported publicly on the state auditor's website.

This would improve the current process by guaranteeing the auditor's findings result in corrective action.

It is a dereliction of duty if the legislature and governor fail to enact performance audits and hold state officials accountable for their fraud and mismanagement.

At the end of the day, however, if the CEO doesn't act, the stockholders can.

Our state constitution recognizes that setting Washington on the right course may only occur through direct action by the people. If the legislature continues its refusal to authorize truly independent and comprehensive performance audits, and the governor refuses to lead, it may be incumbent on the people to bring about this reform through initiative. We've waited long enough.

Jason Mercier is a budget research analyst for the Evergreen Freedom Foundation, a non-profit public policy research organization dedicated to individual liberty, free enterprise and accountable government. Bob Williams is the foundation's President.

Contact: Booker Stallworth | Communications Director | 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