Washington State Auditor’s Office

1. Washington State Auditor’s Office Opportunities for Washington Association of Washington Business Government Affairs Council July 13, 2010 Larisa Benson Director of Performance Audit State Auditor’s Office

2. The role of the State Auditor We audit the accounts of both state and local government for financial reporting standards and legal compliance. In 2005, Washington voters passed Initiative 900, giving the State Auditor the authority to conduct performance audits of state and local governments. Since then, we have conducted 29 performance audits of more than 80 governmental units, identifying potential savings and revenue totaling $285 million.

3. Performance Audits and Reviews 2009 State Government Performance Review • Identified specific opportunities to save money, improve effectiveness and enhance revenue • Built a solid framework for identifying performance audit topics for the future 2010 Performance Audit Work Plan • Update on audits and reviews under way • Future audits aimed at highest state priorities

4. State Auditor’s Government Reform Agenda In 2009, we launched a performance review focusing on specific reform options for state government. We asked these questions: • Is the program a core government function? If not, could it be scaled back, eliminated, or transferred to the private sector? • Would the reform benefit the broad public interest rather than narrow special interests? • Could costs be reduced or revenue increased? • Could program effectiveness or customer service be improved? • Has the idea produced positive results elsewhere?

5. 2009 Performance Review Results • Liquor. We estimated up to $277 million could be gained by getting out of the business of selling and distributing liquor. • Information technology. We estimated savings of 10 percent to 15 percent by comparing state government rates and service with the private sector. • Real estate management (leases). We suggested a “no-cost” contract model for managing lease renewals and more strategic property management. • New revenue. We identified potential revenue from a new debt collection exchange program with the federal government.

6. A more focused approach to audit topics • We reviewed 38 agencies’ budget, management and performance systems, roughly 70 percent of the state budget. • We selected 30 new audit topics that: • Focus on the highest state priorities • Address areas of highest risk or potential for improvement • Provide actionable recommendations • Emphasize savings and service improvements • Legislative proviso (Section 909) calls for a prioritization and evaluation of activities in one of 10 state priorities. • In June 2010, the Joint Legislative Audit and Review Committee selected the category of general government.

7. 2010 Performance Audits and Reviews • K-12 employee health insurance coverage • Capital construction in Seattle Public Schools • Streamlining licensing for businesses in Washington • High-risk programs funded with federal economic stimulus dollars (Recovery Act) • Prescription drug purchasing in workers’ comp system • Crime victims’ services • State ferry system payroll and timekeeping systems • State printing services (12 print shops statewide)

8. Looking ahead to 2011-2013 • Future state performance audits will focus on: • Safety and security (WorkFirst reform; child safety) • Health care (Medicaid) • Education (dollars to the classroom) • State government (procurement, call centers) • Local government performance assessments: • Evaluating the baseline of performance • Assisting cities and counties trying to prioritize budgets

9. What do we mean by “Government Reform”? • Reform = REDUCE Less cost (less service) • Reform = RESHAPE Looks different • Reform = REDESIGN More value for the dollar = Our bottom line RESULTS Taxpayer dollars

10. State Auditor Brian Sonntag, CGFM (360) 902-0360Brian.Sonntag@sao.wa.gov Larisa Benson, Director of Performance Audit(360) 725-9720Larisa.Benson@sao.wa.gov