Audits in the News: August 31st

We here in the audits division are proud that the work we do makes a difference. Our work attracts the attention of the legislature, statewide news sources, and even local media outlets. Local media coverage of our audits is just another way we communicate with the people of Oregon about the work that we’re doing on their behalf to make government better. This is part of an ongoing series of posts rounding up recent instances in which the Oregon Audits Division makes a cameo in the local news.

KTVZ – What’s a casino? Oregon rules unclear, audit finds

Read the story here.

“Video gambling machines are a major source of income for a number of retailers even though the Oregon Constitution prohibits ‘casinos.’  Trouble is, casinos are not defined in Oregon law, with the result that the prohibition is not currently subject to effective enforcement. Those are among the findings announced Tuesday of an audit of the Oregon State Lottery conducted by the Oregon Secretary of State’s Audits Division.”

Read the audit, released last week, here.

The Oregonian/OregonLive.com – ‘Little casinos’? Cash-cow ‘delis’ flout Oregon Lottery rules, audit finds

Read the story here.

“The Oregon Lottery has failed to flag cash-cow ‘delis’ that might be operating illegally as casinos, a state report has found — in part because regulators have increasingly shied away from basic financial checks. The audit from the Secretary of State’s Office, released Thursday, brings to light an open secret long lamented by reformers who worry that the lottery’s billion-dollar returns come at the expense of problem gamblers.”

Read the audit, released last week, here.

The Register-Guard – Opinion: Curbing lottery creep

Read the story here.

The audit makes several recommendations. The first is that state lawmakers work with lottery officials to establish a “clear and enforceable definition” of a casino. The audit also recommends that lottery regulators analyze the financial records of food-light retailers to determine compliance with the 50 percent non-lottery income threshold. For retailers found in violation, the lottery should determine whether removal of some video machines could bring the business into compliance.”

Read the audit, released last week, here.

The Oregonian/OregonLive.com – Lottery director answers criticism after audit questions casino rules

Read the story here.

“The director of the Oregon Lottery responded to criticism in the wake of a state audit this week that called on officials to clarify the state’s ‘casino’ ban and raised questions about the lottery’s ability to enforce its gambling rules.”

Read the audit, released last week, here.

GoLocalPDX.com – Oregon’s Data Center Has Major Weaknesses, Says Report from Atkins

Read the story here.

“A new report from the Secretary of State Jeanne Atkins’ Office claims that the data center operated by the Department of Administration continues to have major weaknesses.  The problems going back nine years continue to potentially expose the most confidential records and data of Oregonians.”

Read the audit, released earlier this month, here.

Statesman Journal – Audit criticizes security at Oregon’s state data center

Read the story here.

“Oregon technology managers never resolved known security vulnerabilities at a state data warehouse that stores a trove of sensitive information about Oregonians, state auditors concluded in a report released Tuesday.”

Read the audit, released earlier this month, here.

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The Roots of Performance Auditing in the Northwest

Jewel Lansing

Jewel Lansing

Oregon has many good local auditors who don’t limit the scope of their work to financial matters. They also produce performance audits that trigger improvements in their government’s programs. The genealogy of performance auditing in Oregon traces back to Jewel Lansing, the elected Multnomah County Auditor from 1975 to 1982.

The story I heard from Jewel is that the Multnomah County elected chair, Don Clark, approached her, hoping to get a professional candidate to run for the elected auditor position against the incumbent. Jewel was a CPA, and former teacher, engaged in local issues and civic matters. She agreed to run and defeated her opponent.

Early in that campaign she agreed to pick up a guest speaker at the airport for a CPA training conference. The speaker was Lennis Knighton, a professor at Brigham Young University, who had written a paper defining a type of accountability that is now known as performance auditing. During the drive she decided to adopt it as part of her campaign platform.

This wasn’t the first performance auditing in the nation however. Up in King County, their legislative auditor, Rol Malan, had received support and federal funding to explore performance auditing at the local level. In this case the funding source was the GAO (now the Government Accountability Office, originally the General Accounting Office).

After two terms as Multnomah County Auditor, Jewel ran and was elected Portland City Auditor. There, against considerable resistance from the mayor and several city commissioners, she introduced performance auditing in 1984. I was fortunate to be one of her hires in 1985. Jewel chose not to run again and left office in 1986.

In 1990 Jewel came back through the City offices one day and suggested that I consider running for Multnomah County Auditor. The value of that office had declined because there had been no requirements that a candidate needed to be a professional auditor or accountant. I made the leap and she agreed to be my campaign chair. I was elected and served two terms, then ran for City Auditor and served for two terms and part of a third, following in Jewel’s footsteps.

Jewel had also planted seeds for two other local performance audit functions, in Washington County, and at Metro the regional government. Alan Percell, Jewel’s deputy auditor in Multnomah County, was approached and agreed to start a similar function in Washington County. In 1990 the Metro government was conducting a charter review and several local government auditors at Jewel’s encouragement testified that the regional government needed an independent elected auditor, which was added and approved by the voters.

The impact of Jewel’s efforts and the attention of her audits didn’t stop at the local level. Norma Paulus, a contemporary of Jewel’s and the Oregon Secretary of State from 1977 to 1985, first promoted performance auditing by her division. The next secretary, Barbara Roberts, expanded on the idea and the efforts, as did Phil Keisling, her successor.

After I left City Hall in 2009 Secretary of State Kate Brown asked me to lead her Audits Division. It was an honor and challenge to bring what I had learned in nearly 25 years of auditing to the state level. One of our principal auditors, Shanda Miller, was recently appointed the Lane County Auditor, and I like to think that some of Jewel’s legacy rubbed off during my nearly six years together here with Shanda.

And whenever prospective candidates for local elected offices contacted me, I made sure to send them to Jewel who still remains active, writing histories of Portland and Multnomah County. I know that auditors Suzanne Flynn, LaVonne Griffin-Valade, Steve March, Mary Hull Caballero, and Brian Evans have all met with her to talk about their aspirations.

Oregon’s important government accountability has been strongly influenced by the work and contributions of Jewel Lansing. I ran across an article she wrote in 1977 about her early experience in auditing, which you can see below. The observations are still very current.

All of this important government accountability has become a public expectation in Oregon, and in the Northwest for over 40 years. Much of it resulted from the contributions of Jewel Lansing.

Jewel1

Jewel2

Gary Blackmer Director, Oregon Audits Division

Gary Blackmer
Director, Oregon Audits Division

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The Evolution of New Auditor Training at OAD

How does training impact the work of new auditors?

We provide training to our newly hired auditors because government auditing is very different than business auditing. Unfortunately, no universities specialize in this field, and even a single class is rare. We try to update and improve our training each time, but what we’ve learned in the last year about our instructional design approach has given us new insights.

First, what we taught was not specifically designed to help new performance auditors conduct their day-to-day work. We explained about preparing a good workpaper, or using our software, Teammate. But there were gaps in the framework and perspective of auditing. To address those gaps, we began to develop trainings that complemented our practical nuts and bolts offerings with courses focusing on soft skills development and leadership.

Auditing has a maze-like feeling for the new hire but we sometimes forget that there are two perspectives of a maze – the bird’s eye view, and the view from inside. From above, our eye can trace the shortest route. But inside, there are no direction markers.  Success must come by assembling a clear memory of the layout of the maze through arduous trial and error.

Inside Hampton Court Maze

Inside Hampton Court Maze

Some people enjoy the puzzle of a maze and pay to wander through corn mazes. Some have no patience for mazes. The image to the right makes some folks feel like a lab rat. And not a very smart one, since I hear that lab rats are quite capable of negotiating mazes.

But even as we think about this frustration, we also need to ’embrace the maze’. Every new audit is an agency maze. We try to understand how all the program and financial pieces fit together, and build up the picture through interviews, data analysis, and observation.

On the financial side we have workpapers and team member continuity to guide us through the maze of risks each year. On the performance side, we are often entering new agency mazes and our initial, scoping phase produces a rough drawing of the maze to help us narrow down to an issue that we should audit.

Above Hampton Court

Above Hampton Court

The other maze is our audit process.  We want newly hired auditors to be able to negotiate their way through the agency maze without also getting lost in the auditing maze. The better we can prepare new auditors in our methods and procedures, how to audit, the more they can focus on what they are auditing.

Our instructional design efforts are laying out the tasks more clearly for new hires with 11 classes so far. For example, we have training on audit documentation, interviewing, elements of a finding, sufficiency of evidence, and report writing. This knowledge and skill set are spread out, presented when a new hire will encounter them, then reinforced as they do their work.

Nonetheless, we recognize that many aspects of auditing are affected by circumstances and context that can’t be set in procedure. Strategies, priorities, principles, and standards provide general guidance in these situations. Leadership is also important and we want to help our newly promoted team leads understand the new responsibilities and situations they must take on, and perform them with competence and confidence.

We are developing that team leader training in our next phase, and some intermediate auditor training, and some technical training on specific software or analytical tools.

This seems like a lot of work but we are asking our auditors to develop and offer the classes, which involves us all in the responsibility of defining expectations, developing the content, and presenting the instruction.

We want to shorten the learning curves of our auditors because that translates into highly professional work from everybody. Staff members that have had the opportunity to take part in thorough and holistic training are a key element of a learning organization.

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Auditors at Work: Spotlight on Sandy Hilton

Once a quarter we will be discussing the wonders of the world of auditing with (you guessed it) actual auditors! Our Summer Spotlight fell on Sandra Hilton, Performance Audit Manager with the Oregon Audits Division, and in her free time, newly adopted Cat Assistant.

What should we call you?
Call me Sandy.

How long have you been an auditor?
I’ve been an auditor for 26 years. I now work primarily on the performance side, but over the course of my career about half of that time was spent working on financial audits and hotline related work.

What led you to auditing?
I wanted to get my CPA certificate! Two years of relevant experience was required. That was the original reason I applied for the job as a staff auditor; however, once I got into it I found that I really, really liked it. I’ve been here ever since.

Many people, upon hearing the word ‘auditing,’ may assume that the job is just deadly dull. Is auditing boring?
I am never bored. Auditing is exciting! There are so many different things to look at, and it’s important work that you get to take on with a whole team. Teamwork, among other things, makes what we do interesting. Of course, after a few rounds of reading the same audit report, it does have its dull moments…

Why is your job important?
Because we can make a difference. We push things along- changing the course of a program or agency by incremental degrees and effecting some substantial long term changes. Similar to altering the trajectory of a rocket, tiny degree shifts make huge differences down the line. Audits build upon previous audit work and are often interconnected. We help the agencies and people we work with know which ‘tweaks’ can make a meaningful difference to achieving their goals.

Any personal victory stories, or tales of challenges overcome and differences made?
The TANF Audit we released a few years ago issued a number of recommendations that DHS used to  overhaul an underperforming program. In following, the most recent Governor’s Budget added $30 million to redesign and improve the program. Some of that money went to investments in support services and smoothing the transition for families off the ‘welfare cliff.’

Any auditing horror stories?
Not exactly a horror story, but it was definitely amusing. Years ago I did a site visit where I saw a safe with an ‘Open’ sign hanging on it. Apparently the safe was difficult to open, so the agency in question just left it open and put a double-sided ‘open-closed’ sign on the front. The safe was full of blank checks, and even had a signature stamp machine. Combined with the lack of segregation of duties and easy access to the safe, it was definitely a ‘one-stop’ shopping opportunity!

What do you do when you’re not auditing?
My number one hobby is gardening, and I enjoy feeding birds as well. I also adopted a cat recently- well, he adopted me. I’ve outfitted him with a break-away collar and a bell to warn the birds that a cat is around. I really enjoy being outside and seeing the new plant growth. When I’m inside I play the piano, and I am very interested in tracking genealogy.

Cats or dogs, and why?
I always thought I was a dog person. I love the affection. Cats are more independent. My husband had a cat before we were married, so I guess you could say I married the cat, too. I’ve learned to respect cats, and I respect them on their terms. I grew to understand and love our first cat. This new cat has also wiggled his way into my heart.

Any words of advice for new auditors?
That’s a tough one! But here goes… Be open to learning. Don’t be close-minded to ideas. Cultivate an attitude of willingness to hear different perspectives- it will help you realize the richness of what we do. As people we tend to focus a lot on ‘what we like.’ You may get a lot out of hearing stuff from people that you may not agree with. Be willing to learn from anybody, no matter who they are. Also, cut each other some slack. You’ll never know everything.

Final thoughts?
I’m really proud of our work here. I want to leave the world a better place, and here you have the opportunity to have a positive impact. That drives my work. When you get a whole group of smart people passionate about making a difference together, you can make change happen.

Auditors at Work Featured

Audits in the News: August 3rd

We here in the audits division are proud that the work we do makes a difference. Our work attracts the attention of the legislature, statewide news sources, and even local media outlets. Local media coverage of our audits is just another way we communicate with the people of Oregon about the work that we’re doing on their behalf to make government better. This is part of an ongoing series of posts rounding up recent instances in which the Oregon Audits Division makes a cameo in the local news.

The Oregonian/OregonLive.com – Ethics reforms after Kitzhaber: Which bills passed? Which bills didn’t?

Read the story here.

“More than a dozen measures dealing with ethics reforms emerged in the Legislature this year after an Oregon first: the resignation of Gov. John Kitzhaber amid a federal influence-peddling investigation. But just three bills passed, part of a measured approach championed by Gov. Kate Brown and top legislative Democrats … Senate Bill 9 orders the secretary of state to conduct an audit of state agencies’ handling of public records, and to report recommended changes.”

This audit is currently underway, with a scheduled release date of Nov. 20, 2015.

Medford Mail Tribune – Our View: Legislature left unfinished business on ethics

Read the story here.

“As lawsmakers look toward the short 2016 session, which also happens to be an election year, ethics reforms should figure prominently on their to-do list … Only three ethics bills passed … The third orders the secretary of state to conduct an audit of how state agencies handle public records and to recommend changes.

This audit is currently underway, with a scheduled release date of Nov. 20, 2015.

Portland Tribune – A victory for the Department of Administrative Services

Read the story here.
“Twelve new employees will work to fix problems identified in audits of state cyber security and IT operations, which the state has been slow to address. For example, the state has yet to fix some of the vulnerabilities auditors identified at the state data center in 2012. The data center is housed at the Department of Administrative Services, which is the central technology provider for state government and some municipal governments in Oregon.”

The audits division’s 2012 audit of the data center can be found here.
Another data center audit, conducted in 2010, can be found here.

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Auditing critical state information systems: Behind the Scenes

The Legislature just approved our request for two more IT auditors to increase our ability to examine the thousands of IT systems in the state. We now have three teams of IT auditors- a 50% increase over the previous two! We make the best of our limited resources by focusing our skilled professionals on the systems most critical to the finances and operations of state government.

We will soon start recruiting for more IT auditors so if you’re interested watch the Secretary of State website in August when applications open.

OurNeal IT Audit Manager, Neal Weatherspoon, was recently featured in the Summer 2015 newsletter of the Willamette Valley chapter of ISACA, an association of IT audit and security professionals.

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“Audits Division working to make reports accessible”

A Daily Astorian story describes some of the work underway as well as changes in how on the Oregon Audits Division reports its results. Originally published in the Capital Insider, the story profiles the office.Astor_050515

“Audits Division is an unseen gold mine of information.”

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