Interested in Audit Work? Come Meet Us this Month

The Audits Division holds its annual “Meet the Agency” event on Oct. 30, an opportunity for potential job candidates to meet the division’s financial, performance and information technology auditors and learn about our work.

capitol mapThe event runs from 11:30 a.m. to 2:30 p.m. Oct. 30, in Room 50 on the lower level of the state Capitol, 900 Court St. NE. Attendees will hear from current auditors and interact with them in small group discussions. Email audits.recruiting@state.or.us by Oct. 23rd to RSVP.

The Secretary of State’s Audits Division hires three types of auditors:

Financial auditors

  • Duties: Audit Oregon’s financial statements, evaluate compliance with grant requirements and rules, and determine whether agencies have adequate internal controls in place. Perform investigations and issue other public reports on financial and compliance projects.
  • Qualifications: Typical candidates have an accounting major or a degree that includes upper division accounting courses, plus a year or more of auditing experience. Internships are also available.

Performance auditors

  • Duties: Analyze data, conduct interviews and look for best practices to determine how agencies can improve. Write public reports detailing potential improvements.
  • Qualifications: Candidates typically have a year or more of experience in auditing or program evaluation or analysis. The division accepts a Bachelor’s degree or higher in one of 12 majors, such as business or public administration, social services, economics, public health and journalism.

Information technology auditors

  • Duties: Review and evaluate agency information systems and evaluate control effectiveness. Write public reports on agency performance and potential improvements.
  • Qualifications: Typical candidates have a year or more of professional IT experience. The division accepts degrees, or degrees with upper division course work, in computer science, management information systems, accounting or business administration.

This event is an information session. Please contact the Secretary of State’s Human Resources Division at sos.jobs@state.or.us for current job announcements and information on how to apply.

 

Auditors at Work Featured New Audit Release Noteworthy

Audits in the News: Oct. 12

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 Oregon Audits Division recently released its audit of Oregon’s debt collection practices, which found that liquidated and delinquent debts owed to the state have nearly doubled since 2008. You can read the full audit here.

The audit was talking some big dollar figures, leading several media outlets to jump on the story.

KTVZ – Audit: State debt collection falls short, $ owed nearly double

Read the story here.

 

“Liquidated and delinquent debts owed to the state of Oregon have almost doubled since 2008, to nearly $3.2 billion, and the state needs a sustained focus to improve collections performance over time, a new audit released Tuesday by Secretary of State Jeanne Atkins found. “

Oregon Public Broadcasting – Oregon’s Delinquent Debts Double Since 2008

Read and listen to the story here.

“Secretary of State Jeanne Atkins says collection rates on the debt have also dropped, from 13 percent to 11 percent.  “The state’s debt collection system needs leadership, it needs sustained focus and accountability to assure Oregonians that the state isn’t squandering opportunities to collect funds owed essentially to tax payers,” she said…. The audit recommends that one agency, the Department of Administrative Services, oversee collections instead. It would set policy and require departments to report their success rates.”

Audits in the News Featured Performance Audit

Eye on the digital future: Coding a Better Government

What is government? According to the Merriam-Webster dictionary, it is “the group of people who control and make decisions for a country, state, etc,” or “a particular system used for controlling a country, state, etc,” or even “the process or manner of controlling a country, state, etc.”

But more simply than that, according to Tim O’Reilly government is, at it’s core, what we do together that we can’t do alone. The Merriam-Webster definition of government- often considered to be technologically outdated, slow, monolithic and inefficient- is being replaced and rebuilt to reflect the vast social and technological changes that have touched most of our lives. As Jennifer Pahlka explains in the video below, governments (particularly local governments) are becoming more accessible, more open-sourced, and more responsive to their communities through effective use of new technologies.

What do these changes in how governments serve their citizens, and how citizens work with one another, mean as we look to the future?

 

Featured

Audit Release: Oregon Needs Stronger Leadership, Sustained Focus to Improve Delinquent Debt Collection

Executive Summary


Liquidated and delinquent receivables owed to the state of Oregon have almost doubled since 2008, to nearly $3.2 billion, while collection rates on the debt have dropped. The state’s debt collection system needs more leadership, sustained focus and accountability to improve performance over time.

 

Read full report here.

Past due receivables are growing

Oregon’s liquidated and delinquent debt rose from $1.7 billion at the end of fiscal year 2008 to nearly $3.2 billion by 2014, while statewide collection rates on that debt dropped from 13.5% to 11.2%. Nearly $800 million of the debt is tied to the state’s general fund.

Liquidated and Delinquent Receivables

collections audit blog pic 1

Source: Legislative Fiscal Office. Adjusted for PERS errors. Excludes Department of Administrative Services interagency debt.

The recession contributed to the increased debt. Evidence indicates many of the debtors are low-income, and more than half the debt may be uncollectible.

However, bumping up Oregon’s collection rates could still make a substantial difference over time. At 2014 debt levels, every percentage point increase in the statewide collection rate would improve collections by about $38 million. If Oregon had collected delinquent debt at a 13.5% rate in 2014 – last achieved in 2008 – the state would have brought in nearly $90 million more in collections.

Our audit found four key improvements that could help Oregon increase collections:

  • Improved oversight of collections;
  • Enhanced performance measurement and reporting;
  • Increased expectations for private collection firms and the state’s central collection agency;
  • Better use of proven collection tools.

Oregon has not focused on improving collections

collections audit blog pic 2Our audit found Oregon’s highly decentralized approach to collections has contributed to a lack of sustained focus on improvement. This is our sixth collections-related audit since 1997. Significant improvements identified in those audits have not been implemented, some dating back 18 years.

Oregon has not implemented productive collection tools used by other states, has not resolved lingering legal issues that hinder collections, and has allowed inadequate performance measurement to persist.

Individual agencies have made some improvements. Statewide, however, no one has been tracking collection improvement efforts or encouraging them. Our discussions with leading states on debt collection highlighted the importance of having a system “expert” responsible for identifying potential improvements, looking outside the state system for new opportunities, and reporting to decision makers.

In Oregon, the statutory authority and history of the Department of Administrative Services indicate it is the best agency to serve as a statewide strategist on debt collection.

Performance reporting, measurement are flawed

collections audit blog pic 3State agencies routinely collect receivables, or bills for charges and services. Statewide performance reporting focuses on receivables that become “liquidated and delinquent” – past due debt that debtors have had a chance to contest.

The Legislative Fiscal Office prepares an annual report on liquidated and delinquent debt collection, designed 16 years ago by the Legislature to help drive collection improvements. However, the report includes few large-debtor agency details – not even their collection rates – contains noteworthy inaccuracies, and does little to hold agencies accountable for collections performance. It also does not identify potential collections improvements or detail the status of agency improvement efforts, key to encouraging advances.

In addition to reporting, we also focused on “assignment” of debt, accounts sent by agencies to private collection firms or the Other Agency Accounts unit at the Department of Revenue, the state’s collectors of last resort. Private collection firms carried nearly $1 billion of the state’s debt as of 2014 – more than double the 2008 balance – with a collection rate just over 1%. Other Agency Accounts, the state’s central collection agency, had a better rate, roughly 7%, according to Legislative Fiscal Office data. Assignment to OAA has stayed relatively flat, however, hitting $259 million in 2014.

We found the Department of Administrative Services is not evaluating the performance of OAA or private collection firms. We also found some large-debtor agencies are not using performance information to strategically assign debt.

Oregon is not using some proven collection tools

Our research, discussions with other states and interviews with Oregon officials suggested eight tools Oregon could pursue to increase collections, including some the state has considered for years but not implemented.

Among the most promising:

State vendor offset: Forty states are intercepting state payments to debtors who are also state vendors, including corporations and consultants. Our work indicates vendor offset in Oregon would collect at least $750,000 a year.

collections audit blog pic 4Bank levies: Other states have systems that allow for automated matching of a wide variety of debtors to bank account records, a process that yielded $30 million for Wisconsin in 2014.

Internet posting of debtors: Twenty-three states maintain public online lists of debtors, some focused only on large debtors, to increase collections. Many of the debtors pay after they receive a warning letter but before the information is posted.

2015 Legislative changes should help

The Institute for Modern Government at Willamette University drafted Senate Bill 55 in the 2015 legislative session to improve debt collection. We issued an interim report to the Legislature to suggest further legislative changes. Our recommendations were incorporated in the bill, which the Legislature passed and the governor signed in July.

At our recommendation, Senate Bill 55 charged the Department of Administrative Services with monitoring and improving debt collection. DAS’s duties, detailed in the bill, include improving performance reporting and assignment of debt for collection. DAS started a committee last year to address statewide collections, and contributed to Senate Bill 55.

Senate Bill 55, passed by the Legislature, included changes we recommended.

Even with stronger oversight, improving collection of Oregon’s rising debt will not happen overnight. During our audit, we found that improving collections requires meticulous work with agencies.

DAS officials – and policy makers – will also have to be persistent to ensure improvements are made.

Recommendations

Beyond the changes implemented in Senate Bill 55, we found improvements OAA could focus on. We also found other steps DAS could take, including:

  • Preparing meaningful annual reports on debt collection, relevant to the public and policy makers.
  • Helping agencies adopt successful collection tools.
  • Developing short- and long-term plans for a sustained focus on debt collection.

Agency Responses

Both the Department of Administrative Services and the Department of Revenue generally agreed with our recommendations, with DAS noting that it recognizes its oversight role.

DAS said it would focus efforts on current receivables as well as liquidated and delinquent debt. The response also included concerns about the difficulty of adopting a fully integrated vendor offset program.

The Department of Revenue said agency officials will continue to discuss many of the collection improvements noted in our audit with policymakers and stakeholders. A computer system upgrade now underway will help the agency make further improvements, the response said.

The full agency responses can be found at the end of the report.

 

Featured New Audit Release Performance Audit

Audits in the News: Sept. 28

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 Oregon Audits Division recently released its audit of the Oregon State Hospital, which found that management has taken significant action to improve safety and patient care, both for the patients and staff. However, more action is still needed to continue improvements and promote patient recovery. You can read the full audit here.

Our last blog post had several stories from media who reported on the audit, but more have been published since.

Willamette Week – Nursing Staff at Oregon State Hospital Face Rise in Patient Violence

Read the story here.

An audit released this month says that staff at the Oregon State Hospital in Salem are coping with increased violence from mentally ill patients.

Aggressive events, which are logged electronically by OSH, rose from 701 in 2013 to 822 in 2014, according to Sandy Hilton, who managed the audit.”

Audits in the News Featured

How To: Analyze payroll data using Excel’s SUMIFS function

A few years ago, I worked on an audit at the Oregon Department of Corrections (DOC). Elected officials were concerned that the DOC was spending too much money on overtime. We used a combination of ACL and Excel to conduct this audit work. We followed the National Institute of Corrections Net Annual Work Hours Post Relief Factor methodology.

First, we accessed our state’s central payroll database. We pulled the tables we needed that recorded hours worked by pay code by month. The way the table was organized was not right for Excel, so we first needed to prepare the information by using the Summarize function in ACL. For this example, you will need to summarize on employee classification, pay code, and location. Aggregate both hours and dollars.
With the data prepared, it should like something like this:

Table 1 – Data

sumif post pic 1

The first column denotes the prison. The next is the classification of the correctional employees (e.g. sergeant, corporal, officer etc.). The following column shows pay codes – we had 50 different pay codes in our data set. The next three are straight forward – dollars, hours, and counts. Lastly, we have a short description of the pay codes. For example, CD is career development/training.

After developing this table, I calculated the average for each row by dividing by the FTE in each classification at each prison. For example, there were 3881.5 hours of CD and 184 FTE, yielding an average of 21 CD hours per staff. Now that I have my data ready I can start analyzing it. I want to know if there are differences between locations, classifications, and pay codes to see if this is driving any overtime.

I set up a table in excel, shown below. CCCF stands for Coffee Creek Correctional Institution and TRCI is Two Rivers Correctional Institution. Pay code descriptions are above. Classifications range from officer (C6775) to captain (X6780).

Table 2 – PRF

sumif post pic 2

I can now use this table within my SUMIFS function to pull average hours from the other table.
The SUMIFS function has three main parameters: Sum_range, Criteria_range, and Criteria.

sumif post pic 3

Sum range is the range of data you want summarized. In this case, I wanted to pull average hours from my payroll data. You only have one sum_range, although you can have as many criteria as you want. I will have three criteria. I want the average to come from (1) the correctional institution (2) the employee classification and (3) the pay code.

Columns a, b, and c, from the table 1 will each be a criteria range. I will use table 2 as my criteria. Here is what the formula looks like. Not I use a combination of absolute and relative references (our next post will delve into this in more detail). Absolute references ‘lock’ in cell ranges in a formula so when you drag the formula it does not change. Absolute references are denoted by a “$”.

SUMIFS function

sumif post pic 4

Reading left to right, the function is asked to summarize the averages calculated from the table 1. It is to look at the first column for the prison acronym to match to “CCCF” highlighted in blue. Next it searches employee classification in column b for “C6775”. Finally, it matches pay code “CD” highlighted in purple.

Once I have the one formula set up, I can drag it over and down and calculate over 500 different averages in a few seconds. After setting up one year of data, all you need to do is copy the tab and re-link to the next data and you can compare year-over-year trends in minutes.

There’s a few steps I’m skipping over, but the end result from these calculations looks something like this:

sumif post pic 5

So what did we find in our audit? Overtime is not as big of a problem as people perceive it.

Most people think that overtime has to be more expensive because you are paying time and a half. What is often left out is the cost of leave time and other benefits, which often add up close to 50% of salary making the pay difference negligible. Furthermore, if you hire an officer to replace overtime you must pay them for about 2,000 hours per year. Whereas with overtime, you only need to pay it when you need it. What is cheaper? $65,000 for a new officer or $25,000 for 500 hours of overtime?

So if you pay only 500 hours of overtime per year in a given shift, it doesn’t make sense to hire an officer to cover that time, because they would be paid for hours not needed. Below is a great example.

Overtime at CCCF

sumif post pic 6

You can see that overtime is quite varied. It peaks around hunting and fishing seasons, flu season, and winter holidays. This is not that surprising as more people are calling in sick during these times and someone needs to work the overtime to replace them.

If CCCF hired an additional officer to work these hours, they would only reduce overtime by a small fraction. At best, CCCF could eliminate all of the overtime between 0 and 8 hours. To eliminate all overtime, CCCF would need to hire 6 FTE on the graveyard shift, or 48 hours of coverage, which is vastly more expensive than the cost.

As we found out in this audit, sometimes your gut, i.e. overtime is costly, is wrong.

ian

Post prepared by Guest Blogger and OAD Senior Auditor Ian Green

Data Wonk Featured How To

GAO Report: Incomplete information on collective performance of rental assistance programs nationwide

Last week the GAO released a report looking at the roles federal, state, and local governments play in providing rental assistance and developing affordable rental housing for low-income households.

“Affordable Rental Housing: Assistance is Provided by Federal, State, and Local Programs, but There is Incomplete Information on Collective Performance” (GAO-15-645)

GAO partnered with 25 state and local audit offices to complete the study, including the Oregon Audits Division, the Multnomah County Auditor’s Office, and the City of Portland.

GAO found that the information on collective performance of federal, state, and local rental assistance programs nationwide is incomplete.

“Without information on the government-wide performance of rental assistance, the Congress, decision makers, and stakeholders at all levels of government are hampered in their ability to set priorities and allocate resources. While complete and reliable information is a vital component of assessing effectiveness, GAO recognizes it is difficult to identify relevant federal, state, and local programs; collect performance information from multiple levels of government; and synthesize the information to reflect collective performance. HUD, the nation’s leading housing agency, in consultation with the RPWG, is well positioned to capitalize on its existing collaboration among federal agencies and with state and local jurisdictions.”

(Excerpt from the highlights page of the GAO report.)

GAO report blog pic

Featured New Audit Release Noteworthy