Talkin’ Shop With: Kip Memmott, Oregon Audit Division’s New Director

About Oregon Audits Division

front_desk_OAD2

The Oregon Audits Division, or OAD, is one of six divisions under Oregon’s independently elected Secretary of State. Oregon is the only state where the state auditing function falls under the Secretary of State. Our approximately 70 professional auditors conduct financial, performance, and information technology audits with the support of two operations staff. In addition, we investigate allegations we receive on our Government Waste Hotline, and monitor the financial audits of Oregon municipalities.

In addition to Audits, the Secretary of State also oversees the state Archives, Elections, and Corporations Divisions. These four divisions are supported internally by our Information Services and Business Services Divisions. Each division is headed by its own director, appointed by the Secretary of State.

Welcome to OAD! What are you most excited about as OAD’s new director?

kip_memmott_4x6

Our impact potential.

Over the next couple of years, I think we have the ability to increase the impact of our audits and value to Oregonians, including educating citizens about what we do as auditors.

I truly believe that governmental auditing is one of the last bastions of objective analysis, free of partisan bias. That’s especially important in the political reality of the national landscape today. Within this context, I take my responsibilities very seriously and am honored to serve in this role.

How you see the Audits Division’s role in state government and your role within OAD?

I see OAD as the external auditor for the state, here to add value, enhance transparency and provide assurance. Through the state constitution, the Secretary has independence and broad authority to conduct audits of state agencies. Our primary stakeholders are the citizens of Oregon and it is our responsibility to report our findings to decision-makers and elected bodies to help guide their decisions. As such, citizen-centric reporting is a cornerstone of our audit strategy. The agencies we audit are of course key stakeholders, but the distinction is that we are do not serve as their internal auditors and do not report to them.

I see two primary roles for myself as director. One is to knit together our culture—our professional auditor staff and the elected Secretary’s Executive Team. In doing this, I need to ensure there is a strong communication approach and implement change management strategies to increase our impact and visibility. I think we can do this internally by focusing on process improvement, reporting enhancements, and staff development and externally (at least in part), by reaching a wider audience with our audit work and products. Second, it is my job to help build trustful and collaborative relationships with the agencies we audit. I have been holding very successful meetings with state agency directors and have been attending department internal audit committee meetings as an initial step.

Any surprises so far at OAD?

Well, there are a couple. First, I knew coming in that the staff at OAD were good, but in the past couple of months I’ve learned that they are not just good, they are elite. The variety of their academic backgrounds, their passion for the work, and their credentials combine to create incredibly high quality teams in all our sections— financial, performance, and information technology auditors

I was less pleasantly surprised by the governmental environment in Oregon. Honestly, there appears to be less transparency than I would have hoped in the state, and less inclination towards accountability than I expected. I have also been disappointed at the strong political reaction to our audit work. OAD is completely non-partisan yet it appears that our work is often viewed from a partisan perspective. This is not surprising but disappointing. I will be working hard to change this dynamic as the citizens are not well served with in this paradigm.

Oregon State Capital Building

What was your first job?

I’ve been working since I was 11 years old. My very first job was as a paperboy in Salt Lake City, Utah. I’ve also worked in fast food, at a movie theater, ski resort, and managed an auto parts store.

Newspaper delivery, food service, movie theater, ski resort, auto parts… Auditing? How’d you get here?

I was interested in accounting and business in high school, and participated in the Future Business Leaders of America program. I started out as an accounting major in college, but it never felt like a good fit, so I switched to U.S. history. I went on to study U.S. History and Public Administration in graduate school at Arizona State University (Go Devils).

It was in grad school that I was first exposed to performance auditing, through an internship with the GAO in Washington, D.C. Did you know federal agencies have historians? They do! My internship with the GAO was in this capacity. I researched and wrote a paper on the history of GAO’s audit team staffing approaches. As part of the internship, I participated in a two week training for GAO performance auditors.

My next internship was with the Arizona State Legislature. I served as an analyst for the House of Representatives Minority Caucus and staffed two committees during the session, Economic Development and Agriculture. It was a great experience and I was offered a full time position after my internship, but I did not take it.

The ASU Grad School Dean, an important mentor to me, suggested I look into the Arizona Auditor General’s officenot because I’d ever want to have a career as an auditor, but because it would enable me to have a bird’s eye view of the different agencies in the state and determine which ones I may be interested in pursuing a career as an administrator. .

I took his initial advice, and a job with the Arizona Auditor General. However, I never looked back.

What other audit shops have you worked at? 

I spent seven years with the Arizona Auditor General, working my way up into management. I left Arizona in 2000 and spent some time in the private sector with a consulting firm in California before taking the internal audit manager position with the County of San Diego. I was there until 2007, when I accepted the Audit Director position with the City and County of Denver, Colorado’s Auditor’s Office. In 2016, I relocated to Oregon and briefly served as the Chief Audit Executive of the Oregon State Treasury before becoming Director of the Audits Division just a couple of months ago.

All the audit shops I’ve worked in had teams of dedicated audit professionals. Auditors seem to be wired the same way— driven, curious, big thinkers who want to change the world.

The shops I’ve worked in have all had different reporting structures. I have worked as both internal and external audit capacities and reported to elected officials, legislative bodies, and operational management (e.g. Chief Financial Officer). I have also reported to audit committees. Audit function governance structures impact audit strategy and risk appetites. Arizona tended more towards risk aversion, which can be the nature of a legislative audit shop. In Denver, unique challenges and culture due to having an elected auditor meant we operated in a very politicized environment. I had to manage political pressure around our findings and reports if and when they conflicted with political agendas.

Kip is quoted in a recent Internal Auditor Magazine article about public sector auditors facing such challenges, including retaliation.

Most memorable audits? 

I have two, and for different reasons. The first one was with the State of Arizona Office of the Auditor General, a performance audit of the state’s Department of Gaming in 1999. This audit epitomized everything performance audits can be.

american-indian_az_reservationsIt was a challenging audit. There’s no criteria on what tribal relations “should be” like and the issues between the American Indian tribes in Arizona and the state government were deep and concerning. As a historian, I brought my knowledge of American history to the audit, which is essential to understanding tribal relations in our country. The audit was controversial from the get-go and looked at governance of the agency within the context of a state that had a history of poor tribal relations. Tribal gaming started in Arizona, and federal laws allow gaming but require a compact between the tribe and state, which allows some state oversight of casinos.

However, the audit found the Department of Gaming was “leaning” heavily on the tribes in ways that were not within their compact, did not add value, and without real cause— as there were good controls in place and no evidence of organized crime. Yet they were strong-arming tribes, showing up to casinos with their badges and guns.

We recommended that the state adhere to their compact with the tribes and essentially back-off. The recommendations we advocated for were based on evidence, but our stance was not politically popular. I presented the findings and recommendations to the legislature and while they were initially not well received, recommendations were implemented that overall, helped tribal relations in the state.

Another memorable audit is the one at the City and County of Denver in 2008 under my leadership, a performance audit of the Emergency Medical Response System. It was heavy on data analytics— a million calls over 5-6 years. We looked at response times and as a result of the audit, the EMR System underwent a Lean process and now the response time is two minutes faster. Two minutes are huge when it comes to life and death situations.

What audits are you most looking forward to?

The two big areas of my audit strategy, or focus, as director are public health and safety, and human services and vulnerable populations. Aside from being interesting areas, these are places I think audits can have more immediate and definitive impacts.

I also plan to conduct audits of legal marijuana, an exciting and high risk emergent public policy. In Denver, my office released the two first municipal performance audits examining aspects of legal marijuana in the nation and they had tremendous, positive impact.

What’s your biggest challenge on the horizon?

There’s two challenges for me. Internally, it’s executive effective change management and continuous improvement within OAD— to align our current processes and reporting approaches with what I see as our impact potential. Externally, it’s building relationships that foster trust and collaboration with the agencies we audit and ensuring we effectively interact and communicate with a wide range of stakeholders, including, perhaps most importantly, the citizens and residents of this great state.

Favorite part about living in Oregon?

The people. I think most transplants would agree with me on that one. It is also a beautiful place to live, (and I have lived in some beautiful places) with a little bit of everything. There are mountains to ski on, trails to hike, the ocean…. And everything is so green!Oregon Welcomes You

Personal motto?

Think Big. Go bold. Think big and take on the big issues, don’t shy away from them. And go bold with strategy and direction. Government auditing is a noble profession. I am honored to work for the elected Secretary of State and to lead such a talented and committed group of audit professionals.

Auditors at Work Featured Noteworthy Regional Roundup: Talkin' Shop

City of Portland Audit Services: Financial Condition Report released

As part of our Regional Roundup beat, we are starting to feature the work of other audit shops. Check out the recent financial condition audit released yesterday by the City of Portland Auditor’s Audit Services Division. 


Portland Audit Services DivisionThe Financial Condition report, produced by the Portland City Auditor’s Office every other year, focuses on historical trends over five years and allows decision-makers to visualize the City’s course, consider options, and make adjustments to improve the City’s long-term financial health.

Portland Spending

Auditors found that although Portland’s financial condition is stable, the City must address long term challenges.

Some City assets are losing value faster than the City can make repairs.  While the City is making significant investments in water, sewer and stormwater assets, most transportation infrastructure is in fair to poor condition.

Portland Construction

The City has also seen a declining net position – partly due to increased liabilities, such as the City’s pension system for police and fire, as well as policy changes for the Oregon Public Employees Retirement System.

Report highlights

Read the full report


Have an audit you would like featured? Let us know!

Auditors at Work Featured New Audit Release Regional Roundup: Talkin' Shop

Talkin’ Shop With: Larry Stafford, Clark County Audit Services Manager

Join us as we talk shop with our neighbor to the North and former OAD performance auditor, Larry Stafford.

About Clark County’s Audit Services

clarkcountylogo

Per county code, internal audit is an independent appraisal activity for the review of operations within the county. The objective is to assist management in the effective discharge of their duties, and to promote efficiency and economy consistent with the public interest.

Clark County government is comprised of several separately elected officials, including the County Auditor.

The Audit Services Department conducts performance audits, internal control reviews, and provides other services to county management. Performance audits are objective and systematic reviews of program quality and the results achieved. Internal control reviews include analytical reviews, interviews, observations, and tests with the intent of evaluating the security of county assets and the accuracy/reliability of financial reports.

The Clark County Auditor

The Clark County Auditor is elected to a four-year term and our current Clark County Auditor is Greg Kimsey. In addition to being the county’s chief financial officer, the auditor also oversees several essential county services: Audits, Auto Licensing, Elections, Marriage Licensing, Financial Services, and Recording. Additionally, the Auditor works with other elected officials, various state agencies, and the state legislature regarding issues that affect these services.

ft-vancouver-clark-county-historical-musuem

Fort Vancouver (image from Clark County Historical Museum)

Working with an elected auditor is interesting because they can bring a different perspective and things to consider. We do debriefs with the auditor throughout our audits, and at the end of the Scoping, Planning, and Fieldwork phases.

Can you describe your role as Audit Services Manager?

stafford

As the Audit Services Manager for Clark County, I serve as the principle auditor and am responsible for the quality of the Audit Services team (2016 Peer review). This includes reviewing audit work and administrative responsibilities such as developing and maintaining policies and procedures, hiring staff, performing the annual quality assessment, and coordinating peer reviews.  I also serve as a liaison between County departments and external auditors, like those from the Washington State Auditor’s office.

When I left OAD, Gary Blackmer, who was the director at the time, told me that I would have to “live with my audits” at the county. He was right. At the state, we would audit an agency and leave. But at the county we see the people we audit every day. We still report to a separately elected Auditor and so we are external to those that we audit, yet we are still internal to county government. We have to build relationships while always being aware of our independence.

What got you into performance auditing?

Luck! I spent ten years in the automation/ engineering field. That was mostly robotics-related work including electrical design, project management, and programming. I also spent some time in the financial services industry.

I wasn’t happy with my work-life balance, so I went to graduate school and earned my MBA as a path to a new career. I attended a job fair with a classmate who went to speak with the Oregon Audits Division about financial auditing. At the booth they also told me about this interesting and challenging field called performance auditing. I’ve always been driven to learn new things and this sounded like just the right fit. I was fortunate to get a position with OAD and to work with some very good auditors.

Larry’s take on performance auditing

One of the most important things I learned at OAD was that performance auditing is about understanding the issues and finding solutions – not placing blame. Also, reporting when you find things are happening the right way is just as important as identifying problems. It provides objectivity to your report and delivers the assurance expected from an audit.

For example, the first audit I worked on at OAD examined if state agencies hired former employees as contractors.  We found some instances, but all of the required procurement processes were followed and the award decisions were appropriate. Saying that in an audit report certainly didn’t get headlines but it did provide assurance.

Working at OAD was really interesting.  I was involved in a lot of issues at different levels, auditing different agencies and topics.

Coordinating with state auditors

clarkcountyThe Washington State Auditor’s office is doing some work around accountability. As part of this work, they are reviewing the financial affairs of municipal governments, state and local laws, and contracts to assess risk and evaluate compliance, mostly looking at internal controls. What I help with is making sure there is no duplication of work, and help facilitate communication and work with Clark County staff. I also help provide context and clear up any confusion, similar to an internal auditor.

Providing training

Internal control failures are common issues identified in our audits. So each fall, we host a half-day seminar on fraud and internal controls for County managers. I’ve found this kind of training is helpful for managers who are often experts in their field but have not been exposed to management tools like the COSO framework or the fraud triangle.

The training doesn’t take a lot of our time, but there is a big pay off. When these fundamental issues are addressed, then our performance audits can focus on higher level issues. The trainings also help to build relationships and credibility, and we get good feedback from managers who attend. They’re very interested in this information and how they can apply it to improve their departments.

How do you choose your audit topics?

We complete a biannual risk assessment and create a schedule of proposed audits. This includes input from elected officials, employees, citizens of Clark County, and our auditors. This proposed schedule is presented to our Audit Oversight Committee, of which the Clark County Auditor is the chair. The committee recommends audit priorities before we finalize our schedule. The County Auditor can approve audit work on issues that emerge between biannual risk assessments.

What are some interesting audits you’ve worked on at Clark County?

An audit I did on economic development was probably the most interesting audit I’ve worked on. Economics has a lot of intertwined theories, so it’s hard to nail down criteria. We wanted tangible criteria because it doesn’t matter what’s happening if you can’t agree on how to measure things. In the end, we also adjusted our conclusions based on the more questionable evidence. This audit received an ALGA Knighton Award as a result of this approach and how we treated the evidence.

Audit of Clark County’s Job Creation- Fee Waiver Program 

“The Clark County Auditor’s Office evaluated an economic development program designed to spur job creation through waiving government fees. The audit found that the fee waiver program cost Clark County approximately $8 million in its first year in forgone revenue and was not cost effective. Objective in its treatment of evidence and sensitive to its policy implications, the audit makes two strong recommendations: 1) either discontinue the program, or 2) implement significant changes to improve the program. The audit won the exemplary award for its scope and methodology, significant impact and for its clear and concise report writing.”

fee-waiver-audit

We’re also completing a series of inventory audits that look at high-risk assets, like ammunition and fuel. These material management audits are more interesting than you’d think! We’ve found opportunities to improve operations while decreasing costs, risk, and liability.

Sheriff’s Office High Risk Equipment and Supplies Management Audit 

“This was an impactful audit that focused on internal controls of high-risk materials utilized by the Sheriff’s Office, taking into account public safety as well as accountability. Findings and conclusions directly tied to objectives. Recommendations when implemented will not only have a cost savings but will increase efficiency and enhance accountability. The report was well organized with effective use of photos and charts.”

What is your favorite part about your job?

When I was a kid, I would research different topics and learn all about them. In doing this work, I have the opportunity to that for a living. It’s also all across a wide spectrum of services — it’s very hard to get bored! My favorite part about this job, though, is getting to work with other auditors. They’re so intelligent and passionate about their work.

Auditors at Work Featured Performance Audit Regional Roundup: Talkin' Shop

Talkin’ Shop with: Brian Evans, Metro Auditor

About Metro’s Audit Shop

MetroAuditor Brian Evans 2015The Metro Auditor’s Office mission is to make Metro programs more transparent, efficient and effective and to ensure that its activities are accountable to citizens. We do this by conducting independent and objective assessments and reporting our findings and recommendations.

It is our vision to be completely relevant and efficient, choosing the right areas to audit and completing audits quickly so that Metro can constantly improve its services and be accountable to the public.

The Metro Charter created the office of Metro Auditor, to be elected at large for a four-year term, beginning in 1995.

So far in 2016, reports have been released on the financial condition of Metro, a follow-up audit on travel practices and ethics, and an audit on community planning and development grants.

In addition to performance audits, the Metro auditor also publishes annual reports and peer reviews.

The Metro Accountability Hotline, administered by the Metro Auditor’s Office, gives employees and citizens an avenue to report misconduct, waste or misuse of resources in any Metro or Metropolitan Exposition Recreation Commission facility or department.

MetroAuditorLogo seems like a pretty unique government structure. Can you describe it?

It is quite unique. Metro is one of only two regional governments with elected officials in the country. It encompasses Clackamas, Multnomah, and Washington counties and is governed by a nonpartisan council, with six district councilors, each representing different parts of the region. Metro’s council president is regionally elected. The region represents 1.5 million people in 24 cities and three counties. MetroAuditorMapBoudaries

Map of the Metro area, indicated with the blue border.

When it comes to transportation planning, Metro is the federally mandated metropolitan planning organization that develops an overall transportation plan and to program federal funds through the Joint Policy Advisory Committee on Transportation (JPACT). JPACT is comprised of locally elected officials from across the region. They strategize how to use federal funds and are high-level decisions-makers.

The Metro Council also oversees the Metropolitan Exposition and Recreation Commission, or MERC. MERC Commissioners are appointed by the Metro Council based on the recommendation of their local area governments. MERC has seven members who represent the city of Portland, Metro, and one each for Clackamas, Multnomah and Washington counties. The commissioners serve four-year terms.

Services of Metro:

So, when you were a kid, what did you want to be when you grew up?

An architect.

Architecture and auditing seem very different— do you see any similarities?

Both professions focus on the details while keeping an eye on the big picture. Architects balance aesthetic considerations with the practical needs of the people who will use the building they design. Performance audits have to balance similar considerations. Effective auditing combines practical information with creativity to produce a report that the public, decision makers and managers can use to understand the need for improvements. In audit reports we choose the words, tone and data points we think will motivate change. This seem analogous with the choices an architect would make for the materials, color and details of a building.

Prior to becoming an auditor, what did you do?

In undergrad, I studied International Relations and Economics. While in school, I studied abroad in Spain, Kenya, and Tanzania. After that, I served as an AmeriCorps member working on microfinance programs at Mercy Corps. In graduate school, I pursued a Master’s degree in International Public Affairs at the University of Wisconsin-Madison. I moved back to Oregon shortly after grad school and worked in state government as the Senior Economist in the economic development department. While there, I did financial and economic analysis of industry trends and business incentives.

How did you get your start in auditing?

In my position as the Senior Economist, I found that I wanted to point out ways we could improve.  There were strategies I thought could help, and recommendations I wanted to make. Essentially, I  wanted to recommend evidence-based policy— which is similar to what auditors do. I learned about the performance auditing in graduate school when the Government Accountability Office did recruiting visits. In Oregon, I did some informational interviews with local government auditors. In 2008, I started my first auditing position with Metro as a Senior Management Auditor.MetroAuditorLandscapeCartoon

What made you stay in auditing?

When I came to Metro, I enjoyed the structured approach to auditing that the office followed. I appreciated and found helpful the office’s commitment to a high level, quality reporting based on the leadership of Jewel Lansing  and Gary Blackmer. Suzanne Flynn, the Metro Auditor I worked for, was committed to the development of staff, and this is something I strive to do as well.

As a Senior Management Auditor and then as a Principal Management Auditor with Metro, I really enjoyed the variety of topics I worked on. I also liked getting into the weeds and the structure of the workflow in performance auditing— the different phases. Programs at Metro tend to be innovative, willing to take risks to move things forward, and have long-term thinking as part of their philosophy. Prior to becoming the elected Auditor of Metro, I had the opportunity to get a good sense of the different parts that make up Metro. I conducted audits on internal services such as payroll, IT, and policy audits around solid waste planning and transportation planning.

You became the Metro Auditor fairly recently. What was the election process like? How’s it going so far? 

I decided to run at the end of 2013, and ended up running unopposed. Running unopposed takes some of the pressure off, but once you commit to running there is a method and timing involved in completing everything you need to complete—the filing deadline, creating a MetroAuditorOfficewebsite, and outreach. I took office in 2015 for a four-year term and am now about halfway though.

One of the things I am most proud of accomplishing in the past two years is putting such a strong team together. There were three vacancies when I took office, as my position needed to be filled, Mary Hull Caballero became Portland’s Auditor, and we had a retirement. I was able to rebuild the office and with my team, keep producing high quality audits.

How do you create your audit schedule

Creating the audit schedule is a process of gathering a lot of data and then analyzing it to identify the areas of greatest need.

We create a list of audit topics based on my discussions with Metro Councilors and department directors, the public, along with topics staff have identified in their audit work. As an office, we have a retreat and conduct a risk assessment, look at impact of potential audit topics, and consider timing and available resources. From there, I select the topics we will audit and publish the list on our website.

What are some current, or recently released audits that you are most excited about?

In February, we released an audit that provides a good picture of the challenge of auditing land use planning. It was also challenging to find a balance between the planning jargon and language the average reader can understand. In the audit, we found decreased geographic alignment between the grant project areas and the ones identified in the regional plan as priorities areas for development. We also found that the program did not develop clear expectations for grant monitoring. The deliverables for some projects were not fully met prior to payments being made. It was not always clear what amount of time should be spent monitoring or how much discretion there was to evaluate deliverables.

Right now, we are conducting an audit of the Zoo, looking at organizational culture. It is challenging to figure out how to audit organizational culture, and then communicate that in a public report. It is making us think about issues from a different perspective.

Follow the Metro Auditor on Twitter! @MetroAuditor 

Check out Metro’s mapping feature that uses GIS and see where the trails, neighborhoods, school districts, and more are.

MetroAuditorMapTrails

Map of the Metro area with trails indicated in green.

Auditors at Work Featured Regional Roundup: Talkin' Shop

Talkin’ Shop with: David Givans, Deschutes County Auditor

For nearly 15 years, David Givans has served as Deschutes County’s Internal Auditor. The Internal Audit program independently reviews, evaluates and reports on the financial condition, the accuracy of financial record keeping, compliance with applicable laws, policies, guidelines and procedures, and efficiency and effectiveness of operations. Internal audit reports are given to management and used to provide a dialog for constructive change. 

DAVID GIVANS PICTUREDavid started out his career as a bio-chemist. But, he decided it wasn’t for him, and he went back to school to pursue a career in auditing and accounting. It was through his work at the CPA firm Deloitte & Touche in Los Angeles that he was first exposed to internal auditing. David then moved to Oregon and worked with a small CPA firm doing traditional financial auditing work, business valuations, tax and transactional consulting.

Around 2001-2002, Deschutes County officials started discussing the benefits of having a performance auditor. A County Commissioner and Finance Director had been attending a PSU class taught by Drummond Kahn, current director of Audit Services at the City of Portland Auditor’s Office. Because of what they learned in the class, they were excited about the prospects of adding an internal auditor. Adding to the urgency was the discovery of an embezzlement from the County Sheriff. In 2002, the internal audit program was started through the hiring of David Givans. David is a Certified Public Accountant (CPA) and Certified Internal Auditor (CIA).

Internal reports are publicly available online. So far in 2016, reports have been released on juvenile justice, notary fees, DA transition, and others.

About the Deschutes County Audit Shop

The Internal Audit program independently reviews, evaluates and reports on the financial condition, the accuracy of financial record keeping, compliance with applicable laws, policies, guidelines and procedures, and efficiency and effectiveness of operations. Internal audit reports are given to management and used to provide a dialog for constructive change.

In 2002, Deschutes County started its internal audit program and the Board of Commissioners appointed David to provide performance audits. An Audit Committee was developed to provide independence and oversight to the position. The Audit Committee is comprised of four to six members of the public and three County officials. They identify and approve the direction of audits and meet with County departments on audit findings.

What is it like being a single person audit shop?

It’s a bit like being the chef, cook and bottle washer! I am responsible for all of it. I am particularly proud that I have been able to show that single person audit shops can comply with yellow book standards. I have been successfully peer reviewed four times.

I also advocate for small audit organizations and have interacted witMt.Bachelorh many single person audit shops over the years. I’ve found that for single person audit shops in particular, it is important to make sure the organization is set-up well. This means having strong independence and a clear charter. It is also important to have support from your committee or other budgeting authority because you are going to need training and software to be successful.

I use technology to leverage myself— ACL, AutoAudit (electronic work papers), and Excel. This helps to amp up my processing power. I use ACL on most audits to assess department performance. It’s important for auditors to adapt to new technology and to look for opportunities to use it. For example, using the apps on a smart phone or taking pictures during fieldwork.

Aside from the physical resources, making connections and receiving support from peers in other organizations is really helpful. There is so much opportunity here in Oregon to effectively share information and collaborate across levels of government in auditing. And it goes both ways—I’ve had the OAD auditors reach out to me to connect them to County staff for their audits. There are also topics that we as a state can address that are both local and state issues, such as behavioral and mental health.

How do you choose your audit topics?

There are discussions with County leadership and the Audit Committee. I also attend committee meetings and gather information on the departments, which helps me to create a matrix to assess risk. I also consider what topics are timely and relevant, along with what departments have not been audited in a while.

After weighing the factors for their relative significance, an overall risk factor is computed for each area. I also consider staffing-hours, as I typically do four to five audits a year. Each audit ranges in hours from 140 up to 400 hours and report length can vary from a couple of pages to forty pages. After consideration of the number of audit-hours (staffing level) available for the year, those departments with the greatest assessed risk are recommended to the Audit Committee for inclusion in the audit plan for the year.

There are some reoccurring themes I’ve seen come up over the years that I expect to re-visit. For example, the County is self-insured for health insurance, which means we have more risk than contracting out because we handle all the claims and have an onsite clinic and pharmacy. There have been audits on claims processing and the onsite facilities. I’ve also done several audits of the behavioral health topics, looking at client access, business processes, and ensuring compliance.

What are some recent audits you think are particularly interesting?

Well, I am pleased with the Light Fleet Management audit, which received a 2015 ALGA Knighton Award. The audit looked at opportunities to minimize our fleet. In the audit, I found the County had not established written countywide policies, procedures, and guidelines for management of vehicles. This influenced accounting, decision making and management of vehicle resources.

There is also the 2015 Sheriff’s Office Transition audit, in which I was able to see the impact pretty quickly. As a result of the recommendations, the Sheriff’s Office identified a theft by one of its captains.

The follow-up to the County Fair Food and Beverage audit will be released later this year and should be interesting. I will be looking at whether it has been cost-effective to move food and beverage operations in-house as opposed to contracting them out.

A little bird told me you are the president-elect for the Association of Local Government Auditors (ALGA). What have you been up to in that role?

I have a pretty long history with ALGA. When I first started, I reached out to colleagues such as Debbie Taylor, then Jackson County Auditor, for networking and support. Debbie happened to be a charter member of ALGA and was interested sharing her passion for the organization. I have served on the Peer Review Committee from 2004-2007, Nominating Committee 2008/2009, chaired the Survey Committee from 2011-2013, and was Treasurer from 2013-2015.

For the past year, I’ve been serving as President-Elect and my main duty has been planning the ALGA conference in Austin this May, which is actually sold out (there is a waiting list!). In May, I will become ALGA’s president for 2016-2017. You can follow ALGA on Twitter at @ALGA_Gov and there is also a LinkedIn ALGA group.

It was great talking with you! Any parting thoughts?

I feel very fortunate to have found a career that utilizes my skills, is complex and challenging and provides opportunities to contribute to change in my County. I thank Deschutes County for taking steps to assure that I can do my job effectively and in supporting this position. As a leader within ALGA, I strive to be a voice for the smaller audit shops.dc-100yrs-logo

For prior Talkin’ Shop blog posts, see Shanda Miller, Lane County’s New Performance Auditor and Drummond Kahn, Director of Audit Services at the Portland City Auditor’s Office.

Auditors at Work Featured Regional Roundup: Talkin' Shop

Talkin’ Shop with: Drummond Kahn, Director of Audit Services at the Portland City Auditor’s Office

talkin shop_City Auditor - Archives Records Management - Auditor s Historical Records Portland Map

Since the 1860’s the Portland City Auditor has been conducting audits of city operations and making recommendations to improve efficiency, effectiveness and equity of bureaus, offices and functions.

About Portland’s Audit Services Division

Through the Portland City Charter, voters in Portland established an elected City Auditor in 1864 and four years later elected the first City Auditor.

More on Portland audit history

Mission: The Division’s mission is to conduct performance and financial audits of City operations, and to make recommendations to improve efficiency, effectiveness and equity of City bureaus, offices and functions.

How does the City Auditor and Audit Services fit into Portland city government?

talkinshop_Audit Services Door

It is important to understand Portland City government in order to understand the City Auditor and Audit Services. Portland has a Commission form of government and is one of the last American cities to do so. The Mayor and four Commissioners make up the City Council, and the City Auditor is the sixth elected official. All six are non-partisan and serve four-year terms. What is most different about this form of city government from others is that the City Council has legislative, administrative, and quasi-judicial powers. The Mayor and Council members also preside over bureaus, such as Public Safety. In addition to Audit Services, the City Auditor oversees other services, such as Archives, Elections, Ombudsman, Hearings Office, and Independent Police Review divisions.

The Audit Services Division is the auditing branch of the elected City Auditor’s Office. In 1986 the Audit Services Division was formally created as an independent audit function reporting to the elected City Auditor. Also in 1986, Portlanders voted to approve amendments to the city’s charter to authorize broad-scope (performance) auditing of City operations.

The Division currently conducts performance and information technology audits, and contracts out for financial audits. All of the Division’s audit reports are available onlineJewel Lansing, Multnomah County’s Auditor in the 1970’s and Portland’s City Auditor in the early 1980’s, was the first to initiate performance audits. She is largely credited with laying down the roots of performance auditing in the Pacific Northwest.

The Audit Services Division has continued this work in performance audits and recently released an audit the team there is particularly proud of.

Portland City Auditor finds City Council grants lack competition and oversight

talkinshop_City Hall

In January, the City Auditor, Mary Hull Caballero and her team released an audit entitled, “City Council Grants: No competition and limited oversight”. The audit found that grants or “special appropriations” made by the Portland City Council over the last five fiscal years lacked competition to ensure funds were provided to organizations best able to provide services. In addition, they found transparency was limited, as it was hard for the public to track who received grants. The audit report acknowledge that the organizations providing critical services to Portlanders may in fact be excellent, but that a competitive grant selection could help the Council ensure they are funding the most effective organizations while also making sure organizations know they are able to request funds. Because the monitoring of grants has been inconsistent, auditors said the “City [is] at risk of paying for activities that are not fully delivered, or not delivered well.”

Recommendations included those to limit direct Council grants, increase competition, and to develop procedures to improve grant monitoring.

Read the Oregonian editorial on the audit 

What’s next for Portland’s Audit Services Division?

We post our audit schedule online.

In the fiscal year beginning July 1, 2015, the audits below are those City Auditor Mary Hull Caballero and her team anticipate reviewing (in no particular order):

  • Office of Neighborhood Involvement
  • City Risk
  • Multi-modal streets
  • Information technology
  • City grants and special appropriations
  • Portland Harbor Superfund
  • Americans with Disabilities Act
  • The Portland Building reconstruction planning
  • Green Building program
  • Bureau of Development Services lien assessments
  • Water Bureau service disconnects

We also have several audits that recur from year to year such as the Community Survey, which measures resident satisfaction with City services. There is also the Comprehensive Annual Financial Report—as required by the Charter, the Auditor’s Office manages the City’s contract with an outside CPA firm to audit Portland’s financial statements. Another recurring audit is the Portland Development Commission- specific audit areas are selected with input from the City Commission’s Audit Liaison Group.

Stay tuned by keeping connected with Portland’s Audit Services Division on Twitter @PortlandAudits.

 

Panorama: City of Portland (OR) Archives, A2012-005: Portland panorama (1871). A2012-005, 12/31/1871.

Featured Regional Roundup: Talkin' Shop

Talkin’ Shop with: Shanda Miller, Lane County’s New Performance Auditor

Nearly a year ago, the Lane County Board of County Commissioners appointed Shanda Miller as the Lane County Performance Auditor. We thought we would check in with her to see how things are going so far.

Shanda Headshot

Shanda Miller

Before being appointed Lane County Performance Auditor, Shanda worked for 10 years as a performance auditor at the Oregon Secretary of State Audits Division. She holds a masters of public administration degree from the University of Oregon and a bachelor’s of science in environmental science from University of Idaho. She’s also a Certified Internal Auditor (CIA).

In her free time, Shanda enjoys travelling. She’s traveled to four South American countries, including Brazil and Argentina. Shanda has also traveled to Europe three times and has visited nine European countries— including Sweden, France, and the Netherlands. When she is not working or traveling, you can often find Shanda backpacking in the wilderness. Someday soon, you may find her hiking the Oregon section of the Pacific Crest Trail.

Before Shanda’s appointment, her position had been vacant since the previous auditor’s retirement in 2010.

Tell us about the office of Lane County Performance Auditor.

Mission: The County Performance Auditor’s Office conducts audits to help improve the performance, accountability, and transparency of Lane County government.

To fulfill this mission, we conduct performance audits to provide relevant timely analysis and information so the county can continuously improve its services and build public trust.

The office of the Lane County Performance Auditor is overseen by the Lane County Board of Commissioners.

Earlier this month, the Board updated new policies for the performance audit program, including a new citizen-majority Performance Audit Committee. This committee will help ensure the independence of the performance audit program. It will be made up of three members of the public and two commissioners.

Learn more about the Lane County Performance Auditor

Performance auditors come from a variety of backgrounds— what’s yours?

My bachelor’s degree is a science degree and my first professional job was as a scientist. I think having a science background has been instrumental in my success as a performance auditor. Going into the fieldwork phase of an audit, I already have outlined the potential findings. I think of my potential findings as hypotheses. In fieldwork, I gather the evidence to either prove or disprove those hypotheses.

What has the first 11 months been like?

Good!  It’s been a lot of relationship building and I’ve developed good working relationships with the county’s elected officials and top managers. I also met with the public through several “Meet the Auditor” events across the county.

Coming in I knew there was a lot of work to be done to create the program and update the existing policies.  I’ve set up the framework for the performance audit office and spent a lot of time working with the Temporary Internal Audit Committee to update the program function policies— they hadn’t been updated since 1986.

I also conducted a County-wide risk assessment and created a strategic plan. Now I’m on my first audit— looking at the County’s financial health. The next audit will be a Behavioral Health services audit, which I will likely start this spring. My goal had been to release the first audit before my one year anniversary, but it will likely be released six weeks after that.

Has there been anything you found surprising?

I’ve found there is a lot of support from the elected officials and managers for having a performance audit function.

What are your goals for the office?

  • I want to conduct audits that are focused on areas of high risk and/or those with a high impact. I hope to release three audit reports in 2016.
  • Another goal is to be timely, and complete audits on schedule.
  • I want to create audit reports that are easy to read and accessible to the public, with lots of visual graphics.
  • Another thing I am working on is implementing a fraud, waste, and abuse hotline. My goal is to have this implemented in May of this year.

Are there any future audit topics that you see connecting to larger state issues?

My next audit topic will be on behavioral health services, which gets a large portion of its funding from the state. I haven’t started the audit yet, so my knowledge is limited, but during a countywide risk assessment I conducted last spring, I found Behavioral Health to have the highest inherent risk of not being able to meet its objectives. This includes funding challenges in addition to high staff turnover. Lane County provides behavioral health services for children and adults, as well as crisis support services. One thing I learned during the risk assessment is that those who are experiencing a mental health crisis often find themselves in jail, which is due to their behavior linked to their mental health and associated addictions.

During your countywide risk assessment, what other issues did you discover face Lane County?

Shanda Meet and GreetAs is experienced by many local and state governments, expenses are rising faster than tax revenues. This is often called a structural deficit and can cause challenges for local governments. A lot of this structural deficit is due to increasing employee pension and health care costs.

In the next fiscal year there is a gap of 6.1 million in the County’s general fund. The primary programs funded by the general fund are the public safety programs, and these programs are already pretty thin. We don’t have 24 hour Sheriff patrols and there are only three Sheriff patrols at any one time covering a county that is 4,722 square miles.

You’ve accomplished quite a bit in your first year! How do you do it all?

Let’s see. . . I focus on one thing at a time and prioritize work based on my deadlines and project goals. I have both daily and weekly to-do lists. If a task is not part of a scheduled project, and I don’t have time, I don’t do it. I also don’t read every single email that comes in— I have a folder in my inbox labeled “To Read” and it currently has 63 items in it.

The newest productivity technique I’ve been practicing is taking more breaks. I find when I take frequent short breaks, I can get much more done than if I work 4 hours straight without a break. It may seem counter-intuitive, but it works!

What advice do you have for all the aspiring local governmental auditors out there?

For other performance auditors who think they might want to be a local government auditor, my advice is to work toward getting your Certified Internal Audit credential. Local government auditors are in high demand, and I believe the demand will only increase. Yet there is a low supply of performance auditors with certifications and/or the equivalent experience.

Follow Shanda on Twitter @LaneAudits

Auditors at Work Featured Regional Roundup: Talkin' Shop