(ALGA Repost) Opportunities for Improvement: We Need to Talk

“The Yellow Book addresses communication of audit scope and objective at the beginning of the audit, and audit results at the end, but much communication happens, or should, during the audit.

8.23 Determining the form, content, and frequency of the communication with management or those charged with governance is a matter of professional judgment, although written communication is preferred. Auditors may use an engagement letter to communicate key information early in the engagement.

“Written communication is preferred”? Of course an engagement letter and discussion draft are written, and at the federal level, written is probably preferred, but the federal government is astronomically larger than any local audit office, like Jupiter is to Earth. Working under the general assumption that communications must be written, I think, will limit interaction that is critical to the ultimate success of an audit.

Because you all are auditing in a large variety of jurisdictions, I am cautious about recommending universal practices and just urge you to develop your briefing (and listening) procedures around the who, what, when, where, and why appropriate to your government.”

Gary Blackmer, former director of the Oregon Audits Division, discusses how auditors can communicate most effectively with agency heads and staff in his quarterly ALGA post, with practical suggestions for making introductions, engaging the agency in the audit process, finding context for problems, and making sure that your audit is on point. Read more here.

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ALGA RePost: Opportunities for Improvement: Risky audit topics to avoid

…Topics to avoid always sound good to a ‘somebody’: elected officials, agency directors, newspaper editors, green auditors, or even you. Yet these topics run the risk of wasted effort, embarrassment, loss of credibility, or lawyers.

I always keep in mind the goal of adding maximum value with each topic: Producing audits that leverage large performance improvements in government organizations to benefit the public. If the topic can’t compete with others on your list, then ask these ‘somebodies’ how they think their topic will produce on-going benefits for the public.

Choosing audit topics carefully is of paramount importance to undertaking an audit that can bring benefit to an agency and to the public. Part of knowing what to choose is knowing what to avoid; after all, all that glitters is not gold. Gary Blackmer, former Director of the Oregon Audits Division, shares some sage and straightforward advice with the Association of Local Government Auditors (ALGA ) on avoiding audit topics that look flashy but might not contribute anything of value to the general public, or to the agency being audited.
Follow the links above, or read more here!
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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

Oregon Leadership

ALGA President-Elect David Givans

David Givans

Several auditors here in Oregon deserve recognition. The Association of Local Government Auditors elected David Givans to be their President-elect, and in a year he will be the President of the 2,000-member organization. David is the Deschutes County Auditor.

ALGA Board Member

Alexandra Fercak

ALGA Treasurer Kristine Adams-Wannberg

Kristine Adams-Wannberg

In addition, Kristine Adams-Wannberg was elected to be the Treasurer, and Alexandra Fercak was elected as an At-Large Board member. Kristine and Alexandra both work in the City of Portland Audits Division.

This speaks highly to the leadership and professionalism of these three auditors, and to the pool of talent here in Oregon. Congratulations to you all!

Auditors at Work