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

About Oregon Audits Division

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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?

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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.

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Introducing OAD’s Auditor Alerts

If you follow local news, you’ve probably seen mentions of (or perhaps even read) our office’s first Auditor Alert, which was released on May 17, 2017.

The Auditor Alert, The Oregon Health Authority May Be Providing Medicaid Benefits to Ineligible Recipients, discussed substantive risks related to Medicaid eligibility determination.  This flexible reporting tool supports the Division’s goal of promoting transparency and accountability to improve Oregon government. Alerts provide decision makers with critical information so they can take action to address substantive issues in a timely manner. Alerts are also aligned with the Division’s citizen-centric reporting philosophy in that they apprise the public of critical matters in a timely fashion.

Here’s how Alerts work: our auditors occasionally uncover information during an agency audit that requires an immediate course correction and is considered too urgent to be delayed until an audit’s completion. In other instances, as in the case of the Medicaid Alert, the Division is apprised of an issue that is not within the scope of any current audit activity. In these instances, the Secretary of State may issue an Auditor Alert describing the finding, its importance, as well as give the agency and the legislature recommendations for immediate action. These Alerts are issued in a manner that is fully compliant with Government Auditing Standards.

The Division will continue working every day to ensure that state government is functioning to benefit all Oregonians. We will continue to use flexible tools and innovative reporting practices, such as Auditor Alerts, to accomplish this goal.

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Oregon Newsroom RePost: My First 100 Days as Secretary of State

Interested in keeping tabs on what’s happening in Oregon government? Check out the Oregon Newsroom.

 

A word from Secretary of State Dennis Richardson

Salem, OR—I’m excited to announce that I just passed the 100-day mark as your Secretary of State, and today I am sharing a brief report of our progress.

On December 30, an inauguration was held in the Capitol that was attended by more than 700 excited Oregonians. January 2 was my official first day on the job, and January 6 was my first official appearance at the swearing-in ceremony in Portland for 35 new Americans. These immigrants, like many of our ancestors, came from Europe, Asia, Africa, and Latin America with hope and excitement for a new life in the Land Of The Free. This naturalization ceremony provided the opportunity for me to give an impromptu talk on what it means to be an American.

With the guidance of Oregon’s Chief Archivist Mary Beth Herkert, we’ve breathed new life into the Oregon Constitutional Challenge. Our goal is to restore our deteriorating state constitution and place it on permanent display in protected cases. The manuscript will be kept at the Archives Building and on special occasions brought to the Capitol where all visitors, including school children, can see and learn about our state’s early history and the pioneering founders who crafted our earliest laws. Please take a minute and learn about this important project: https://youtu.be/p0CbioHLoaA

For nearly a year, our Audits Division has been functioning without a permanent Division Director and with several auditor vacancies. During this time, we’ve been very fortunate to have steady leadership from Interim Director Mary Wenger. Since taking office, we have filled 75% of our audits vacancies and made continuous improvements in our processes and reporting. Recent audit work has included transportation, energy, and municipal audits and we are now focusing on education, environmental quality, foster care, and Medicaid. I’m happy to report that yesterday, Kip Memmott assumed the reins as Audits Division Director. Kip is a nationally recognized leader in performance auditing and brings to the Oregon Audits team a wealth of experience. Kip and our executive team will work together to provide the energy and leadership needed to transform our Audits Division into Oregon’s own Government Accountability Office.

The Corporations Division is the first stop for Oregon businesses. Under the experienced leadership of Corporations Director Peter Threlkel, we’ve become known for quick, friendly, and efficient assistance to businesses of all sizes. In addition, Ruth Miles is Oregon’s Small Business Advocate and helps businesses work with government agencies at both the state and local levels: http://sos.oregon.gov/businessSoS

My commitment to helping all eligible Oregon voters gain access to their ballots was demonstrated last week with the announcement that the Elections Division will restore or protect the rights of more than 60,000 registered voters: https://youtu.be/b6LIdjClC_Q These voters have either been removed or would soon be removed from active voter status. Being on the inactive voter list would keep them from receiving their mailed ballots in future elections.

My next newsletter will update you on both the decisions coming out of the State Land Board and the Redistricting Task Force. The Task Force is a multi-partisan attempt to make recommendations for how Oregon can have fair, non-partisan redistricting. Suffice it to say, the guiding principles of my administration as Secretary of State continue to be restoring greater accountability, transparency, and trust in state government.

In closing, be assured I’m taking the responsibilities of this office very seriously. I’m surrounding myself with qualified and quality women and men to lead our agency divisions. With their help, I’m doing all in my power to earn the respect and confidence of those who gave me the opportunity to serve in this important role.

I’ll continue to put the needs of Oregonians first.

Sincerely,

Dennis Richardson

Oregon Secretary of State Dennis Richardson

 

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