Audit Release: DEQ Should Improve the Air Quality Permitting Process to Reduce Its Permit Backlog and Better Safeguard Oregon’s Air

Report Highlights


The Secretary of State’s Audits Division found that the Oregon Department of Environmental Quality (DEQ) should evaluate staffing and workloads among air quality permit writers and provide better guidance to both staff and businesses to help reduce the agency’s air quality permit backlog.

Background

This audit reviewed air quality permitting at the Oregon Department of Environmental Quality. Air quality permits regulate the types and amounts of air pollution businesses are allowed to emit, based on federal pollution limits set by the Clean Air Act and state limits established in state laws and DEQ rules.

Audit Purpose

The purpose of this audit was to determine how DEQ could improve its air quality permitting process to better safeguard Oregon’s air quality.

Key Findings

The Oregon Department of Environmental Quality has a significant backlog in air quality permit renewals. We found that:

  1. 43% (106 out of 246) of DEQ’s largest and most complex federal and state air quality permit renewals are overdue for renewal. Additionally, more than 40% of the most complex permits issued from 2007 to 2017 exceeded timeframes established by DEQ or the Clean Air Act, some by several years.
  2. DEQ struggles to issue timely permits and renewals due to a variety of factors, including competing priorities, vacancies, and position cuts that have created unmanageable workloads. Other factors include inconsistent support and guidance for staff; a lack of clear, accessible guidance for applicants; and increased time for the public engagement process.
  3. Untimely permits, combined with a current backlog of inspections, endanger the state’s air quality and the health of Oregonians. For example, when DEQ does not issue permit renewals on time, businesses may not provide DEQ with data showing they are complying with new or updated rules.

To reach our findings, we conducted interviews, analyzed air permit data, reviewed documents and reported practices, and researched leading practices.

Key Recommendations

Based on our review of leading practices and air quality agencies in other states, the report includes ten recommendations to the Department of Environmental Quality. Recommendations include evaluating permit writer workloads and staffing, clarifying the public engagement process, providing better guidance to permit writers and businesses, and conducting a process improvement effort.

The agency agreed with our findings and recommendations. Its response can be found at the end of the report.

Read the full report here.

Featured New Audit Release Performance Audit

DHS – Aging and People with Disabilities: Consumer-Employed Provider Program Needs Immediate Action to Ensure In-Home Care Consumers Receive Required Care and Services

Report Highlights


The Secretary of State’s Audits Division found that the Aging and People with Disabilities (APD) program should take immediate action to address gaps in program design and oversight in order to improve the safety and well-being of participants in the Consumer-Employed Provider (CEP) program.

Read full report here.

Background

Oregon is a leader in providing in-home long- term care options for older adults and people with disabilities. The most used in-home care program is the Consumer-Employed Provider program, which positions consumers as employers of their homecare worker.

Purpose

The purpose of this audit was to assess the policies and processes used by APD to ensure the needs of consumers in the CEP program are met.

Key Findings

The effectiveness of the Consumer-Employed Provider program is dependent on the consumer, the case manager, and the homecare worker. If each is capable, competent, and supported in their role, the current model can be successful. Our audit found:

1. Some consumers are not receiving the support necessary to ensure required employer duties are being performed, which adds to case managers’ and homecare workers’ responsibilities.
2. Case managers are not consistently contacting consumers, or monitoring services consumers receive due to excessive workloads.
3. Agency requirements do not ensure that homecare workers are prepared to provide the care and assistance consumers need.
4. Due to current data collection and utilization practices, it is difficult for APD to determine if consumers are safe and receiving the care and services they need.
5. Current deficiencies in the program may put consumers’ health and well-being at risk and keep the program from operating as intended.

To reach our findings, we conducted interviews and case file reviews, collected and analyzed CEP consumer data, and researched federal and state standards.

Recommendations

The report includes recommendations to improve Consumer-Employed Provider program implementation and support. Recommendations include consistently following existing monitoring policies, addressing case managers’ excessive workload and responsibilities, and providing more support to consumers and homecare workers.
The Department generally agreed with our findings and recommendations. Its response can be found at the end of the report.

Featured New Audit Release Performance Audit

Audit Release- ODOT: The Oregon Fuels Tax System Accurately Assesses and Collects Fuels Taxes for Oregon and Local Jurisdictions

Report Highlights


The Secretary of State’s Audits Division found that the Oregon Fuels Tax System (OFTS) accurately assesses and collects fuels taxes for Oregon and local jurisdictions, collecting over $564 million in 2016. However, processes for issuing fuels tax refunds and system design flaws result in minor overpayments and reporting inaccuracies. Additionally, ODOT should enhance processes for testing system backup files, granting and monitoring user access, setting user password parameters, implementing safeguards over personally identifiable information, and identifying security weaknesses.

Read full report here.

Background

In 2013, ODOT contracted with Avalara to implement a new fuels tax system for $2.8 million, replacing an outdated paper based system previously used to handle Oregon Fuels Tax returns.

Purpose

The purpose of our audit was to review and evaluate the effectiveness of key general and application controls that protect and ensure the integrity of the Oregon Fuels Tax System and its data.

Key Findings

1. OFTS accurately calculates, assesses, and collects fuels tax for the state of Oregon and local jurisdictions, but manual processes governing refund payments should be improved to ensure accurate refund payments.
2. Application design flaws result in a small number of refund overpayments and minor reporting inaccuracies.
3. Changes to OFTS computer code are appropriately managed to reasonably ensure that the system and its data will not be compromised as the result of a code change.
4. System back-up processes have never been tested to ensure system data can be restored in the event of a disruption.
5. Security weaknesses exist in processes for granting and reviewing system access, monitoring activities of internal and third-party users with significant system access, and identifying and remediating system security vulnerabilities. In addition, password parameters should be more robust, and safeguards protecting some Personally Identifiable Information (PII) need improving.

Recommendations

The report includes nine recommendations to the Oregon Department of Transportation focused on addressing weaknesses in the refund review processes, fixing system design flaws, testing backups, and correcting security weaknesses.

Featured IT Audit New Audit Release

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

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.

Accountability and Media Auditors at Work Featured

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

 

Accountability and Media Featured

Oregon Department of Education: Clearer Communication, Consistent Use of Results and an Ongoing Commitment to Improvement Could Help Address Testing Concerns

Executive Summary


Our audit responds to House Bill 2713 (2015), developed with input from the State Auditor. It called for a Secretary of State audit to review the impacts of the statewide summative assessment on Oregon’s public schools, and make recommendations for improvement.

Through a series of surveys, site visits and interviews, we learned many schools faced challenges in the first year of administering the new Smarter Balanced test, including adjusting to the demands on staff and school resources. Some reported fewer challenges in the second year.

Some educators are concerned that certain student populations may experience more negative impacts than others. Some also told us that a more comprehensive assessment system would be useful.

Read full report here.

Oregon introduced Smarter Balanced in 2015

The Smarter Balanced assessment is a new test introduced by the Oregon Department of Education to all public schools in the spring of 2015. Smarter Balanced tests 3rd – 8th graders and 11th graders in math and English language arts near the end of the school year. The test assesses students’ progress toward meeting Oregon’s college- and career-ready standards, the Common Core State Standards. Smarter Balanced requires more time and depth of knowledge than the previous test.

There is not clear agreement on the test’s purpose

The Smarter Balanced test is intended to provide a measure for accountability, data to identify achievement gaps, and information about whether students meet standards overall, and many value these purposes. We also heard from educators who feel the test should be more useful in the classroom. However, other tools may be better suited for that purpose. The Oregon Department of Education could take a more active role in communicating about the test’s purpose.

The results of the test are not used consistently

Schools, school districts and the state use Smarter Balanced test results inconsistently, and sometimes not at all. Educators told us that it would be easier to use results if they received them sooner. Many reported that additional guidance on how to use results would be helpful. Some also reported that a more comprehensive assessment system would be useful.

Many reported test administration challenges

Educators described schoolwide challenges in the first year of administering Smarter Balanced. Testing did not just affect the classrooms that were actively testing, but could also place additional staffing and resource demands on the entire school. However, some said there were fewer challenges in the second year.

Testing took away from other duties of school and school district personnel. Some schools hired additional staff or substitutes specifically for testing. Testing also tied up computer labs for months at some schools. Time spent taking and preparing for the test took away from instruction time.

Some student populations may experience more negative impacts than others

Standardized testing may affect certain student groups more than others. Despite having accommodations, we heard concerns that the test’s greater use of technology and language may increase the risk that some students will not be able to demonstrate their abilities accurately. Students who take longer to complete the assessment may miss more instruction time.

Students in special education, English Language Learners, and students with less exposure to technology and typing may be particularly affected.

Recommendations

We recommend that the Oregon Department of Education improve communication, foster consistent use of results and continue its commitment to improve test administration. Our specific recommendations can be found on page 18 of the report.

Agency Response

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

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