1. Washington State Auditor’s Office Troy Kelley Independence Respect Integrity Local Government Performance Center How auditors can help local governments work better and cost less NSAA’s 2014 Excellence in Accountability Award Special Project November 6, 2014 Sheri Sawyer, Assistant Director

2. Washington State Auditor’s Office  As performance auditors, we conduct research and use tools that, if shared more broadly, could help many local governments reduce their costs and improve performance.  Sometimes an independent perspective and expertise from outside the organization can help you see and do things differently.  We believe that by sharing what we know through this project, we can reach more governments faster and cheaper than by doing one local government audit at a time. 2 Why the State Auditor’s Office?

3. Washington State Auditor’s Office The Local Government Performance Center within the State Auditor’s Office offers tools and training to help local leaders who want their governments to work better, cost less, and improve the value of their services to citizens.  An online resource center with tools and examples.  Training on how to improve government services.  Customized on-site training sessions (on request and within available resources). Our goal: better results for citizens and customers at lower cost to government and taxpayers 3 Improved government performance: A shared goal

4. Washington State Auditor’s Office  The Center is funded through the state performance audit program, which was established in the Auditor’s Office following voters’ approval of Initiative 900 in 2005.  A small fraction of the performance audit budget is dedicated to this effort.  There is no charge to governments. 4 What does it cost?

5. Washington State Auditor’s Office 5 Where to find us on the web www.sao.wa.gov/performancecenter

6. Washington State Auditor’s Office 6 Four examples of what we’re doing 1.Turning a completed audit into a management tool  Sharing lessons learned from a recent state audit in a checklist format helps governments save money on cell phone costs. 2.Performance measure training and assessments  Training on performance measures plus auditor assessments of how local governments use performance data and ways they can improve. 3.Demystifying tools like “Lean management”  Training plus creating a peer-support network to help governments learn and use process improvement methods to develop faster, cheaper delivery systems.  Created “Lean Academy” 4.Use information from local financial audits  Assess financial condition of local governments state-wide.  Create tools from common audit and findings management letters.

7. Washington State Auditor’s Office 7 Example 1: Translating auditor insights into “plain talk” Can your jurisdiction save money on cell phones? Start by asking these questions: How many phones are we paying for? How much are we paying for these phones? Why do we need the phones? Do the phones justify the cost? Do employees need a land line and a cell? How many different phones or plans can our employees choose from? What are the key differences between the available plans? Do we need them all? How many minutes are we actually using? Would other plans better fit our current use patterns? Are there any phones we aren’t using very much? Why? Should these phones be turned in? Are there any suspiciously high use patterns? Can our employees use their personal phones for their work? Are stipends an option? Is our demand changing? Has the number or type of devices or their use increased or decreased over time? How can we explain the change? Do we need a new plan to better fit our needs? “Every dollar saved now is a dollar that can be used for more important priorities.” The November 2011 State Auditor’s Office report.

8. Washington State Auditor’s Office  Cities and counties have asked the Local Government Performance Center to review how they use performance measures and offer guidance.  We provide on-site training to help managers and analysts improve performance-based strategies.  Recently completed assessments for several cities and counties. Available on our website.website 8 Example 2: Performance measure assessments

9. Washington State Auditor’s Office 9 Example 2: County Sheriff’s Office Assessment Before

10. Washington State Auditor’s Office 10 Example 2: Front desk data presented another way After

11. Washington State Auditor’s Office Example 2: Burglaries per month by sector 11 Before

12. Washington State Auditor’s Office Example 2: Burglary data presented another way 12 After

13. Washington State Auditor’s Office  Kitsap County redesigned their permit process for Single Family Residences using lean management techniques.  Front line employees involved in redesign effort  Extensive on-site training assistance  Their new process reduces the time it takes to make a permitting decision by 77% (down to 6 days)  Clark, Douglas, Island, and Whatcom Counties have now completed our “Lean Academy” to help streamline their permitting offices.  Case studies, videos, and “how-to” tools are posted on our website.videos 13 Example 3: Using Lean principles

14. Washington State Auditor’s Office  Eleven counties and seven cities have now completed our “Lean Academy” to help streamline their various processes.  Case studies, videos, and “how-to” tools are posted on our website. 14 Example 3: Using Lean principles

15. Washington State Auditor’s Office 15 Example 3: Lean Academy in Clark County Before

16. Washington State Auditor’s Office 16 After Example 3: Lean Academy in Clark County

17. Washington State Auditor’s Office 17 Example 4: Use information from local audits Type Number of Findings Number of Management Letters Significant Audit Area Acting outside of audit authority78Yes Annual Reporting16Yes Bid law2557No Conflict of Interest84Yes Contracts513No Cost Allocation454Yes Financial Condition2534Yes Gift of Public Funds13Yes Interfund Transactions85Yes Internal Controls over Significant Accounting Systems62177Yes Loss Reporting15Yes Restricted Funds25Yes Safeguarding of Assets1225No

18. Washington State Auditor’s Office Example 4: Use information from local audits 18 Summary audit findings and management letters 57 local government showed indicators between November 2012 and May 2014 3.1 percent of audited governments showed indicators during audits of 2012 financial statements Progress Report: Local Government Financial Health

19. Washington State Auditor’s Office Example 4: Use information from local audits 19 Progress Report: Local Government Financial Health Incidence of indicators by local government type

20. Washington State Auditor’s Office Example 4: Use information from local audits 20 What Local government financial health indicator library, data, & guidance User defined dashboards with indicators & data that are most important to them Benchmarking financial health against other entities selected by the user Who All types of local government entities Accounting basis – GAAP & Cash All types of user roles – elected officials, finance officers, state agencies, etc. Eventual public access Why Enable local governments to assess their own financial health proactively Provide actionable information to local government policymakers Trend analysis and future forecasting Responsive Design Visualization Easy-to-Use Trusted & Accurate Data Clearinghouse Communication Between Entities & Agencies Educational Financial & Non-Financial Data Financial Intelligence Tool (F.I.T.)

21. Washington State Auditor’s Office  Maintaining our independence: We have developed an extensive intake procedure that evaluates any potential compromise of our independence.  We are scrupulously clear with local governments that we don’t do the work for them – we provide tools, training and technical assistance.  Auditors who work on assistance engagements do not audit those entities; but we do share information with the audit teams and they share information with us. 21 New roles bring new challenges

22. Washington State Auditor’s Office  Do you want to :  Have broad impact in local governments across Washington state?  Work with team members who have a passion for public service?  Use your performance management/Lean expertise to help create innovative, sustainable improvements in local government? 22 Interested in joining our team? Performance Management Specialist

23. Washington State Auditor’s Office 23 Contacts Website: www.sao.wa.govwww.sao.wa.gov Twitter: www.twitter.com/LocalGovPerformwww.twitter.com/LocalGovPerform Sheri Sawyer Assistant Director, Local Government Performance Center (360) 725-5552 Sheri.Sawyer@sao.wa.gov Chuck Pfeil Director, State & Performance Audit (360) 902-0366 Chuck.Pfeil@sao.wa.gov