1. Review of Accountability Entities Overseeing WSDOT Preliminary Report Keenan Konopaski, JLARC Analyst June 29, 2005

2. 2 JLARC Review of WSDOT Accountability Scope of Review Two elements to this review: 1.Review the state entities that have an accountability role with WSDOT, to assess consistency and avoid duplication and inefficiency 2.Assess issues for helping TPAB periodically evaluate WSDOT’s success delivering capital projects

3. 3June 29, 2005JLARC Review of WSDOT Accountability Objectives of Review 1.Catalog state accountability entities/initiatives 2.Assess entities for inconsistency in performance expectations 3.Describe related business processes 4.Identify recommendations for consistency and efficiency 5.Provide suggestions for assessing project delivery performance

4. 4June 29, 2005JLARC Review of WSDOT Accountability Many Things Have Changed Since This Review was Initiated  Under legislation effective 7/05:  WSDOT reports directly to the Governor  Role of Commission shifts from management oversight to policy guidance/recommendations  LTC is dissolved and staff support to TPAB is provided by Commission  TPAB membership expands and has more independent discretion to direct audits  State Auditor also may conduct performance audits  Significant expansion of gas tax funding for DOT

5. 5June 29, 2005JLARC Review of WSDOT Accountability So What Does this Mean? Role of the Governor and cabinet initiatives become prominent for managing transportation Government Management, Accountability and Performance (GMAP) is new management process being developed Government Management, Accountability and Performance (GMAP) is new management process being developed Priorities of Government (POG) budgeting process is formally instituted into state law Priorities of Government (POG) budgeting process is formally instituted into state law

6. 6June 29, 2005JLARC Review of WSDOT Accountability And What’s the Impact?  Roles will be further clarified as various entities implement the new legislation  Governor and Legislature will study and provide recommendations on appropriate division of roles between DOT and Commission (by 1/06)  Lots of learning for redefined roles and new players  Opportunity for this review to help with implementation of changes

7. 7June 29, 2005JLARC Review of WSDOT Accountability Oversight Structure (pre 7/05) Internal Audit TPAB LTC JLARC State Auditor Commission Governor OFM Senate Committee House Committee DOT

8. 8June 29, 2005JLARC Review of WSDOT Accountability Many Similarities to Other Executive Agencies (pre 7/05) State Auditor and Internal Audit units focused on financial/compliance audits and internal controls Independent entity conducted performance audits and evaluations (TPAB and/or JLARC) Cabinet-level activities provided management direction (POG, Governor’s Performance Agreement, Executive Order on Quality Improvement)

9. 9June 29, 2005JLARC Review of WSDOT Accountability Oversight Structure (pre 7/05) Internal Audit TPAB LTC JLARC State Auditor Commission Governor OFM Senate Committee House Committee DOT Leg. Committees Management Direction Performance Audit/Evaluation Financial Audit /Internal Controls

10. 10June 29, 2005JLARC Review of WSDOT Accountability But Some Big Differences between DOT and Others (pre 7/05) Executive direction was governed by Transportation Commission (not Governor) DOT voluntarily participated in cabinet activities Process for performance audits involved coordination among more players (TPAB, JLARC and LTC) Dedication of revenues and separate budget act set funding decisions apart for DOT Transportation budget decisions are focused on prioritizing within DOT’s programs and projects

11. 11June 29, 2005JLARC Review of WSDOT Accountability Current Reporting (pre 7/05) A lot of reporting takes place, but there is currently not a lot of duplication of effort or inconsistent performance expectations: Several entities currently have distinctly separate accountability roles Several entities currently have distinctly separate accountability roles Greatest potential for duplication or inconsistency was between direction from Commission vs. Governor/OFM Greatest potential for duplication or inconsistency was between direction from Commission vs. Governor/OFM DOT minimized inconsistency by using same measures as those reported to Commission (Gray Notebook) DOT minimized inconsistency by using same measures as those reported to Commission (Gray Notebook) Measures reported in cabinet activities were essentially repackaged or referred to Gray Notebook Measures reported in cabinet activities were essentially repackaged or referred to Gray Notebook

12. 12June 29, 2005JLARC Review of WSDOT Accountability Gray Notebook is Primary Reporting Tool (pre 7/05) Principal performance information (excluding federal requirements) is in the Gray Notebook: Gray Notebook takes substantial staff time for executives and managers to prepare and review Gray Notebook takes substantial staff time for executives and managers to prepare and review Relies on extracting, interpreting, and explaining data from multiple information systems Relies on extracting, interpreting, and explaining data from multiple information systems In addition to providing an external report, the preparation process is linked to internal management review processes In addition to providing an external report, the preparation process is linked to internal management review processes

13. 13June 29, 2005JLARC Review of WSDOT Accountability Process for Gray Notebook Weeks 1-2Weeks 3-4Weeks 5-6 System A System B System C System D System E Managers extract performance data from numerous systems and databases “Performance journalism” context is provided to explain results and provide Gray Notebook narrative and figures Data is compiled manually and distributed for analysis Regions conduct a quarterly review meeting with Exec Team Managers provide explanations for performance levels and changes Executive review and discussion Strategic Assess. Office does trend analysis, asks questions

14. 14June 29, 2005JLARC Review of WSDOT Accountability Findings (pre 7/05) Business processes for responding to other accountability entities do not lend themselves to a standardized work flow: Several are event specific or ad hoc Several are event specific or ad hoc Some are simple processes or an end product as a result of the Gray Notebook Some are simple processes or an end product as a result of the Gray Notebook Collecting performance data often requires decentralized and inefficient manual data collection processes Collecting performance data often requires decentralized and inefficient manual data collection processes

15. 15June 29, 2005JLARC Review of WSDOT Accountability JTC Expectations (post 7/05) TPAB JLARC Internal Audit State Auditor Governor DOT Leg. Committees Management Direction Performance Audit/Evaluation OFM Commission Financial Audit /Internal Controls

16. 16June 29, 2005JLARC Review of WSDOT Accountability Expectations (post 7/05) The linkages between accountability entities will be closer under new legislation Potential Benefits: Possibility for improved coherence of performance expectations across the three “zones” Potential Benefits: Possibility for improved coherence of performance expectations across the three “zones” Potential Risks: If individual entities do not communicate and coordinate, possibility for increased duplication of effort or inconsistency Potential Risks: If individual entities do not communicate and coordinate, possibility for increased duplication of effort or inconsistency

17. 17June 29, 2005JLARC Review of WSDOT Accountability Role of the Commission (post 7/05) Commission retains some existing planning functions, which will be staffed through an agreement with DOT Commission also provides staff support to TPAB for conducting audits As a result, some potential conflicts for audit independence could arise for Commission staff E.g., duties to both prepare and audit the 10 year capital plan E.g., duties to both prepare and audit the 10 year capital plan

18. 18June 29, 2005JLARC Review of WSDOT Accountability Project Delivery Information Substantial information is reported on capital program (constructing roads, ferries, etc.) DOT continues to evolve from a program-focused to project-focused approach Existing external reports are not sufficient to comprehensively assess performance—additional data is needed

19. 19June 29, 2005JLARC Review of WSDOT Accountability Project Delivery Information OFM, Governor, Legislature, and TPAB are all seeking additional project delivery information DOT also needs more standardized project level data to effectively manage its increased portfolio DOT also needs more standardized project level data to effectively manage its increased portfolio JLARC has used this opportunity to refocus the effort on project delivery assessment, with the goal of a collaborative approach between OFM, Governor, and Legislative staff Effort has the goal of avoiding conflicting direction and minimizing reporting burden on DOT Effort has the goal of avoiding conflicting direction and minimizing reporting burden on DOT

20. 20June 29, 2005JLARC Review of WSDOT Accountability Conclusions New governance structure offers opportunity of more coherence in oversight, but poses greater risks of duplication and will require more coordination Oversight entities need a clear, aligned understanding of goals to ensure consistent expectations for DOT Impact of workload on DOT for performance reporting is unknown, but more information is needed for both internal and external audiences There are limits to current project delivery reporting, which is hampered by lack of integrated information systems The Commission’s role in both recommending policy and staffing TPAB poses potential conflicts that should be examined by Governor and Legislature

21. 21June 29, 2005JLARC Review of WSDOT Accountability Recommendations Rec. 1: The Transportation Performance Audit Board and the State Auditor should collaborate on developing the 2005-07 audit work plans for each organization.

22. 22June 29, 2005JLARC Review of WSDOT Accountability Recommendations Rec. 2: As part of the upcoming study of Transportation Commission and WSDOT responsibilities, the Office of the Governor should include an assessment of independence requirements for the Transportation Commission’s role supporting TPAB.

23. 23June 29, 2005JLARC Review of WSDOT Accountability Recommendations Rec. 3: Staff supporting TPAB, the Legislature, OFM, the Office of the Governor, and WSDOT should collaborate on developing standardized performance measures for delivering transportation projects. A staff workgroup has already been convened. A staff workgroup has already been convened. JLARC supports a goal of moving from exception- based reporting to information covering status on the entire capital program. JLARC supports a goal of moving from exception- based reporting to information covering status on the entire capital program. Processes for oversight entities in obtaining and analyzing data will require further work. Processes for oversight entities in obtaining and analyzing data will require further work.

24. 24June 29, 2005JLARC Review of WSDOT Accountability Recommendations Rec. 4: DOT should add information to its quarterly status reports about the proportion of capital projects for which standardized performance data (cost and schedule progress) is available.