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WACO Conference presentation (Larisa


State Auditor s Office Local Government Update Local Government Performance Center Local Government Audits & Accounting Presented to Washington Association – PowerPoint PPT presentation

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Title: WACO Conference presentation (Larisa

State Auditors Office Local Government
Update Local Government Performance CenterLocal
Government Audits AccountingPresented to
Washington Association of County Officials
ConferenceOctober 5, 2012Larisa Benson,
Director of Performance Audit Chuck Pfeil, CPA,
Director of State Local Audit
Local Government Performance CenterMaking
government work better and cost less Presented
to Washington Association of County Officials
Conference October 5, 2012Larisa Benson,
Director of Performance Audit
Slow economic recovery causing pain
  • Governments dependent on tax revenues see their
    tax base shrinking in a down economy
  • Voters, also feeling the pressures of the
    economy, demonstrate strong anti-tax sentiments
  • Meanwhile, rising caseloads actually increase the
    demand for government services
  • Unprecedented levels of fiscal austerity cause
    leaders to ask Have we cut all we can? What do
    we do now? Is it possible to do more with less?
    How can we do less with less what choices and
    tradeoffs must be made?
  • Using performance data to inform tough budget
    decisions sounds like a good route . . . but its
    not as easy as it sounds.
  • Could the tools and techniques that performance
    auditors use help local government leaders make
    more informed decisions and use the opportunity
    in the crisis to improve government services?

A new resource for local governments
  • In this challenging environment, governments need
    precise and practical information to make
    important decisions.
  • We created the Local Government Performance
    Center to offer help using performance management
  • All organizations can use performance-based
    techniques to improve how they
  • Evaluate and improve programs
  • Prioritize resources and increase efficiency
  • Engage citizens and be more responsive to

Why the State Auditors 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.
  • 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

Improved Government Performance A Shared Goal
  • The Local Government Performance Center within
    the State Auditors 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
  • 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

Where to find us on the website
Local government experts from across Washington
  • The leadership and technical advisory panels
  • 12 county representatives
  • 14 city representatives
  • 6 representatives from resources and
    universities, including WACO
  • Varied positions bring important perspectives
  • Directors or managers of budget, finance, public
    works, public health, community relations,
    information technology, community development,
  • 7 elected officials including four
  • 2 deputy county executives

Local government leaders guide our way
Leadership Technical Experts Group
Name Organization Name Organization
Mike Bailey City of Redmond Byron Katsuyama Municipal Research Svcs. Center
Randy Beehler City of Yakima Larry Keeton Kitsap County
Charlie Bush City of Issaquah Kim Krause City of Burien
Robin Campbell Thurston County Alicia Seegers Martinelli Association of WA Cities
Kent Cash Cowlitz County Dean Maxwell City of Anacortes
Gavin Cooley City of Spokane Jim McEntire Clallam County
Mike Doherty Clallam County Marie Mosley City of Kennewick
Steve Gorcester Trans. Improvement Bd. Tom Nosack Clark County
Cheryl Grant City of Chelan Kevin Phelps Pierce County
Michael Grayum City of DuPont Helen Price Johnson Island County
Henry Hash Skagit County Doug Schulze City of Normandy Park
Bud Hover Okanogan County Rich Siegel City of Bellevue
Michael Jacobson King County Ken Smith University of Washington
Eric Johnson WA Association of Counties Lloyd Tyler City of Vancouver
Chuck Johnson City of East Wenatchee Iwen Wang City of Renton
Patrick Jones Eastern Wash. University Stacy Wenzl Spokane County
Local government leaders told us what they need
  • 1) Evaluating operations and services
  • Understanding and using effective performance
  • Setting targets/benchmarks
  • Staffing analysis and models
  • 2) Managing and improving performance
  • Building logic models that explain what
    government does and why
  • How to manage with performance measures and data
  • LEAN and other process improvement methodologies
  • Alternative service provision models, tools and
    success stories
  • Performance-based budgeting
  • 3) Communicating with citizens
  • Engaging citizens in setting priorities and
    solving problems
  • Using social media in local government
  • How to create and use dashboards/scorecards

Five examples of what were doing
  • 1) Staff analysis training and tools
  • Help government leaders evaluate costs of
    overtime versus adding staff
  • Training formats include classroom style,
    webinar, and on-site
  • 2) Turning a completed audit into a management
  • Sharing lessons learned from a recent state audit
    in a checklist format helps governments save
    money on cell phone costs
  • 3) Citizen engagement tools and resources
  • Pilot citizen survey project with Walla Walla,
    creating a model
  • Training on how to engage citizens and increase
  • 4) Performance measure training and assessments
  • Training on performance measures plus auditor
    assessments of how local governments use
    performance data and ways they can improve
  • 5) 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

Example 1 Staffing analysis tools training
  • Questions local government leaders ask
  • How do we know if we have the right number of
  • Whats the best way to calculate the FTEs to
    cover a post on a 24/7 schedule?
  • How do we know if were paying too much in

Example 1 Staffing analysis - Modeling
  • Elements of a Sound Staffing Model
  • Does the staffing model have solid information
    about the work being done?
  • Does it provide points of comparison, such as
    historical workload levels and costs by site/work
  • Is the level of staffing resources clearly
    related to meeting workload requirements or
    service level goals?
  • Has the model been validated to check its
  • Is its design consistent with best or leading

Example 1 Staffing analysis Coverage and
  • How do we know if we have the right number of
    staff to cover a post on a 24/7 schedule?
  • Calculating appropriate relief requirements
  • Anticipating and budgeting for hidden costs
  • Why the relief factor doesnt always work well
  • How do we know if were paying too much in
  • Analyzing overtime data who is using OT, and
  • What is Good vs. Bad overtime?
  • Correctly calculate and compare the costs of
    overtime vs. adding another full-time employee.

Example 1 Staffing analysis overtime management
  • Strategies to more effectively manage overtime
  • Calculate and compare the fully burdened hourly
    cost of OT and straight time how different are
    the costs?
  • Analyze overtime data who is using it and why?
  • Review OT approval policies and processes - do
    criteria exist for acceptable OT use?
  • Analyze leave policies is annual leave being
    closely managed?
  • Analyze unscheduled leave use trends?
  • Examine Comp Time policies controls in place?
  • Look for potential economies of scale possible
    to pool staff?

Example 1 Staffing analysis Online tools
  • Two-page online tool highlights the difference
    between good and bad overtime use
  • Elected official audience
  • The format is designed to help elected officials
    and decision makers ask the right questions

Example 1 Staffing analysis tools
  • Determining coverage
  • In our workshops, we review ways to calculate
    leave to factor into evaluations
  • Downloadable template
  • This example uses the average leave per law
    enforcement officer to calculate how many FTEs
    are required
  • Using available data
  • These tools use data governments already have

Example 2 From the audit comes the cost savings
  • Our November 2011 performance audit helped the
    state save 1.7 million, or almost 20 of its
    total cell phone bill.
  • We summarized and translated our recommendations
    into an online tip sheet
  • Compare actual usage to current rate plans
  • Consider using pre-paid phones vs. calling plans
  • Consider joining purchasing cooperatives
  • Negotiate with cell phone providers
  • Evaluate the pros and cons of using an employee
    stipend policy
  • Local governments used our idea to get better
  • Pierce County discovered most phones were rarely
    used, but the county was paying for higher-use
    plans the average phone used 67 minutes and
    covered for 600 minutes.
  • The county is using this information to negotiate
    better plans and lower costs.

Example 2 Questions to ask to cut costs
Example 3 Helping governments engage citizens
  • We provide tools and training that help cities
    and other organizations communicate with their
  • Training on citizen engagement strategies
  • Citizen-driven prioritization of resource
    allocation and process improvement efforts help
    governments focus on what matters most
  • Citizen surveys
  • Helping the City of Walla Walla develop and
    analyze a citizen survey
  • Developing a survey template other governments
    can use
  • Guidance using the results to inform decisions

Example 3 Engaging citizens in setting priorities
Source Elway Research, Inc.
Example 3 What matters most to citizens?
Source Elway Research, Inc.
Example 4 Performance measure assessments
  • 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.
  • Current projects include assessments for the City
    of DuPont and the Thurston County Sheriffs
  • Our assessment of Pierce Countys performance
    measures is available on our website.

Example 4 Thurston County Sheriffs Office
Great data about workload management can be hard
to read
Example 4 Front desk data presented another way
This measure looks at demand for one application
over time.
Example 4 Thurston County burglaries per month
by sector
Great data on burglaries in each sector all
sectors look the same.
Example 4 Burglary data presented another way
The data shows sectors A and B usually report
more burglaries.
Example 5 Using Lean principles
  • Kitsap County redesigned their permit process for
    Single Family Residences using lean management
  • 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
  • Kitsap County is now featured in our Lean
    Academy pilot to help three more jurisdictions
    streamline their permitting offices.
  • Case studies, videos, and how-to tools will be
    posted on our website, and more training will be
    offered in 2013.

Example 5 Lean Academy benefits
  • BEFORE Kitsap County single family residence
    permit process

Example 5 Using Lean principles
AFTER Kitsap County single family residence
permit process
Why should we do this?
  • Our vision is to create a place where government
    leaders who are committed to achieving cost
    savings and better results can learn from and
    support one another.
  • By participating, local governments can
  • Learn new ways to deliver better results and give
    citizens a better return on their tax dollars.
  • Receive information and technical assistance from
    performance experts at no cost to their
  • Share ideas, challenges, and resources with other
    government leaders who face similar challenges.

What does it cost?
  • The Center is funded through the state
    performance audit program, which was established
    in the Auditors 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.
  • This is a pilot effort we will be evaluating
    whether its working or not, and whether we can
    meet demand.

New roles bring new challenges
  • Partnering with the State Auditors Office

How can you stay informed?
  • Email performance_at_sao.wa.gov
  • Roxanne Lowe, Project Coordinator (360) 725-9722
  • Get real-time updates and offer your input
    on Center development through _at_LocalGovPerform.
    (Twitter account facilitated by FLT Consulting.)

Upcoming Performance Center projects
  • New Website The Center will roll out a new and
    improved website with more tools in November
  • Remember this site www.sao.wa.gov/performancecent
  • Lean Academy The Center is hosting a training
    for three governments on Lean performance on
    October 25.
  • Training sessions The Center is providing
    sessions open to all governments in Chelan on
    October 18 and November 7
  • Webinars Staffing analysis October 12 and
    communicating with citizens November 30

Auditing and Accounting Update Presented to
Washington Association of County Officials
Conference October 5, 2012Chuck Pfeil, CPA,
Director of State and Local Audit
Audit Accounting Topics
  • Audit Frequency
  • Proposed Federal Audit Changes
  • Recent SEC Report
  • Public Development Authorities Public Facility
  • Local Government Financial Condition

Audit Frequency
  • State Auditors Office reassessing Accountability
    Audits in schools, cities and counties.
  • Current school cycles
  • 85 annual
  • 120 two year
  • 41 three year
  • 49 limited-scope accountability audits (audit

Audit Frequency
  • Over 110 schools offered less frequent audit
  • About half accepted
  • Counties and cities currently being evaluated

Proposed Federal Audit Changes
  •  OMB considering Federal Audit changes
  • Higher audit threshold
  • Fewer compliance requirements
  • Focus on improper payments, fraud, errors and
  • Higher questioned cost threshold

Securities Exchange Commission Report on
Municipal Securities Market
  • July 31 report issued
  • http//www.sec.gov/news/studies/2012/munireport073
  • Seeking expanded authority including
  • Setting issuer disclosure requirements
  • (timeframe, frequency, content)
  • Establishing the form and content of financial

Public Development Authorities Public Facility
  •  Many do an effective job
  • When we find problems they center around
  • The creating entities not monitoring the PDA/PFD
  • The governing boards not monitoring their own
  • Declining or distressed financial condition
  • Non-compliance with laws and regulations
  • Summary report on our PDA/PFD audits

Local Government Financial Condition
  • Seeing financial distress in both large and small
  • Conditions looked for in our audits
  • Declining/negative fund balance
  • Expenditures exceeding revenues
  • Lack of adequate management action/oversight
  • Reliance on interfund loans
  • Reliance on registered warrants
  • Increasing or high debt
  • Reliance on unsupported cost allocation
  • Contingent liability
  • Failed levy
  • Pending litigation

Local Government Financial Condition
  • Reported on financial condition in 15 of 35 types
    of local governments
  • Increase in number of governments and conditions
  • Notable change in cities and towns
  • Improvements in some governments
  • Southwest Washington has largest number

Local Government Financial Condition
Brian Sonntag, CGFM State Auditor (360)
902-0360 Brian.Sonntag_at_sao.wa.gov
Larisa Benson Director of Performance Audit (360)
725-9720 Larisa.Benson_at_sao.wa.gov
Chuck Pfeil, CPA Director of State Local
Audit (360) 902-0366 Chuck.Pfeil_at_sao.wa.gov
Website www.sao.wa.gov Twitter
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