Government Transparency

I keep seeing the potential for the web to bring government closer to citizens. Here's an article in Wired magazine about one person's attempt to do that. (Hat tip to KidFurbo)

How do you turn things around?

I was at a conference last week that included auditors from federal, state, and local governments. As I listened to presentations and participated in discussions, it became clear to me that many times local government is far ahead of the federal level. I think that it is because government at the local level is so immediate and near. It doesn't take long to hear the echo from your constituency when they are upset.

Even comparing the federal and state audit organizations to local auditor shops, I could see the difference. There are very few levels, if any, of hierarchy at the local level. The audit director knows almost immediately what direction an audit is taking and has a close eye on audit quality and standards. At the state and local level there are levels of review and supervision before an audit is issued. This takes time and money.

So how do you turn things around in a large organization or how do you ensure that what you want the direction to be is what is occurring on the ground? It takes a concerted and dedicated effort. There are many analogies that I could think of. Imagine grabbing a 20 foot long rope and twirling around so that all of the rope was eventually off the ground. Just think how fast you would have to twirl before that final foot of rope was elevated. In large bureaucracies it may take years before the direction that you envisioned actually is reached.

Auditors can have a role in making the vision happen. Audits look at weaknesses in design and direction. As management twirls to lift that rope up, auditors can find places where weights drag the rope down.

Just a note. I am not saying that local efforts are more important. Many times those barriers to success at a local level occur because of state or federal action. So it takes us all to improve government.

Where were the auditors?

As I watched the economic crisis unfold and then read yesterday that over 100 economists had come out with a united statement about the government bailout I wondered, where were the auditors? This blogger is wondering which big 4 firms will be auditing the failing banks and noting that they were also involved in creating this crisis. But I also wondered if government auditors had been warning about this risk or not.

I did a quick search on the Government Accountability Office (GAO) website and found two reports that are interesting to say the least. In 2000 the GAO issued an audit about the roles of Freddie Mac and Fannie Mae. At that time the GAO said, "Federal sponsorship creates significant risks and costs because taxpayers might end up paying part of that more than $2 trillion debt."

An audit released on March 6, 2008 and titled, HOUSING GOVERNMENT-SPONSORED ENTERPRISES: A Single Regulator Will Better Ensure Safety and Soundness and Mission Achievement, contained these statements. "While the GSEs (government sponsored enterprises) provide certain public benefits, they also pose potential risks." and "While not obligated to do so, the federal government could provide financial assistance to the GSEs, if one or more experienced financial difficulties, that could result in significant costs to taxpayers." The GAO recommended "that Congress establish a single regulator that is equipped with adequate authorities to fully oversee GSE activities and governed by a board or hybrid board structure."

And, in 2007, a report was issued on default and foreclosure trends. That report stated "According to mortgage industry researchers and participants, the number and percentage of loans in default and foreclosure are likely to worsen through the end of 2007 and into 2008, due partly to scheduled payment increases for many ARMs." So the auditors were not silent.

Citizen's point of view

This blog about The Big Look Task Force's visit to Tillamook reminded me of a presentation I gave last fall on auditing from the citizen's point of view. The blog describes a citizen who went to this meeting with hopes of interacting. He had thought there might be a 15 minute introduction or summary then two hours available for testimony and observations. Instead, the event was managed to keep the participants "on task" according to him. He also described a survey where he felt the choices were not comprehensive enough to include what would have really been his choices. Overall, his impression was that the event was "window dressing."

Getting public input on potential policy choices is not a easy task. The timing of gathering input and the methods are an art. This blog represents one person's experience from his perspective. Sometimes audits can help improve a citizen's experience in the future. I have conducted several audits that try to improve this experience from how easy it is to access public records, find a building or service, or get help over the phone if you are homeless to whether an adult foster care home is homelike. Each of these started from a simple concept. Instead of auditing the process, experience the process to add validity to the information available. Government workers may have the best of intentions. But in their focus on how best to manage input and be productive, they forget how it feels from the citizen's perspective.

Oregon doing a good job; citizen's paying their share of federal taxes more accurately

According to a recent GAO audit Oregon is a potential model in the area of regulating tax preparers. There are no federal regulations or requirements that tax preparers must meet prior to preparing taxes. In California and Oregon there is. The GAO compared returns from both states and found that Oregon was more accurate. On average Oregon's 2001 federal returns were $250 more accurate than returns in the rest of the country which equates to $390 million in taxes paid by Oregon residents over what would have been paid if the accuracy rates were at the level of returns in the rest of the country. Seems like an equity issue. Oregon is doing a good job and its citizens are paying their share but citizens in other states aren't.

They also compared each program's costs and found that Oregon's costs were higher because the program includes testing and they are spread across fewer preparers.. The GAO estimated that Oregon's regulatory program cost in 2007 was about $6 million. They conclude "If only a small portion of the increased revenue that we found in Oregon is attributable to the Oregon regulatory regime, the regime would compare favorably to IRS's overall efforts to increase reporting accuracy."

Update to Sex, Drug Use and Graft

Update to a recent post. The Oregonian now has an editorial relating to the audit report that was issued last week.

Meeting auditing standards and audit quality

In every audit report there should be a statement that the audit was conducted following standards. Few outside of the accountability community understand what that statement means. Not that it is infallible, but following standards helps ensure the quality and integrity of auditing.

Recently auditing standards have become more rigorous. With the implementation of the new government auditing standards for audits initiated after January 1, 2008 there is a new requirement for annual monitoring of the quality control system. I recently designed a monitoring process to comply with this standard. Surprisingly, I found that our own office procedures were not being followed as intended. As an audit director I had been lax in providing guidance and supervision. This was a great learning experience. It also strengthened my belief that it is not just good enough to develop standards but also just as important to check that they are being met. A message we constantly give to auditees.

Sex, Drug Use and Graft! and Tone at the Top

The importance of the auditing function has been in the news several times this week, at least at the federal level. The inspector general of the Interior Department testified before the House on September 10th. He accused high-level officials of tolerating ethical failure and allowing such things as cronyism to cover-ups of incompetence. The NY Times ran an editorial on September 11th titled "Anything goes, apparently."

One of the important things that has evolved in auditing, especially after many of the large ethical failures, is the interest in an audit to address tone at the top. Nothing is more critical to an organization than to have explicit ethical standards that are publicized, reinforced, and followed by all from the top to the bottom. Without that an organization runs the risk of having a situation where "anything goes."

More about Olympic Medals

I have blogged here and here about the quandary on how to measure success at the Olympic games. I have now found an interesting blog site and here is a map that shows Olympic success on a world scale at the 2004 games in Athens. It'll be interesting to compare to the updated 2008 games.

GSA and Judges in a deadlock

How do you resolve conflicting objectives in an expensive government construction project? In 2002 at Multnomah County an audit was issued that grappled with this problem. The audit found that many times elected officials drove the design of projects and that this increased the scope and cost. The recommendation was to put in place an extended design and approval process so that all costs were known, including costs that might be incurred for scope creep.

The GAO released an audit yesterday that noted construction costs had tripled for a new courthouse in Los Angeles and that there was no consensus on how to proceed. After Congress had approved a design and funded a 41-courtroom, of 1,016,300-square-foot, the General Services Administration (GSA) designed a 1,279,650-square-foot courthouse that contained 54-courtrooms. There is disagreement as to why that occurred. The GSA stated it was because of the judiciary and the judiciary stated that it was a joint decision and driven in part by planning criteria, which the GSA denies.

There are now three proposals on how to proceed, but no agreement on which to choose. Any of the choices will require additional funding. The judiciary supports the most expensive option and opposes the other two more "modest" options. Construction was originally to be completed by 2006. If a decision can be made, the end date is now projected for 2013 and costs have tripled to $1.1 billion. At least the audit puts the full story in the open so that the public can see that the reasons for the cost increases are more complex than ineptitude. Here's a newspaper story covering the audit.

Department of Defense auditors muzzled

Several weeks ago I wrote about how government auditors had been intimidated and didn't follow standards. On the same topic, the Government Accountability Office released an audit today titled "Allegations That Certain Audits at Three Locations Did Not Meet Professional Standards Were Substantiated." That doesn't sound very newsworthy - didn't meet standards - ho-hum. Note: the DCAA is the Defense Contract Audit Agency (DCAA) under the Department of Defense and provides oversight for defense contracts.

But read this "Moreover, during our investigation, DCAA managers took actions against their staff at two locations that served to intimidate auditors and create an abusive work environment."

Further, "We found that enough evidence had been collected by the original supervisory auditor and senior auditor to support this opinion. However, after the contractor objected to draft findings and conclusions presented at the audit exit conference, the DCAA resident auditor replaced the original supervisory auditor assigned to this audit and threatened the senior auditor with personnel action if he did not change the summary workpaper and draft audit opinion. The second supervisory auditor issued the final report with an “adequate” opinion without documenting adequate support for the changes."

That is why following standards is so important.

Multnomah County Library & Web 2.0

Here is an example in my own backyard. The Multnomah County Library is on myspace, has a couple of videos on YouTube, also a pod cast from Parkrose High School on how to use the Library Media Center and is also in Wikipedia. Pretty interesting. Take a moment to look through the myspace page. Seems like lots of potential and also makes one think about how to audit these activities.

Walkability Audit

This sounds interesting. I tried to find out if an actual audit had been published but my search turned up nothing on the Department of Transportation's website. It reminds me of unique audits I have been part of in the past such as the Wayfinding Audit, an audit about how easy it was for citizens to find service locations (no longer available online), and the Public Records Audit, an audit about accessing public records from the public's point of view.

Why it's important to create good measures

Great guest post on NYTimes Feakonomics blog. Not only does it talk about performance measures that cause public policy to misdirect resources and efforts, but also touches on how systems can be just as important as building infrastructure.

Auditing is like going back to school

It took me a long time to not want to go back to school in the fall. Every time the season changed and the air became crisp, I used to think about new classes, new challenges, and new books. I was reminded of this when my daughter started college a week ago.

One reason auditing is fun is because each audit requires that you go back to school. At the beginning of an audit, we are never experts in the particular field we are studying. So at first, audit work involves becoming a mini-expert in the subject area. We review literature, find books to read, and go out and visit the program to see how it works on the ground. It's an exciting time as a picture starts to emerge.

Auditor who ran for office

Previously I said if I were running for office I would talk to the auditor. In Kansas City the auditor ran for mayor. I guess he got tired of no one taking the office's advice or asking. His campaign focused on financial stability and transparency. Here is a recent story with a great quote at the bottom. The office of the Kansas City Auditor has audited tax incentives many times in 1998, 2002, 2003, and in 2007 released after he retired and announced his campaign for mayor. So I think he has a good understanding of the problems. He has not been without controversy.

Audit idea

Here is an idea for an audit that I hadn't thought about. Seems like it would be relatively easy and might have benefit.

If I were running for president

If I were running for president, or for any other office, I would talk to the auditor. Past audits provide a wealth of information about government's weaknesses and how to make improvements. The GAO has a High Risk Series that I've always admired and wished I had time to duplicate at the local level. The Office states that addressing these high risk areas will:

• dramatically improve service to the American public,
• continue to yield significant financial and non-financial benefits,
• ensure that the government can deliver on its promises, and
• strengthen public confidence in the performance and accountability of the federal government.

I know that talking about audits to the public and expecting to be elected might be far-fetched. But the four bullets above sound like good sound bites to me.

Web 2.0 Update

In May, at the Association of Local Government Auditors annual conference, my office made a presentation about the potential for Web 2.0 for government and auditors. We noted that we found two instances of government using "Second Life" to have virtual communication with citizens, one in the Netherlands and the other by our own Congress.

Government continues to experiment with this media. Here is a story from New Jersey about the Attorney General's Office using Facebook for citizens to register complaints about unwanted advances on the Internet. Also, the State of Missouri did virtual recruiting on Second Life for IT jobs. Auditors need to be thinking about how to audit these new efforts for effectiveness and efficiency. Also, these new methods potentially might become recommendations in future audits.

The challenge

One of the reasons I enjoy auditing is that it allows you to challenge perceptions. Most organizations have a story that has become reality. Management often doesn't have time to step back and review landscape changes. What may have been true in the past may no longer be true. One prime example I remember from an audit long ago was library circulation. Library book circulation was reported to be steadily increasing and seemed to support management's request for increased funding. However, when auditors reviewed the statistics we found two things. Part of the increase was due to an increased ability to renew books. So the statistics didn't reflect just new books checked out but also books that were kept longer through renewal. Also, when we looked at circulation trends by branch library, we found significant differences. Both of these findings didn't necessarily suggest that the library shouldn't receive increased funding, but did suggest that the current level of funding could be managed better. It also didn't necessarily mean that management was deceptive or inept. Auditors have more time to dig into the data and find subtleties.

Just as an aside, I was reading another blog today and was directed to the Vote Studies Workbook that looks at voting history and how congressmen and women votes are aligned with their party. One of the things you can do is sort the data by various categories. I sorted by the "Member Since" column which shows the year they came to office. The oldest is from 1955, so 53 years in office. Can that be right? It would have been cool to examine the data to see how many had been in office since 2000 or to aggregate by 10 year periods. Makes you wonder how the voting history looks based upon time in office.