WA State Auditors Office Update - HFMA WA

Washington State Auditor’s Office Update
Healthcare Financial Management Association
Washington-Alaska Chapter
Lynnwood Convention Center
November 16, 2015
Deborah Pennick
Hospital District Program Manager
Wa s h i n g to n S ta te A u d i t o r ’s O f f i c e
SAO update
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2014 Snapshot: Local Government Audits
2014 Hospital Audit Overview
SAO Perception Survey
Local Government Performance Center
Emerging Issues
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Audit Dispute Resolution
Local Audit Billing Rate Adjustment
Public Records Study
State Auditor Stewardship Award
Wa s h i n g to n S ta te A u d i t o r ’s O f f i c e
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2014 Snapshot: Local Government Audits
Local governments
audited annually:
2014
1,391
2013
1,314
Management
letters issued:
2014
236
2013
263
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2014 highlights
 Lack of internal controls in key financial systems accounts for
42% of all audit exceptions
 Declining financial condition continues to jeopardize financial
stability due to rising costs and constrained revenues
 56 misappropriation investigations totaling $682,000 –
largest cases - theft of cash receipts and fuel and personal
use of credit cards
 Continued struggles with federal grant compliance –
problems in 15% of federal audit reports published
 New SAO resources and tools on our Local Government
Performance Center webpages
To view the reports, findings and resources or subscribe to our service go to: www.sao.wa.gov
Wa s h i n g to n S ta te A u d i t o r ’s O f f i c e
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2014 Snapshot: Hospital comparison
Reports issued by type of audit
2014 Local
governments
audited annually:
All Hospital
1,391
44
Management
letters issued:
All Hospital
236
19
Wa s h i n g to n S ta te A u d i t o r ’s O f f i c e
All
Hospital
1,321
43
Financial & Federal
450
3
Financial
407
14
Special
46
0
Investigations
13
0
2,237
60
Accountability
Total:
Findings issued by type of audit
All
Hospital
Federal
85
1
Financial
70
3
Accountability
93
6
5
Number of exceptions by category
Area of Issue
Exceptions
All Hospital Area of Issue
Exceptions
All
Hospital
Accounting/Financial Reporting
Grants (Federal)
Cash Receipting
Disbursements/Expenditures
Procurement/Bid/Prevailing Wage
Safeguarding of Assets/Property
Payroll/Personnel
Miscellaneous
Open Public Meeting/Record
Billings/Receivables
Apportionment (Transportation)
Contracts/Agreements
Financial Condition
Restricted Funds
ASB (Legal Compliance)
Apportionment (Staff Mix)
Apportionment (Enrollment)
Interfund Transactions/Balances
796
435
360
249
191
184
179
133
104
100
95
91
87
55
53
45
35
34
21
19
17
17
14
14
12
9
9
8
6
5
0
0
0
0
0
7
0
0
1
1
0
0
1
0
0
0
0
0
0
0
0
0
3,377
164
38
8
25
20
13
8
13
2
6
9
0
3
9
0
0
0
0
0
Gift of Public Funds
IT Controls
Insurance/Risk Management
Investments/Deposits
Conflict of Interest/Ethics
Grants (State/Local)
Misappropriation
Surplus Property
Taxes/Assessments
Budget Compliance
Donations/Fundraising
Misuse/Abuse
Debt/Covenants
Danger to Public Health/Safety
Police/Jail (Legal Compliance)
Authority
Courts (Legal Compliance)
Note: *Exceptions include all findings, management letters and exit items.
Wa s h i n g to n S ta te A u d i t o r ’s O f f i c e
Grand Total
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Hospital findings and management letter by category
2014
Finding
Management
Letter
Financial Condition
4
4
Accounting/Financial Reporting
3
4
Procurement/Bid/Prevailing Wage
1
4
Payroll/Personnel
1
2
Grants (Federal)
1
0
Cash Receipting
-
1
Contracts/Agreements
-
1
Billing/Receivables
-
1
Misc. – Policy Compliance
-
1
10
19
Area of issue
Totals:
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SAO perception survey results & insights
Wa s h i n g to n S ta te A u d i t o r ’s O f f i c e
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Local Government Performance Center
The Center’s mission is to provide non-audit services and
resources to help local governments deliver better results.
 An online resource center with tools and examples.
 Training on how to improve government services.
 Customized technical assistance (on request and within
available resources).
The Center is funded through the 2005 voter approved Initiative
900. There is no charge to governments.
Improved government performance:
A shared goal
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Local Government Performance Center
Examples of what LGPC does:
1. Use information from local financial audits
 Assess financial condition of local governments state-wide.
 Create tools from common audit findings and management letters.
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 like the “Lean Academy” plus creating a peer-support
network to help governments learn and use process improvement
methods to develop faster, cheaper delivery systems.
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Example: Use information from local audits
Type
Acting outside of audit authority
Annual reporting
Bid law
Conflict of interest
Contracts
Cost allocation
Financial condition
Gift of public funds
Interfund transactions
Internal controls –
significant accounting systems
Loss reporting
Restricted funds
Safeguarding of assets
Wa s h i n g to n S ta te A u d i t o r ’s O f f i c e
Number of
Findings
Number of
Management
Letters
Significant
Audit Area
7
1
25
8
5
4
25
1
8
8
6
57
4
13
54
34
3
5
Yes
Yes
No
Yes
No
Yes
Yes
Yes
Yes
62
177
Yes
1
2
12
5
5
25
Yes
Yes
No
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Example: Use information from local audits
Progress Report: Local Government Financial Health
 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
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Example: Use information from local audits
The most commonly found indicators of declining financial condition
.
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Example: Use information from local audits
What
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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
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Responsive Design | Visualization | Easy-to-Use
Trusted & Accurate | Data Clearinghouse
Communication Between Entities & Agencies
Educational | Financial & Non-Financial Data
Wa s h i n g to n S ta te A u d i t o r ’s O f f i c e
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
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Enable local governments to assess their own
financial health proactively
Provide actionable information to local
government policymakers
Trend analysis and future forecasting
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Example: Use information from local audits
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Collaboration with MRSC
 Public Records Act/Open Public Meetings Act resources
 Local Government Contracting Portal
 IT Security resources/training
 Government Performance Consortium
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Collaboration with MRSC
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Audit Dispute Resolution
- Website Access
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Audit Dispute Resolution
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Local audit billing rate change
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Public Records Study
• Legislative request
• State and Local
Governments will not
be billed (performance
audit funded)
• Survey of all entities
with some follow up for
some entities
• Publish Fall 2016
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Stewardship Award
 Recognizes outstanding
accomplishments
 Acknowledges governments that
share our goal of government
that works better, costs less, and
earns greater public trust
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Auditor’s Office Contacts
Jan Jutte, CPA
Acting State Auditor
(360) 902-0360
[email protected]
Kelly Collins, CPA
Director of Local Audit
(360) 902-0091
[email protected]
Sheri Sawyer
Deputy Director of Local Gov’t Services
(360) 902-0364
[email protected]
Deborah Pennick, CPA
Hospital District Program Manager
(509) 334-5825
[email protected]
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