Excellence in Auditing

Thanks for posting this - and congratulations on making some tough decisions to improve the operation of a very important office! - promoted by david

“Better” government is government that is more efficient, more effective, more accountable, and transparent.  The public deserves no less.

For the past year I have been  telling the people of Massachusetts that I want to make government work better, and I knew that any effort to improve state government would need to begin right here in the Office of the State Auditor.

Today, I announced sweeping changes that I am implementing in my own office to answer those concerns as part of my mission to achieve “Excellence in Government Auditing”.   These reform measures establish higher standards for virtually every aspect of audit operations and are predicated on three basic components of our transition period:

  • Discussions with local industry leaders and experts who I assembled for my transition team.
  • The results of an independent review of the office’s audit policies and procedures coordinated National State Auditors Association.
  • Internal performance assessments that my senior staff developed and recently conducted on our auditing staff.

Before I get into the specifics of these reform measures let me give you a little background.

Right after the election, I contacted the National State Auditor’s Association who coordinated a team of auditors from six states to conduct what is called a “Peer Review”.

They reviewed audit policies and procedures and spent a week in our offices reviewing audits and questioning audit staff to determine whether the work of the Office complies with Generally Accepted Government Auditing Standards (GAGAS) set by the federal government.   These standards are laid out in what is known as the bible for auditors: the Yellow Book.   Massachusetts law requires that the Auditor’s office follow the Yellow Book in performing its audits.

Today we have made public the reports of the peer review process, available online, which provide an unsparing assessment of the Massachusetts audit operation, the first peer review, it noted, in 15 years.  The team has issued a rare adverse report.

According to the report, during the audit period of July 1, 2009 through December 31, 2010, the Office’s system of quality control did not conform to government auditing standards. The Peer Review noted deficiencies in audit planning, staff competence, audit documentation, and audit reporting, but did not say the body of the Auditor’s work was without merit or that audit findings could not be supported.

These findings, along with advice from our transition committee and our employee performance assessments lead us to today, 100 days into my administration, and my issuance of new standards for performance and operations.

Among the actions I am taking:

  • The development of a new audit manual and improvement of the functionality of the software we use to conduct audits to ensure rigorous adherence to and documented compliance with GAGAS.
  • The launch of a new performance evaluation system to review, manage and reward staff performance throughout the entire office.
  • The initiation of an intensive training program that focuses on government auditing standards, institutes mentoring and professional development requirements which exceed Yellowbook standards, and which will remain a permanent feature of our personnel management system. In this way, we will develop career paths, ensure leadership development and keep skills sharp and up-to-date.
  • The elevation of the audit quality assurance position and the appointment to the post of Meredith Barrieau, a Certified Public Accountant, who also is certified in fraud examination, and financial forensics, and has spent 10 years at one of the big four private accounting firms.
  • Revised audit job descriptions with new educational and professional job requirements to raise the professional level of the audit staff and form the basis for a new recruitment and hiring process.
  • 41 Personnel actions, including terminations, demotions and promotions. Beginning Friday, we will post job openings to fill vacated positions for entry-level field auditors and audit supervisory staff. All positions may be applied for via our website: www.mass.gov/auditor.

This action plan is designed to improve the effectiveness of our work, commit to a professional workforce, articulate proper standards in office policies and procedures, ensure documented adherence to them and above all, put into operation a vigorous quality assurance system.

We have already set the wheels in motion to ramp-up to full staff strength, initiate new training standards and deploy other initiatives to begin in June and be completed by September 1.

The Auditor’s Office must model the behavior it expects from the rest of government if officials in state government are going to respect and heed our audit findings and the public has confidence that this office can be an effective watchdog.

I am committed to achieving this, and I promise the people of Massachusetts that when the peer review team returns in three years, as required by the government auditing standards, it will find a changed Auditor’s Office. This Office will not receive another adverse report while I am State Auditor.

By serving as a shining example of accountability, professionalism, efficiency and effectiveness and transparency and by producing quality audits, we provide the motivation and tools state government can use to make meaningful improvements in their own agencies and programs. That is what taxpayers need and want from their state government.

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