Auditude

Straight talk from the D.C. Auditor

D.C. Agencies Need a Playbook

New ODCA white paper asks: If auditors can’t audit, how can overseers oversee?

Published January 22, 2019

What do you do if you’re DC Auditor and you are tired of issuing the same report over and over? It began to feel like that with the annual audits of the city’s school modernization program that we’re required to produce. During my four-plus years on the job, we’ve continued to ding the Department of General Services (DGS) and, more particularly, the mid-level staffers who continually have trouble giving us timely, current, and complete documentation on their oversight of school modernization contracts.

Every year we came up with the same findings: DGS lacks basic policies, procedures or structural processes that ODCA could verify.

Tired of dinging and wanting to affect change, we’ve issued a white paper on how to fix what has felt to us like a reoccurring Groundhog Day! The lead author of two of our recent school modernization audits, ODCA Audit Supervisor and Certified Public Accountant Lilai Gebreselassie, asked to investigate what he initially saw as the absence of a playbook for District employees to use when the auditor comes calling.

He explained: when he was in the private sector and arrived on the scene for a bank audit, he knew what he was doing and the bank officials knew what he was doing. They had their rulebook; he had his. Banks and CPAs have national and international associations that revise and update their own sets of rules. The bank staff knew the documents he would need; he knew what to look for within them. No one said, “This isn’t our job,” or “That happened before I got here,” or “Maybe the information is at the archives.” The ensuing bank audit was good, bad, or indifferent, but no one was confused or surprised. And that can often be the case when we knock on the door of a D.C. agency.

Among the findings we continue to uncover in our audits are:

• The program does not operate under a set of standard operating procedures.
• Staff are not routinely trained on HOW to manage the program or service.
• Documents to verify either can’t be found or were never created.

When one of these issues arises and officials can’t prove exactly how they’ve operated, our own set of rules says we have to cry “risk!” We opine that there’s a risk of waste, fraud, or abuse.

What we came to in our new white paper is that the District of Columbia government needs a playbook, some kind of operational framework of controls that means every program and service operates under standard operating procedures and staff are trained—plus whatever else is needed to make our agencies more like a bank that anticipates what the auditor is going to need to see. If your agency is ready for an audit that means you’re ready for a D.C. Council oversight hearing and can prove to Joe and Susie Taxpayer that you are spending their money wisely.

The report notes that there have been other efforts in other contexts to bring greater order to operations. The federal government has its OMB Circular A-123. The U.S. corporate sector has its Sarbanes-Oxley Section 404. We mention a couple of states that have attempted to impose a framework for internal controls for program operations–New York and Tennessee–though with admittedly mixed success.

Getting on the same page will be a very tall order for our very young government. In the past two decades the District government has turned into a sprawling set of independent actors. Some agencies have their own procurement authority. Some have their own personnel authority. Finding a standard or framework or a new law that dictates how everyone must operate will require a lot of discussion and revision and amendment.

What we recommend in the white paper is at least starting the conversation. One thing we might borrow from Sarbanes-Oxley: cabinet agency directors have to certify every year that they actually have an agency playbook of all their SOPs, and the processes were “monitored and tested.” Maybe we start with a single agency as a pilot for a coherent and tested system of controls. And, whatever we do to seek consistency and preparedness for evaluation, we build in an accountability system so that once established the framework for controls stays in effect.

We love Bill Murray, but we’re tired of Groundhog Day!

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