NLPES Question of the Month

March/April 2002

WHAT STEPS DOES YOUR OFFICE TAKE TO IMPROVE WORKING RELATIONSHIPS WITH THE AGENCIES YOU'RE EVALUATING?

Rick Riggs, Kansas

I recently asked [via the NLPES listserve] for information on what other states do to prevent agencies from "managing" auditors' access to agency personnel. Here's a quick summary of what I found. In summarizing, I rounded off a lot of the corners. [Contacts are listed in parentheses.]

  • Arizona: No formal policy, but this issue is often discussed at the entrance conference. Politely decline all offers of coordinators, liaisons, etc. Offer to set up regular progress meetings to foster open communication, cooperation. (shays@auditorgen.state.az.us)
  • Colorado: Standard engagement letter language that asks the agency director to appoint an audit liaison to attend to things like logistical issues. Usually resolve problems by having a little talk with the agency director about how this appears (e.g., Are you trying to hide something?). This usually takes care of the situation. (heather.moritz@state.co.us)
  • Kentucky: Everything must be sent through the Cabinet Secretary to the Health Services Cabinet. This procedure has caused us some delays. We do not have any procedures for dealing with this. (Alice.Hobson@LRC.STATE.KY.US)
  • Michigan: Most success in overcoming roadblocks has come by practicing good public relations with auditee. (BrownG@michigan.gov)
  • Minnesota: Finesse the problem with a phone call from the project manager or deputy explaining that any kind of restrictive procedure is unworkable and not acceptable. Sometimes it's helpful to have a single contact person to go to when there are problems, especially if the person has stature within the agency. If agencies choose to designate contact persons, they should understand that (1) auditors aren't obligated to always work through the contact person to obtain information, and (2) it is impractical and inappropriate for the agency to expect that the contact person will always participate in any discussions with agency staff. It's inappropriate (and potentially illegal) for agencies to restrict employees from contacting the auditor directly. (Roger.Brooks@state.mn.us)
  • Ohio: No formal policy but all client contracts for performance audits contain a clause regarding a designated "go to" person who serves as the liaison between the audit team and the client personnel. Resolving access problems starts with the designated liaison. This is discussed at the entrance conference. (BJBashore@auditor.state.oh.us)
  • Oregon: It doesn't happen often, but some agencies make us jump through the hoops. We don't have anything specific that covers this, but we have over the years convinced most managers that its in their best interests to cooperate with us (mostly we're in and out of there quicker...). (Catherine.E.Pollino@state.or.us)
  • South Carolina: We give the agency a list of points during the entry conference, citing enabling statutes which give us access to all agency information. (KSnider@sclac.state.sc.us)
  • Washington: Problems are resolved through a meeting, and by trying to increase trust between staff and auditors. (Moss_He@leg.wa.gov)
  • Wyoming: Mention at the entrance conference auditors' right to free access to staff and records. (BROGER@state.wy.us)

In sum, some states are specific at the entrance conference stage about their preferences with regard to access to staff, and others prefer to address the problem informally if it occurs. What we're trying to set up in Kansas is standard language in the startup letter, and a standard checklist of points to be covered at the entrance conference, that eliminates ambiguity on this point right up front, especially with agency folks who don't see us very often and may be, shall we say, paranoid. Another thing we've instituted, in the category of establishing mutual trust, is providing agencies with a pamphlet that explains the audit process. If you're interested, the pamphlet language also is on our website at http://www.kslegislature.org/postaudit/auditeeinfo.htm


Ken Levine, Texas Sunset Advisory Commission

We start out the process with an introductory meeting at the agency under review with their executive director and other key senior staff. We try to be very up front about the workings of the Sunset process and what to expect (and then stick to it). We let them know that we will be discussing our findings with them well in advance of any exit conference and draft reports...that there will be no big surprises at the end. This one item alone tends to increase their comfort level.

We try to weed out the "gotcha" attitude of our analysts. While we write persuasively, we try not to overly blame the agency for its shortcomings, unless fully deserved (i.e., we recognize the outside influences that help create some problems). As a result, our motto of late is "only as mean as we have to be." Agencies have seen this change in the tone of our reports, and I believe this approach has changed their attitude about the Sunset process...at least a little bit.

With respect to access to agency staff and their wanting to manage that access: We cover these topics in the entrance conference. We tell them that the preferred practice is to set up meetings directly between our staff and theirs. However, if they want to go through a central person to set the meetings, we live with it. But we tell them if it causes delays or other problems, we will quickly revisit this issue with the agency executive director. We do not allow a person to "sit in" on interviews. If they want to know what was discussed, they can ask the interviewee.

A majority of the agencies choose to let us set our own meetings directly. Some prefer the central coordinator. Usually, they get tired of centrally coordinating and switch to direct contacts at some point. We're just direct about our needs in this area in the entrance conference, but also flexible to fit the culture of the agency.

The question, "Do good auditor-auditee working relationships endanger the auditor's independence?" is mostly irrelevant. We expect staff to build and maintain good working relationships with agency personnel if at all possible. We trust their professional integrity to not be influenced by these positive relationships. The only item we worry about to some degree is if the relationship becomes a bit too trusting. Our job is to question and dig under what we are given and told. While usually not a problem, it is something to watch for.

What may be interesting sometime is to hear people's horror stories about when an agency relationship becomes unmanageable, untrusting and highly negative. What happened, how did you handle it, and were there any "winners and losers" in the process.

Sylvia Hensley, California

The California Bureau of State Audits takes a variety of steps to improve working relationships with the agencies we audit. For instance, the State Auditor personally meets with each new agency secretary to explain the role of our office. Not only does this familiarize them with what we do, but it also personalizes the bureau. Although we do not typically provide the agency being evaluated with written information about the bureau, information is available to them on our Web site.

Job start letters and entrances conferences are other mechanisms that we use to inform the auditee about the bureau. In addition to informing the auditee that we are about to begin the audit, the job start letter spells out the bureau's statutory access to records.

The entrance conference provides an opportunity not only to familiarize the auditee with the bureau and the audit process, but also to establish the "ground rules" for the audit. Besides discussing the specifics of the audit at the entrance conference, we also discuss the audit process so the auditee knows what to expect. For entities that we have never audited before, we may even share copies of past reports to give them some idea of the type of report we issue. We always make it a point to discuss access and confidentiality. We attempt to surface access issues early so that we can involve the attorneys (theirs and ours) as early as possible to resolve any access issues.

We recognize the benefits of a good auditor-auditee relationship and attempt to maintain a good, professional working relationship at all times. For example, to the extent that it is practical to do so and does not impede our independence, the audit, or our access to records or personnel, we will comply with procedures or protocols established by the auditee. For example, agencies will often designate an audit liaison to coordinate certain interview or document requests. When such arrangements interfere with our access, we will work with the agency to remove the barriers. However, if these attempts are unsuccessful, the State Auditor has the authority to subpoena the information. It is rare that the State Auditor must exercise this authority. Generally, the threat of a subpoena is sufficient to induce the agency to cooperate. 


Jane Thesing, South Carolina

We take several steps to improve working relationships with the agencies we audit:

  • At the entry conference we review the audit process and our expectations for the agency during the audit. The points covered include our access to records and confidentiality laws, how we handle contacting the agency's staff, information requests, the exit process, the follow-up process, etc. We make the written audit request available to the agency and try to answer their questions fully.
  • At the end of our audit survey, we send the agency a written document that details our audit objectives and the estimated time it will take to do the audit (including our target dates for the end of fieldwork and publication).
  • When we have a draft report we conduct an exit conference at which the agency is given a written guide to the exit procedures and our publication procedures. At this meeting we try to answer any questions fully and we always encourage further questions at any time.

Throughout the process we try to encourage open communication with the agency. Our staff are encouraged not to make unreasonable demands on the agency (to negotiate requests for information or records and to disrupt the agency's work as little as possible) and to be open about what we are reviewing and what we are finding. The goal is for the audit report to generally contain no surprises for the agency. We try to be professional and friendly in all dealings with the agency. If an agency tries to "manage" our contact with staff by asking us to contact staff only through an agency official or to provide them with a list of everything we have requested from anyone, etc. we explain that we have found that to be an inefficient and unwieldy process. We contact staff directly and while we often make requests in writing, we are not going to copy every request to agency management. However, we tell them that they are free to ask their staff what we are asking and requesting, etc. Usually, they try to control their staff for a while, and then give up because it is too much trouble. If an agency tries to deny us access to records that we need, we assert our right to have them if it is relevant to our audit objectives. While it is true that the agency's attitude probably has some effect on how we view the audit results, independence is a key value that our staff is careful to maintain.