Auditor's FYI 21 Budget Presentation 5/19/21

Read auditor McGuirk's remarks at the 5/19/21 budget hearing.

Good morning, Chair and Commissioners. I’m Jennifer McGuirk, the Multnomah County Auditor. I’m pleased to talk with you today about my office’s work during fiscal year 2021 and our budget for 2022.

My office’s mission is to ensure that Multnomah County government is efficient, effective, equitable, transparent, and fully accountable to all who live in our county. We conduct performance audits, which are in-depth evaluations with rigorous standards. We also run the Good Government Hotline to help catch and prevent fraud, waste, and abuse of position – and to protect whistleblowers.

There are many assignments made to the Auditor in County Charter, which established the Auditor’s role. Charter directs my office to conduct performance audits of all County operations and financial affairs, as well as studies intended to measure or improve the performance of county efforts. The Charter specifies that we must conduct performance audits in accordance with Generally Accepted Government Auditing Standards.

Charter also requires the Auditor to appoint a Salary Commission by January 1 each even year.

And it directs my office to apportion Commissioner districts based on the U.S. census. This is currently under way, although we are not able to complete preparing a redistricting plan until we can access the decennial census data. The Census Bureau has said the data will be released by the end of September. 

My office also has an assignment that comes from County Code. This assignment is to provide technical and clerical support to the Board of County Commissioners’ Audit Committee, which acts as a liaison to you, to the external auditor, and to management for the external financial audits required under Oregon law. 

To carry out all of this mandated work, I have one assistant and seven staff auditors. In each of my first two years, I requested funding for additional staffing, but did not receive it. Due to the pandemic and the Chair’s direction that we all budget for a 2% decrease in general fund dollars, I did not submit a request for additional staffing for the upcoming fiscal year. But I am concerned about the resources afforded to the Auditor. The office has been the same size since the late 1990s. During that time, county government has grown increasingly complex. Since 2014 alone, the county has created substantial new functions including the Joint Office of Homeless Services and preschool for all, and the county has undertaken numerous capital projects, such as building the new central courthouse – as well as in-process capital projects like the Behavioral Health Resource Center and the Earthquake Ready Burnside Bridge. As the county government has grown, the resources allotted to the Auditor’s Office have not kept pace, which has implications for the county’s compliance with Charter’s significant mandates to the Auditor. 

As we strive to meet these mandates, my staff and I are dedicated to doing so in ways that support the county’s stated commitment to racial equity. My office has focused on three areas of the Workforce Equity Strategic Plan, and I’m happy to give this update on our work.

The WESP includes a minimum standard that all managers will have a minimum of four hours of training per year related to intercultural communication and racially just practice. We have exceeded this minimum standard for the second year in a row. For example, inspired by 2020's protests calling for racial justice, several staff in my office initiated a book group to deepen our knowledge of systemic racism. Through our discussions we encourage each other to commit to personal and professional growth, and to think critically about how the government systems we audit have contributed to systemic racism - and how our work may help them transform. Other training we have taken has included courses in supporting under-resourced populations through performance auditing and centering racial equity in auditing.

Another area we have committed to is providing exposure to government auditing and government work by initiating a formalized internship program. The Workforce Equity Strategic Plan specifically calls out a minimum standard of participating in the College to County Program. While the Auditor’s Office has not received funding to participate in the program, we did launch our own internship program that could be expanded to include College to County participants. In FY21, we hosted two BIPOC interns from immigrant communities who participated in important audits. Each intern earned six college credits as well as a small stipend.

We also revamped our hiring practices in alignment with the county’s minimum qualifications program and emphasized hiring individuals with diversity, equity, and inclusion expertise. 

The third area we have focused on with respect to the Workforce Equity Strategic Plan is related to improving our practices. Improving practice is focus area 5 of the WESP. In fiscal year 20, the Office of Diversity and Equity created an equity lens tool with my office, and in fiscal year 21, we implemented the tool as part of our standard methodology for every audit.

I also launched a Community Advisory Committee to provide input on equity and inclusion work, as well as community engagement practices. Members include people who identify as LGBTQ and BIPOC. Participants in the Community Advisory Committee help me ensure that my internal practices are addressing systemic barriers, and that our audit practices are as well.

As we have worked to transform our practices, the world has been rocked by COVID-19. We have strived to support government accountability while not impeding the county’s critical work to provide essential community services.

During the pandemic, we have taken a long, hard look at our positional power, and this has also been connected to our work to learn about the historic and ongoing harmful impacts of white supremacy in our county. Our engagement with this work, along with the pandemic, meant that we had to adapt how we fulfill our accountability function for the county. We did not want to impact the ability of county programs to focus on serving community members during a pandemic. As a result, I revised our audit schedule, and we adapted our practices, such as by limiting our on-site observations.  I believe that during unprecedented circumstances, we have supported government accountability while not impeding the county’s critical work to provide essential community services. 

Despite the pandemic, we had a number of achievements this fiscal year.

For example, we assisted the Board of Commissioners’ Audit Committee and worked with internal partners to conduct a successful competitive request for proposal process for the county’s external financial auditor. I am grateful to everyone who participated in that process, including staff in Central Procurement and the Department of County Assets, Annamarie McNiel in my office, Chief Financial Officer Eric Arellano, Commissioner Jayapal, who serves on the Audit Committee, and the committee’s five community members.

We also issued our first audit report on the county’s response to the pandemic. We examined congregate settings, specifically Joint Office of Homeless Services’ shelters, county jails, juvenile detention, and adult care homes. And we examined countywide guidance for employees, physical changes to county buildings, and telework practices. We essentially packaged seven audits under one large umbrella. Between February 9, when we issued the report, and April 30th, we had more than 2,800 visits to this audit report’s website. 

We issued our 2020 annual report and our annual report on calendar-year activity for the Good Government Hotline, which we talked with you about last month. And we also passed our external peer review, which takes place every several years. This review is essentially when we are audited, and other government auditors examine our office’s policies, procedures, and practices. 

For the upcoming fiscal year, we will complete our audit of jail conditions. That audit is currently in fieldwork.

The cost recovery audit is also near the end of fieldwork, while the contact tracing audit is in its initial phase. I anticipate issuing both of these audit reports in fiscal year 22. I am finalizing the remainder of the audit schedule for this calendar year and will issue that before the end of June.

And we will also continue running the Good Government Hotline and will conduct outreach to employees and county contractors to increase hotline awareness.

We will complete apportionment of Commissioner districts based on census results.

We will continue to support the Board of County Commissioners’ Audit Committee.

We will recruit and appoint community members with HR and compensation expertise to the Salary Commission, in accordance with Charter.

As we carry out all of this work, we will continue to support the goals of the Workforce Equity Strategic Plan through training and a focus on equity & inclusion in all of our work to support accountable, transparent, and equitable county government. 

My office will do all of this work through a proposed budget for the upcoming fiscal year of approximately $1.8 million, or 0.07% of the county’s proposed overall budget. This funding level is less than half of the average for government audit shops, according to the Association of Local Government Auditors’ 2018 benchmarking study. The majority of my office’s expenses are personnel costs at $1.5 million, with the next major line item of about $176,000 for the majority of fees associated with the state-required annual external financial audit. My office is not the client for this contract, but we hold it to ensure the audit’s integrity. We also receive funding to ensure my staff and I get the ongoing training required to comply with County Charter. I am pleased that my office’s budget is included in Chair Kafoury’s proposed budget for the county.

Last reviewed May 27, 2021