Last updated March 3, 2008 11:11 p.m. PT
Bill aims at paying audit costsMeasure would reimburse education groups
Who should pay for audits meant to assure good governance?
That debate has been stirred up in Olympia by Senate Bill 6450, which would require educational service districts and school districts to be reimbursed for costs they incur while collecting information for the Washington state auditor's performance audits.
Depending on the angle, the bill is either fair compensation to school districts or a swipe at State Auditor Brian Sonntag's office.
Those who support the first interpretation say it is only fair that agencies be compensated for the time and money spent cooperating.
"We had to curtail a lot of our regular activity in order to meet the requirements of the audit," said Stephen Nielsen, president of the King County Washington Association of School Administrators and finance officer for the Puget Sound Educational Service District. "People were taking time away from their other jobs, and it put us behind in our budget and finance departments."
Sonntag believes the cost to the agency is more than offset by the potential savings identified as part of the audit, and his office considers the bill the first of many small cuts aimed at chipping away at the authority voters granted him with the passage of Tim Eyman-sponsored Initiative 900 in 2005.
Washington's nine educational service districts, which provide training, technical assistance and support to public and private school districts, were the first to be reviewed by Sonntag's office under I-900 and are not slated to receive retroactive compensation.
"We hear time and time again from school districts: Quit sending us unfunded mandates," said Sen. Rodney Tom, D-Bellevue, the bill's lead sponsor. He added that the contracted auditors' information requests to the educational service districts alone totaled 27 pages. "The auditors get paid for their time, but school districts are expected to take it out of classroom funds."
While the bill's fiscal note labels the costs of cooperating with the auditors as undetermined, Bill Keim -- the president of the Educational Services Districts Superintendents Association -- said the cost to the Thurston County district he oversees was "significant" -- totaling $35,000 for just the initial data collection and auditor interviews.
In a February letter to the Legislature, Sonntag wrote, "our first nine performance audits have made 434 specific recommendations and identified more than $3.2 billion in potential cost savings. Clearly, these audits have shown their value."
I-900 dedicated one one-hundredth of 1 percent of the state sales tax to pay for the audits, totaling about $14 million each in 2006 and 2007, according to auditor spokeswoman Mindy Chambers, who said the office has $14.7 million banked in reserve thus far.
"This is an attempt to take the funds allotted by I-900 and move in a different direction," said Sen. Joseph Zarelli, the Senate Ways and Means Committee's Republican leader who was in the minority of that committee's 13-3 vote on the matter. "The findings pay for themselves because they've shown the districts the way to save millions of dollars."
The public school districts have not yet been audited under I-900.
Those who believe the bill is an attack on the auditor's newly won authority see it as a precedent that could open the door for other disgruntled agencies to ask for the same guarantee of cost reimbursement. If its provisions were extended to include more and more agencies, the Auditor's Office would be hamstrung and, with it, the voter's will, they say.
"It is bad public policy to single out one agency to get special treatment because it opens up the door for other agencies to come in and ask for funds," said Amber Gunn, director of the Evergreen Freedom Foundation's Economic Policy Center, who described the bill as a raid on the auditor's funds.
Sonntag -- fresh from a slowly healing tussle over his performance audit of the Port of Seattle, which spawned a federal criminal investigation -- believes some agencies would use the bill's proposed reimbursement structure to bleed his office of funds through unnecessary delays, a concern echoed by the Washington Policy Center, a conservative think tank.
Sen. Rosemary McAuliffe, D-Bothell, said the bill could actually help further the interests of both the auditor and the audited agencies by providing some seed capital to put into practice the recommendations that are part of each audit report.
"They are costly to implement," McAuliffe said. "If (the agencies are) reimbursed, perhaps they could be able to move on and implement the recommendations: otherwise, they would be coming to the state and asking for it out of our operating budget."
The bill's sponsor believes that education's primacy in the Legislature's Constitutional mandate sets his bill apart from others that might follow.
"Schools have a constitutional mandate that they are our paramount duty, so I do think there are cases where schools should have advantages versus other programs," Tom said. "I don't think it sets a precedent; all we're trying to do is account for the full cost of the audit."
The bill must be acted on before March 13 to become law this session, and as of Monday it was not set for the last scheduled public hearing of the House Appropriations committee that must review it. However, the bill has been thought to be dead in the past only to be resurrected for Thursday's 26-22 vote, which sent it out of the Senate and to the House.
