Performance Audits
What is a preformance audit?
Performance audits differ from fiancial audits, which the auditor does either yearly or every other year for 5,600 government entities in Ohio. They often recommend cutting positions to save money and to bring staff numbers in line with similar-sized entities.
What have performance audits found?
Online: For more information on performance audits, including completed audits, go to www.auditor.state.oh.us. Click on “performance audits.”
http://www.auditor.state.oh.us/auditsearch/results.aspx
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Performance Audit of Graham Local Schools Released
Columbus – More than $1.4 million in potential savings were identified
in the performance audit of the Graham Local School District released
today by Auditor of State Dave Yost. The savings recommended in this
performance audit report represent about 7.8% of the district’s fiscal
year 2010 actual operating expenditures.“I am delighted the
administration at Graham Local Schools has already implemented
many of the recommended savings from this performance audit,”
Auditor Yost said. “In times where schools must cope with dwindling
dollars, it’s encouraging that the district is being proactive in
“skinnying down” operations to ensure its fiscal health for the future
”In June 2010, the Ohio Department of Education requested that the
Auditor of State’s office conduct the performance audit based on the
district’s financial condition. In FY 2011, the district projected a
deficit of about $721,000 that increased to $7.8 million by the end of
the 5-year forecast period. Voters in the district defeated a November
2010 tax ballot issue to increase revenue. Performance are
designed to provide cost savings, revenue enhancements, and/or
efficiency improvements. During the course of the performance audit
of the Graham Local Schools, the scope of work included financial
systems, human resources, facilities and transportation. The audit
report outlines four areas where staffing levels could be reduced for
total potential savings of $1,351,500. As of March 29, 2011, the district
made staffing reductions of $1.6 million, many of which are
comparable to those in the audit report, and in some cases, exceeded
the recommended levels. In addition to staffing reductions, the audit
report suggests the district discontinue paying the employee share
of retirement benefits for administrative positions. In doing so, the
district could save an additional $56,000. These benefits are not
required to be provided by law, and eliminating them could avoid
more staffing reductions that directly affect the education of students.
The Graham Local School District, located in Champaign and Shelby
Counties, had an enrollment of 2,351 in the 2009-10 fiscal year. The
cost of this performance audit was approximately $52,000. Compared
to the savings identified in the report, the return on investment of
this performance audit is $27.07 for every dollar spent to audit.
A full copy of this performance audit can be found online.
http://www.auditor.state.oh.us/auditsearch/Reports/2011/Graham_
Local_School_District_11_Performance-Champaign.pdf
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ENQUIRER EDITORIAL
City should get an audit – and act on it 7/8/11 A9
. Cincinnati City Council members are wise to call for a state performance audit to help the city control costs and operate more efficiency. Council must define the scope of such a study by the Ohio Auditor’s Office, and it must resolve to turn its recommendations, wherever they may lead, into action. But the review is a smart idea.
. Council members began discussing performance audits after a June 12 Enquirer editorial (Three ‘C’s to keep city’s budget above water”) called on the city to invite the state to help it identify savings, get advice on best practices and boost its accountability to taxpayers.
. The state auditor’s office has been doing such studies for more than a decade with success. Last year alone, it spotted potential savings of $66,708,000 statewide. Youngstown City School District recently identified through an audit $6.3 million a year it could save. But can such savings be realized? Yes. The Youngstown implemented more than 75 percent of the ideas in its previous audit in 2008, saving millions of taxpayer dollars, according to the Youngstown Vindicator.
. As we’ve noted, it’s simply a way to get fresh, expert eyes from outside to take an objective look at a government’s operations. It is just one tool Cincinnati can use in its struggle for long-term fiscal stability – but an important tool.
. To start, a performance must focus on police and fire because public safety accounts for 69 percent of general fund spending. As City Manager Milton Dohoney said last fall, it is “mathematically impossible” for the city to have a structurally balanced budget without cuts in public safety.
. Audit skeptics say the audit would simply let council off the hook because the state would make the hard choices. That’s silly. The audit is a set of recommendations. Nothing can happen until the council acts. And an objective, the third-party analysis can give council members and citizens greater confidence in the wisdom of a policy choice – and courage to get it done.
. Critics also say an audit will take too long to do the city any good this fall when it considered next year’s budget. That’s probably true. But that argument could be made every year. Council must look beyond the current budget or election cycle.
. We hope a state audit will point out opportunities for consolidation, competition and the sharing of services – areas in which the city needs to go much further.
. The catch though is huge: Council members simply must resolve to follow through on the audit’s conclusions. With chronic deficits dogging their deliberations, we suspect they may find there’s no choice.
TO DO s USING THE TABLES IN THE STATE AUDITS