Review of Accountability Entities Overseeing WSDOT Preliminary Report Keenan Konopaski, JLARC Analyst June 29, 2005.

Review of Accountability Review of Accountability Entities Overseeing Entities Overseeing

WSDOTWSDOT

Preliminary ReportPreliminary Report

Keenan Konopaski, JLARC AnalystKeenan Konopaski, JLARC Analyst

June 29, 2005June 29, 2005

22June 29, 2005June 29, 2005 JLARC Review of WSDOT AccountabilityJLARC Review of WSDOT Accountability

Scope of ReviewScope of Review

Two elements to this review:Two elements to this review:

1.1. Review the state entities that have an Review the state entities that have an accountability role with WSDOT, to assess accountability role with WSDOT, to assess consistency and avoid duplication and consistency and avoid duplication and inefficiencyinefficiency

2.2. Assess issues for helping TPAB periodically Assess issues for helping TPAB periodically evaluate WSDOT’s success delivering capital evaluate WSDOT’s success delivering capital projectsprojects


Objectives of ReviewObjectives of Review

1.1. Catalog state accountability entities/initiativesCatalog state accountability entities/initiatives

2.2. Assess entities for inconsistency in Assess entities for inconsistency in performance expectationsperformance expectations

3.3. Describe related business processesDescribe related business processes

4.4. Identify recommendations for consistency and Identify recommendations for consistency and efficiencyefficiency

5.5. Provide suggestions for assessing project Provide suggestions for assessing project delivery performancedelivery performance


Many Things Have Changed Since Many Things Have Changed Since This Review was InitiatedThis Review was Initiated

Under legislation effective 7/05:Under legislation effective 7/05: WSDOT reports directly to the GovernorWSDOT reports directly to the Governor Role of Commission shifts from management Role of Commission shifts from management

oversight to policy guidance/recommendationsoversight to policy guidance/recommendations LTC is dissolved and staff support to TPAB is provided LTC is dissolved and staff support to TPAB is provided

by Commissionby Commission TPAB membership expands and has more TPAB membership expands and has more

independent discretion to direct auditsindependent discretion to direct audits State Auditor also may conduct performance auditsState Auditor also may conduct performance audits Significant expansion of gas tax funding for DOTSignificant expansion of gas tax funding for DOT


So What Does this Mean?So What Does this Mean?

Role of the Governor and cabinet Role of the Governor and cabinet initiatives become prominent for managing initiatives become prominent for managing transportationtransportation Government Management, Accountability and Government Management, Accountability and

Performance (GMAP) is new management Performance (GMAP) is new management process being developedprocess being developed

Priorities of Government (POG) budgeting Priorities of Government (POG) budgeting process is formally instituted into state lawprocess is formally instituted into state law


And What’s the Impact?And What’s the Impact?

Roles will be further clarified as various entities Roles will be further clarified as various entities implement the new legislationimplement the new legislation

Governor and Legislature will study and provide Governor and Legislature will study and provide recommendations on appropriate division of recommendations on appropriate division of roles between DOT and Commission (by 1/06)roles between DOT and Commission (by 1/06)

Lots of learning for redefined roles and new Lots of learning for redefined roles and new playersplayers

Opportunity for this review to help with Opportunity for this review to help with implementation of changesimplementation of changes


Oversight Structure (pre 7/05)Oversight Structure (pre 7/05)

InternalAudit

TPABLTC

JLARC

StateAuditor

Commission

Governor

OFM

SenateCommittee

HouseCommittee

DOT


Many Similarities to Other Many Similarities to Other Executive Agencies (pre 7/05)Executive Agencies (pre 7/05)

State Auditor and Internal Audit units focused on State Auditor and Internal Audit units focused on financial/compliance audits and internal controlsfinancial/compliance audits and internal controls

Independent entity conducted performance audits Independent entity conducted performance audits and evaluations (TPAB and/or JLARC)and evaluations (TPAB and/or JLARC)

Cabinet-level activities provided management Cabinet-level activities provided management direction (POG, Governor’s Performance direction (POG, Governor’s Performance Agreement, Executive Order on Quality Agreement, Executive Order on Quality Improvement)Improvement)


Oversight Structure (pre 7/05)Oversight Structure (pre 7/05)

InternalAudit

TPABLTC

JLARC

StateAuditor

Commission

Governor

OFM

SenateCommittee

HouseCommittee

DOT

Leg.Committees

Management Direction

Performance Audit/Evaluation Financial Audit /Internal Controls


But Some Big Differences between But Some Big Differences between DOT and Others (pre 7/05)DOT and Others (pre 7/05)

Executive direction was governed by Executive direction was governed by Transportation Commission (not Governor)Transportation Commission (not Governor)

DOT DOT voluntarilyvoluntarily participated in cabinet activities participated in cabinet activities

Process for performance audits involved Process for performance audits involved coordination among more players (TPAB, JLARC coordination among more players (TPAB, JLARC and LTC)and LTC)

Dedication of revenues and separate budget act Dedication of revenues and separate budget act set funding decisions apart for DOTset funding decisions apart for DOT

Transportation Transportation budgetbudget decisions are focused on decisions are focused on prioritizing within DOT’s programs and projectsprioritizing within DOT’s programs and projects


Current Reporting (pre 7/05)Current Reporting (pre 7/05)

A lot of reporting takes place, but there is A lot of reporting takes place, but there is currently currently notnot a lot of duplication of effort or a lot of duplication of effort or inconsistent performance expectations:inconsistent performance expectations: Several entities currently have distinctly separate Several entities currently have distinctly separate

accountability rolesaccountability roles

Greatest Greatest potentialpotential for duplication or inconsistency was for duplication or inconsistency was between direction from Commission vs. Governor/OFMbetween direction from Commission vs. Governor/OFM

DOT minimized inconsistency by using same measures DOT minimized inconsistency by using same measures as those reported to Commission (Gray Notebook)as those reported to Commission (Gray Notebook)

Measures reported in cabinet activities were essentially Measures reported in cabinet activities were essentially repackaged or referred to Gray Notebookrepackaged or referred to Gray Notebook


Gray Notebook is Primary Gray Notebook is Primary Reporting Tool (pre 7/05)Reporting Tool (pre 7/05)

Principal performance information (excluding Principal performance information (excluding federal requirements) is in the Gray Notebook:federal requirements) is in the Gray Notebook: Gray Notebook takes substantial staff time for Gray Notebook takes substantial staff time for

executives and managers to prepare and reviewexecutives and managers to prepare and review

Relies on extracting, interpreting, and explaining data Relies on extracting, interpreting, and explaining data from multiple information systemsfrom multiple information systems

In addition to providing an external report, the In addition to providing an external report, the preparation process is linked to internal management preparation process is linked to internal management review processesreview processes


Process for Gray NotebookProcess for Gray Notebook

Weeks 1-2 Weeks 3-4 Weeks 5-6

System A

System A

System B

System B

System C

System C

System D

System D

System E

System E

Managers extract performance data from numerous systems and databases

Managers extract performance data from numerous systems and databases

“Performance journalism” context is provided to explain results and provide Gray Notebook narrative and figures

“Performance journalism” context is provided to explain results and provide Gray Notebook narrative and figures

Data is compiled manually and distributed for analysis

Data is compiled manually and distributed for analysis

Regions conduct a quarterly review meeting with Exec Team

Regions conduct a quarterly review meeting with Exec Team

Managers provide explanations for performance levels and changes

Managers provide explanations for performance levels and changes

Executive review and discussion

Executive review and discussion

Strategic Assess. Office does trend analysis, asks questions

Strategic Assess. Office does trend analysis, asks questions


Findings (pre 7/05)Findings (pre 7/05)

Business processes for responding to other Business processes for responding to other accountability entities do not lend themselves to a accountability entities do not lend themselves to a standardized work flow:standardized work flow: Several are event specific or ad hocSeveral are event specific or ad hoc

Some are simple processes or an end product as a Some are simple processes or an end product as a result of the Gray Notebookresult of the Gray Notebook

Collecting performance data often requires Collecting performance data often requires decentralized and inefficient manual data collection decentralized and inefficient manual data collection processesprocesses


JTC

Expectations (post 7/05)Expectations (post 7/05)

TPAB

JLARC

InternalAudit

StateAuditor

Governor

DOT

Leg.Committees

Management Direction

Performance Audit/Evaluation

OFM

Commission

Financial Audit /Internal Controls


Expectations (post 7/05)Expectations (post 7/05)

The linkages between accountability The linkages between accountability entities will be closer under new legislationentities will be closer under new legislation

Potential Benefits: Possibility for improved Potential Benefits: Possibility for improved coherence of performance expectations across coherence of performance expectations across the three “zones”the three “zones”

Potential Risks: If individual entities do not Potential Risks: If individual entities do not communicate and coordinate, possibility for communicate and coordinate, possibility for increased duplication of effort or inconsistencyincreased duplication of effort or inconsistency


Role of the Commission (post 7/05)Role of the Commission (post 7/05)

Commission retains some existing planning Commission retains some existing planning functions, which will be staffed through an functions, which will be staffed through an agreement with DOTagreement with DOT

Commission also provides staff support to TPAB Commission also provides staff support to TPAB for conducting auditsfor conducting audits

As a result, some potential conflicts for audit As a result, some potential conflicts for audit independence could arise for Commission staffindependence could arise for Commission staff

E.g., duties to both prepare and audit the 10 E.g., duties to both prepare and audit the 10 year capital planyear capital plan


Project Delivery InformationProject Delivery Information

Substantial information is reported on capital Substantial information is reported on capital program (constructing roads, ferries, etc.)program (constructing roads, ferries, etc.)

DOT continues to evolve from a program-focused DOT continues to evolve from a program-focused to project-focused approachto project-focused approach

Existing external reports are not sufficient to Existing external reports are not sufficient to comprehensively assess performance—additional comprehensively assess performance—additional data is neededdata is needed


Project Delivery InformationProject Delivery InformationOFM, Governor, Legislature, and TPAB are all OFM, Governor, Legislature, and TPAB are all seeking additional project delivery informationseeking additional project delivery information DOT also needs more standardized project level data DOT also needs more standardized project level data

to effectively manage its increased portfolioto effectively manage its increased portfolio

JLARC has used this opportunity to refocus the JLARC has used this opportunity to refocus the effort on project delivery assessment, with the effort on project delivery assessment, with the goal of a collaborative approach between OFM, goal of a collaborative approach between OFM, Governor, and Legislative staffGovernor, and Legislative staff Effort has the goal of avoiding conflicting direction and Effort has the goal of avoiding conflicting direction and

minimizing reporting burden on DOTminimizing reporting burden on DOT


ConclusionsConclusionsNew governance structure offers opportunity of more New governance structure offers opportunity of more coherence in oversight, but poses greater risks of duplication coherence in oversight, but poses greater risks of duplication and will require more coordinationand will require more coordination

Oversight entities need a clear, aligned understanding of goals Oversight entities need a clear, aligned understanding of goals to ensure consistent expectations for DOTto ensure consistent expectations for DOT

Impact of workload on DOT for performance reporting is Impact of workload on DOT for performance reporting is unknown, but more information is needed for both internal and unknown, but more information is needed for both internal and external audiencesexternal audiences

There are limits to current project delivery reporting, which is There are limits to current project delivery reporting, which is hampered by lack of integrated information systemshampered by lack of integrated information systems

The Commission’s role in both recommending policy and The Commission’s role in both recommending policy and staffing TPAB poses potential conflicts that should be staffing TPAB poses potential conflicts that should be examined by Governor and Legislatureexamined by Governor and Legislature


RecommendationsRecommendationsRec. 1Rec. 1: : The Transportation Performance The Transportation Performance Audit Board and the State Auditor Audit Board and the State Auditor should collaborate on developing the should collaborate on developing the 2005-07 audit work plans for each 2005-07 audit work plans for each organization.organization.


RecommendationsRecommendationsRec. 2Rec. 2: : As part of the upcoming study of As part of the upcoming study of Transportation Commission and WSDOT Transportation Commission and WSDOT responsibilities, the Office of the Governor responsibilities, the Office of the Governor should include an assessment of should include an assessment of independence requirements for the independence requirements for the Transportation Commission’s role Transportation Commission’s role supporting TPAB.supporting TPAB.


RecommendationsRecommendationsRec. 3Rec. 3: : Staff supporting TPAB, the Legislature, Staff supporting TPAB, the Legislature, OFM, the Office of the Governor, and WSDOT OFM, the Office of the Governor, and WSDOT should collaborate on developing standardized should collaborate on developing standardized performance measures for delivering performance measures for delivering transportation projects.transportation projects. A staff workgroup has already been convenedA staff workgroup has already been convened.. JLARC supports a goal of moving from exception-JLARC supports a goal of moving from exception-

based reporting to information covering status on the based reporting to information covering status on the entire capital program.entire capital program.

Processes for oversight entities in obtaining and Processes for oversight entities in obtaining and analyzing data will require further work.analyzing data will require further work.


RecommendationsRecommendationsRec. 4Rec. 4: : DOT DOT should add information to its should add information to its quarterly status reports about the proportion quarterly status reports about the proportion of capital projects for which standardized of capital projects for which standardized performance data (cost and schedule performance data (cost and schedule progress) is available.progress) is available.

Review of Accountability Entities Overseeing WSDOT Preliminary Report Keenan Konopaski, JLARC Analyst June 29, 2005.

Documents

accountability role

state law slide

jlarc analyst

state entities

wsdot reports

management oversight

performance gmap

new management process