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Completed Performance Audits at WSDOT

WSDOT has been the subject of nearly 50 external performance audits over the past 10 years by the Joint Legislative Audit and Review Committee, Transportation Performance Audit Board, Joint Transportation Commission, Transportation Commission, and most recently, the State Auditor’s Office. WSDOT values recommendations to improve its operations, and has developed comprehensive action plans to address those recommendations within its control.

Completed performance audits are organized below by auditing agency and report issue date.


State Auditor's Office (SAO)

Completed Performance Audits

Performance Audit Follow-up Report (Most Recent)


Joint Legislative Audit and Review Committee (JLARC)


Completed Performance Audits

Completed Tax Preference Performance Audits

I-900 Performance Audit Status Report (Most Recent)

As required by Initiative 900, JLARC annually reviews the implementation of State Auditor’s I-900 recommendations to the Legislature.

Other performance Audits:

Joint Transportation Commission

Washington State Transportation Commission

Transportation Performance Audit Board


State Auditor's Office (SAO)



Washington State Ferries Performance Audit

Issued September 4, 2007 - Report #1000003

This performance audit analyzed data from June 30, 2004 through June 30, 2006. The auditors conducted an initial risk assessment of the entire Washington State Ferries division to identify the best opportunities for improvement. The audit firm determined two audit areas:
1) The functions and activities performed by WSF’s Maintenance Department, specifically the Eagle Harbor Repair Facility, which bears the main responsibility for vessel maintenance and preservation; and, 2) The capacity and efficiency of ferry routes, in order to identify opportunities for cost savings related to fuel and labor.

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Managing and Reducing Congestion in Puget Sound Performance Audit

Issued October 10, 2007 - Report #1000006

This audit evaluated the effectiveness of WSDOT’s current highway investments and infrastructure usage given current and projected highway user volume over the next five years. It also evaluated the financial and non-financial costs of any recommended improvements over the next five years.

 



Administration and Overhead Performance Audit

Issued November 15, 2007 - Report #1000007

This audit makes recommendations that focus largely on streamlining and centralizing operations within the Department, resulting in $18.2 million to $23.5 million in cost savings in the next five years. Those resources can be redirected to make improvements at the Department that we recommended in our other performance audits and that echo citizens’ priorities.

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Highway Maintenance and Construction Performance Audit

Issued January 10, 2008 - Report #1000009

This performance audit had four primary objectives:
1) Answer whether WSDOT's Consumable Inventory and Supply Management system was meeting the operational needs of the Department efficiently and effectively? 2) Whether WSDOT's current procurement strategy for hot mix asphalt, used for road construction and maintenance, as well as current state legislation, effective in optimizing hot mix asphalt supply chain costs? 3) Whether WSDOT's maintenance-operations as efficient as possible based on best practices identified at other state transportation agencies or the private sector? 4) Whether WSDOT's highway project delivery was effectively managing project costs and delays, as well as tracking these factors.

The audit field work was conducted from June 2006 through March 2007 under the nine principles of Initiative 900.

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Department of Transportation Results Wrap-up Engrossed Substitute Senate Bill 6839

Issued April 1, 2008 - Report #1000010

The Washington Legislature passed Engrossed Substitute Senate Bill 6839 in 2006.  The legislation required SAO to hire a contractor to conduct performance audits of transportation-related agencies in Washington.  Based on citizen feedback and their own research, SAO chose the four audits above: 1) Washington State Ferries, 2) Managing and Reducing Congestion in the Puget Sound, 3) WSDOT Administration and Overhead, and 4) WSDOT Highway Maintenance and Construction Management.  This report summarizes the legislation and each of the audits.

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Collection of State Debt Performance Audit

Issued August 12, 2008 - Report #1000012

This multi-agency audit was designed to determine if state agencies use and share opportunities to improve the collection of state debt. Additionally, the audit addressed the nine elements contained in Initiative 900. The audit examined outstanding receivables from six state agencies (including WSDOT) from July 1, 2005 through June 30, 2006 (Fiscal Year 2006), totaling $3.3 billion.

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Statewide Performance Review - Opportunities for Washington

Issued December 17, 2009 (Re-issued January 25, 2010) - Report #1002726

WSDOT, along with 37 other agencies, participated in the State Auditor’s Performance Review of Washington State Government. The Performance Review looked at ways to improve the efficiency and effectiveness of state government’s shared services, identified innovative and practical government reform opportunities, and identified priorities for future state government performance audits. WSDOT participated in all three elements of the review.

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Washington State Department of Transportation Ferries Division Performance Audit

Issued September 8, 2010

In March 2010, the Governor asked the State Auditor’s Office (SAO) to consider conducting a performance audit of WSDOT’s Ferries Division’s payroll and timekeeping system. In 2007, SAO conducted two performance audits that included evaluations of the ferry system payroll and timekeeping processes. In response to the Governor’s request, SAO focused on whether another audit would identify additional cost-savings opportunities or operational improvements. The report outlines the following SAO conclusion (summarized, see report for complete details):

  1. WSDOT implemented previous audit recommendations within their authority.
  2. The current timekeeping and payroll system does not effectively support WSDOT’s needs.
  3. There are barriers to improve WSDOT’s timekeeping and payroll system, which include; incompatibility of data systems, collective bargaining agreements, and lack of funding.
  4. SAO does not believe another performance audit would be an effective use of taxpayer dollars at this time.

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Master License Service Performance Audit (Multi-Agency Audit)

Issued December 20, 2010 - Report #1004634

This performance audit looked at the Master License Service (MLS) administered by the Department of Licensing to determine if the MLS program was achieving the goals set when the program was established in state law. In addition, the audit looked at ways service might be improved if more state agencies (including WSDOT) and local governments participated in the MLS program. SAO also examined factors that might inhibit the MLS expansion and identified options and recommendations to overcome those barriers. 

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Printing Services Performance Audit (Multi-Agency Audit)

Issued April 25, 2011 - Report #1004989 

The State Auditor’s Office issued the Printing Services audit report in April 2011, which looked at ways to reduce printing costs at the state printer and throughout state government. The audit examined 10 state agencies with in-house printing shops (including WSDOT), as well as 8 state agencies that primarily use the state printer for printing services. 

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Review of Performance-Based Contracting by State Cabinet Agencies (Multi-Agency Audit)

Issued June 30, 2011 - Report #1004877

On November 29, 2010, Washington’s Governor issued Executive Order 10-07 requiring that all cabinet agencies institute performance-based contracting for all new contracts and renewals of existing contracts. When issuing the Executive Order, the Governor also requested assistance from the State Auditor’s Office to conduct a management review of current contract practices. The initial phases of the review included WSDOT and 33 other state agencies and of those WSDOT and 13 other agencies were selected to participate in the detailed review phases of the audit.

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Opportunities to Reduce State Cell Phone Costs (Multi-Agency Audit)

Issued November 18, 2011 - Report #1006772

The State Auditor's issued the Cell Phone audit report November 18, 2011, which looked at ways "to help Washington State reduce costs and improve the management of state-issued cell phones and wireless services."  The report identified specific steps state agencies can take to reduce costs and improve cell phone management.  These improvements were derived from the review of nearly 22,000 cell phones used by state employees in 89 state agencies.

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Regulation Reform - Streamlining Business Regulations (Multi-Agency Audit)

Issued September 6, 2012 - Report #1008276

This performance audit was conducted in three phases; inventory of Business Regulations, website access to business information, and streamlining business regulations.  The audit identified 1,377 business permits, licenses, and inspections administered by 26 state regulatory agencies.  Recommendations were made to improve website access to business regulatory information and to agencies to improve rule steamlining processes.

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Washington State Ferries - Vessel Construction Costs

Issued January 3, 2013 - Report #1008884

This performance audit analyzed WSDOT's Ferry Construction program to determine if it uses leading practices to develop, manage, and monitor its construction contracts.  The State Auditor's (SAO) found that WSDOT's Ferry Division uses 13 of the 15 practices identified, either fully or partially.  In addition, SAO looked at what factors affect the costs of constructing ferries, to what extent those factors affect total construction spending, and how WSDOT's vessel construction costs compare with those of comparable ferries built elsewhere.  The audit made recommendations to both the State Legislature , to review laws governing vessel construction, and to WSDOT, to further review and implement leading vessel construction practices.

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Creating a 21st-century Financial Management System in Washington (Multi-Agency Audit)

Issued May 8, 2013 - Report #1009673

The State Auditors (SAO) conducted this multi-agency audit to answer the following four questions: 1) What is the current condition of the state's financial management system, and how does it compare with leading practices found in a modern ERP system and in other states? 2)What are the technical problems or risks associated with the current financial management system?  3) What governance and oversight model is applied to Washington's financial management?  4) Are there gaps or overlaps in that authority?  What are the financial and other impacts of sustaining the current system compared to migrating to a modern ERP System?  Three core and twelve other agencies, including WSDOT, participated in the SAO performance audit.  Read more to find out what SAO found.

Washington's Tolling Program: Lessons Learned from Project Delays

Issued August 2, 2013 - Report # 1010219

The State Auditor's (SAO) performance audit focused on WSDOT's procurement of a contractor to perform back office operations required to collect all-electronic tolls and to operate the Customer Service Center.  SAO indicated that WSDOT did not fully meet criteria outlined in the State Administrative and Accounting Manual (SAAM) when selecting contractors, managing and monitoring contractor performance and holding contractors accountable to fulfill the requirements of the contract.  Further, SAO noted that WSDOT needs to take steps to adequately plan for and manage project risk to help ensure the success of future projects.  SAO issued three recommendations "to improve WSDOT's management of future tolling projects and to minimize the risk of project delays:

  1. The Secretary ensures roles, responsibilities, and decision-making authority are clear for projects managed by the Toll Division
  2. The Assistant Secretary for Tolling establish policies and procedures to guide the development and implementation of tolling projects.
  3. The Department of Transportation report on its progress implementing these recommendations to the House and Senate Transportation Committees and Office of Financial Management, as required in the 2013-2015 transportation budget.

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Regulatory Reform: Improving Permit Timeliness

Issued December 30, 2013 - Report # 1010778

As the second audit in a series by the State Auditors (SAO) on regulation reform, this audit focused on the efficiencies in the issuance of business permits.  The audit included the Washington State Department of Transportation (WSDOT) and thirteen other state agencies.  In the five year period covered by the audit, WSDOT issued more permits than other agencies included in this audit, but had only one permit included in SAO's in-depth reviews and customer surveys.  The in-depth reviews and customer surveys focused on permits that SAO felt had the greatest opportunity for improvement in permit issuance timeliness and on average took two weeks or more to issue.  The majority of WSDOT's permits are issued on the same day.  SAO noted WSDOT as one of three agencies to "have made the biggest improvements" in providing permit information online since the first regulation reform audit was released in September 2012. 

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Safe Data Disposal - Protecting Confidential Inforamtion

Issued April 10 , 2014 - Report # 1011501

The Washington State Department of Transportation (WSDOT) was one of 13 state organizations involved in the Safe Data Disposal – Protecting Confidential Information performance audit performed by the State Auditor’s Office (SAO). SAO inspected 177 of the 1,215 desktop and laptop computers the 13 state organizations sent to the Department of Enterprise Services (DES) for disposal over a six week period in July and August of 2013. While inspecting the computers SAO found that 4 organizations (Departments of Ecology, Health, Labor & Industries, and Social and Health Services) sent computers for disposal still containing confidential information. SAO also found 4 organizations that did not have documented procedures in place for data disposal and 10 organizations that did not employ the best practice of a final step to ensure data had been removed from the computer before it was surplused. The audit issued 4 recommendations, 2 to the Office of the Chief Information Officer (OCIO) and 2 to the state organizations. WSDOT is working towards ensuring it has procedures in place that meet both OCIO standards and the audit’s cited best practice. Before the audit even began, WSDOT was in the process of installing a hard drive shredder, which is now operational and utilized to shred all hard drives from all computers being surplused.


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Performance Follow-up Report (Most Recent w/ WSDOT Participation)

2013 Performance Audit Progress Report

Issued November 19, 2013 - Report #1010777

Since citizens approved Initiative 900 in November 2005, the State Auditor’s has conducted more that 50 performance audits of more than 100 local and state governments, including several on or including WSDOT. In 2008, the State Auditor’s began issuing progress reports to summarize the results of those audits and the effectiveness audit clients have had in implementing the recommendations issued. This report "reviews improvements made based on performance audit recommendations published in 2012 and updates the results from previous performance audits.".

                                



 

Joint Legislative Audit Committee (JLARC):


Performance Audits:

Scoping and Cost Estimating for Highway Projects Performance Audit

Issued January 5, 2010 - Report #10-3

The 2009-2011 Transportation Budget directed JLARC to review WSDOT’s scoping and cost estimating practices for highway construction projects. The review examined whether the scoping and cost estimate guidelines used by WSDOT were consistent with general construction industry practices and other appropriate standards. In addition, the review analyzed how WSDOT is developing scope and cost estimates for future highway construction projects. The review resulted in one recommendation indicating that WSDOT “should adapt its current procedures and forms so that an easy-to-follow trail is established between the cost estimate developed by the cost estimating process and the request for funding submitted to the Legislature."

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Costs and Benefits Associated with Acceptance of Bankcards at WSDOT Performance Audit

Issued April 21, 2010 - Report #10-4

The 2009-2011 Transportation Budget directed JLARC to conduct an analysis of the cost of credit card payment options at WSDOT. JLARC’s study identified and compared WSDOT’s full costs for accepting credit cards, debit cards, and other forms of payments, including the direct costs of contracted services, labor, and materials and the indirect costs of support activities. The analysis resulted in two recommendations; one directing WSDOT to work with the Office of Financial Management (OFM) and Office of the State Treasurer’s (OST) as we “develop plans for the future, such as the expansion of tolling” “to identify alternatives for reducing bankcard payments,” and the other is directed at OFM and OST, recommending that they “develop statewide guidance for all state agencies relating to the use of Automated Clearing House (ACH) transfer, use of convenience charges, and any other factors OFM and OST identify that could reduce state agency costs for accepting customer payments." 

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Stormwater Permit Requirements Performance Audit

Issued January 5, 2011 - Report #11-2

The 2010 Supplemental Transportation Budget directed JLARC to analyze options for implementing the new stormwater permit issued to WSDOT by the Department of Ecology in 2009. JLARC’s study looked at options to implement the three major stormwater actives; maintenance, monitoring, and inventory. JLARC considered timing needs, organization fit, and the experience of other states and local governments when assessing the advantages and disadvantages of each option, and narrowed viable options worth considering for each of the major activities required in the permit. JLARC’s report resulted in two recommendations; the first was directed to the Legislature recommending that they direct WSDOT to conduct a pilot program contracting for the maintenance of some stormwater control devices, and the second recommending that WSDOT prepare comparative cost information on viable options for meeting monitoring and inventory requirements for future budget cycles.

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Capital Cost Accounting Practices of the Washington State Ferries Performance Audit

Issued May 18, 2011 - Report #11-6

The 2009-2011 Transportation Budget directed JLARC to conduct an audit of the capital cost accounting practices of the Ferries Division of WSDOT. The audit follows a 2006 Joint Transportation Committee study and 2007 legislation addressing a broad range of State Ferries operations. Like the study and legislation, JLARC’s audit focused on ferry terminals. The audit found that Ferries Division and the Office of Financial Management had made progress in implementing the 2007 legislation, but additional actions were needed to ensure the Legislature receives appropriately detailed information and justification when requesting funding for ferry terminal preservation projects. As part of the WSDOT 2011-13 terminal preservation budget request the Ferries Division provided the Condition Rating and Due Year information to the Legislature and OFM Staff. In addition, they provided documentation justifying preservation work for assets in advance of their Due Year.

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State Risk Management Practices in Washington (Multi-Agency audit)

Issued September 21, 2011 - Report #11-8

JLARC conducted a review of the effects of risk management practices on state conduct and tort payouts (i.e., payouts arising from lawsuits against the state) as required by the 2009-2011 Operating Budget (ESHB 1244). The Legislature directed JLARC to analyze post-incident reviews, including statutorily established Loss Prevention Reviews. In addition, JLARC also identified more general statewide risk management requirements.

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Total Highway Maintenance and Preservation Estimates Are Available - Phase I Briefing Report 

Issued January 7, 2014

The 2013-15 Transportation Budget (ESSB 5024) directed JLARC to conduct a review of the methods and systems used by WSDOT to develop estimates of asset condition, maintenance service level needs, and subsequent funding requests for highway maintenance and preservation programs.  The directive establishes a two phase study: Phase I, released January 7, 2014, presents an overview of the methods and systems WSDOT uses to develop estimates of maintenance and preservation needs and the documentation for those methods and procedures.  Phase II, which is scheduled to be released in December 2014, will evaluate whether WSDOT methods and systems for estimating maintenance and preservation needs are consistent with industry practices and other appropriate standards.  

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Tax Preference Performance Audits:


2009 Full Tax Preference Reviews – General Aviation Exemption from Property Taxes
Issued January 5, 2010 - Report #09-11

Under Washington law, aircraft generally are subject to either the personal property tax or the aircraft excise tax, depending on the type of aircraft. This tax preference performance audit reviewed general aviation aircraft that pay the aircraft excise tax but are exempt from the personal property tax. “General aviation aircraft” refers to all aircraft except those owned by the government or by commercial airlines. JLARC recommended no change to the current tax exemption.

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2009 Expedited Tax Preference Reviews (2 Audits):

Issued January 5, 2010 - Report #09-12


Commercial Aircraft Exemption from Aircraft Excise Tax

Washington imposes an annual excise tax for the privilege of using an aircraft in the state. There is, however, an exemption from the aircraft excise tax for aircraft engaged in commercial flying. The exemption also applies to aircraft operated for testing and training purposes. This tax preference performance audit was conducted to determine if the tax exemption should be continued under the existing tax system, since aircraft exempt from the aircraft excise tax are paying significantly more in taxes because personal property is taxed at a higher rate. JLARC recommended no change to the current tax exemption.


Nonresident Aircraft and Aircraft Held for Sale Exemption from Excise Tax

Washington imposes an annual excise tax for the privilege of using an aircraft in the state. Two exemptions from the aircraft excise tax are for; aircraft owned by nonresidents and registered in another state; and aircraft that are held for sale, exchange, delivery, test, or demonstration purposes solely as stock in trade of a licensed aircraft dealer. This tax preference performance audit was conducted to determine if the tax exemption should be continued under the existing tax system. JLARC recommended no change to the current tax exemption.

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2011 Tax Preference Reviews – Aircraft Fuel Tax

Issued January 11, 2012) - Report #12-2

Aircraft fuel tax applies to each gallon of aircraft fuel sold, delivered, or used in aircraft in Washington. The preference exempts certain purchases in Washington of aircraft fuel from the aircraft fuel tax when it meets conditions under RCW 82.42.030 or 82.42.070 (i.e., sold for export, used by commercial air carriers, or purchased by the U.S. Government or its agencies, etc.). This tax preference performance audit was conducted to determine if the tax exemption should be continued under the existing tax system. JLARC recommended that the Legislature further review and clarify the preferences, since parties that are exempt from paying the aircraft fuel tax now benefit from the expenditures of fuel tax receipts.

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Status Report: Implementation of State Auditor I-900 Recommendations to the Legislature

Most recent report Issued July, 2013

Initiative 900 approved in November 2005 directed the State Auditor’s (SAO) to conduct performance audits of state and local government agencies. The initiative also includes the following direction with regard to performance audits of state government: “An annual report will be submitted by the Joint Legislative Audit and Review Committee by July 1st of each year detailing the status of the legislative implementation of the State Auditor’s recommendations.” This report represents JLARC’s compliance with this requirement for 2013.

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Questions? Please contact:

Steve McKerney
WSDOT Director of Internal Audit
360-705-7004
mckerns@wsdot.wa.gov


Jesse Daniels
WSDOT External Audit Liaison
360-705-7035
danielje@wsdot.wa.gov

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