LEGISLATIVE PROGRAM EVALUATION; LEGISLATIVE EMPLOYEES;

PROGRAM EVALUATION AND REVIEW;

You asked for information on the type of organization of other states’ legislative program evaluation offices. You asked for descriptions of models for performing financial and performance audits of state programs and agencies.

The National Conference of State Legislatures’ National Legislative Program Evaluation Society (NLPES) has surveyed 44 state program evaluation offices and the results, Summary of Survey Results and Profile of Legislative Program Evaluation Offices, provide the details for this report.

SUMMARY

Legislative program evaluation offices around the country differ widely in the mix of functions they perform. Those include financial audits; compliance audits; performance audits; program evaluations; policy analyses; investigations; sunset reviews; assessments of performance measures; county, city, and school district audits; best practices reviews; and fiscal notes. The most common models seem to be the offices that conduct program evaluations and performance audits, staffed by professional staff with background in public or business administration, economics, and accounting (most like our Legislative Program Review and Investigations Committee) and offices that conduct financial and compliance audits, staffed by professional accountants (similar to our State Auditors of Public Accounts). Other offices add to their duties (1) development and assessment of agency performance measures or (2) staffing services, most commonly fiscal analyses of legislation and sometimes bill drafting. The common features of these models are described below, along with some of the more interesting or notable duties or characteristics found in particular states.

Most program evaluation offices (the generic term used to refer to all types) are organized under a legislative auditor’s office while others are established under an oversight committee or council that is often joint House and Senate and bipartisan, or directly supervised by legislative leadership. Some are established in independent legislative offices. Exceptions include operations in Illinois and Michigan that come under a constitutional auditor’s office. Oregon’s Audits Division is part of the independent secretary of state’s office and reviews all three branches of state government. And South Carolina’s Legislative Audit Council is a five-member citizen body. Generally, the legislature sets the agenda, though some offices are authorized to initiate studies on their own.

Several offices track the implementation of their recommendations and attempt to quantify the savings associated with them.

PROGRAM EVALUATIONS AND PERFORMANCE AUDITS

Almost all of the offices included in the NLPES survey conduct program evaluations and performance audits of state agencies as one of their primary functions. Performance audits are designed to help legislators oversee and evaluate state programs and agency operations. In half of the states surveyed, the offices spend at least half of their time on this, addressing a variety of issues. They may conduct special investigations of incidents or agencies of concern to the legislature or individual members. As a result of these studies or in connection with a separate policy analysis, the office may suggest policy alternatives. Staff in these offices work on the following:

• Performance audits

• Program evaluations

• Investigations of allegations of fraud, waste, or abuse

• Policy analyses

• Sunset reviews

• Special reviews of private entities receiving state funds

• Best practice reviews.

Employees typically have varied backgrounds in public administration, accounting, business administration, political science, economics, and law.

In about a quarter of the states surveyed, the evaluation offices are located within a legislative oversight committee, which sets the evaluation agenda. Office personnel work as staff to the committee. Offices that are very much like Connecticut’s Legislative Program Review and Investigations Committee are in Kentucky, Minnesota, Virginia, and Washington.

Exceptions to this model are Nebraska and North Dakota. The Legislative Research Division director supervises Nebraska’s four professional staff in the Program Evaluation Unit. North Dakota’s Legislative Council staff members provide bill drafting, policy and fiscal analyses in addition to the evaluations they conduct.

FINANCIAL AND COMPLIANCE AUDITS

Many offices conduct financial or compliance audits and this is the primary function of offices organized under the legislative auditor. Those responsible for conducting regular financial audits of all state agencies have larger staffs. While most of the staff in these offices work on typical agency financial audits, some states have a smaller component of staff who concentrate on evaluations. Evaluation offices that concentrate on financial and compliance audits produce the following:

• Financial statement audits

• Single audits

• School district audits

• County and municipal audits

• Information system audits

• Best practices reviews.

Employees are accounting professionals including certified public accountants (CPAs), certified information systems auditors (CISAs), certified fraud examiners (CFEs), certified internal auditors (CIAs), and certified government financial managers (CGFMs) or have a background in public administration, business, law, or computer science. Several offices are authorized to contract with CPA firms for financial audits.

The work of our State Auditors of Public Accounts is most like these offices in other states. California’s State Auditor administers the California Whistleblower Protection Act in addition to conducting performance, financial, and compliance audits.

PERFORMANCE MEASURE DEVELOPMENT AND ASSESSMENTS

About a quarter of the offices spend at least some time developing and assessing performance measures of state agencies. The office may review the performance data agencies report to determine its validity or reliability or interpret performance results for legislators making program or budget decisions.

Florida’s Office of Program Policy Analysis and Government Accountability is the most active in working with state agencies’ performance measures as part of the state’s performance budgeting initiative. It maintains the Florida Government Accountability Report on descriptive and evaluative information on over 300 programs.

West Virginia’s Performance Evaluation and Research Division assesses performance measures and data for the state’s welfare reform efforts.

OTHER STAFF SERVICES

Several of the program evaluation offices provide other staff services to the legislature including:

• Fiscal analyses

• Bill drafting

• Committee staffing

• State budget or appropriations act reviews.

In Iowa, the Legislative Fiscal Bureau focuses most of its attention on fiscal and budget analyses that include summaries of department budgets and the governor’s recommendations, revenue projections, and appropriations tracking. It conducts program evaluations only at the request of the Legislative Council. The Missouri Oversight Division of the Committee on Legislative Research writes fiscal notes and produces an annual report on the state’s bonded indebtedness. New Mexico’s Legislative Finance Committee analyzes computer system funding requests and reports on system development status.

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