Audit fund targeted as Troy Kelley faces trial

Lawmakers won’t try to remove state Auditor Troy Kelley from office ahead of his criminal trial, but they may cut his budget.

Gov. Jay Inslee and House budget writers — all Kelley’s fellow Democrats — want to move $10 million from the performance-audit fund to other state programs.

Deputy Auditor Jan Jutte said that move on top of $12.6 million worth of shifts last year would siphon 74 percent of the fund’s expected two-year revenue, reducing audit work.

It’s just the latest of many raids over the years on funding for performance audits, but this time the backdrop is Kelley’s indictment over his private business dealings. Jutte told lawmakers in a letter Tuesday she sees the agency falling “victim” to her boss’s legal troubles as well as budget pressure.

Kelley left the office in Jutte’s hands for months as he dealt with the criminal case but returned in December after House members threatened impeachment over his leave of absence. House leaders now say they won’t try to impeach Kelley and risk interfering with his trial next month on charges including tax evasion and money laundering. But Jutte said relations with lawmakers are strained.

“I didn’t get the impression that I was really being heard to the degree that I felt I was prior to Troy returning,” Jutte said of meetings with legislative leaders. “I feel we don’t have the same strength we have before.”

A budget plan has yet to emerge from the GOP-led Senate, but Republicans didn’t object to the transfer when asked Tuesday.

“Now you’re seeing the fruits of the lack of trust,” said Sen. Mark Miloscia, R-Federal Way — and a candidate for auditor, “and the lack of champions standing up and saying, ‘Oh yeah, we think the state auditor’s doing well.’ That’s not the case. So this is the inevitable conclusion of Troy Kelley staying in office and allowing his agency to become a laughingstock.”

Voters devoted a fraction of the sales tax to performance audits in 2005 when they approved a Tim Eyman-backed measure allowing for the audits. The money is supposed to be used to measure government performance and look for efficiencies and waste.

Lawmakers have found it a tempting target when they need to balance the state budget.

The chief House budget writer, Rep. Hans Dunshee, said he isn’t convinced the fund is being spent on its stated purpose even within the agency.

“I’m a little worried about them sort of expanding out beyond their original mission to kind of find work to spend their money on,” said Dunshee, D-Snohomish. “Maybe we need to do an audit of the auditor to really see what we’ve gained out of that work.”

Jutte said the agency’s recommendations could recover $16 for every $1 spent if state agencies implemented them all.

Not all of what the Auditor’s Office receives for performance-audit money is spent on audits. About 20 percent of it goes to training and technical assistance for local governments. Jutte said part of improving performance is explaining best practices.

Dunshee said performance audits should focus on trying to save money for state government and questioned a recent focus on the security of information-technology. There are other state agencies to oversee that area and at the local level it’s the responsibility of local government, he said.

The Auditor’s Office has said its focus on IT aims to reduce risk to government. Audits have discovered security lapses.

Dunshee said paying teachers more and fixing the state mental-health system are higher priorities.

This story was originally published February 23, 2016 at 5:02 PM with the headline "Audit fund targeted as Troy Kelley faces trial."