What is a petition audit?
A petition audit is an audit of a political subdivision (in this case, Kansas City), which is conducted at the request of registered voters who live within its boundaries. Upon receipt of a petition that includes the required number of valid signatures, the State Auditor will begin the audit, and the local government entity being audited is responsible for the cost. A political subdivision may not be audited by petition more than once every three years.
Why should we audit the Kansas City Water Department?
Government works best when it is transparent and open to public scrutiny. In the past, the elected officials of Kansas City have rebuffed the State Auditor’s efforts to review city operations. What could they be hiding?
The water department says that they are audited every year. What would be different about this audit?
The existing annual audit that is performed is a financial audit. The audit that will be performed by the State Auditor’s office is a performance audit. From Wikipedia, “Performance audit refers to an independent examination of a program, function, operation or the management systems and procedures of a governmental or non-profit entity to assess whether the entity is achieving economy, efficiency and effectiveness in the employment of available resources. The examination is objective and systematic, generally using structured and professionally adopted methodologies.”
The existing audit program tells us all about money that came in the door and money that went out the door. A performance audit will tell us whether the department is run correctly.
The State Auditor’s office has stated that the price of this audit will likely be between $1 million and $1¼ million. How can you justify spending that much money when you don’t know that problems exist at the water department?
Undoubtedly, this is a lot of money to you and I. However, when the State Auditor offered to audit the water department in 2013, the Mayor and City Council turned down the offer and, instead, hired a Chicago-based consulting firm (by way of a $12 million no-bid contract) to address the department’s customer service problems.
Additionally, this audit would give the State Auditor the power to audit the performance of all departments within our city’s government. The opportunity for cost savings across the entire scope of Kansas City government is enormous.
Do signatures have to be submitted on a special form?
Yes. The State Auditor’s Office has provided a Petition Signature form, which includes an estimate of the cost of the audit, as required by state law.
Who can sign the petition?
A signer must be a resident of Kansas City and a registered voter.
What happens when the State Auditor receives the Petition Audit Submission and Petition Signature forms calling for an audit?
If the signature form includes enough signatures, the State Auditor’s Office sends a copy to the local election authority to verify the signatures are of registered, resident voters. If there is a sufficient number of valid signatures, the petition is considered “active” and the State Auditor’s Office notifies the chief petitioner and the entity being audited. The petition information is added to the list of upcoming audits for future scheduling. If the signature requirements are not met, the petition is returned to the chief petitioner for additional signatures. Any additional signatures must be submitted within the original one-year period.
Can a signature be removed from a petition submitted to the State Auditor’s Office?
Yes. Section 29.230.4, RSMo, allows a person to withdraw their signature within ten days after the petition is received by the State Auditor. When petition forms are received, the political subdivision name and date of receipt will be posted on our website. The website also includes a form that may be completed to remove a signature from a petition.
Are the petition signature forms and signatures considered public records?
Yes. Once the Petition Audit Submission form and Petition Signature form are received by the State Auditor’s Office, they are public records, including all signatures received. All working papers, including any concerns, are confidential.
Once a petition is on the list of audits to be performed, how long before work will begin?
Work begins on petition audits as soon as staff members are available. It is often several months before the audit can be scheduled.
What happens once the audit begins?
The State Auditor’s Office meets with the governing body of the entity being audited in a meeting to explain the audit process and answer questions. This meeting is open to the public. Auditors then enter the fieldwork phase, which includes gathering records and information. Once the report is drafted, a copy is shared with the governing body in a closed meeting to discuss the report findings and begin the process of obtaining responses from the entity. Those responses are included in the final audit report.
What does an audit cover?
The scope of the audit is partially based on information provided, including concerns from the chief petitioner and citizens. Petition audits cover the current period and most recently completed fiscal year when the petition becomes active and the audit is scheduled, with any revision in scope to be determined by the State Auditor’s Office.
How are petitioners informed of the progress of the audit?
The chief petitioner will be notified once the petition is considered active, and again when the audit is scheduled. The results of the audit will be available to the petitioner(s) and the public once the audit is completed and released. Section 29.070, RSMo, prohibits employees of the State Auditor’s Office from revealing information secured in the course of an audit.
How is the public informed of audit results?
At the conclusion of some petition audits, a public meeting is held in the political subdivision. When a public meeting is not held, a press release will be issued. News releases and audit reports are available on the State Auditor’s website.
What happens if the auditor uncovers something serious, like potential fraud or a large amount of money missing?
If information is uncovered that indicates ongoing criminal activity or fraud, the State Auditor’s Office informs the proper authorities as soon as possible. In less serious cases, the audit report will note the problem and recommend the proper authorities correct the situation.
How are report recommendations enforced?
The State Auditor’s Office cannot require an entity to implement the recommendations. However, if an entity receives a rating of poor, the State Auditor may conduct a follow-up review to monitor implementation of audit recommendations. For the follow-up report, auditors work with the entity to establish a timeline for the follow-up review and assessment.
How does a petition audit performed by the State Auditor’s Office differ from the audit performed by a CPA firm?
The State Auditor’s Office conducts audits in accordance with standards contained in Government Auditing Standards, issued by the Comptroller General of the United States. Petition audits conducted by the State Auditor’s Office are performance audits and will not fulfill requirements the political subdivision may have for a financial statement audit, including federal and state grant requirements and bond or loan requirements. When conducting a performance audit of an entity that has already had a financial audit, the State Auditor’s Office will review the independent audit in order to avoid duplication of effort.
Who is behind this petition initiative?
The initiative was started by the Libertarian Parties of Jackson, Platte, Clay, and Cass Counties and the petitioner is Sean O’Toole, Chair of the Jackson County Libertarian Party. It is important to note, however, this effort is not political. We have seen support from Democrats, Republicans, Independents, and other third party voters and residents of Kansas City. Our intent is to bring about transparency and accountability in city government – government that we all pay dearly to support.