State suing to force audit of the agency
The Colorado Office of the State Auditor has sued to force Great Outdoors Colorado to submit to an intensive performance audit that the lottery-funded agency says threatens its independence.
It’s the first time the office has sued to force an audit.
GOCO’s books have been audited more than 20 times since voters created the program in 1992. The most recent audit, published in November, found GOCO in compliance with accounting standards and that the organization had implemented previous recommendations from the auditor’s office.
But in January, state auditor Dianne Ray asked for a deeper exploration of GOCO’s finances.
GOCO — which since 1992 has directed more than $917 million in Colorado Lottery money into 4,800 community projects in every county in the state — balked.
Its 17-member board of trustees is asking a Denver District Court judge if the program can reject Ray’s request for an exhaustive performance audit, citing the amendment to the Colorado Constitution that created the GOCO Trust Fund. The amendment says GOCO “shall not be affected by any order or resolution of the general assembly … nor shall it be subject to administrative direction by any department, commission, board, bureau or agency of the state, except to the extent provided in the constitution.”
The Office of the State Auditor has filed both a motion to dismiss GOCO’s petition and a lawsuit asking the court to compel GOCO to submit to the performance audit. Both are firstever court filings by the office.
GOCO executive director Jim Spaanstra said the board considered its petition of the court “a very nonadversarial way to get this clarified.”
“It’s a bit of a head scratcher to us why, after 20-some years of this process, that the auditor has attempted to shift gears to a performance audit,” he said.
Ray, in her lawsuit filed in July, said the increased scrutiny would “provide objective analysis to assist management and those charged with governance and oversight in using the information to improve program performance and operations, reduce costs, facilitate decision-making by parties with responsibility to oversee or initiate corrective action, and contribute to public accountability.”
The performance audit delves beyond reviewing financial statements and scouring for accounting mistakes. The deeper audit peers into financial decision-making, grant distri- bution and procurement processes, and could identify potential conflicts of interest.
“A performance audit gets into programs and hows and whys,” Ray said Tuesday, noting that the constitutional amendment that created GOCO also requires an annual audit.
“It does not specify it being a financial audit,” Ray said, noting that a performance audit would be conducted with an eye toward improving GOCO’s efficiency and processes. “After 22 years of financial audits, there are some things I would really like to look at beyond financials.”
GOCO, which receives 50 percent of the profits on Colorado Lottery ticket sales but no tax money, was created as a sort of ivory tower — intentionally removed from the financial tug-of-war contests in the state legislature. A performance audit, Spaanstra said, could lead to auditor recommendations that would be reviewed by legislators who could then, in theory, start funneling GOCO dollars toward other budget demands. Spaanstra said that was a real fear when the initiative was crafted in the early 1990s as a tool for preserving and protecting the state’s wildlife, parks, trails and open spaces.
GOCO also is concerned about adding a layer of bureaucratic and political review to its competitive grant program, which makes grants through a process involving a staffer and three reviewers, Spaanstra said.
“It’s hard to see how a performance audit could not have that kind of result,” he said of potential legislative involvement in grant distribution.
Ray, who was named auditor in 2011 and reappointed by the legislature in April, said GOCO appears before a legislative audit committee every year and there has never been any attempt to take control of GOCO money.
“Our audits are informational and our findings and recommendations are just that. We don’t make management decisions, and we don’t have any authority to hold anyone to implement our recommendations,” Ray said. “They say those things, but I don’t know what that means or how it could possibly happen.”
In 2011, the state auditor’s office was conducting a performance audit of the Colorado Division of Wildlife, now Colorado Parks & Wildlife, which receives GOCO funding. The auditor suggested the performance audit should extend to GOCO. The GOCO board said it would provide all the documents and answer any questions, but the performance audit would pertain only to the state’s parks and wildlife division. Ray’s predecessor. Sally Symanski, agreed.
“This time we said, ‘Let’s do this like we did last time,’ and we divulged all the information we had but said, ‘Like last time, you are not doing a performance audit of us,’ ” Spaanstra said.
Lawmaker Norma Anderson chaired the GOCO board back then and was in the legislature in 1990, when Ken Salazar, the then executive director of the Colorado Department of Natural Resources, joined Gov. Roy Romer in scripting the initiative that voters approved to create GOCO.
“They purposely wrote that the legislative body would not have oversight over GOCO,” Anderson said, noting that the initiative did allow the books to be audited, but that was before the legislature enabled the state auditor to conduct the more extensive performance audits. “They did not do those back then. A performance audit is oversight by the legislative body because the auditor’s office is a branch of the legislative body. The state auditor back then understood that. They have no business going in and trying to write performance audits of GOCO.”