PORTLAND, Ore. (KOIN) – Washington County auditor John Hutzler, the focus of two investigations into how he’s treated employees, is also accused by employees of not following auditing standards.
According to a February 2021 report obtained by KOIN 6 News through a public records request, the three current employees who work to produce audits told county human resources they are “worried that the county’s audits do not follow typical auditing standards. Team members reported that they would occasionally point out to the Auditor that based on their extensive experience in auditing they thought their audits should follow standard auditing practices, but they felt their concerns were dismissed by the Auditor.”
During an interview, KOIN 6 News’ Dan Tilkin asked Hutzler about the accusation that he’s not in compliance with audit standards.
Hutzler said “that was not the accusation. The accusation was, or that the concern was that I was not doing things in a way that they were accustomed to.”
Two of the employees worked for the City of Portland, one for the state of Oregon before Washington County.
The human resources investigation did not make any conclusions about the auditing standards, writing: “The standards the employees referred to are not laws, but instead best practice. Any assessment of the validity of staff concerns about meeting professional audit standards goes beyond the scope of this workplace environmental assessment.”
Hutzler explained “I may do audits, somewhat differently from the way that they were used to, it’s not an HR issue. It’s not an issue of intimidation or harassment. It’s simply a different process. And, you know, I think when employees take a new job in a new position, they need to be prepared to adjust to new processes.”
A standard in the industry is to have an audit peer review at least every three years by someone outside your agency.
Hutzler has never had his office peer reviewed.
Full statement from Sherry Kurk, an employee that complained about Hutzler:
“I began working for Washington County Auditor’s office mid-January 2020. Within a few short weeks I was experiencing John’s persistent, uncollegial, cross-examining me when I brought up issues about his own audit work and documentation that he assigned to me to complete the quality review of some follow-up reports John wanted to issue. John did not like his own audit work questioned or the expectation that he be required to perform the same due diligence of audit standards that all auditors are required to complete. When I identified issues with his work and non-compliance in documentation, John would debate, over-ride, or refuse to address a comment citing, ‘I am the County Auditor. Staff do not supervise the boss, and the CAE (Chief Audit Executive) is not supervised.’”
I often felt pressured into signing off on his audit work that lacked adequate documentation and support by sufficient, reasonable evidence. When I said the audit did not meet audit standards, John made up excuses that it was due to his prior audit staff and then proceed to disagree he needed more documentation. It was exhausting. We advised HR of John’s failure to follow auditing standards, and HR said the CAO’s office would be over seeing this aspect of the complaint. It’s been two years, and audit staff have heard no response as to whether they have investigated this issue or intended to complete a review.
The Washington County Auditor’s Office has never had a peer review to provide assurance that County audits are in compliance with Government Auditing Standards. These standards require a review (an audit) of the audit organization every three years. The prior audits would fail a review, because they were not in compliance. My current colleagues and I made every effort to bring the office to industry standards so that we could prepare and pass a review. The current staff all came from audit organizations that have been peer reviewed for a long time, and are well known and well respected in the government auditing field for producing quality work.
When I worked for John, audit work was often micro-managed. The audit process and the scopes of the audits were constantly changed. John micromanaged and changed fieldwork plans after fieldwork was complete, saying he didn’t agree to the work that was done, even though he approved and signed the fieldwork plan. All of this resulted in audits taking months longer to complete, because he did not trust the professional experience of his staff. He would attend audit team meetings without any preparation, often taking the meeting into directions that were outside the audit objective. John publicly called us his “Dream Team” during a Board of County Commissioner meeting yet our work was constantly criticized and professional judgement questioned if we didn’t align with John’s views. We were often treated as if we had no audit experience in spite of the fact staff have many years of it.
John also micro-manage us in other ways. He denied my request for remote work even though he agreed to this prior to starting with the County. Once we all started work remotely, he admitted he did not trust us because of an experience with his prior staff. He insisted we provide read receipts for all emails. On two separate occasions, John accused me of deleting his emails. In one instance he said his tracking shows I deleted the email at 2:00 am. I had done neither. If we worked over the eight-hour work day we were not allowed to flex this time to our 40-hour work week. In his words “we are volunteering our time”. At one point he tried to deny my right to take coffee breaks as a part of my work hours, requiring me to work all 40 hours, and breaks were on my own personal time. He would call our personal cell phones after our work hours or close to the end of our work day to discuss audit work keeping us on the phone long after our official work time ended. I also saw John go into the Principal Auditor’s office in one situation, and heard him make derogatory comments about me with the door closed.
We requested a copy of the HR report and were told we could not have a copy. They indicated they were working on a summary for us, but that was never provided. I am aware of the prior staff experienced similar behavior while under John’s management, and both staff were moved to new divisions within the County. Yes, within months, John was allowed to hire new staff, and he proceeded to continue with similar behavior.
The CAO’s remedy of our problems was to provide John with executive coaching. We would receive nothing other than an occasional email checkup from HR and suggestions to seek out help from the EAP program. EAP offers limited support such as five to six counselling sessions. We quickly learned we would not be protected, and that we needed to figure out how to survive John.”
Full statement from Hutzler:
“Each of the three staff I hired in between September 2019 and January 2020 had spent their entire career as performance auditors in only one audit shop. That experience can foster a belief that there is only one right way to do audits. I have worked in seven different audit shops over my 25-year career and peer reviewed four others. I understand that there are many ways to accomplish quality audit work while complying fully with professional standards. Those standards allow for the exercise of professional judgment in many areas of audit work. My responsibility as the elected head of the office is to resolve differences of opinion in these areas, which I did after listening and carefully considering the professional judgment of all concerned. We were all looking forward to a peer review this summer which would confirm our compliance with audit standards, and no one on the team expressed any doubts that we would pass that review.
These new hires to my office also had never reported directly to the elected auditor. The portfolios of the Portland Auditor and the Oregon Secretary of State include much more than their performance audit function. Both audit shops are led by an appointed Chief Audit Executive, and the elected is not directly involved in audit work. My office is different because the sole responsibility of the Washington County Auditor is to conduct performance audits, and I choose to be directly involved in every audit engagement because reports are issued in my name.
My staff spent years in their prior positions earning the respect and confidence of their managers and were accustomed to working with limited oversight. When they came to Washington County, they entered new positions with a new employer. They were serving a year on probationary status, and my responsibility as their manager was to closely monitor their performance to assess whether they should advance to career status. I understand that this higher level of management oversight was not what they were used to, but it was appropriate for new employees in probationary status.
The quality control processes for audit work, like those for journalism, are rigorous. The editorial and review processes for audit reports can be stressful for any auditor. The auditor must satisfy their manager, and ideally another auditor entirely uninvolved in the project, that every statement in their report is supported by sufficient, competent evidence. Challenging the sufficiency of evidence is an inherent element of the quality control process and can make an auditor feel that their work is on trial. It is designed to ensure that audit findings cannot be challenged.
I have never denied or denigrated the experience and qualifications of my staff. In fact, I publicly and privately recognized them as the most highly qualified audit team I had worked with. I was surprised and disappointed that they were not comfortable expressing their concerns to me directly, but when HR brought those concerns forward, I welcomed the opportunity to engage an executive leadership and team-building consultant to help us address them together. We made steady progress in that work, as documented in the consultant’s summary report, until Ms. Adams-Wannberg, who apparently had been preparing her candidacy for months, announced her intention to run against me.
Two investigations have determined that I did not bully or retaliate against staff. In 2019 I worked with county administration to find positions within the County, at the same or higher salary, that were better suited to the employment goals of staff. More recently, to avoid the risk of claims of retaliation inherent in a political campaign in which an employee is running against their direct supervisor, the County elected to transfer my staff to another supervisor until after the election.”