Building a Culture of Accountability: Interview with PA Auditor General Tim DeFoor

PA Auditor General Tim DeFoor

Interviewed by Julie Platt

• Reflecting on Your Work: Looking back at your tenure so far, what are you most proud of in terms of improving the services and accountability your office provides to constituents?

  Tim Defoor: 

  The main thing is trying to make this department a legitimate auditing Bureau, not something considered a political office, which goes back to the department's original intent. 

  Why was this office created? 

  It was created to ensure that our tax dollars are being spent as they're supposed to be, that programs paid for by Commonwealth dollars are working, and that the only way to do that is to perform audits—audits with professional and knowledgeable staff who know how to do them.

• That's a really interesting and helpful perspective, and I think it shows your commitment to ensuring we're getting the best services we can. My next question is, where do you see your office heading in the next four years, and how do you plan to build upon the work you’ve already accomplished?

  Tim Defoor: 

  My first four years were about transforming this office again, and I just mentioned transforming it back to what its original intent was. 

  The next four years are about ensuring that what we've built is ingrained as part of the auditor general's culture for the rest of this administration and future administrations. So they can take a look at what we build, improve it, and grow from there.

• I love that. It's like building the base but then also looking for the future.

  Tim Defoor: 

  I'm the first auditor general in this office, So I came into it with a different perspective, and that was the perspective of an auditor.

  An auditor who's done internal audits and external audits and looking at, okay, what is it that we what and how can we move forward? One of the things that's very important to this department, which should also be necessary to the government, is that it should always be thinking about continued process improvement. 

  Things may be great today, but there are always ways to improve. This department may be ineffective because you haven't kept up with what's happening outside these walls. So, we should always be looking at ways to improve upon what we're doing, and that means incorporating auditing best practices, which are constantly changing because the accounting world is always changing. I look to incorporate best practices that include the most modern technology. 

  How is your staff being trained? What kind of person are you recruiting as your auditors? We're always looking for ways to improve what we do in this office. 

• Since we are talking about new technology, I will move on to another question: How is your office exploring new technologies, methodologies, or partnerships to enhance the efficiency and effectiveness of audits?

  Tim Defoor: 

  There's always auditing software, which helps in several ways. It helps you manage audits by organizing your information and that of others.  Audits are a process, and as long as you have something that helps you organize and streamline the process, that's where a lot of the work is done.  If you have the technology to help you do that, it will reduce the time you spend working on audits. 

• What specific audits or initiatives stand out to you as the most impactful or interesting during your office?

  Tim Defoor: 

  Last fall, we audited how pharmacy benefit managers (PBMs) impact independent pharmacies and Medicaid/Medicare recipients. We discovered that PBMs charged hidden fees to independent pharmacies but did not notify the state of those fees.

  Independent pharmacies couldn't survive with all these fees, and they're going out of business. I will get this number wrong because it will be a little low. At least 150 and 180 went out of business last year. 

  Who's hurting? The most vulnerable population. It hurts people in rural areas and in big cities like Philadelphia and Pittsburgh. 

  It could be somebody living in one of the rural counties who no longer has an independent pharmacy that organizes and delivers their medications because that is what independent pharmacies do. Many pharmacies, including larger ones, will not do that. 

  They will just want you to come in and get your prescription. And so when we lose those independent pharmacies, who are we hurting? There were undisclosed fees of which the state was unaware, and we only found out about them when we asked the pharmacy about them. That's a problem that strikes the core of this office's importance.

• I have been following the PBM issue for a while. I had not realized that so many independent pharmacies had closed.

  Tim Defoor: The number I gave you is likely low, and many more have closed down. And if you're talking about supporting businesses in Pennsylvania, we need to support independent pharmacies. That's a business in Pennsylvania. The owners of the pharmacy live in the community. Some of these pharmacies have been in the families for maybe up to 50, 60, 70 years, generations. We must make sure that these businesses stay open and are protected. 

• Thank you for that example. I am going to ask about your legislative relationships. In a politically divided environment, how do you approach working with both sides of the aisle to ensure that your office remains a trusted and nonpartisan entity? For example, what happened after the PBM report came out?

  Tim Defoor: The report was partisan. Unfortunately, some individuals attacked it because of one of the words we used in it. Our report called it a transmission fee or a hidden fee; others called it something else. It's the same thing. 

  We identified an issue that if you talk to a pharmacist, an independent pharmacy owner, which we did, they would say this problem exists. So I wish, as opposed to attacking me saying that the audit was worthless, I wish that they would have gone and spoken to independent pharmacies. 

  One of my biggest problems is that everything is so partisan in our lives. If I produce a report, it will probably get attacked by Democrats. If I were ever a Democrat auditor general putting out the same report, I probably would get attacked by Republicans. That's the one serious problem that I have with this office. People will look at everything through a partisan eye instead of the facts and the audit details.

  My staff has met with all the legislators, those who have been here for a while, and those who may have just been elected this past cycle. 

   My door is always open. 

  The bottom line is that if they have a concern, like if the governor has a concern about something, I want the governor to come talk to me about it. If the governor has a program, like a new program that he may have initiated or one that has been up and running for two years, I want him to come to us and say, hey, look. I want to make sure that this is working, mind taking a look at it, and that's something that we do anyway.

   I mean, if there's a new program that's up and running, or if there's a new piece of legislation, we want to make sure that it is having the most impact, but as Hayden (my chief of staff)  said, my door is it's always open. I'm willing to listen to anybody as long as they have a concern. Let's sit and talk about it; either we can do something about it, or we can't do something about it. But let's have a conversation. 

• It sounds like you are always looking for ways to improve the government and ensure it works effectively with taxpayer dollars.

  Tim Defoor: Yes, that was the original intent of this office, but it's been politicized. So, I want to get it back to being that independent office that ensures we are improving programs, spending our funds correctly, and ensuring that the programs are working. 

  The only way we can tell is by looking at it. For example, the governor will give his budget address next month, and I put the budget at about 45 billion. A lot of money goes to these departments and other organizations that receive state funds. Wouldn't we want to know that everybody is using these funds as they are supposed to and that the funds in the programs are working?
  

• You already mentioned that you have an open-door policy and that your staff meets with legislators. Are there any other steps you take to deepen engagement with legislators, and is there anything you want to do to deepen those relationships?

  Tim Defoor: No, just continue to meet with them, talk with them, and ask their concerns. What are your concerns? What are some of the things that we should be doing? Most of them, 90% of our audits, are statutorily required, but others we get from the public or elected officials. It could be from the governor's office, the member legislature, or someone like yourself. It could be something that we identified. 

  We get our audit requests for various services, but even with them, the legislatures have their things where they want to ensure that funds are being spent correctly. So the only way we can do that is to have that one-on-one conversation and ask how we can improve. Because one of the things that we need to do as we go out and do our audits is to ask, hey, is there something we can improve on? 

  What do we need to do?

   Is there something that we missed?

   Is there something that we need to start doing? Having these conversations helps us improve. 

• That shows great leadership and a commitment to public service and the people of Pennsylvania. Are there other audits that stand out to you as the most impactful? And then, on top of that, are there any issues that you're going to be anticipating working on in the next four years?

  Tim Defoor: One that was off the top of my mind was the Turnpike report, and I know people like to beat up on the Turnpike. 

  We looked at how the turnpike is running. How are they using tax dollars? Through the report, we discovered that they were $11 billion in debt because they had to fund PennDOT, and there were some issues with collecting tolls because of the toll cameras. When we looked at that, we made some recommendations on how to improve. The leadership at the Turnpike took our recommendations. 

  So that's one of the ones I'm incredibly proud of. The Turnpike looked at that audit, and they said, You know what, we appreciate what the Auditor General did, and we're going to follow up, and we're going to make those changes.  

• Thank you for helping us improve the Turnpike! Are there any upcoming initiatives, such as audits, that you want to focus on in the next four years?

  Tim Defoor: We're working on finishing up the cyber charter school audit. Another thing that we're going to be looking at is one of the things we've always been asked to create or do forensic audits, and we're looking to do that. I don't know what that's going to look like yet, but that's something that we're looking into. So again, that's another improvement.  

   I constantly think about things like health care because that is where a tremendous amount of tax dollars is used. We will be looking into that. I also want to continue process improvements in each state department.  Each state department has a process of what they're supposed to do and how they're supposed to follow those processes, and if you make continued process improvements, you're going to be okay when you don't, that's when the problems occur.

• You brought up the importance of looking at the processes but also of not being afraid of change and of trying to look at a system differently.

  Tim Defoor: Yes, and in the private sector, you had to change as I audited the private sector. If you didn't change, you'd be out of business.

  Our state government is not going out of business, but you still have to take a hard look at how we spend our money. When you do that, we want whoever you hand that report to after they're done to take our recommendations. 

  The Turnpike. They appreciate it. Because what we did, we said, look, this is the issue. These are the issues. These are some comments and some recommendations on how to fix it. Because normally, when you do something like that and look at some of those issues in a big agency that impacts so many different people for their leadership, to call you up and say, Thank you, that made me feel pretty good.

• We can see your leadership qualities through this conversation. What are some of your leadership philosophies? How do you keep your passion for public service?

  Tim Defoor: Regarding my leadership philosophy, it helps that I've audited on the county, state, federal, and private sector levels. 

  When I got here, I  started by looking at the staff. And I have the best staff in the world. One of the things that we did when I first got into office was not to hire political appointees. Instead, I looked at the best people for this position. 

  We looked to see if you were a subject matter expert.  Being at this level, you have to let your staff do their job because as they're doing their job in the positions that they are, they're my subject matter experts, and I run to them so they can help me understand what's going on in there in their areas. 

  They let me know what's going on, and then it's my job to help. I also wanted to make sure that they had all the tools needed to do their job, I mean, provide them with the resources. 

  What do the employees need to be successful? That was one of the very first questions we asked for real: What do you need to succeed? We'll get it for you. And we did, and we got them as far as equipment, training, and education, giving them the tools to do their jobs and be successful, and also giving them ownership over their bureaus and departments. 

• Thank you for this insightful conversation. The Commonwealth is lucky to have you. To end on a fun note, what is your favorite restaurant or anything you like to do on the weekends?

  Tim Defoor: 

   My favorite restaurant is actually in Erie. It's a barbecue place. I like spending time with my family. My stepson just committed to play football at Rutgers today.  I would also be remiss if I left without saying that Alvaro's Bread is the best restaurant in the Harrisburg area. 

• About Tim DeFoor

  Timothy L. DeFoor is Pennsylvania’s 50th Auditor General. He was elected and then sworn into office for his first term on January 19, 2021, and is currently serving his second term.

  Tim began his career in public service as a Special Investigator with the Commonwealth of Pennsylvania in the Office of Inspector General, where he investigated government and contractor fraud, waste, and abuse within state government.

  Tim then went on to become a Special Agent with the Commonwealth of Pennsylvania in the Office of Attorney General, investigating Medicaid fraud and illegal prescription drug diversion. Later, he became a Fraud Investigator and Internal Auditor for the University of Pittsburgh Medical Center and several federal contractors.

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