Name as it appears on the ballot: Luis A. Toledo
Party affiliation: Democrat
Campaign website: www.luistoledofornc.com
Occupation & employer: Audit Manager at Ernst & Young; Adjunct Professor of Public Policy at Elon University
Years lived in North Carolina: 20 years
1) Please tell us what in your record as a public official or private citizen demonstrates your ability to be an effective State Auditor. These might include career or community service—please be specific. What do you believe qualifies you for the job?
What qualifies me for the position is the combination of my education, auditor certifications, and professional auditing experience at both the federal and state levels of government. As the son of Hispanic immigrants who never got the opportunity to attend school, I am the first in my family to graduate from college, where I earned degrees in Business Administration and Cybersecurity, as well as a Master’s in Public Administration, which formed my understanding of how to effectively assess both private and public entities. I have dedicated my life to public service, and since serving in active duty in the U.S. Air Force, I have spent my career behind the scenes analyzing government operations in order to improve them and better serve all communities.
I am the only candidate in this race who is a certified auditor, with a focus on technology and cybersecurity (Certified Information Systems Auditor), which is critical considering our dependence on IT systems. While my opponent presents the CPA as a requirement for the position, it is actually not required, and in fact is uncommon for this position, as this office is not responsible for auditing the personal income taxes of residents. As a certified auditor and former Assistant State Auditor, I have a firm understanding of audit process, as well as the professional responsibilities of the office and government auditing standards.
After graduate school, I was selected as a Presidential Management Fellow and worked at the U.S. State Department and Pentagon auditing and making recommendations to improve billion-dollar programs as part of President Obama’s initiatives pertaining to global hunger/food security and national security. Afterward, I returned home to North Carolina, and worked for four years as an Assistant State Auditor, proposing and managing innovative audits that had never been done before and incorporating all divisions within the office (i.e., Performance, Investigations, Financial, and Information Systems).
For example, I proposed and audited:
The groundbreaking audit of the most expensive contract and largest IT project in North Carolina’s history: the $484 million State’s Medicaid Billing System (NCTracks) and NCFAST
North Carolina’s first ever statewide cybersecurity audit to assess the posture of all executive branch state agencies
The readiness of the state’s Core Banking System (State Treasurer system) which processes transactions worth over $150 billion a year
The audit that found the State Board of Elections paid a vendor $1 million to replace the State’s Campaign Finance System and received nothing in return
I have been recognized nationally for my innovative and groundbreaking work as an Assistant State Auditor, having received the “Best Audit in the Nation” (Excellence in Accountability Award) from the National State Auditor’s Association.
Additionally, while at the State Auditor’s office I was a board member of the national E-Gov committee and provided audit guidance to other auditor offices in the nation.
Since leaving the Auditor’s Office, I have worked as a Budget & Tax Policy Analyst conducting independent analysis and research on federal and state budget issues. As such, I have a firm understanding of federal, state and local budget processes and their intersections. I am currently an Audit Manager at Ernst & Young, a global accounting firm, where I manage various audit teams in assessing Fortune 100 companies. I am also an Adjunct Professor of Public Policy at Elon University.
2) What do you believe are the three most pressing issues face the State Auditor’s office? If elected, what would you do to address them?
As a former Assistant State Auditor I believe it is time for change in the Auditor’s office. It’s time for new blood and a fresh set of eyes to assess state government operations and reverse the complacency that has set in over recent years. The three most pressing issues that I see in the office as it stands today are a failure to conduct performance audits in critical areas and follow up on audit recommendations, avoidance of including disparities in audits, and a decline of office morale. I want to change that.
As it pertains to performance audits I find it unacceptable that the office has not conducted any audits or assessments in the areas of public education (DPI), environment (DEQ), public safety (DPS), or IT and cybersecurity, even though these have all been high-risk areas in recent years and with many areas for improvement.
Regarding the reporting of disparities, I want to lead this office in conducting audits that promote evidence based policy-making and therefore ensure all statistics and demographics related to a government program are contain within public audit reports – in a similar approach as the U.S. Government Accountability Office (GAO) which issues guidance to all government auditors. In other words, if the evidence and statistics are there then as State Auditor I will ensure it is all reported so that lawmakers and the public are aware and can make well-informed decisions.
To increase morale, I will trust my employees as the educated and experienced professionals that they are. I will ensure they are valued as true public servants.
Overall, I have the courage to follow audit standards, to point out disparities that exist in state government programs, and to lead the office in such a way that all staff feel welcome and trusted with their assigned duties, thereby increasing job satisfaction and productivity.
3) To what extent should auditing be policy-driven, as opposed to the fundamental job of ascertaining whether money was spent in the way the law directed that it should be spent? In other words, when is it the Auditor’s job to recommend changes in law and policy?
As a former Assistant State Auditor, I know that the extent as to how much auditing is policy-driven is determined by State Auditor initiative. The State Auditor’s office is composed of various divisions, some divisions are dedicated to accounting for the money, while other divisions have the ability and discretion to assess state government performance. At this time the performance divisions are not utilized effectively, and I believe this needs to change in order to bring value to all North Carolinians.
Professional government auditing standards issued by the U.S. Government Accountability Office are clear in stating that government auditing provides the objective analysis and information needed to make the decisions necessary to help create a better future. As such, I believe it is the State Auditor’s job to recommend to the legislature changes in law or policy any time a program is not achieving its intended goals or meeting the needs of the people. While the State Auditor may propose changes in law and policy at any time, it is imperative that these recommendations be based on sufficient, appropriate, and objective evidence – as required by government auditing standards.
For example, as a former Assistant State Auditor I have issued findings and recommended that the legislature consider changes, such as: 1) establishing guidelines to address inappropriate revolving doors between state government and private sector employees; 2) revising general statutes to clarify the responsibilities of elected officials; and 3) modernizing state laws pertaining to cybersecurity oversight and data privacy. In all of these cases, these recommendations were based on objective evidence with the sole purpose of improving state government operations.
4) What areas of state spending do you believe will demand your sustained attention? Please be specific.
Given North Carolina’s trends, the public’s interest, and recent legislative actions I believe the areas of state spending that will demand sustained attention in the coming years include investments towards education, healthcare, and the state’s debt capacity.
The first two areas collectively account for approximately 80 percent of where the state money goes. Specifically, I believe funding for public education (K-12) will be a very sensitive issue given the serious gaps and various concerns being expressed by educators. As it pertains to healthcare, I believe that Medicaid Transformation in our state and the ongoing shift to managed care will require sustained attention, especially as our state population continues to age and the need for elderly services increases. Given the possibility of Medicaid Expansion to cover an additional 500,000 North Carolinians that are currently in the coverage gap, and the involvement of federal funding, I see the need for sustained attention in this part of the state budget.
Additionally, it is clear that more attention will be necessary in the state’s debt capacity as both the N.C. Department of Transportation and state employee benefit programs have financial concerns that must be addressed. For example, the NCDOT has no remaining debt capacity for the next decade and the state has a $42 billion hole in its pension plan and benefits for retired employees.
5) The Auditor’s office is expected to stay out of politics. What steps will you take to assure the public that you and your office are meeting that standard?
As an Assistant State Auditor, I consistently followed the government auditing standards as issued by the U.S. Government Accountability Office (GAO). These professional standards and guidance provide a framework for conducting high-quality engagements with competence, integrity, objectivity, and independence. As State Auditor I will continue to abide by these standards and will ensure that all findings and recommendations are always based on sufficient and appropriate evidence – as called for by audit standards. I know very well that the credibility of the State Auditor is contingent on providing an independent, objective, nonpartisan assessment of the stewardship, performance, or cost of government policies, programs, or operations.
6) What steps will you take as Auditor to build trust that the office is applying the law equally to each subject of an investigation?
As former Assistant State Auditor, I recognize that performing audits and investigations in accordance with ethical principles is a matter of personal and organizational responsibility. As State Auditor I will establish much needed processes to ensure management has visibility that ensures: 1) each auditor is preserving independence throughout an entire investigation, 2) that auditors only take on work that they are competent to perform, and 3) appropriate professional development and training is provided to all staff (to include updates on new laws/regulations, and race equity).
Additionally, to ensure each investigation and audit is conducted in accordance with the law and government standards I believe it is critical to establish an independent quality assurance manager in the office to focus solely on assessing internal compliance and identifying lessons learned and trends. I believe that each investigation and audit needs to meet all applicable government auditing standards before a public report can be released. I am also committed to ensuring that appropriate government agencies (e.g., State Bureau of Investigation, the attorney general’s office, FBI) are involved as necessary so that the law is applied equally and appropriately to all subjects of an investigation.
7) What measures will you take to recruit and retain qualified, experienced employees?
Recruiting – In order to produce quality audits, it is important to have the best auditors. I see this as a personal priority due to the staff that have departed the office over the years. As such, I am committed to recruiting the best auditors from other parts of the state, such as counties, recent graduates participating in career fairs, and from the private sector. It is important to have a talented, diverse team comprised of experienced, middle, and early-career auditors passionate about improving state government services.
As State Auditor, I would travel across the state to not only promote my office but to ensure that all people in the state are aware of state government job opportunities. I recognize that our state government works best when it is adequately staffed across all agencies and public universities.
I am also planning to work with the NC OSHR (Office of State Human Resources) to ensure job descriptions and postings adequately reflect the true needs of positions posted and that they are posted across multiple platforms.
Retention – To retain qualified and experience employees I will ensure they are trusted and respected, which is a concept that is much needed in this office. I will also promote innovate cross-training across all divisions and will break silos so that all auditors have the ability to work on different audit teams depending on their qualifications and interests. Furthermore, I plan to give credit where credit is due by reformatting all audit reports to ensure the names of all the auditors that worked on a report are listed within it– this is currently not the case.
8) What additional measures should the State Auditor take to encourage citizens to offer information about the abuse of taxpayer dollars
As State Auditor I would like to publicize the abuse hotline by way of social media, radio, phone app, and tv, and work with all 100 counties and their auditors to ensure the message is also delivered at the local level so that all North Carolinians are aware that they can call the hotline or report online any suspected fraud, waste, or abuse.
9) Is there anything else you wish to address that was not included in this questionnaire.
The State Auditor’s office does not get much attention so many people may not know how to assess the performance of the State Auditor. I would argue that this assessment can be made by looking at the number of reports and the areas that have been audited in the past four years. If this assessment is done in 2020, the people would know that the number of audits has declined by over 10% and that no performance audits have been done in critical areas, such as: education, healthcare services, the environment, disaster recovery, public safety (prison safety), or even cybersecurity. The question the public needs to ask is: “In 2020 and beyond, which candidate is willing to look at the high-risk programs that need attention and will release all the facts?
Another point to be made is the fact that in 1992 Ralph Campbell was elected as State Auditor and become the state’s first African American to hold statewide elected executive office. In 2020, if elected I would become the state’s first Hispanic to hold statewide elected office.