“An effective public sector audit function strengthens governance by materially increasing citizen’s ability to hold their government accountable.”
We government auditors believe that performance auditing shows great promise for strengthening the ability of citizens to govern themselves effectively, efficiently and equitably. Often, however, this promise remains unrealized. While the number of cities with a performance audit function has increased over the last two decades, a third of American cities with populations greater than 100,000 still had no audit function as of 2000. For those cities that did have a performance audit function, fewer than twenty percent were independent. A recent assessment of local government auditing in the U.S. concluded that the organizations were “fragile” and that performance audits constitute a major part of the work of only very few local government audit organizations.
How can we strengthen government performance auditing? To be effective government performance audit organizations must simultaneously solve three sets of daunting challenges:
They must be effective government agencies;
They must manage the conflict generated by their work; and
They must master increasingly sophisticated audit techniques and methods.
I am taking two months off this summer to begin a world-wide study of government performance auditing. This project, sponsored by the Institute of Internal Auditors, is designed to answer the following questions:
- How have government auditors in different countries attempted to meet the common challenges of managing effective government performance audit organizations?
- Beyond the superficial differences in basic audit standards, in what ways are the strategies and tactics employed by government performance audit organizations in different countries similar or different from each other?
- What insights into the challenges faced by all performance audit organizations are revealed by examining the ways in which successful audit organizations have attempted to meet these challenges?
- How can the insights gained from this research be used to support to leaders of government performance audit organizations and to strengthen performance auditing as a tool for increasing the ability of citizens to hold government at all levels more accountable?
The project design involves four major clusters of research methods:
- Analysis of the literature on performance auditing as it has developed in the United States and in other countries;
- On-site analysis of performance audit organizations, which will enable me to gain first-hand knowledge of those organizations;
- Web-based surveys to extend the reach of the project beyond just American audit organizations and the audit organizations reviewed in the site visits;
- Integration of the information from the literature, the site visits, and the web surveys with similar information on audit organizations in the United States from my previous research and from my contacts within the government performance auditing community.
I plan to visit seven countries – the United Kingdom; the Netherlands; Sweden; Israel; Canada; Australia; and South Korea – over the course of the summer and fall of 2006 and submit the final product to the IIA for publication in May 2007. I selected the countries to visit based on previous research, a review of the literature, and consultation with experts knowledgeable about government performance auditing. Besides studying how the organizations manage their work, I’ll focus on how government auditing is organized in each country, including relationships between different levels of government audit organizations such as internal auditors in the ministries and local and regional auditors.
My overall goal with the project is to synthesize information and insights from a wide variety of government performance audit organizations and from academic studies of performance auditing and package it in such a way as to make it useful and relevant to leaders of government performance audit organizations. The bottom line is to find new and better ways to help each of us meet the challenges that we all face.
I’ve been plotting and planning a study like this for nearly twenty years, and very actively working on it for the past year. Now, thanks to the IIA and to help from many of you, especially Colleen Waring and Steve Morgan of the Austin City Auditor’s Office, it’s finally coming to pass. Wish me luck.
Funkhouser on Auditing