| Written by Mark Funkhouser,
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I recently taught a course on performance auditing in the masters in public administration program at the University of Kansas. I structured the course around Raaum and Morgan’s textbook Performance Auditing: A Measurement Approach, and had the students read a performance audit for nearly every class.
We discussed each audit in the context of the concepts in the particular section of the textbook we were covering for that class. I found the experience both exhilarating and enlightening. It was exhilarating because I could see the students “get it” that performance auditing is a fascinating and powerful tool for improving organizational performance. My students – intelligent people interested in developing or strengthening careers in public service – were astonished and excited by what they found in the reports they read. It was enlightening because, while I have read many performance audits over the years, I had not done so in a rigorous, systematic fashion with an eye to critiquing the reports against established criteria and drawing conclusions about their quality. This is, of course, what the class members and I did together.
We reviewed about a dozen audit reports. The reports were not randomly selected. I assigned audits that I had been very impressed with when I first read them or that I thought represented a good example of a particular kind of audit work. Several of the reports were “Knighton Award” winners. In addition, the students identified and reviewed additional reports on their own, using the criteria we developed in class.
What did we find?
We found a wide variety in the nature, style, length and format of existing audit reports. While I would expect variation depending on the mission of the audit shop and the needs of the jurisdiction, there ought to be more similarity than presently exists in general structure and content. These wildly differing versions of performance audit reporting can’t all be equally right, springing as they do, from a common set of standards and a relatively common body of knowledge and principles. The underlying audit work is usually strong, but the reports are often not especially well written. The flaws include lack of clarity in the message, inadequate development of criteria, poor organization of ideas and reports that are too long. The best auditors often do a good job of finding things out, but a fairly poor job of communicating what they’ve found.
It would be useful if ALGA sponsored some sort of analysis of existing audit reports. To my knowledge we have no empirical knowledge of the nature of performance audit reporting. Each of us peers at the elephant from his or her unique perspective and offers pronouncements but I know of no one who has studied the characteristics of audit reports the way auditors study other issues: developing criteria and examining the evidence with regard to actual condition, comparing the condition to the criteria, drawing conclusions based on rigorous analysis and making recommendations.
In the absence of such a study, I offer the following ad hoc recommendations for audit directors seeking to improve the quality of their shop’s audit reports.
• Systematically review reports of audit organizations that you believe to be exemplars of good reporting. Ask someone from that organization to talk to you and your staff about how they write reports. In my own case, some of my best ideas for our reports have been taken from the work of other auditors, particularly Barb Hinton, the Legislative Post Auditor of the State of Kansas.
• Review Raaum and Morgan’s chapters on report writing. It’s the most practical reference book I’ve seen so far on performance auditing.
• Train staff on report writing. If you’re not already writing team-developed audit reports, do so. The Government Audit Training Institute has an excellent course on team developed audit reports. Stan Stenerson, through SGS Writing Workshops, provides outstanding training on report writing and throws in an analysis of your recent audit reports as part of the class.
Many auditors view doing the audit work as the important thing and see report writing as a necessary evil. They’re wrong. Report writing is a vital part of the audit process and is critical to success in performance auditing. Good reports are accurate, have a clear message supported by compelling evidence and arguments, are concise and contain solid recommendations. Good reports have impact. They provide information to the public that people care about and their recommendations lead to structural, institutional and cultural changes in the organizations audited. That’s why we’re here, isn’t it?
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Funkhouser on Auditing