The real criterion of success in audit is its impact on the lives of regular folks in the community. While this is true for auditors at every level of government, it is especially true for local government auditors because the connection between government services and community conditions is stronger and clearer. Partnering with other audit organizations to produce joint audits can increase the impact of auditors’ work.
Joint audits – conducted by combining the resources of two different audit organizations – can increase the impact of local government audit organizations by extending our reach and by adding to our strength.
Joint audits extend our reach by giving the audit office access to areas it could not otherwise examine. For example, in Kansas City, our city property tax revenue is dependent on the real estate assessment process conducted by the county. While the function is important to city government, my office does not have audit access since it is a county program. We partnered with the county auditor to conduct a joint performance audit of the property tax assessment program. The county auditor had audit access but fewer audit resources and less capacity to do performance auditing and so was receptive to the idea of the joint audit. In another example, an agency that processes abandoned property was widely seen as having significant management problems. The result was a growing inventory of blighted property, mostly within the city of Kansas City. The agency was, however, a state agency and again my office had no audit authority. We did a very successful audit of the agency jointly with the Missouri State Auditor’s Office.
Joint audits add to the strength of the audit organization by allowing it to gain the use of skills, expertise and person hours it does not have. For example, my office is conducting a series of housing audits jointly with the regional Office of Inspector General for the U.S. Department of Housing and Urban Development (HUD-OIG). The HUD-OIG auditors bring to these audits not only their superior knowledge of HUD programs, policies, rules and regulations, but the combined total of years of experience auditing similar programs and agencies in other cities.
Recently I did a presentation on joint audits for the local AGA chapter with Ronald Hosking, the HUD-OIG assistant district inspector general for audit for our region. Ron provided important practical tips for auditors planning to conduct joint audits. I have summarized those below.
Memorandum of Understanding. The two audit organizations need to work together and with their respective sets of lawyers to develop a formal document that codifies the relationship between them. Among the issues that should be addressed in the MOU are the development of the audit program, workpaper retention, public access to documents, use of subpoenas, public statements about the audit, and the form of the final report.
Planning. Joint planning on the front end is crucial. Careful attention should be given to developing the audit objectives and work program and assembling the audit team. Each agency must be flexible and willing to compromise on how it normally does the work.
Staff scheduling. One audit team comprised of auditors from each agency working together will generally work better than separate teams from each agency working on separate segments of the audit. One auditor-in-charge should be appointed and empowered to make day-to-day decisions within the framework of the agreed upon MOU and work program. This includes the authority to direct and review the work of auditors from the other agency.
Interest in conducting joint audits is growing. In December 2000 the executive committee of the Mid-America Intergovernmental Audit Forum had lunch with Comptroller General, David Walker. The main topic of conversation was the recent election. Walker mentioned that he was hearing from Congress about the need to do an audit or series of audits of the election process and spoke of the potential benefits of doing such audits jointly with state and local auditors. In March 2001 the National Intergovernmental Audit Forum meeting in Washington, D.C. included a session on joint audits. Those of us in local government auditing should be actively looking for opportunities to partner with others. Such partnerships can improve the odds that we will make recommendations that will have a positive impact on the community and that those recommendations will be implemented.
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Funkhouser on Auditing