Local Government Auditing-Improving the Performance of Government in the Next Century

Abstract

A report released in June 1999 by a panel of the National Academy of Public Ad ministration urges public officials to take strong measures to rebuild the poor relationships between citizens and government before effective democrat ic government becomes steadily harder to achieve. To rebuild damaged relationships and restore trust, government must show citizens that it can perform well. Local government auditors are increasingly being recognized for their role in establishing accountability while improving government performance. This commitment to accountability should continue well into the next century A traditional and fundamental role of auditing has been to assess whether government is doing things right. Most often, audits were designed to check compliance with accounting controls,--whether rules had been followed, procedures had been established, proper accounting had been made and controls were in place and functioning. Today, as the definition of controls has been expanded to include all of the methods, systems and functions used to achieve the purpose and mission of an organization, auditors have also expanded audit objectives to assess an organization's performance in this broader scope. As the new century dawns it will become even more important for auditors to assess performance as a means of helping governments achieve success. In Austin, Texas, as in many local government audit organizations, the city auditor's office works to improve government by performing audits and providing additional services such as consulting and assistance, quick response to information requests and strategies to support a strong ethical environment. On a broader perspective, a relatively young organization, the National Association of Local Government Auditors (N.A.L.G.A.) is promoting independent, effective local government auditing. Auditing for Results Broad-scoped performance auditing has developed as a result of customer emphasis on outcomes and results. Citizens today are increasingly concerned not only with safeguarding their tax dollars, but also with efficient services and the results achieved with those dollars. In response, auditors are assessing the efficiency, effectiveness and economy of the organization and evaluating management systems and operational performance. Performance audits provide information to management, policy-makers and citizens about the performance of their government. The 1999 N.A.L.G.A. directory shows that 85 percent of its local government audit offices include performance auditing on their list of audit services. Some of the performance audit benefits include improved service delivery@ cost savings, additional revenues and improved accountability Thus, as we enter the next century, local government auditors are well-positioned to provide even greater influence through the benefits of performance auditing. See the sidebar on the Benefits of Performance Auditing. Just as performance auditing with its emphasis on outcomes/results is being embraced by more and more auditors, other trends will continue to influence the business of local government auditing. Many of these trends are driven by changes in the government environment including diminished resources, increased competition within government for limited resources, competition with private industry, infusion of technology, process reengineering and the demands for increased accountability. Local government auditing will continue to evolve in response to this rapidly changing environment. Benefits of Performance Auditing Local government performance auditing provides a broad range of benefits including improved service, cost savings, additional revenue and improved accountability@ The following are just a few examples of the types of findings and recommendations that typically result from a performance audit. Each issue of the National Association of Local Government Auditors Quarterly Newsletter provides examples from many government organizations. …

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