Auditors on the Sports Page!

The Indian Audit and Accounts agency is on the sports page of The Hindu for capturing both the men’s and women’s titles in the 10th National inter-institutional carrom championship. What is carrom? And? The Indian Audit and Accounts? The Indian Audit and Accounts has a history of over 140 years. In 1860 the Government Accounting and Auditing functions were amalgamated and placed under the Auditor General of India. That made me curious about the U.S Government Accountability Office (GAO). Here is a history of the GAO. Excerpts from that history are below.

"The first Congress passed the Treasury Act of 1789, creating the Treasury Department with a Secretary, a Comptroller, an Auditor, a Treasurer, and a Register. The Comptroller of the Treasury was the predecessor of the modern Comptroller General."

"After debating in 1919 and 1920 whether accounting and auditing functions should remain in the executive branch, the Congress eventually decided to create GAO “independent of the executive departments.” And, "Title III of the Budget and Accounting Act of 1921 abolished the Office of Comptroller of the Treasury and established the positions of Comptroller General and Assistant Comptroller General..."

Painting the audit report

Although I like the puzzle of analysis, I think the report writing phase of an audit is my favorite. It's when the puzzle falls into place and you begin to see the picture. Layer upon layer of facts hide some findings and bring others to the forefront. Although you have an objective, a foundation, to begin with, the successful audit, or painting, presents it so that the viewer sees the complete picture and can take away a learning.

Telling it like it is

Embedded in this Freakonomics blog post is information about the French government's refusal to allow collecting statistics based on race or ethnicity either by the government or private bodies. I had never thought about it, but the census is an act that provides transparency to the citizenry to know who we are and what our circumstances are.

The job of inspector general

Learning about the audit function and role in other countries is always interesting. However, this story about Iraq was alarming. In the U.S. inspector generals are appointed either by the president or by the federal agency head. There were protections written into the U.S. Code to ensure independence. Just recently the Inspector General Reform Act was passed to further enhance independence. According to the N.Y Times article about Iraq "But Stuart W. Bowen Jr., who leads an independent oversight office in Washington, the Office of the Special Inspector General for Iraq Reconstruction, and who is currently working in Iraq, said he knew of six of the dismissals. He said the inspectors general were vulnerable because once their offices were created, the United States provided little support and training for what was a startling concept for the bureaucracy, which was shaped by the secrecy and corruption of the Saddam Hussein era." While inspector generals have had problems with independence in the U.S, it has been nothing in comparison to this.

Citizen's point of view II

Citizen's are very sensitive about how tax dollars are used. Travel to attend conferences, training, and meetings related to government business are necessary expenses. But it is important to always reflect on appearances. Here is a story about an audit of travel expenses. I was impressed that the reporter clarified the findings and put them in context. The reporter notes that the expenses were a "tiny fraction" of the total spent during the time period studied and also describes the methodology to arrive at the estimate of potential savings.

Timing

Good audit timing can be defined in several ways. It is impossible to audit everything frequently or at the same time. So making a decision about timing of the audit can be related to risk - all signs suggest that if action is not taken, significant harm could occur. Timing can also be defined in terms of relevance. The audit's value is diminished if the data or analysis used to make conclusions is old. But the timing that I most enjoy is when management is ready to change and an audit helps them make that change. In those cases an auditor almost becomes a partner with the organization. The mood is receptive and management appreciates the additional information. But, sometimes an audit is about a service that management and leaders had not even thought about and assumed was working effectively. Good timing in that case is raising a red flag that the service needs attention because it is not performing well. The response to these types of audits is usually less receptive as management is taken aback.

OMG - Exotic Fantisies - GAO Reports

David Brooks, Op-Ed columnist to the NY Times and also commentator with Newshour with Jim Lehrer, began a column yesterday with this, "I have dreams. I may seem like a boring pundit whose most exotic fantasies involve G.A.O. reports, but deep down, I have dreams." Yes!

Missing

I've not had as many ideas lately to post about. I think it is because I am preparing for a show of my paintings at the end of November. Seems like all my thoughts are taken up with finishing the work I want to show. Not that I've left auditing musings behind, just that the musings are now more in a visual mode. I have been thinking a lot more about data visualization, perhaps because of my show and I'll probably write about that next.

Interesting statistics web sites

Here is a web site that compiles information for comparison of state data. One statistic is called the "penny pincher" index or the ability to build and preserve savings. Oregon is 25th, right in the middle. Another online source is via Governing.com called the state and local sourcebook. Unfortunately the Portland region isn't reported separately from Oregon unlike many other metropolitan areas.

Trying to find out if it is an audit

It has always bothered me when the word audit is used to describe a process that is similar but not the same. At least in the public sector, audits have maintained their credibility. This is because of audit standards for evidence and objectivity.

In the news was this, "Auditor cites Afghanistan rebuilding challenges." The report states that Special Inspector General for Afghanistan Reconstruction Arnie Fields presented his first report to Congress. Here is a link to testimony before the Congress announcing the appointment of the special inspector general.

I tried to investigate to see if audit standards were followed. To do so required considerable tenacity. A link provided in by the AP led me to the website of the Department of Defense. However, finding any information about the Inspector General's Office is difficult. I went to a page of "most important and most popular" websites but the Inspector General was not listed. I attempted to access the alphabetical listing for "I" with difficulty. (As I write this post, I am still stuck trying to access it.) My computer took too long to access it so I gave up. I then used a Google search of the web site to find information about this specific report without success. Finally, I Googled "inspector general" and was able to find that page. I tried to find the audit itself, to see if standards were followed, but didn't see it listed. It may be, however, that the report is not public for security reasons. I'm assuming it was an audit following standards because Inspector Generals also have similar standards. (Final note: The page finally came up and there is a link to the Inspector General. It took about 10 minutes.)

All -in - all, an unsatisfactory transparency experience.