Elements of an Audit

Several times I've written about how the work that auditors and journalists do is sometimes similar. Here is a news story by Henry Esteve that begins with a simple questions. Were the estimates of the cost of a tax credit accurate? Estimates are just that, estimates. Costs may turn out to be lower than higher than estimated. But it is good management to check and adjust a program depending upon what unfolds.

It's called closing the loop. Many audits address this management area. In my auditing experience, government service providers intensely pay attention to the design and organization of services. Just as much work and effort should also be placed in monitoring the service and evaluating whether it was successful.

This lengthy unfolding news story also illustrates a difference between journalism and auditing. News stories are short, not comprehensive, and accumulate over time. Turns out that state energy subsidies have been an ongoing story in 2009 in the Oregonian. The most recent story linked above that caught my eye was followed by at least 10 more stories and commentary including a story that the Governor would roll back subsidies.

Journalism is designed to foster accountability and transparency by shining a light on government practices. So is auditing, but audits are also intended to analyze the source of the problem and offer recommendations for change. Audits have a dual purpose - accountability and improvement of government services. The article cited a potential cause for the under estimated costs - that they had been low balled to gain legislative approval. If I had been conducting an audit I would have wanted to look at management practices that allowed estimates to be manipulated, if that is indeed what happened. What an auditor wants is to shine a light on the problem but also to have management rebuild a system that will protect the accuracy of data and prevent the problem in the future.