Auditing the DoS

I just can't fathom an auditor performing an audit of the military. Here is an audit by the Special Inspector General for Iraq reconstruction. The first sentence in the summary is a statement that the work was impaired by the lack of cooperation of the Department of State. Auditors had to write the Secretary of State, Hillary Clinton to gain cooperation. And then auditors found "only a relatively small portion of program funds—about 12%—will be used to pay for advising, mentoring, and developing the Iraqi police forces." The rest of the funding was for security and life support. The auditors state "Without specific goals, objectives, and performance measures, the PDP could become a “bottomless pit” for U.S. dollars intended for mentoring, advising, and training the Iraqi police forces." Where else could you find this type of information? And what must it be like to do audit work in this climate ?

TSA screeners need better training - Really?

An audit done by the inspector general at the Transportation Security Administration finds that TSA screeners need to be better trained. "One lead TSO indicated that he had not accessed the Online Learning Center since 2005. The TSO also explained that staff had limited time to read printed training materials in lieu of going online." You can understand the urgency of getting the program underway but by now there should have been some kind of assessment by the agency itself.

Auditing the food we eat

We rely on our government to regulate the quality of the food that we eat. But recently there have been cracks in that protection. Here is another one. According to an audit of efforts to ensure the quality of meat that is sold in the U.S., high levels of veterinary drugs, pesticides, and heavy metals are not detected or, if detected, still enter the market for us to eat. Additionally, there is no attempt to recall meat, even when tests have confirmed the excessive presence of veterinary drugs. In 2008, when Mexico rejected the entry of U.S. meat for copper levels higher than its acceptable standard, there was no basis to stop this meat from entering the U.S. market since there was no comparable set tolerance level here.

Accountability, Politics and Independence

It is always difficult to create the best organization to provide government services. Many different structures have been created to remove politics from decisions made about the services. In some jurisdictions sheriffs and police chiefs are elected to give the agencies independence from politics, but this creates a different type of political battle at budget time when these elected officials can make an independent case to the public for a larger share. Another organizational model is to create an independent commission to direct the service such as a development commission or a library foundation.

There is another side to this puzzle. Some of the solutions to keep politics out of decision-making and provide the best service also remove the organization from accountability. There is no question that elected officials are accountable to the voters. When a barrier is created to this accountability, e.g. a commission, that link is broken. While voters may still blame the elected officials for poor decisions, the elected officials may have no control because of the independence of the commission.

During my career I have audited several of these types of organizations. I continue to believe that it is not the structure but the people that make the difference. There is a constant search for the perfect balance between accountability and independence and politics. Here is an audit and news story that illustrates that dilemma. This is a case where the commission is appointed by the governor with the consent of the state senate. The mayor along with the commission oversee police operations.

Opaque Transparency

I have written before about transparency and how that is translated into action. In one post, I cited the Government Accountability Office’s report on transparency. To reiterate, transparency is the public’s access to information. I have also written about the presentation of information recently when I compared EPA web information to the New York Times handling of very similar information. Thinking about the citizen point of view is important to designing the presentation.


Today there was commentary in the Oregonian about the opaqueness of government transparency as it is currently delivered on http://www.recovery.gov/ . The GAO has now started to audit transparency. See page 33 of this report. They note as positive that the Office of Financial Stability on its http://www.financialstability.gov/ site has added a usability survey to help them improve the quality of their transparency. The GAO itself uses a similar survey when you search their website and I have to admit I have seen steady improvement in their website and its usability.

Bus audit creates discussion about purpose

Here is an interesting news article about an audit of the transit system in Houston. A state audit has caused a debate about what the purpose of the transit system is. Is it efficiency? One metric considered was the operating ratio or the percent of the cost that is paid for by the fare. Increasing this metric requires reducing or eliminating routes that serve lower numbers of people. But then this raises the issue of equity or whether the transit authority's purpose is serving the low income, those who have no other means of transportation. Quality can be measured in another way - the comfort of the trip. Some think that using that performance measure light rail transportation is better than bus routes - because light rail is quieter, more comfortable, and more reliable.

A very interesting discussion and illustrates the value of an audit. Audits can improve the quality of the public discussion. This article reminds me of the debate that is taking place in my own jurisdiction, but without the benefit of an audit to clarify issues. See here, here, and here.

Another watchdog

The U.S. Senate has confirmed a special investigator within the Treasury to audit and investigate the Troubled Asset Relieve Program (bailout). A discussion of the GAO audit is posted below.

Safety Audit in Pakistan

This is interesting. A story from Pakistan about a safety audit. I went to the story from a google alert because I was curious what kind of "safety" would be audited. I have to admit I'm very ignorant about Pakistan and my only frame of reference was with the "war against terrorism." But this audit is looking at road safety in a very traditional way. The study will allow the department of transportation to improve future road projects. It reminds of my experience many years ago as a student at the Hebrew University in Jerusalem. The only news that my parents ever read or heard was about bombings in the city and they assumed that was the enviroment I lived in. Yes, there was violence, but there was so much more of life going on.

Oregon doing a good job; citizen's paying their share of federal taxes more accurately

According to a recent GAO audit Oregon is a potential model in the area of regulating tax preparers. There are no federal regulations or requirements that tax preparers must meet prior to preparing taxes. In California and Oregon there is. The GAO compared returns from both states and found that Oregon was more accurate. On average Oregon's 2001 federal returns were $250 more accurate than returns in the rest of the country which equates to $390 million in taxes paid by Oregon residents over what would have been paid if the accuracy rates were at the level of returns in the rest of the country. Seems like an equity issue. Oregon is doing a good job and its citizens are paying their share but citizens in other states aren't.

They also compared each program's costs and found that Oregon's costs were higher because the program includes testing and they are spread across fewer preparers.. The GAO estimated that Oregon's regulatory program cost in 2007 was about $6 million. They conclude "If only a small portion of the increased revenue that we found in Oregon is attributable to the Oregon regulatory regime, the regime would compare favorably to IRS's overall efforts to increase reporting accuracy."

If I were running for president

If I were running for president, or for any other office, I would talk to the auditor. Past audits provide a wealth of information about government's weaknesses and how to make improvements. The GAO has a High Risk Series that I've always admired and wished I had time to duplicate at the local level. The Office states that addressing these high risk areas will:

• dramatically improve service to the American public,
• continue to yield significant financial and non-financial benefits,
• ensure that the government can deliver on its promises, and
• strengthen public confidence in the performance and accountability of the federal government.

I know that talking about audits to the public and expecting to be elected might be far-fetched. But the four bullets above sound like good sound bites to me.

Government auditors and independence

Here's an another good example of why auditor independence is so critical. The NY Times evidently broke the story after a report by the Inspector General at the U.S. Department of Health and Human Services was leaked. You can also read about it in the Miami Herald. In a report to be released next week, the Inspector General found that AdvanceMed, a company hired to audit claims payments by the Medicare program and calculate the rate of improper payments, was pressured to not follow written procedures. They were told to only verify payments with the vendors and not check medical or patient records to ensure that the item was prescribed and received. As a result, the Inspector General found that the rate of improper payments was much higher than reported by AdvanceMed.

According to one report this firm is a subsidiary of a larger company that is a major government contractor and that this made them susceptible to the pressure applied by the Medicare program. According to another report, the Government Accountability Office is in the early stages of auditing the same company for another project.

Auditors speak out.

If the auditors won't say it who will. Sometimes everyone knows what the problem is but no one can say it and it is only the auditor who can bring things to light. This recent audit by the Government Accountability Office shows how auditors may be the only ones able to call out when there is a suppression of facts. GAO auditors found that Department of Defense auditors were prevented from acting independently in a review of contracts. Independence is the cornerstone of auditing. Only bad things can happen when independent review is constricted.