When I first started auditing I was put off by the auditing standards because they talked about internal controls and how auditors were to assess their effectiveness. The terminology was alien to me and I had trouble grasping the concept. Coming from a research/evaluation perspective, it just didn't make sense. But after a few years I realized that when an evaluator assesses the processes that a program uses to deliver the service, she is actually looking at the controls.
Government services are designed to resolve a problem or generally improve the quality of life for its citizens. Officials can't just spend money and hope for the best. They are accountable to the citizens who entrusted them with public dollars. Controls could be information, evaluation, feedback - anything that tells a manager or leadership that something is wrong and needs to be corrected. Controls are also the processes that ensure resources and assets are protected, such as software security or limiting access to financial resources.
But auditors deal with an additional type of control. Audits shine a light on a program and provide information. For many managers, that is giving up "control." Over the course of my career, I have encountered many responses to audits from fearless openness to closed obstructionism. Working through that is also part of the auditor's job. You have to keep your eye on the prize - improving government.
Monday, August 11, 2008
Saturday, August 9, 2008
Friday, August 8, 2008
Operating in a political arena
Auditors for the most part tend to be cautious and reticent to be in the public eye. But here is an audit that brings facts to a politically charged arena. It resulted in an editorial in the NY Times.
Wednesday, August 6, 2008
Putting the personal aside
When you're auditing you have to separate your personal beliefs from your work. There are many programs and services at Metro that I get excited about because they help to shape the future of our region. I value planning and preserving what is unique about this area. But as an auditor I also value action and efficiency. So it is with a critical eye and skepticism we approach any program or service. Without that an auditor can't be objective or provide the accountability that the job requires.
Monday, August 4, 2008
I was right
Front page of the Oregonian today is a second story about Social Security. Yesterday I wrote about this story and speculated that the cause of the incredibly slow system could be lack of funding or over-proceduralization. The headline of the story - "Social Security backlog grows from lack of cash." Another difference between journalists and auditors - auditors get to write their complete findings in one report. Journalists have to write a series over several days to tell the complete story.
Sunday, August 3, 2008
Journalists and Auditors
I've always thought that the work of journalists and auditors is similar in many ways. Reading the Sunday Oregonian confirmed that today. Both write public reports that shine a light on a situation that needs changed. Both seek facts and have standards to ensure quality of the report. The auditor is looking for the elements of a finding - condition, criteria, effect, cause, and recommendations. What is happening, what should happen, what is the result, why did it happen, and what should be changed.
First case in point - "Getting disability payments can be a fight to the death" on the front page. The reporters describe the struggle of several individuals over many years to received social security disability payments. A few die before payments are received (condition). Several individuals talk about how they paid into the system and believed that the government would support them when they legitimately needed help (criteria). The length of time of the struggle results in some going on welfare, becoming homeless, and dying (effect). What the story lacks is the cause and recommendations, something an audit would provide. It alludes to one cause - the baby boomer generation and its demand on the system. But perhaps it is also cutbacks in funding or a system over-proceduralized because of concerns about abuse.
Second case in point - "State parole board finds itself up for review" again on the front page of the Oregonian. This has been an ongoing story at the Oregonian and began with a decision by the Parole Board to release an offender who had been convicted of one rape but had admitted several others. In September the Board voted to release the offender and cut his 30 year sentence in half (condition). Because of a mix-up they failed to notify the victim so that she could attend the hearing (criteria). The Board conducted another hearing but again voted for release. The victim sued and another hearing was conducted. Since then several other victims have come forward and there has been a public outcry. The fear is the possibility of future victims. (effect). The series of stories have highlighted what may be some causes - poor notification of victims, hearings that were conducted inside the prison, and a closed-door policy. An audit might take on more systemic causes such as overall lack of transparency and whether the Board should be appointed.
Between the work of the journalist and the auditor, which is more likely to effect real change in government? Both. The work of journalists can put incredible pressure on government to change and have significant results. I think the difference though is time. Journalists face a deadline. Auditors can spend time in the audit process to craft realistic recommendations and to work with the auditee and encourage change. The difference is that found between a surgeon and your physician. One removes a diseased part of your body and the other works to improve habits and prevent or delay disease.
First case in point - "Getting disability payments can be a fight to the death" on the front page. The reporters describe the struggle of several individuals over many years to received social security disability payments. A few die before payments are received (condition). Several individuals talk about how they paid into the system and believed that the government would support them when they legitimately needed help (criteria). The length of time of the struggle results in some going on welfare, becoming homeless, and dying (effect). What the story lacks is the cause and recommendations, something an audit would provide. It alludes to one cause - the baby boomer generation and its demand on the system. But perhaps it is also cutbacks in funding or a system over-proceduralized because of concerns about abuse.
Second case in point - "State parole board finds itself up for review" again on the front page of the Oregonian. This has been an ongoing story at the Oregonian and began with a decision by the Parole Board to release an offender who had been convicted of one rape but had admitted several others. In September the Board voted to release the offender and cut his 30 year sentence in half (condition). Because of a mix-up they failed to notify the victim so that she could attend the hearing (criteria). The Board conducted another hearing but again voted for release. The victim sued and another hearing was conducted. Since then several other victims have come forward and there has been a public outcry. The fear is the possibility of future victims. (effect). The series of stories have highlighted what may be some causes - poor notification of victims, hearings that were conducted inside the prison, and a closed-door policy. An audit might take on more systemic causes such as overall lack of transparency and whether the Board should be appointed.
Between the work of the journalist and the auditor, which is more likely to effect real change in government? Both. The work of journalists can put incredible pressure on government to change and have significant results. I think the difference though is time. Journalists face a deadline. Auditors can spend time in the audit process to craft realistic recommendations and to work with the auditee and encourage change. The difference is that found between a surgeon and your physician. One removes a diseased part of your body and the other works to improve habits and prevent or delay disease.
Friday, August 1, 2008
Accountability Costs
Citizens demand accountability of their government. They want assurances that their tax dollars are spent wisely. Unfortunately accountability costs. A lot of what we address in audits is making government more accountable. Here is an auditor in San Diego who tells his Council how much it will cost to complete an audit.
It is fairly common that when a government plans to place a fundraising initiative before its electorate it includes in the package a promise to audit or have oversight. Why? Because polling shows that when this is included, the likelihood of the measure passing increases.
A few years ago Multnomah County and the City of Portland leaders were contemplating a measure to raise support for area school districts. As we observed the deliberations on the side, the City Auditor and I, then the County Auditor, intervened. We proposed that a small portion of the revenues be directed towards funding two auditors for schools. The tax passed and auditors were funded. For three years audits were completed about schools.
In preparing this post, I attempted to find links that used to be available to point the reader to these audits. Unfortunately, the audits, and any discussion of them, seem to have disappeared. This was a valiant effort, but I'm not sure how successful it was. One positive outcome was that performance auditing became institutionalized at Portland Public Schools. Reflecting on what happened, I don't think I would propose something similar in the future. Auditing needs to be integral to the government it is auditing. An auditor that specifically has jurisdiction over its particular government can speak directly to its leadership and also have the advantage of thoroughly understanding its dynamics.
One of the things that I consider when I prepare our annual audit schedule is cost. Audits are expensive. I estimate they take between six to eight months to complete. One of the benefits of an audit is that we have time to thoroughly review a service or operation. But that is expensive. So I try to schedule audits that are worth the cost and audit areas that management does not have the time to review or that represent a risk to the government's operations.
It is fairly common that when a government plans to place a fundraising initiative before its electorate it includes in the package a promise to audit or have oversight. Why? Because polling shows that when this is included, the likelihood of the measure passing increases.
A few years ago Multnomah County and the City of Portland leaders were contemplating a measure to raise support for area school districts. As we observed the deliberations on the side, the City Auditor and I, then the County Auditor, intervened. We proposed that a small portion of the revenues be directed towards funding two auditors for schools. The tax passed and auditors were funded. For three years audits were completed about schools.
In preparing this post, I attempted to find links that used to be available to point the reader to these audits. Unfortunately, the audits, and any discussion of them, seem to have disappeared. This was a valiant effort, but I'm not sure how successful it was. One positive outcome was that performance auditing became institutionalized at Portland Public Schools. Reflecting on what happened, I don't think I would propose something similar in the future. Auditing needs to be integral to the government it is auditing. An auditor that specifically has jurisdiction over its particular government can speak directly to its leadership and also have the advantage of thoroughly understanding its dynamics.
One of the things that I consider when I prepare our annual audit schedule is cost. Audits are expensive. I estimate they take between six to eight months to complete. One of the benefits of an audit is that we have time to thoroughly review a service or operation. But that is expensive. So I try to schedule audits that are worth the cost and audit areas that management does not have the time to review or that represent a risk to the government's operations.
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