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!