News analysis Politicians should heed auditors more, argues US chief

29 Mar 07
Politicians suffer from myopia and tunnel vision they look only to the short term and take a blinkered view of the issue in hand. This is a sentiment with which many people would agree.

30 March 2007

Politicians suffer from myopia and tunnel vision – they look only to the short term and take a blinkered view of the issue in hand. This is a sentiment with which many people would agree.

But it is not the exasperated cry of an angry parent who can't get their child into their first-choice school, or a green campaigner who wants radical action on climate change.

It is the considered view of David Walker, the comptroller general of the United States.

He heads the Government Accountability Office in Washington, the US equivalent of the National Audit Office, and argues that government too often fails to see the structural challenges that lie ahead, such as rising pensions liabilities or mushrooming healthcare costs.

He is a passionate advocate of the central role that he believes auditors must play in giving elected officials a clear-sighted understanding of these issues.

Walker's maxim for auditors – 'increase insight and facilitate foresight' – soon established itself as the dominant theme of the conference staged jointly by CIPFA and the Public Management and Policy Association on March 26.

'Internationalising the accountability profession: towards good government' brought Walker together with the heads of the audit bodies for the four home nations to discuss how the audit function is changing to include a sharper focus on good governance.

Walker argued that auditors need to move from examining what has happened – the money already spent and the decisions already taken – to taking a more strategic, forward-looking approach.

'There are a range of questions that have to be asked and answered to ensure government is best placed to take advantage of the opportunities of the twenty-first century,' he said. 'We need to focus on projection information… to help them understand what's working, what's not working, and to promote accountability.'

But to do this effectively each audit body needed to identify the issues. 'If you don't have a plan then you only have prayer. Prayer is good, but it's better to have both so you can maximise value.'

Walker did acknowledge the sensitivities of auditors potentially straying into the realms of policy formulation, recognising that such decisions properly lay in the hands of elected representatives.

But he argued that it was legitimate for auditors to provide the performance information and options analysis that would enable informed decisions to be made.

'We [the GAO] are educating the public about our large and growing fiscal problems, so when our elected officials start to make difficult decisions… they will understand the reasons why.'

The comptroller general was also clear that, whatever the differences between the US and the UK, the same challenges were facing auditors on both sides of the Atlantic. 'There is no doubt in my mind we are going global in accountability and audit, the only question is when,' Walker said.

John Bourn, the NAO's auditor general, cautiously endorsed many of Walker's arguments. He said his organisation had undertaken a study of the risks associated with the London Olympics project, which was published recently, precisely because there was little point in producing a study after the event in 2013.

He also mentioned the audits the NAO undertakes, at the invitation of Chancellor Gordon Brown, of the fiscal assumptions that underpin the Budgets and Pre-Budget Reports. But Bourn alluded to the constraints that auditors face in the UK.

'It means we're looking at the assessments the Treasury makes on gross domestic product growth, on VAT revenues, and so on, and we do assess the intellectual worth of these assumptions. But I have to say we're looking forward in quite a careful way. How do you show foresight in a way that is non-political and appropriate?' he mused.

Steve Bundred, chief executive of the Audit Commission, cited the use of resources statement now included in Comprehensive Performance Assessments for local authorities as the kind of forward-looking study that auditors could produce without exceeding their brief. 'I think it is the single most important thing we are doing to drive up standards in local government. They have real bite,' he added.

But Bob Black, the auditor general for Scotland, sounded a note of caution. He warned of the risks of 'over-auditing' and said it was important that organisations had operational freedom. Black invoked the 'command and control' tendency in Scottish public administration as a potential barrier to good government.

He also reminded delegates of the need to ensure that projections were based on robust evidence. 'We need to… avoid slipping into the realms of futurology,' he said.

The risk of good intentions leading to a surfeit of audit activity was a theme taken up by the auditor general for Wales, Jeremy Colman. 'Beware of hyperactivity,' he counselled.

'Instead of just saying, “we must do that because it's a good idea”, it needs someone to think it through properly.'

John Dowdall, Northern Ireland's comptroller and auditor general, endorsed Walker's call for a more active audit role and joked that he was looking forward to 'testing the tolerance' of the province's politicians following the restoration of devolution.

But Dowdall called for recognition that improvement in an organisation could be driven only by the staff who are subject to audit. 'Management drives improvement. It's important that we as auditors position ourselves so we reinforce rather than damage that culture.'

Caroline Mawhood, assistant auditor general at the NAO, also pointed out that the changing role of auditors would make new demands on accountants.

'It requires them to perform a more complex set of tasks to provide managers with the information they need, so we need a sufficient number of trained accountants in the public sector and greater transference of skills between the public and private sectors,' she explained.

All the speakers, however, agreed that audit does not exist merely to check on what public organisations are doing, it must also act as a catalyst for change through constructive, but critical, challenge.

As Walker told delegates, the key responsibility for auditors is good stewardship, now and in the long term. 'It's not just about getting results today. It's about leaving things better for the future, and that's a much tougher standard to meet.'


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