Auditors: Allies for Local Government Leaders

The Ally Local Government Leaders Should Know They Have

I dedicated most of my public service career to elevate the profession of performance auditing. So, of course I advocate for the role of audits as a vital mechanism for speaking truth to power.

At the annual conference of the Association of Local Government Auditors in Seattle, I was gratified to see Auditing for Impact, the title of a session I was pleased to moderate, progress to a top priority for the current generation of local government auditors.

There’s a growing realization audits can and should be used to improve community outcomes by ensuring governments operate efficiently, effectively, and equitably. Plus, local government leaders who seek to strengthen democracy can look to their auditors as key allies.

The focus on auditing for impact is a shift in philosophy toward a more inclusive and results-oriented approach. It’s promoted by an activist brand of practitioners who, in the words of one scholar of the field, “regard the public as their ‘ultimate client.’”

This is a healthy progression also reflecting the growing trend toward diversity and inclusivity among the auditing community itself. It’s a positive change cultivated by ALGA as well. The all-female panel I moderated featured leading auditors from diverse backgrounds, a metamorphosis clearly invigorating the profession.

As this year’s conference program made clear, local government auditors rise to the challenges faced by their communities. They highlight important opportunities for audit shops and other local government agencies to work together.

Why we need auditing for impact

The costs of services, the way services are delivered, and the powers of coercion of government agencies are experienced differently by different communities within a city. They require a watchful eye — a function best served by auditors. Auditing for impact, as I have written before, is a crucial tool for strengthening democracy.

Traditional audits seek to ascertain only whether the financial reports of a government agency or program are free of material misstatement and the money has been spent lawfully. Performance auditors are additionally concerned with the larger question of program outcomes. This proactive, holistic approach often uncovers social and policy inequities.

As governments focus on policy initiatives and modern tools to better meet residents’ needs, they tend to neglect the institutional dimension — the inequities baked into governance structures or implementation mechanisms. Auditing serves as an institutional bulwark for the fair exercise of power, efficiency, and effectiveness. The policy leaders who see their auditors’ work as complementary to their own will do a better job of moving the needle on equity, accountability and restoring the public’s trust.

A heavier emphasis on equity

Auditors in King County, Washington, found several equity red flags in recent audits, County Audit Director Brooke Leary relayed during the ALGA conference. This included more-lenient treatment for white defendants represented by public defenders. More frequently, white individuals receive domestic personal protection orders compared to Black and Native American petitioners. Transit fare-evasion citations disproportionately impact unhoused individuals or those experiencing housing instability.

When ALGA advocated for equity to be made part of the official auditing standards, it took an important step to help auditors expose inequities that exist in terms of different access or quality of services provided, lack of procedural fairness, and different (even if unintended) outcomes for different groups.

A broader scope

After San Diego began enforcing new brushfire hazard-mitigation rules on private properties, brushfires continued to increase. A performance audit eventually revealed the city neglected mitigation on its own property. This finding — a lack of coordination and integration across siloed government organizations — resulted from focusing on a bigger issue and taking a more holistic, government-wide approach to auditing.

As a trend, this type of cross-cutting audit indicates a growing willingness of auditors to take on big issues requiring an increased capacity and analytical sophistication. For local government leaders seeking to streamline operations or design more integrated services or approaches, audit findings like these, coming from an observer working from outside of the governmental chain of command, can increase organizational learning and bring increased competence and, ultimately, improved residents’ confidence in their government.

Getting the word out

Even the most robust audits and important findings will have limited impact if the message goes unheard. The new generation of local auditors includes people who are unafraid to make a splash. In presenting their work, auditors take advantage of modern tools and technologies to synthesize and visualize the information and make a compelling case about their findings.

Getting the word out also involves reaching out to those who administer programs and those who use them. New methodologies of data collection include more qualitative approaches. For example, worker and end-user interviews and surveys seeking insights into how a service or program impacts them.

Audits involving New York City’s Housing Authority are a great example of leveraging user surveys. “Auditors worked with residents with distinct needs, to help drive engagement and change and determine which changes will be most impactful.” said Maura Hayes-Chaffee, the city’s deputy comptroller for audits. “The resulting audits use more fine-tuned criteria, stemming from residents’ feedback, to better measure delivery and impact of services.”

Allies for good governance

What I took away from this year’s ALGA conference is the future of performance auditing is bright! A new generation of auditors opens doors for improved engagement with both government and the public.

The auditor’s office is independent (although there are threats to that independence), but auditors are also allies for both the community and government representatives. They provide an objective, evidence-based perspective that shines a light on what can be improved. Taxpayers consistently express support for the important oversight role auditors play. It is important city managers, department heads and elected officials look at auditors as friends rather than adversaries.

Oversight of government operations is fundamental to organizational learning and capacity-building and it is as important a legislative function as passing laws. America’s confidence in institutions has been on the decline, and auditing for impact offers a vital antidote.

Want to learn more about allies from Mark?

Then you’re in luck! Join Mark Funkhouser for a two incredible 2-hour live webinars to help auditors become better allies!

Intro to Auditing for Impact | October 10

Auditors explore how Auditing for Impact advances institutional and systemic change and informs the policy agenda. Also, Mark explains how Auditing for Impact helps government organizations address new risks and pressures restoring confidence in their institutions.

Good for Whom? A Greater Focus on Equity in Audit | November 15

Participants examine guidelines for putting an equity lens on audit criteria. Mark highlights recommendations for navigating the thorny issues and pushback auditors may encounter when it comes to equity findings.