Performance audit essentials

Performance audits are rarely seen in the public sector, so few elected officials and their staff really know what they are. Performance audits are a valuable management tool, carefully structured around tough, nationally recognized auditing principles—principles that cannot be ignored if the best intentions of legislators and the desires of the public are to be realized. Here are the non-negotiables, as defined by the U.S. General Accounting Office Auditing Standards (a.k.a. Yellow Book):

• Independence. Auditors must be independent, both in fact and appearance from personal, external, and organizational impairments to independence.

• Sufficient, competent, and relevant evidence must be obtained. Self assessments do not count.

• Efficiency, economy and effectiveness (program audits) are the three standards that define performance audits. They are a three-legged stool.

• Comprehensive written reports must be communicated to designated authorities in a timely fashion.

• All performance audits should follow generally accepted government auditing standards.

Most proposals tagged as performance audits squeeze around some or all of these standards, meaning the best intentions of well-meaning lawmakers will not be realized in the end. No proposal will be perfect, but it must at the very least be a clear step forward.

Performance audits should be welcomed, not feared. They are invaluable management tools to determine what is working as intended and what is not. Furthermore, they almost always result in significant savings. Lawmakers and the Executive Branch in Texas have worked in a bipartisan manner to use performance audits to save more than $9 billion in ten years.

It is always tempting to appoint a citizen board. But there is inherent danger in telling an independently elected state official that he or she may not do their job without advance approval from an unelected group of citizens—a group appointed by the very people and agencies to be audited.

Washington taxpayers have made it clear they want true accountability in government. When we have a chance to get it right, why not go for it?

Prepared by Bob Williams, President and Senior Research Analyst (360) 956-3482

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org