Pushing the frontiers of state audit: political auditing by Israel's state comptroller

Israel's State Comptroller has audited the political behaviors of elected officials and private citizens, in what are departures from its own traditions and those of other state auditors. Political auditing seems likely to appear among other auditors, sooner or later. Auditing is likely to attract more attention from political scientists, and the politics of auditing is likely to become an increasing topic of inquiry, as politics becomes more prominent on the auditor's agenda. The criticism directed at Israel's State Comptroller can be read to suggest the problems inherent in this expansion of audit activity.     

AUDITING THE EFFICIENCY OF NATIONALIZED INDUSTRIES: ENTER THE MONOPOLIES A MERGERS COMMISSION

For over thirty years, there have been no arrangements for the systematic audit of the efficiency and effectiveness of British nationalized industries. In November 1981, the Government announced their intention to introduce such audits on a regular, programmed basis and assigned the responsibility to the Monopolies and Mergers Commission. Using two of the Commission's reports, this essay contests the opinion that efficiency audits, as distinct from effectiveness audits, require pre-determined performance criteria. But whilst recognizing both the advance in Whitehall thinking represented by the new arrangements and the quality of the audits so far completed by the Commission, the essay questions the decision to assign this function to the Commission, rather than the Comptroller and Auditor General, and expresses doubts about the extent to which the new arrangements will contribute to proper parliamentary control and accountability in the case of public enterprises.     

Defense System in Israel: The State Comptroller's Perspective

The compliance of audited bodies to the recommendations published by the State Comptroller is very important while evaluating the effectiveness of the state audit process. To measure the effectiveness of the State Comptroller's audit the rate of deficiencies' rectification has been taken into account. Audit frequency is defined as the number of audits in audited bodies in a given period. The effectiveness of the State Comptroller's audit carried out in the Israeli Defense Forces (IDF) characterized by a rigid hierarchy was compared with that of the State Comptroller's audit carried out in the Ministry of Defense (MOD) characterized by a less rigid hierarchy.     

Explaining Israel's Misuse of Strategic Assassinations

This study explains Israel's insufficiently discriminate use of strategic assassinations during the last two decades. It shows that the tool's misuse considerably diminished its overall contribution to Israel's national security. It identifies five dimensions of systematic misuse: timing, political views of the targets, organizational affiliation, domestic political consequences for the adversary, and the visibility of Israel's responsibility. It finds three clusters of causes for these patterns of misuse: a flawed decision-making culture, the prevalence of false causal stories, and the pernicious effect of norms. This study could not find evidence for a direct link between domestic political pressures to any systematic pattern of misuse.     

Value-For-Money Audit for Accountability and Performance Management in Local Government in Ghana

Public sector organizations, including local government (LG) entities, continue to resort to value for money (VFM) audit to enhance performance and accountability. Based on the analysis of the consolidated reports on the annual performance-based Functional Organizational Assessment Tool (FOAT)—VFM audit—in Ghana to determine the efficacy of VFM on performance, this article argues that VFM audits constitute a significant public management tool that could enhance LG performance. However, the FOAT reports, like most VFM audits, only provide quantitative evidence, which fails to capture the qualitative or other relevant explanatory factors behind the recorded performance improvement.     

ISRAEL'S AUDITOR AS POLICY-MAKER

Supreme audit institutions claim to avoid directly criticizing government policy. However, their assertions do not reflect reality. Israel's State Comptroller is explicit in criticizing government policy, and suggesting other policies in their place. The US General Accounting Office, the UK National Audit Office, and the Philippines Commission on Audit also criticize policy, but with styles that are more subtle and indirect than the Israeli auditor's. A review of the responses to Israel's audit reports reveals the extent of policy influence and the constraints that limit the auditor's role as a policy-maker.     

DEVELOPING STATE AUDIT IN BRITAIN

This paper discusses the development of the British state audit system exercised by the Public Accounts Committee (PAC), the Comptroller and Auditor General (CAG) and the National Audit Office (NAO). It briefly describes the concerns which led to a campaign for reforming our audit arrangements and to the passing of the National Audit Act in 1983 and considers ways in which that Act could be used to increase the effectiveness of parliamentary and public accountability of central government in the light of new developments in the management of departments.     

POLITICAL ACCOUNTABILITY AND PERFORMANCE AUDIT: THE CASE OF THE AUDITOR GENERAL IN NORWAY

Performance audit is widely used in public administration, but, at present, little empirical evidence exists on its usefulness and contribution to accountability. Based on survey data from 353 civil servants in Norway, this article analyzes the auditees' perceptions of the audit. Performance audit was seen as useful by a majority of the auditees. If auditees agreed to audit criteria and assessments, were allowed to influence the process, had favourable opinions of the reports, and believed that the State Audit Institution contributed to accountability and improvement, then they regarded it as useful. Reports used for accountability purposes were not perceived as less useful. The auditees' administrative level, the use of the report to further interests, and attention from politicians, the media, and the Parliament impacted on the accountability dimension. These results indicate that performance audit can influence civil servants, but the influence is contingent on how the audited civil servants perceive the performance audit.     

Reflexive Watchdogs? How Supreme Audit Institutions Account for Themselves

Supreme Audit Institutions (SAIs) such as the UK National Audit Office and the French Cour des Comptes play important roles within the institutional mechanisms of the democratic state. They are given high independence in order to secure public accountability for, first, the probity and legality of public spending and, second, economy, efficiency and effectiveness. During the last twenty years several SAIs’ mandates have been adjusted to reflect the latter, more managerialist, concerns. This article asks two questions: first, what evidence do these SAIs offer as to the quality and effectiveness of their activities in carrying out their mandates and, second, to what extent does their self–reporting appear to have been influenced by the precepts of the ‘New Public Management’ (NPM)? To address these questions an analysis is carried out of the annual reports and other relevant documents of the Finnish, Swedish, French and UK SAIs, and of the European Court of Auditors. The analysis shows considerable differences of approach. These may well be related to the differing constitutional positions and administrative cultures of the SAIs concerned. In conclusion we identify different concerns which are associated with either a fervent embracing of NPM criteria by SAIs or, alternatively, with an apparent rejection of those approaches.     

Cultural Resistance,Output Measures,and Audit Practice: Impact on Non-Implementation of Program-Based Budgeting in Nigeria

Excessive spending on recurrent expenditure hampers economic growth. A program-based budgeting approach has been proposed to discipline fiscal excesses of agencies outside direct civil service machinery but government is inactive. This study hypothesized that difficulty in securing output measures, resistance from politicians, agency heads, and workers; current audit practice; and cost–benefit considerations, hinder implementation. Analysis of perceptual data reveals that resistance from politicians and employees is the major factor that hinders implementation of a program-based budgeting in Nigeria. In addition, difficulty in securing measures to quantify outputs thwarts implementation initiatives, and current audit practice whereby private audit firms audit operational activities of agencies only at year-end subvert program reviews. The study recommends that politicians be advised on political considerations in budgetary allocation; a performance measurement committee be set up to develop measures of outputs acceptable to workers; and a body of auditors be nationalized to undertake audit of government agencies.     

Organizational position and program implementation

Examples of policy implementation success suggest that organizational characteristics are important but policy researchers generally neglect the explicit study of organizational characteristics. Data from a mailed survey are used here to examine two organizational characteristics in one policy area in a single state. The advice of capacitybuilders' (federal and state agencies, municipal associations) about organizing local energy management programs through the appointment of “comprehensive local energy coordinators” is one concern. The other is the importance of the regular organizational position of the parttime community energy coordinators on the “comprehensiveness” of community energy programs.

The research develops a rudimentary methodology for studying program implementation which assesses organizational change by measuring differences among policies based on the dimensions of change embodied in a policy. Also devised are measures of program implementors' attitudes and perceptions in influencing program implementation. The findings demonstrate the usefulness of greater linkages of research across the organizational change and program implementation literatures.     

MANAGING GOVERNMENT-THIRD SECTOR COLLABORATION: ACCOUNTABILITY,AMBIGUITY, AND POLITICS

Recent years have witnessed increased revelations by watchdog agents of mismanagement and abuse in third sector organizations that collaborate with government resulting in a decline in public trust and signs of a portending legitimacy crisis. Strengthening accountability mechanisms seems an obvious response to this trend. Yet, Israeli attempts to improve accountability of government-third sector collaborations have largely failed. Politics of accountability theory provides an explanation as to why. The findings demonstrate that political, bureaucratic and third sector stakeholders have a mutual interest in maintaining a cloak of ambiguity over government-third sector collaborations. The effects of four alternative accountability types on accountability, ambiguity, flexibility and politics are examined in an attempt to identify feasible and effective accountability strategies. There is no one ideal accountability type for all situations. Attention to the pitfalls of each accountability type may alert accountability decision-makers to appropriate combinations of accountability types for particular circumstances. However, the actual choice of accountability types has more to do with the politics of accountability than with scientific analysis of what is most appropriate.     

Government Internal Audits: The Determinants of Quality Supervisory Review of Audit Documentation

This study investigates the factors that impact the quality of government internal audit workpaper review. Numerous concerns have been expressed about the quality of government audits in recent years. The audit workpaper review helps to ensure public officials rely on accurate audit reports and recommendations. A survey was sent to local government chief auditors in the United States to learn about their audit and audit review processes. Survey analysis reveals the quality of audit workpaper review is a function of auditor training, audit client cooperation, audit departments’ budget size, auditor consulting engagements with the clients, etc.     

Playing a zero-sum game? The pursuit of independence and relevance in performance auditing

Supreme audit institutions (SAIs) are fundamental institutions in liberal democracies as they enable control of the exercise of state power. In order to maintain this function, SAIs must enjoy a high level of independence. Moreover, SAIs are increasingly expected to be also relevant for government and the execution of its policies by way of performance auditing. This article examines how and why the performance auditing of the Danish SAI pursues independence and relevance. It is argued that, in general, the simultaneous pursuit of independence and relevance is highly challenging and amounts to a zero-sum or, at the very best, a very modest plus-sum game. More specifically, while the Danish SAI actively pursues both objectives, it has persistently prioritized independence over relevance. This priority seems to be the most effective strategy for the Danish SAI to maintain its legitimacy in a situation where the parliament is characterized by minority governments.     

PRIVATE LEGISLATION AS A STRATEGY OF POLITICAL NEGOTIATION

This article contributes to the perception of the role of the legislator as political initiator in modern parliamentarianism. Most of the research literature relates to the parliament member as a ‘eam player’ of their faction and party. This research was conducted into the functioning of the Israeli parliament The Knesset and into private members' legislation. The article examines in an innovative way the act of legislation, not only as a judicial or procedural process but as a process of political negotiation. The concept and findings that arose from the study of the role of the legislator as initiator of bills and negotiator with the government gives important knowledge and perspective on legislation as a political negotiation process.     

Another path to customs reform: Mexico's second inspection

This paper presents two theses about reforming customs administration in developing countries. First, that modern customs systems increasingly rely on documentary audit rather than physical control and that the private sector can improve the information needed to strengthen audit. Second, that reform of customs administration in developing countries requires building both accountability and efficiency. The widespread use of Pre-Shipment Inspection (PSI) services by developing countries and Mexico's innovative privatized second inspection supports the first thesis and Mexico's experience with privatizing a key layer of its customs administration supports the second thesis.

This paper examines Mexico's recently introduced Second Customs Inspection which is a novel approach of using private firms to improve the accountability of a customs system. The Second Inspection is uniquely poised to improve both physical control and documentary audit in Mexico's customs by clearly defining the inspection as “rough justice.” “Rough justice"” is an approach to physical customs inspection that recognizes the limitations oftime and space of customs inspections prior to detailed documentary audit. Rough justice is an approach to customs administration that promotes systematic but selective review of contents and documents in the front end of the customs process (inspection) that can be done within reasonable time limits that do not unduly delay trade.     

Modernisation and Political Management Arrangements: The Case of Redcar & Cleveland Borough Council

In the United Kingdom the Labour government has placed considerable emphasis on the need to modernise public services. In the case of local government, Labour's belief in the need for modernisation has resulted in radical measures to change local authorities' political management arrangements designed, in part, to achieve greater efficiency, transparency and accountability. In its response to the Labour government's agenda, Redcar &; Cleveland Borough Council established interim political management arrangements in May 2000 prior to the establishment of permanent arrangements. The permanent arrangements were to be decided upon following public consultation and a review of the interim arrangements. This article reports the outcomes and, in doing so, provides evidence of the impact of Labour's measures to achieve change in local government.     

Executing priority national development in indonesia: Program innovation of the junior minister

In the process of Indonesia's administrative reform and conduct of its planned development efforts, several innovative measures evolved in its executive structure. One of these was the use of temporary organizational entities to expedite the achievement of development goals where sectors/programs of the national development plan encompass two or more executive agencies and/or levels of governments. In organizational design, the executive problem is the reconciliation between responsibility and authority with the purpose of achieving maximum technical efficiency in the execution of priority development programs. As an organizational device to deal with this problem, the offices of six junior ministers were established. By employing the technique of executive authority in rank, these ministers, heading temporary agencies organized in terms of program responsibility as specified in the development plan and as approved by the cabinet, have become the organizational means by which to integrate all of the disparate project activities vested in the executive line agencies in productive organizational cores. Should this organizational innovation prove successful, it will be one of the more important organizational contributions in recent years to the execution of centrally planned development programs in a developing society.     

THE THIRD SECTOR AND IMMIGRANT ABSORPTION: LESSONS FROM THE ISRAELI EXPERIENCE

This paper deals with the role of two third sector organizations in immigrant absorption in Israel during the mid-1980s through 1993. The Jewish Agency, a non-governmental, voluntary, non-profit “public institution” funded by Diaspora Jewry had responsibility for immigrants during their first year in the country. It represented world Jewry and Israeli political parties. A second third sector institution, the quasi-public party controlled state religious school system played a significant role in the education of Ethiopian immigrant children.

The paper evaluates their impact on the absorption of immigrants. To what extent did these third sector agencies pursue their own agendas and or serve the immigrants? The paper also examines the influence of Israel's political-administrative systems on the third sector. How unique is the Israeli experience? Hopefully the findings will shed new light on the politics of collaboration with the third sector in contemporary Israel.

Evidence presented here suggests that third sector absorbing agencies often pursued their own interests at the expense of the immigrants. The paper also reveals the complexity of the political and administrative character of Israel's third sector. Finally, the analysis shows the importance of political-administrative systems for understanding third sector collaboration in Israel.     

Financial Discrepancies in Political Party Funding by Indonesian Local Government Authorities

Through different forms of decentralization variables, this study investigates Indonesian local government authorities' 2006 financial accountability reports in terms of local government authorities' contributing funds to political parties. Audit results by the Supreme Audit Body reveal that many articles were violated by these authorities in regard to the distributing, administrating, and reporting of assistance funds from them to political parties. Each rupiah committed by the 221 local government authorities involved in this study violated, on average, 1.8 articles, indicating a low level of compliance.

Critically, the study finds that administrative, fiscal, and political decentralization decreases discrepancies. The less administratively decentralized provincial authorities, where decision making is a level of government farther from the people, are more likely than non-provincial local government authorities to make discrepancies with political party legislation and regulations. Fiscally decentralized local government authorities, who earn a higher fraction of their revenue from local sources, also tend to have fewer discrepanciesFinally, politically decentralized authorities with a higher percentage of elected officials from the decentralized supporting ruling coalition, also have fewer discrepancies.