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.     

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.     

The growing challenges of providing pensions to state and local civil servants in an aging society

Much hope has been placed in the ability of Supreme Audit Institutions (SAIs) to enhance public accountability. SAIs' independence and professionalism lend promise to the chance that they might succeed where program budgeting, program evaluation, performance measurement and strengthened legislative oversight have failed. Little attention has been paid in the literature to political and organizational constraints on the ability of SAIs to enhance public accountability. The article examines the contribution of Israel's State Comptroller to enhanced accountability across three measures: audit coverage; type of audit coverage; and use of audit reports by the Knesset (Israel's parliament). Programs connected with crisis situations, large programs and direct provision programs are found to receive significantly more audit attention. The Comptroller conducted few audits of program effectiveness. The few reports used by the Knesset were almost all connected with crisis situations. Exploration of the reasons for these patterns reveals that: organizational politics considerations limit the willingness of state auditors to conduct effectiveness audits and relate to controversial issues; logistical and political considerations of Members of Knesset limit their interest in using audit reports; and the paucity of audit resources relative to the scope of government means that much activity is not scrutinized.     

Auditee Strategies: An Investigation of Auditees’ Reactions to the Norwegian State Audit Institution’s Performance Audits

This article contributes to theory on accountability—how it is played out and responded to. It uses the Norwegian State Audit Institution as an illustration. The responses of the audited entities to the SAI’s institutional pressure were identified through an analysis of four different cases. Four auditee strategies were identified. They indicate that the performance audit has impact when the auditees agree with the conclusions of the SAI. Sanctions from the control committee and the Parliament are equally important. Even though the extent of sanctions and conflict of opinion matter for the auditees’ responses, the effects are context dependent.     

AUDIT OR EVALUATION? A NATIONAL AUDIT OFFICE VFM STUDY

This article presents a case study of an important but relatively neglected aspect of the British policy process - the Value for Money (VIM) studies undertaken by the National Audit Office. It analyses in detail the conduct of one particular study, including the reactions of the audited bodies and the parliamentary activity which followed the publication of the NAO report. The case is then used to illuminate what appear to be some more general characteristics of the NAO's approach. It is concluded that NAO VFM work marks an important step beyond traditional audit for regularity and/or economy, and that it significantly enhances democratic accountability. Yet at the same time this work falls short of a full-blooded evaluation. Indeed, it appears to take place within quite prominent constraints, some of which were built into the legislation setting up the NAO but others of which could conceivably be eased, even without new statutory authority.     

Terrorism: Review of 1988 and prospects for 1989

This article is the first to explore the Israel Defense Forces's official statistical data on Palestinian terrorism toward Israeli targets during the al-Aqsa intifada 2000–2004. Focusing the analysis on the logic of terrorist target choice, the article identifies two separate results: First, an unambiguous difference in the form of the attacks contingent on whether they are carried out in the state of Israel or in the Occupied Territories. Second, based on the same distinction, the analysis points out how the attacks are targeted toward distinctively different categories of the Israeli populace. Causes of the results are discussed.     

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.     

Introduction

In this Introduction, Larkin Dudley and Gary Wamsley reveal a dual intent in this project: to reprint the famous Papers on the Science of Administration and to celebrate critically Luther Gulick's contributions to public administration in order that the critique will help us understand ourselves and our conditions. Gulick's contributions as a man of action are praised, but his misplacement of an organizational conception upon a polity with a distinct constitutional design is questioned. In Dudley and Wamsley's view, American public administration is the study and practice of a key component of our governance process, misfounded on a concept of management in monocentric, hierarchical settings and on a focus of power of an elected executive. From the work of the other writers of this symposium, the authors tease out further some of the contradictions in hierarchy and democracy. Finally, they note that Gulick himself at the age of 93 published a repudiation of his early notions of organization based on hierarchy and, instead, called for a more democratic and participatory system in all agencies.     

Development under patrimonial conditions: Suriname's state oil company as a development agent

This article analyses the conditions under which the Surinamese State Oil Company (Staatsolie) has been consolidated, not only as an oil producer, but also as a development agent. Staatsolie's chances of success seemed rather slim at its creation in the early 1980s, mainly because of the non-developmental, patrimonial character of Surinamese politics and the nature of Suriname's state, which has traditionally been oriented toward patronage and clientelism. The analysis documents the origins of Staatsolie and focuses on its commitment to the acquisition and further development of technological and managerial expertise. At present, Staatsolie ranks among the most successful companies in Suriname and its contributions to the economy of this small middle-income country are considerable. The success of Staatsolie's attempt to become a development agent is attributed, in particular, to the company's double strategy. The internal part of this strategy, derived from the management vision and ideological commitment of the company's leadership, was aimed at developing technological and management skills. The external part of the strategy was aimed at steering away from political influences on the company and playing out, politically, the formal-legal position of the firm in the petroleum sector. After 25 years of Staatsolie, it is argued that the same factors that were responsible for the company's success may turn out to be the main challenges for the years ahead.     

China: alternative futures

What alternatives are available to China in the next one or two decades? `More of the same' is not a likely scenario, because one-party rule is not optimal for coping with the challenges of modernization and global interdependence. A second model, Singapore's authoritarian capitalism, appeals to many CCP leaders. But Singapore's scale and way of life are so different that its example cannot be very relevant to China. Nor does the Soviet imperial model fit, because China does not suffer from imperial overreach as did the USSR. The post-Soviet Russian model—a move from rigid hierarchy to free enterprise anarchy—could await China. Both countries have lacked institutions of civil society that could stabilize the country if central authority collapses. Another alterative would be a return to regionalism, spurred by economic and ethnic differences within China. Some PRC leaders hope to find a Chinese way that transcends other models, but this is not realistic. The most useful model for China and the world would be a gradual transition from authoritarianism to multi-party democracy, as has taken place in Taiwan. In one or two decades, China could edge in that direction. If so, animosities between the mainland and Taiwan would also diminish, removing a thorn from U.S.–Chinese relations. Opportunities for mutual gain may then overshadow present tensions.     

Implementation of CRM systems in Portuguese Municipalities

Customer relationship management is a business strategy which dynamically integrates a set of services with the purpose of creating value for the organisation and for their customers. In Portugal, the 2009/2010 edition of ‘Simplex for Municipalities’, the action plan carried by the Portuguese government through the Secretary's Office of State for Administrative Modernisation, makes a commitment to promote a set of initiatives in order to help citizens using the public services. This process intends to reduce costs of context which burden the economic activities, making way for the modernisation of administration. Customer relationship management assumes a central role in this context. This paper presents the main results of a survey that was carried out with Portuguese municipalities, aiming a general characterisation of the adoption of customer relationship management systems, covering several aspects, from the motivations for CRM adoption to the obtained results. The improvement of the relationship with citizens and a higher information quality are some of the most important results obtained by municipalities.     

T2 Transfer of high technology from the united states to the soviet bloc: A public policy issue

The Union of Soviet Socialist Republics and the Soviet-bloc states are engaged in an extensive effort in the legal as well as illegal acquisition of United States high technology. This study examines the importance to the U. S. of such losses; the manner in which the Soviets acquire our high technology; benefits of such acquisitions to the Soviet Union; steps being taken by the U. S. to reduce its loss of high technology; and the author's recommended course of action to reduce high-technology transfer.

The transfer of U. S. high technology to the Soviet Union is recognized as one of our most serious national security problems. This problem is complicated, however, when considering our free enterprise system and the need to promote free trade. On the one hand high technology represents a substantial share of our current exports, while on the other, the United States has relied on technological superiority to offset the Soviet-bloc edge in military might. An equilibrium must be established to ensure protection of both economic and national defense interests of the United States.

The Soviet effort to acquire U. S. high technology is broad based, supported by the Military-Industrial Commission and State Committee for Science and Technology (in legal acquisitions), as well as the Soviet Intelligence Service (in illegal acquisitions). Such techniques as review of U. S. publications, U. S.-Soviet exchange programs, as well as extensive clandestine intelligence operations, are utilized by the Soviets in obtaining our high technology.

The Soviet acquisition of U. S. high technology has greatly benefited the USSR. This is clearly seen in U. S. Government estimates that the Soviets may have saved as much as $100 million in research and development of advanced microcircuitry. Several examples of savings to the Soviet defense industry as a result of high-technology transfer are elucidated in this work. In short, the Soviets have been able to save billions of defense dollars by utilizing proven U. S. designs with none of the risks experienced in the research and development of this technology.

Because of the paradoxical nature of this question of high-technology transfer, U. S. Congressional reaction to renewal of the Export Administration Act of 1979 has been mixed. On one side of the aisle, there has been support of looser controls on high-technology exports to promote free trade. On the other side of the aisle, tighter controls on such exports have been supported to protect critical U. S. high technology. At the same time, the U. S. Government has undertaken steps to strengthen its agreement with the COCOM nations. Another effort undertaken by the U. S. and other Western governments is the expulsion of accused Soviet spies from various Soviet diplomatic establishments (at least 67 Soviets from January to May, 1983). Additionally, the U. S. Department of State, Defense, Commerce, and Customs, as well as the American Intelligence Community, have undertaken efforts to reduce high-technology transfer to the Soviet Union. U. S. industry has attempted to increase security of high-technology; however, because of the Defense Investigative Service's workload, the quality of background investigations on individuals, working in firms handling defense contracts, has suffered.

The author recommends establishment of an ad-hoc matrix organization to integrate the resources and efforts of all of the federal agencies, as well as industry, in controlling the transfer of U. S. high technology to the Soviet Union and Soviet-bloc states. The author also includes recommendations as contained in various Congressional bills. The author's suggestions are made with a view toward creating a balance necessary to the protection of our free market system and protection of the national defense of the United States.     

‘Selective Affinities’: The Reactions of the Council of Europe and the European Union to the Second Armed Conflict in Chechnya (1999 – 2006)

This article aims to compare how the main bodies of the European Union and the Council of Europe reacted to the issues raised by the armed conflict in Chechnya: human rights violations; the necessity (or otherwise) of political negotiations between the Chechens and the Russians; and Chechen terrorism. While the requests for political negotiations were quickly dropped by nearly all organs of the Council of Europe (CoE) and European Union (EU), the issue of human rights abuses uncovered a chasm between the legislative and decision-making bodies. The terrorist acts had no impact on either the EU's or the CoE's definition of the conflict in Chechnya, but they did influence EU policy. In sum, this comparison suggests the presence of ‘selective affinities’ between the CoE and EU bodies depending on the issue involved.     

Benchmarking Tax Compliance Efficiency Among South African Retail Firms Using Stochastic Frontier Approach

Random selection of taxpayers for audit mostly nets tax compliant taxpayers. There is hence a need to adopt other methods that are efficient and and effective in performing their specific and general deterrence roles. This article uses profit efficiency benchmarking to analyze selected retail firms tax compliance risk in South Africa over the 2005–2006 period. It seeks to identify firms that should be audited because of their suspected tax compliance risk, using a stochastic frontier analysis. The profit efficiency estimates of 24 retail stores are used to rank them in terms of their performance. They are also tracked over time. Approximately, 50 percent of the firms performed better than the average profit efficiency of 0.39. The top 10 firms are significantly performing better. However, the bottom 50 percent of the retail firms performed poorly and could be targeted for tax audit.     

Reform: health care

The Italian National Health Service was established in 1978 as three-tier system, involving State, Regions, USLs (Unità sanitarie locali, Local Health Care Units). The division between the responsibility of determining the general features of health care policy and financing it, on one side (the State), and that of managing services, on the order side (Regions and USLs), was bound to lead to increasing levels of expenditure and large financial deficits. An important reform has been carried out over the last five years, aiming toward a more decentralized system, which, although still public, were based on competition among suppliers and free choice for consumers. We argue that although the reform seems to have been successful in containing public expenditure, it has left some important issues still unresolved: the relationship between patients' freedom of choice and competition among providers, and the definition of a model of rationing the bundle of health services financed by the public sector.     

THE REFORM OF FINANCIAL MANAGEMENT IN THE EUROPEAN COMMISSION: A PUBLIC MANAGEMENT POLICY CYCLE CASE STUDY

Since the mid‐1990s during the Santer, Prodi, and Barroso presidencies, the European Commission has experienced several public management policy cycles. Included on the Barroso Commission's (2004–2008) policy agenda was the reform of internal financial control, prompted by significant irregularities in budget execution signalled repeatedly by the European Court of Auditors (ECA) in its annual Declaration of Assurance (DAS) and Annual Reports. This led to a declared Barroso Commission strategic objective of achieving a ‘positive DAS' by 2009. The proposed solution was ‘integrated internal control’ based on an international reference point within the accounting and auditing professions. The result was a centrally co‐ordinated Commission project aiming to reform management and audit practices within both the Commission and EU member states. This article reports on the ‘positive DAS' and ‘integrated internal control’ policy cycle and explains its agenda‐setting, alternative‐specification, and decisional processes.     

Nationalism and orthodoxy: Nichifor Crainic and the political culture of the extreme right in 1930s Romania

This article explores the interplay of religion, anti-Semitism, and personal rivalries in building the ultra-nationalist movement in 1930s Romania, using the career of Nichifor Crainic as a case study. As a theologian, Crainic created and taught a synthesis of nationalism and Romanian Orthodoxy which was broadly accepted by most ultra-nationalists in interwar Romania. As a journalist, Crainic directed several newspapers which spearheaded acrimonious attacks on democratic and ultra-nationalist politicians alike. As a politician, he joined and left both Corneliu Zelea Codreanu's Legion of the Archangel Michael and A.C. Cuza's National Christian Defense League before attempting to form his own Christian Workers' Party. Crainic's writings ultimately earned him a place as a minister in two governments and membership of the Romanian Academy. His career reveals an ultra-nationalist movement rife with division and bickering but united around a vaguely defined ideology of religious nationalism, xenophobia, and anti-Semitism.     

Demilitarisation in Latin America

Since the mid 1970s relations between the USA and Libya have been antagonistic. The radical policies the regime of Muammar Qadaaffi has pursued have made Libya one of the USA's bêtes noires . The reasons for US antagonism derive from Libya's repression at home, its alleged support for terrorism and for radical movements opposed to US interests, its staunch opposition to Israel, and its anti-Western rhetoric. Libya's hostility towards the USA rests on a perception of the USA as a global power intent on maintaining its hegemony and control over the Arab and Islamic world. Libyans have been resentful of US support of Israel to the detriment of Arabs and Muslims. Libya's resolute opposition to the USA especially in the 1980s, resulted in a series of military confrontations. The USA has maintained sanctions despite the suspension of UN sanctions on Libya in 1999. The USA has retained Libya on its short list of 'rogue states' despite recognition that Libya has stopped sponsoring terrorism. The contention here is that Libya, like the other 'rogue states', provides justification for US domestic policies (eg National Missile Defense). Given the events of 11 September 2001 in the US, it is quite conceivable that Libya could become a target of the US antiterrorism campaign. The USA could at last find valid justification for the removal of the Qadaffi regime.     

An agency ethics audit ∗

An agency's ethics posture can encompass both compliance with controls and legal prohibitions and individual ethical reasoning and its role in the organization. This article presents a model ethics audit designed to profile the agency's strengths and deficiencies and produce an action agenda in a format appropriate for periodic review.     

An Integrated Model for the Audit,Control and Supervision of Local Government

This article considers the issue of the audit, control and supervision of local government units in a new paradigm. The author argues that the treatment of audit, control and supervision activities in the present paradigm, in which they are treated separately from each other, or only as a ‘control or audit pyramid’, has so many imperfections that it no longer represents a reliable means of modern good governance. The author presents some ideas for the operation of an integrated system of audit, control and supervision for the local government sector, focusing particularly on small, local government units. Although the author's research is based on the case of Estonia, a small, liberal constitutional democracy with an open economy, his ideas are also applicable to other democratic societies.