The wisdom of watchdogs

The Art of Audit: Eight Remarkable Government Auditors on Stage. By Roel Janssen. Amsterdam University Press; 104 pages; $24.99 and £15.99.

WHEN offices handle public money, said Aristotle, “there must of necessity be another office that examines and audits them.” Today’s equivalent is the “Supreme Audit Institution”, and 192 countries have one. These beancounters-cum-watchdogs check on behalf of legislatures and the public that their governments spend money cleanly and sensibly—and hold them to account when they do not. Though public, they are (or at least are supposed to be) independent of government.

In “The Art of Audit”, Roel Janssen, a veteran Dutch journalist, tells their story through conversations with former top auditors from eight countries. Number-crunching may be number-crunching, but their experiences, and the outfits they run, differ enormously.

America’s 94-year-old Government Accountability Office (GAO) is a bulky, sophisticated machine employing 3,000 people that holds the government’s feet to the fire on behalf of Congress. David Walker’s main achievement, as its head from 1998 to 2008, was to raise the alarm about America’s exploding federal debt. Running Iraq’s audit board from 2004 to 2014, Abdulbasit Turki Saeed worried more about being blown up himself. His predecessor was killed in the job, as were some people on Mr Turki’s team; he had a lucky escape when he discovered a bomb under his car.

The bravery of Iraq’s public auditors in perilous circumstances is inspiring. The board has fought corruption fearlessly, even producing a damning report on graft at the defence ministry that led to the minister and several members of staff receiving prison sentences. (Its authors were duly sent abroad for their own safety when it was published.) Mr Turki shrewdly convinced the finance minister to cut off funding to state institutions that were not following the board’s accounting rules. Overall, he helped turn it into a rare role model for good governance while, as he describes it, “everything else around us was collapsing”.

Other stirring stories of public service include Tunisia’s then auditor-in-chief, Faiza Kefi, posting all previously censored reports online during the Jasmine Revolution, and the corruption-fighting muscle of Heidi Mendoza, the head of the Philippine court of audit, who needs a permanent security detail because of her past work on fraud cases. Ms Mendoza provided fresh thinking, too: she pioneered “citizen audits”, in which ordinary workers are encouraged to contribute to local audits in education, health care, housing projects and the like, for instance by conducting interviews to check if experience on the ground matches investment on paper.

Not all audit bodies are such paragons of good governance, however. Dozens lack full independence, and as a result are docile and rarely heard in public. Auditors can be “drowsy” even in “exemplary democracies”, says Saskia Stuiveling, former head of the Dutch court of audit. Frustratingly, the book has almost nothing to say about these laggards.

The auditors’ work has evolved, from plain book-keeping to “regularity audits” (checking whether money has been spent correctly), “performance audits” (whether it has delivered the desired results) and complex fraud investigations. Mr Walker changed the GAO’s name from General Accounting Office to reflect this broader focus. Modern audit bodies are increasingly promoting the somewhat fuzzy concept of “organisational learning”: encouraging government institutions to identify and learn from past mistakes.

Another challenge comes from the “open data” revolution, which preaches unrestricted electronic access to information. NGOs are demanding real-time access to government budgets and programmes, with some striking results. Spending linked to America’s Recovery and Reinvestment Act of 2009, for instance, is published online as soon as it is disbursed, down to the postcode level. But, as Mr Walker points out, spewing numbers out is not all that is needed to foster transparency: they have to be correctly interpreted as well.

The book shows that, at their best, the watchdogs play a vital role in bolstering public trust in government, particularly in countries that are in political chaos, emerging from dictatorship. Ms Kefi sees Tunisia’s auditor, the Cour des Comptes, as “the guardian of the political process”. Mr Janssen makes the same point a different way: by institutionalising mistrust of public finances, government auditing creates trust in public administration.