Improving the Audit of Federal/State/Local Programs

• NCJ Number: 69819
• Journal: Federal Accountant Volume: 27 Dated: (December 1968) Pages: 31-43
• Author(s): L M Knighton
• Date Published: 1968
• Length: 13 pages
• Publication Format: Article
• Language: English
• Country: United States of America

Annotation

The article explores four alternatives for auditing Federal-State-local programs: the use of State auditors, Certified Public Accountants (CPAs), or Federal auditors, and a combination of all three.

Abstract

None of the alternatives is free from problems and limitations, but the use of Federal auditors and the use of a combination of all three types would result in excessive duplication of efforts and would be too costly. Useful criteria for evaluating audit alternatives are effectiveness of the auditors, efficiency in terms of cost/benefits, timeliness, scope of examination and opinion, and independence from political bias and influence. Although the use of State auditors to audit Federal-State-local programs would seem to be an excellent alternative because it involves the expertise of an experienced staff of government auditors and can avoid duplication, the two State professional auditor organizations do not provide effective leadership in coordinating the development of consistent State auditing practices. Moreover, the workload of State auditors is already beyond their means, and the development of excellent professional staffs is restricted by personnel codes and lack of competent leadership. Arguments for using CPAs focus on their availability, their professional image, their objectivity, and the possibility of obtaining uniform cut-off dates and simultaneous audits of all programs. However, arguments against using CPAs range from their lack of knowledge of governmental accounting to the lack of separate CPA guidelines and standards for business and government. Improvement of government auditing can be achieved through the establishment of guidelines and uniform standards and policies for State auditors and CPAs, clear definition of the programs and performance standards, introduction of some form of cost reimbursement to State audit agencies, and flexibility in any alternative employed.