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control that still prevails in Latin America, which privileges formal compliance with legal rules over substantive accountability with managerial objectives.

Timing of audits Fiscal control can occur before (ex-ante) or after (ex-post) the fact. Ex-ante auditing verifies the legality of administrative actions before they are implemented, thereby acting as a potential veto on administrative discretion. Ex-post auditing examines administrative actions after their implementation. Ex-ante and ex-post forms of accountability differ in their relative focus on prevention or correction, including punishment. Some scholars see accountability essentially as an ex-post phenomenon while others argue that, to be meaningful, it should occur before, during and after the exercise of public authority (Elster 1999; Schmitter 1999).

The timing of compliance control is a subject of intense controversy in the audit profession. While performance auditing can only be ex-post, compliance auditing can be either ex-ante or ex- post. While it is generally agreed that a core function of internal audit systems is to perform ex- ante compliance controls, there is disagreement over the extent to which AAAs should have any ex-ante compliance control functions. Ex-ante compliance control, often criticized as co- administration by the bureaucracy, gives the AAA veto power over administrative actions. It converts the AAA into a ‘veto player’ in the implementation of public policy, endowed with the power to question or nullify administrative acts (Tsebelis 2002). Nevertheless, it is generally accepted that AAAs should focus on ex-post forms of control, including through compliance control and performance auditing.

This controversy over the timing of compliance control illustrates a fundamental tension between two different philosophies of government auditing. Speck (2000) aptly underscores that AAAs are torn between two concerns: a liberal concern for limiting and restraining executive power, which is best achieved through ex-ante compliance control, and a managerial concern with improving public sector management, which is best achieved through performance auditing. While both these functions are important, the relative emphasis on one or another dimension will depend on the stage of development of the budgetary system, the quality of the bureaucracy and the prevalence of the rule of law. However, as Speck (ibid), they are unlikely to be compatible in the same organization.

Enforceability of audits An important controversy in accountability theories and the literature on oversight agencies centers on the enforcement of audit rulings and the sanctioning powers of audit agencies, especially AAAs. This debate has both theoretical and policy implications. It is central to our understanding of the distinctive roles of oversight agencies and accountability institutions. Accountability necessarily implies a measure of answerability (providing an account for actions undertaken) and enforceability (punishment or sanctions for poor performance or illegal actions) (Goetz and Jenkins 2001, 2004). Some authors argue that enforcement and sanctions are intrinsic elements of accountability and that ‘inconsequential accountability is not accountability at all’ (Schedler 1999:17). According to this view, without enforcement mechanisms, AAAs only impose soft constraints and ambivalent incentives. Consequently, still according to this view, to be credible, AAAs should be endowed with sanctioning powers, which they can impose directly and autonomously without the intervention of another state power.

We take a different view, however, distinguishing oversight agencies from accountability institutions. We argue that AAAs are essentially oversight agencies which dependent on accountability institutions to enforce accountability on government. Accountability institutions are those state powers endowed with the constitutional prerogatives to hold government to account. In the constitutional model of separation of powers, those accountability institutions are the legislature and the judiciary. As Moreno et al. (2003:117) observe, ‘agents cannot hold other agents accountable, only their principals can.’ Only the government’s principal, the legislature,

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