Democratic Accountability During Performance Audits Under Pressure: A Recipe for Institutional Hypocrisy?

• Published date: 01 February 2016
• Author: Danielle Morin
• Date: 01 February 2016
• DOI: http://doi.org/10.1111/faam.12081

Financial Accountability & Management, 32(1), February 2016, 0267-4424

Democratic Accountability During

Performance Audits Under Pressure:

A Recipe for Institutional Hypocrisy?

DANIELLE MORIN∗

Abstract: This study shows how the tensions between transparency and secrecy are

likely to engender ‘institutional hypocrisy’ in the accountability process taking place

during Supreme Audit Institutions’ performance audits. The examination of relations

between the French Cour des comptes, Administration and Parliament has revealed

gaps between Administration and Parliamentarians’ discourse and action, secrets

and things left unsaid. This impression of Administration and Parliamentarians’ full

participation in this democratic process may give to citizens a false sense of security

leading them to believe that accounts are indeed rendered, which is not actually the

case. Rather, the appearances of functional democracy have been preserved.

Keywords: accountability, Court of Accounts, performance audit, secrecy, trans-

parency

INTRODUCTION

‘Sunlight is said to be the best of disinfectants,’ US Supreme Court Justice Louis

D. Brandeis (1914, p. 92) remarked, underscoring the merits of transparency

for financial institutions charged with managing collective wealth. The ‘sunlight

metaphor’ is known to bring great benefits to economies, governments and

societies (Heald, 2008, p. 59). By inhibiting input, oversight, and criticism within

and outside government, secrecy would undermine the quality of policies and

even ‘when the secret-keepers are perfectly virtuous, debate and dissent may

be muted, important facts and insights may be overlooked, and preexisting

∗The author is a Professor at HEC Montr´

eal.

Address for correspondence: Danielle Morin, Ph.D., MBA, CPA-CA, Audit Professorship

Roland-Chagnon, HEC Montr´

eal, 3000 Chemin de la Cˆ

ote Ste-Catherine, Montreal, Quebec,

Canada H3T 2A7.

e-mail: danielle.morin@hec.ca

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DEMOCRATIC ACCOUNTABILITY DURING PERFORMANCE AUDIT 105

biases may be amplified’ (Pozen 2010, p. 278). Secrecy is likely to become an

‘instrument of conspiracy’ because it exacerbates the principal-agent problem

inherent in representative democracy (Pozen, 2010, p. 278).

Democracy requires that citizens be able to hold officials accountable. To this

end, citizens must know what officials are doing and why, says Thompson (1999,

p. 182). He refers to ‘partial secrecy’, namely secrets that are not completely

concealed because their content could be widely known (p.186). One of these

types of ‘partial secrets’ is ‘political hypocrisy,’ which Thompson defines as

‘the alleged contradiction between what officials try to make the public believe

about how they act and how they actually act’ (p. 190). He adds that democratic

accountability is threatened more by ‘institutional hypocrisy’ than by ‘individual

hypocrisy,’ because ‘the moral discrepancies in their individual conduct that

officials refuse to acknowledge are often not so damaging as the functional

divergences in institutional goals that they try to obscure’ (Thompson, 1999,

p. 192).

The present study explores the consequences of these tensions between

transparency and secrecy on the accountability process during performance

audits (management control missions) done by the French Cour des comptes.These

consequences are examined not only from the perspective of the Administration,

which must render accounts, but also from the viewpoint of Parliament, which

requests such accounts during this accountability process.

As will be argued below, the obscurity surrounding the real contribution of

auditors that conduct performance audits, coupled with the tensions between

democracy and secrecy inherent in the accountability process that unfolds

during the audits, may favour the propagation of institutional hypocrisy (as

defined by Thompson,1999) that could jeopardize the process by perpetuating

the ‘illusion’ of accountability and transparency. The examination of episodes

of relations between the French Cour des comptes and the Administration and

Parliament has brought to light divergence between the discourse and actions,

and between Court’s findings and actions subsequently taken. This divergence

indicates that the messages conveyed by the Court are not always heeded

by the Administration, which is not obliged to explain its decision not to follow-

up the recommendations formulated. Even when Parliamentarians are aware

that the Administration is not fully cooperating with the Court, they act as if

the democratic process had unfolded flawlessly.

This paper is organised as follows. First, the areas of obscurity that charac-

terise the impact of legislative auditors’ performance audits in Administrations

and some of the secrets and the tensions inherent in the accountability process

of Administrations are presented. Next the methodology is described. The

empirical data are then presented and analysed in series. The last section states

the study’s contribution to better understanding the tensions inherent in the

democratic accountability process during performance audits along with the

limitations of the research.

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2016 John Wiley & Sons Ltd