Local government auditors' relationships with the media: a survey.

AuthorGoodman, Jon

Auditors' perceptions of the media and its impact, if any, on 1) auditor independence, 2) the process of reporting audit findings, and 3) the internal auditor's role in local government were the subject of a survey conducted by the author in September and October 1997. One prominent local government auditor states in his response, "citizens do not read my audits of which I print 100 copies - citizens get their information from the media such as the newspaper whose daily circulation is 450,000." Despite the large role that the media plays in the dissemination of audit findings, there is not much guidance on the proper relationship between the local government auditor and the media. The Government Auditing Standards ("Yellow Book"), the Standards for the Professional Practice of Internal Auditing (Institute of Internal Auditors), and some state laws and government policies address issues such as auditor independence, reporting practices, and the public inspection of certain records, which may hint at the proper relationship between government auditors and the media. However, there is little or no specific guidance on this subject.

The survey consisted of a questionnaire mailed to 48 local government chief auditors throughout the nation; 41 responded, representing governments from 23 states. The annual budgets of the responding governments averaged $926 million, ranging from $90 million to $8.3 billion. The respondents served 15 cities, 12 counties, seven school districts, and seven other local governments, such as water management districts and community colleges. Twenty chief auditors, or 49 percent of those surveyed, reported to a governing board; 32 percent (13) reported to a CEO; 7 percent (three) had dual reporting responsibilities to a board and to a CEO; and 12 percent (five) reported to senior management other than the CEO. The average number of employees in the respondents' audit departments was 11, ranging from one to 71.

Data and responses to the survey questionnaire are discussed in the following sections. The questionnaire and response data are shown in Exhibit 1.

Frequency of Calls from Media

The average number of newspapers, television channels, and radio stations that regularly reported on the respondents' local governments was 3.3, 3.8, and 4.3, respectively. The average number of calls, written correspondences, or visits made by the media to responding audit departments was 41.5 per year. Large audit departments (15 or more employees) received more phone calls, visits, and correspondences from the media than small or medium audit departments. Calls to large audit departments averaged 132 per year, medium size audit departments (five to 14 employees) received an average of 20 per year, and small departments (one to four employees) received an average of eight calls per year from the media. The internal auditors employed by large governments (budgets of more than $500 million or with more than 5,000 employees) received an average of 72 calls per year from the media, while those of smaller governments received an average of eight calls per year.

The offices of chief auditors reporting to the governing board received significantly more contact from the media - an average of 71 calls per year - than those whose chief auditor reported to the CEO or other senior management; the latter received, on average, 12 calls per year.

These data clearly indicate that audit findings relating to larger local governments, as compared to smaller governments, are of more interest to the media and, presumably, to the people they affect. Larger audit departments also perform more audits and, therefore, would be subject to more inquiries from the...

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