Critical Perspectives on Accounting 22 (2011) 714721

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Critical Perspectives on Accounting

journal homepage: www.elsevier.com/locate/cpa

Keeping secrets? Or what government performance auditors might not

need to know
Warwick Funnell
School of Accounting and Finance, University of Wollongong, NSW, Australia

a r t i c l e

i n f o

Article history:
Received 13 August 2009
Received in revised form 27 January 2010
Accepted 4 February 2010
Keywords:
Performance auditing
Public secrets
Public sector auditors

a b s t r a c t
This paper examines the claims made in a recent paper in Critical Perspectives on Accounting
by Vaughan Radcliffe about the way in which public sector auditors report their ndings.
Drawing upon the work of Taussig, he argues that while public sector auditors may know the
truth, as may others, they choose not always to tell the truth in their reports and instead
to treat what may be publicly unpalatable as a public secret. They modify their ndings
to ensure that these will be more acceptable to governments and, thereby, enhance their
opportunity to inuence government. These claims are shown in this paper to overstate the
public sector auditors response to difcult issues. Rather than keeping secrets, the contents
of the auditors reports may instead reect the constitutional and institutional limitations
in which they must work. Most importantly in most jurisdictions they are not to comment
on matters of policy which are the domain of the government.
2010 Elsevier Ltd. All rights reserved.

1. Introduction
In a recent paper Radcliffe (2008) argued that public sector auditors may be effectively colluding with governments to hide
uncomfortable facts and provide reports that are knowingly biased. He notes that they are constrained both by themselves
and others from making observations that may be publicly unpalatable (p. 99). There are things that are known but are
equally known to be things that cannot be said, or cannot be seen to be known, especially in the context of an audit report
(p. 99). Most especially, Radcliffe believes that auditors must work within a given set of discourses, rather than challenge
them, and to be strategically wise in presenting their work if they wish to be effective. They police themselves to say only
certain things and in certain ways to ensure that their ndings have a greater chance of being accepted and, thereby, be
seen to be successful (p. 100). These limitations constitute efforts to maintain public secrecy about some matter. In effect,
Radcliffe argues that public sector auditors are prepared to sacrice the truth to ensure inuence and standing, that they
are prepared consciously to subvert the intention of their mandate and are complicit in providing a more acceptable, less
threatening account of the Executives1 performance. The auditor internalizes the need to preserve the public secret and
thereby it becomes a self imposed, powerful and limiting force (p. 124).
This response to Radcliffe will argue that these views of public sector auditors2 are overly pessimistic about the responses
of auditors and, of most concern, give insufcient credence to the constitutional and institutional context in which public
sector auditors operate and how this determines the auditors mandate and the matters upon which they are authorised

E-mail address: warwick@uow.edu.au.

The term Executive will be used to refer to the elected representatives who form a government.
2
The position of public sector auditor primarily refers to the statutory head of the ofce established by the legislature to conduct audits of the public
sector. Other terms used include government auditor and state auditor. In Westminster jurisdictions they are usually known as Auditors-General and in
the United States the Comptroller General. Audits are conducted of behalf of the Auditor-General or the Comptroller General by staff who are appointed
independent of the Executive.
1

1045-2354/$ see front matter 2010 Elsevier Ltd. All rights reserved.
doi:10.1016/j.cpa.2010.02.007

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to comment. Most especially, the conclusions reached in Radcliffes paper do not recognise sufciently that the form of
independence provided for public sector auditors has required that they are excluded mainly from commenting upon matters
of policy when conducting performance audits. They are expected not to question the priorities and objectives of government,
only the manner in which these may be achieved. The former are the responsibility of other constitutional bodies, most
importantly committees of the legislature such as public accounts committees. Also disputed here is the implicit intention
of Radcliffes paper, in the absence of any reference to or evidence from other national audit jurisdictions, that the ndings
drawn from one case in Ohio are applicable to other public sector auditors, that the behaviour that they allegedly evinced is
endemic to the role of public sector auditors. There is also an almost exclusive reliance upon the authors own work when
referring to studies of performance auditing and no reference to the experiences of auditors-general in Canada,3 Australia
or Britain, all of whom experienced considerable difculties in the implementation of performance auditing.
2. The power of not knowing: keeping secrets
The conclusions and argument of Radcliffes paper are primarily informed by Michael Taussigs provocative work published in 1999 as Defacement: Public Secrecy and the Labor of the Negative. Taussig suggests that all societies rely upon
individuals to collude in keeping secrets to manage the contradiction and complexity which characterise all societies. Without needing a formal explicit agreement between individuals, members of society instinctively know that there are some
things that they must not openly discuss or acknowledge, sometimes to ensure their physical safety. A particularly arresting
example provided by Taussig is Columbia in the early 1980s when citizens were only too aware that the terrorists who were
said to threaten their lives were not the people taken off buses or taken from their homes by the military in the early hours
but the police and the military. To openly acknowledge this, however, would be to place oneself in great peril. Thus, notes
Radcliffe (p. 103), all know the truth, but all know not to know it, possibly to the extent of denying any knowledge of this
secret. As knowledge may be the source of power, so not knowing was also a form of power. In addition, those party to the
secret, which could be the social collective, are aware that the enormity of the social consequences of exposing the public
secret, or its defacement as Taussig refers to it, might be so great that it becomes impossible not to maintain it.
Using insights from Taussig, Radcliffe (p. 106) then argues that public secrecy provides a map to professionals social
agreement as to how to conduct their work, that is what to say and what not to say. Extending this to public sector auditors,
he argues that there is a ready adherence by government auditors to keeping public secrets, resulting in an attendance to
those in power . . . through . . . provision of a reliable stream of managerial diagnoses and an abrogation of political debate (p.
106). This is supposedly demonstrated by a performance audit by the Auditor of State for the Cleveland City School District
(CCSD) in Ohio.
While Taussigs work is provocative and provides a dramatic way of understanding society, and possibly audit, this paper
will argue that the manner in which it has been applied by Radcliffe to performance auditing by public sector auditors
creates a deceptive impression of the way in which public sector auditors conduct performance audits, but more especially
report their ndings to favour governments. Certainly, the areas investigated with performance auditing and its malleability
(see Guthrie and Parker, 1999), in contrast to the more traditional nancial audits conducted by public sector auditors,
ensure that it is inherently political in nature and in its possible effects. The heightened potential for political exposure
which performance auditing would make possible was keenly appreciated by governments, when introducing performance
auditing, who were consequently determined not to give the public sector auditor a new weapon which would make things
unnecessarily difcult for them.
Consistent with other accounting technologies, public sector audit is an artefact which is a response to social and political
pressures (Lowe and Tinker, 1977, p. 266). The work of Cooper and Sherer (1984) has shown that accounting practices, of
which auditing is a prominent component, can never be merely technical instruments. Rather, they need to be recognised
as being consistently partial; that the strategic outcomes of accounting practices consistently . . . favour specic interests
in society and disadvantage others (Likierman, 1989, p. 626). However, as will be demonstrated later in this paper with
reference to a controversial report by the British National Audit Ofce in late 2009, the highly contentious nature of many of
the subjects that are the focus of performance audits does not mean, as suggested by Radcliffe, that this will cause auditors
necessarily to moderate and modify their responses to ensure that they do not raise the ire of the Executive and, thereby,
enhance their ability to have their ndings accepted as legitimate. Nor has the case been made in Radcliffes paper, following
Taussig, that it is important for public sector performance auditors to uphold public secrets to ensure the future of society
(p. 107).
3. The nature of performance auditing and auditor independence
The signicance of the contributions of public sector auditors to a vibrant, robust democratic state is undisputed in the
literature and in practice (Recommendations of the 9th INCOSAI 1977, 30 Years of INCOSAI, 1983, p. 85; AAA, 1973, p. 13).
Who says democracy, declare Day and Klein (1987, p. 6), also says accountability. A vibrant democracy and an informed

3
Radcliffe has written about the experiences of Canadian auditors-general but these are not given any prominence in the paper (see Radcliffe, 1998,
1999).

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public are mutually dependent, for access to information is vital to the knowledge of ones own interests and the broader life
of the community (Starr and Carson, in Rose, 1991, p. 690). According to Prewitt, democratic society is preserved when the
public has reliable ways of knowing whether policies are having the announced promised effect. . . . Numbers, . . . contribute
to the accountability of a democracy (quoted in Geist, 1981, p. 4; Rose, 1991, p. 690). In Britain, which has provided the basis
for most public sector auditing in Anglo-American states, some form of nancial audit conducted by public sector auditors
has been a feature of government for centuries (Funnell, 1994; Glynn, 1987; Hopwood and Tomkins, 1984). The modern
form of public sector nancial audit developed from the late 18th century, but mainly in the latter half of the 19th century.
Performance auditing, in contrast, only began to appear in the second half of the 20th century and was accorded legislative
recognition in Britain, Canada and the United States from the 1970s.
The accountability enacted by the public sector auditor until comparatively recently has traditionally been directed to
scal accountability, which the Canadian Royal Commission on Financial Management and Accountability (1977) referred
to as the essence of our democratic form of government . . . (quoted in Cousins, 1988, p. 89; see also Asian Association of
Supreme Audit Institutions (ASOSAI) 1985 in Tokyo Declaration of Guidelines of Public Accountability). Fiscal accountability
was almost exclusively concerned with the language of nancial accounts and, thus, with nancial stewardship, legality and
regularity. These narrow, duciary aims of public sector audit were consistent with the form of governance at the time which
did not have as its central concern the good management of public funds, although consideration of this was never entirely
absent. Audit was governed by a very formalised, objective mandate which kept the public sector auditor out of policy issues
and, thus, was less threatening to governments. Audit was concerned with clear, denable and ascertainable criteria of
assessment which limited the auditors mandate to relatively contentious-free concerns and ensured that the independence
of the public sector auditor from the Executive was more easily prescribed. While ever the public sector auditor respected
these requirements the potential for problems with the Executive could be limited.
Restricting public sector audit to narrow nancial and administrative codes of accountability and their accompanying
legal, economic and technical rationalities precluded or impaired other values, discourses and rationalities from being promoted, in particular those derived from economic and political rationalities which are now associated with performance
audits (Gray and Jenkins, 1985, pp. 180181). Performance auditing differs signicantly from the more traditional, constitutionally based nancial audit in its subject matter and the way in which the audit requires of the public sector auditor a
greater element of judgement and, thus, its greater capacity to generate controversy. This exibility in practice may allow the
auditors the opportunity to be selective when choosing what to disclose. Whereas the concerns of nancial audits are clearly
established and generally less contentious, the concerns of performance audits can be more difcult to either circumscribe
or isolate.
Movement of the public sector auditors into performance auditing, and therefore into the use of new languages of accountability, has brought them into the realms of contentious and contested judgement. Performance auditing questions whether
the best decisions were made in using the resources available to the Executive. Performance auditing, therefore, questions
higher level management skills, not accounting prowess. This is not to deny that an unfavourable nancial audit could also
embarrass governments and threaten ministerial careers, or that the management of programmes and the implementation
of policies by the Executive were immune from criticism from the public sector auditor. However, when the mandate of the
public sector auditor was extended to include performance auditing the nature of the public sector auditors relationship
with the Executive and, therefore, the quality of his4 independence became problematic as the public sector auditor began
to move his questioning gaze to matters of policy implementation. Performance auditing might provide greater latitude
when dealing with public secrets, if they exist, but it must also be conducted within a given, prescribed mandate which
characteristically provides for the public sector auditor a high degree of independence.
Independence is the most essential constitutional requirement if public sector auditors are to champion the public interest
by providing a powerful means by which the Executive can be held to be accountable to the legislature and to the public.
Mosher (1978, p. 235) recognises that independence in the context of public sector audit
concerns the freedom of an individual or agency from outside pressures or inuence in the reaching of its decisions
and carrying out its activities. In this sense, independence is nearly synonymous with objectivity, freedom from
hierarchical, political, special interest, personal, or other partial bias.
Without a strong, independent public sector audit function there can be no guarantee that other accountability measures
will have any value. The presence of a public sector auditor whose actions are protected by a high degree of independence
from Executive inuence has the potential to be a powerful means of monitoring the Executive and, where necessary,
exposing its actions to public criticism (Loeb, 1978, in Likierman, 1989, pp. 11920; Mosher, 1978; Normanton, 1966). For
Heinig (in Normanton, 1966, p. 402) a crucial element in the preservation of democracy is a public sector auditor who is
independent of the Executive and other interests. Pois (1981, p. 70) in his study of the United States General Accounting
Ofce (GAO), observed that there is such widespread acceptance of independence as a sine qua non of public sector audit that
there seems to be little point to engage in the academic exercise of marshalling the arguments in support of this proposition.
Thus, the independence of the public sector auditor is the essential quality of his post which guarantees the value of his

In all Anglo-American states the state auditor has been male.

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work (Levin, 1976, p. 41; Nichols and Price, 1976, p. 335). Knighton (1979, p. 6) stresses that nothing is more important in
the establishment of an audit system . . . in government than the laws enacted to secure and protect audit independence.
In the absence of independence it is claimed that the opinion and the value of the audit function itself is questionable (St.
Pierre, 1984, p. 257).
Independence for the public sector auditor is dependent upon legal and scal protections which are designed to identify
and proscribe behaviour by the Executive, or others, which could be construed as interfering with the duties of the public
sector auditor. Indeed, the public sector auditors independence in all Anglo-American jurisdictions is guaranteed by legislation. His statutory independence results from the quasi-judicial method of his appointment, remuneration and dismissal
and his powers of investigation and reporting without Executive interference or direction. At the same time, scal independence is achieved when he is free from Executive nancial control, primarily in relation to stafng matters. In 1983 when
Britain established the National Audit Ofce as a separate parliamentary body, the independence of the Comptroller and
Auditor General (C&AG) was strengthened by rstly reafrming his complete discretion in the discharge of his functions
(National Audit Act, 1983, s.1(3)) and allowing him unfettered control over his staff. Operational independence was further
strengthened by providing for a separate budget for the National Audit Ofce under the watchful and protective eye of the
Public Accounts Commission, a parliamentary body formed under the auspices of the Committee of Public Accounts, the
Comptroller and Auditor Generals proven historical ally. To conrm further the independent status of the newly corporatised
National Audit Ofce, the Comptroller and Auditor General was made an ofcer of the House of Commons.
Independence is a fragile quality, something which may be professed in the legislation but if it is not widely believed
to exist in practice then the public sector auditor is liable to be cast as a partisan participant in government. This would
seriously undermine public condence in the public sector auditor for to question the public sector auditors independence
is to question his integrity and the very institution of public sector audit itself. Hence, it is crucial for the credibility of public
sector auditors that they carry out their duties in a manner which inspires condence in the independence of their ofce
and in their individual ability to resist pressures to modify reports to ensure that they are more favourable to the Executive
or to avoid investigating politically sensitive areas (Shockley, 1981, pp. 126, 139). Recognition of this, however, is missing
from Radcliffes paper. He fails to acknowledge the fundamental requirement that public sector auditors are expected to
be independent of the Executive and that this should promote a fearless determination to protect and promote the public
interest. Radcliffe (p. 106) instead accuses public sector auditors of complicity . . . in maintaining public secrets, a feature
which has been essential to its appeal in the public sector. He, therefore, accuses not just one but all public sector auditors
of subverting their hard fought independence.
At one point Radcliffe claims, without citing any evidence beyond one of his own papers or without indicating in which
jurisdictions these might be located, that performance auditors said what they thought their audiences were ready to hear,
. . .. Certainly auditors are aware that if they are too combative with the Executive that this may have a very signicant effect
on their ability to be effective, to have their reports accepted and acted upon. However, an examination of the history of
performance auditing indicates that, while this may not be an impossibility, many auditors-general have established reputations as fearless, highly combative interrogators of government. This is clearly in evidence in the adversarial relationship
which developed between Auditors-General John Taylor in Australia and Maxwell Henderson in Canada and their respective
governments (Funnell, 1998; Henderson, 1984; Macdonell, 1980; Sinclair, 1979; Sutherland, 1980). Despite knowing the
likely consequences of their zealous commitment to executive accountability these auditors, who are far from unique, were
determined to do that which their mandate allowed them, indeed demanded of them, and not to be intimidated by possible
attacks from the Executive. They were also aware, however, that a particularly effective means of guarding against threats
to their independence which might emanate from the Executive was to avoid encroaching on the Executives exclusive right
to pronounce on matters of policy.
4. Policy, secrets and the public sector auditor
With the establishment of performance auditing the statutory concerns of the auditor were formally extended to include
government measures designed to pursue the efcient and effective implementation of policies, although the auditor was
not to question whether the objectives to which the policies were directed were appropriate. The privileged and powerful
position of the public sector auditor had been granted on the understanding that he did not comment on the goals of the
Executive. Policy was about politics and was to be taken as given (see Funnell, 1998; Guthrie and Parker, 1999). Governments
were elected and given the power to enact their policies. A constitutional pact had evolved in Anglo-American states between
the Executive and public sector audit; the public sector auditor knew that the Executive would only tolerate him as long as he
did not publicly criticise its policies. Any public sector auditor who might be tempted to interpret their mandate too exibly
and comment on policy could nd themselves publicly disciplined and attacked. Prior to performance audits this form of
Executive defence was not a recurrent feature of the relationship between the public sector auditor and the Executive. It was
not needed because, as noted earlier, the legal provisions governing nancial and compliance auditing kept the public sector
auditors work circumscribed. After confrontations with the Executive in the early days of performance auditing, subsequent
Australian public sector auditors sought to reassure governments that should any encroachments on policy occur these were
not intentional and that the auditors respected the constitutional right of elected governments to decide on matters of policy
(Australian Audit Ofce, Submission to the Independent Departmental Committee, Review of Efciency Audits, April 1982, p.
5; Steele Craik, April 1976, p. 8). Similar assurances and concerns were being voiced in Britain as the Comptroller and Auditor

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General (C&AG) grappled with value-for-money issues (Public Accounts Committee 1980, Appendix XLI, Memorandum of
the Comptroller and Auditor-General, p. 160) and in Canada by the Auditor-General (see Macdonell, 1978).
The potential for performance auditing to intrude on matters of policy was readily recognised by governments in the
United States, Canada, Britain and Australia from the 1970s when public sector auditing mandates were widened as part of
the new public management reforms. It was readily appreciated by governments that, by its very nature, without sufcient
constraints performance auditing has the potential to stray into matters of policy. Thus, concerted efforts were made when
forming the relevant legislation to ensure that this would be much less likely to happen with governments seeking to
identify as precisely as possible the reach of performance auditing (see the British National Audit Act 1983, Canadian Auditor
General Act 1987, Australian Auditor General Act 1998). The public sector auditor was to report only on the effectiveness and
efciency with which policies were implemented by executive agencies. Most especially, auditors were not to overstep their
mandate and become involved in policy effectiveness issues as opposed to administrative effectiveness (for a discussion
of this difference see Parker and Guthrie, 1991 and Glynn, 1991). These concerns, in part, account for the long gestation
period between conception and implementation of the enhanced audit mandate in most Anglo-American states, in the case
of Canada more than 15 years.
Despite the constitutional importance of public sector auditors not commenting upon and making judgements about
government policies, that is the aims and priorities of government, and the implications of this for their independence
should they do so, this is not given a presence in Radcliffes paper. Instead, he sees silence in policy matters as the public
sector auditor colluding with the Executive in keeping secrets. Nor does he recognise that should auditors exceed their
mandate in this way they are intruding upon matters which are meant to be addressed by other constitutional means, most
importantly investigations by committees appointed by the legislature. The most important investigations by legislative
committees which compliment the work of auditors-general are those conducted by standing committees such as public
accounts committees, special committees of inquiry and, in Westminster jurisdictions, royal commissions. In the United
States, congressional committees have long provided a powerful means to hold the Executive to account. The work of these
bodies is now supplemented by the work of statutory bodies such as Ombudsman and administrative appeals tribunals,
while the general public and the press are able to use freedom of information legislation to gain access to information.
Understanding the essentially complementary roles of public sector auditors and the legislature, for whom most immediately the public sector auditor works, is critical to understanding why the auditor may make certain observations which
may seem to be telling only part of the story, interpreted by Radcliffe as keeping secrets. That part of the story told by state
auditors is that part of the story which they are given the authority to discuss, according to the form of audit. In Radcliffes
paper, apart from a brief reference to the possibility of exposure by others, there is no discussion of this complementary
nature of the work of the legislature, which can be heavily reliant in its work on the reports of the public sector auditor. Thus,
it is contended here that the manner in which Radcliffe portrays the work of public sector auditors is to overly stigmatise it,
to accuse the auditors of deciencies which are neither relevant nor constitutionally valid. This can be shown with reference
to a case cited in Radcliffes paper.
As a suggested example of the tension between audit mandate, the need for performance auditors to be politically astute
and the ndings that are eventually reported by the performance auditors, Radcliffe (p. 101) refers to a conversation between
three Canadian performance auditors who were expected to audit in areas which were strongly inuenced by political
requirements. They felt constrained by political pragmatism to provide a report which was incomplete but less contentious
in its observations and recommendations. However, rather than as Radcliffe suggests this being a matter of keeping secrets,
instead it is more that the auditors recognised that they were not to intrude in matters of policy. This would certainly explain
why one auditor concluded it would have been impossible to say that . . . (p. 101). In the case cited, Canadian auditors were
discussing moving from a fee for service for doctors to a xed payment to limit their remuneration and, thus, to help ensure
that the Canadian health care system remained viable. Fundamentally this was a policy decision, not a matter for auditors to
comment upon while conducting their performance audits. It was self-editing by the auditors (p. 101) but only in the sense
of realising that performance auditors were not to stray into matters which were clearly policy concerns of government, not
that of performance auditors. It may be pragmatism but it is constitutionally legitimised pragmatism, not that which is at
the whim of a particular auditor or the circumstances. Certainly, as established earlier, if the auditors had strayed into clear
issues of policy they knew that they would become the target of attack by government. Auditors need to have more than a
knowledge of social reality garnered from newspapers, other media and legislative debates (p. 101). They must have a very
clear understanding of their constitutional mandate which determines the nature of their relationship with the Executive
and the legislature. Each has its own sphere of constitutionally and legislatively sanctioned inuence which is meant to be
respected and used to the fullest to ensure the synergistic effectiveness of the constitutional means which have evolved to
ensure the political and nancial accountability of the Executive in a liberal democracy. The importance of this enduring
characteristic of the work of public sector auditors, in concert with the sanctity of the auditors independence, was recently
conrmed yet again in a highly controversial and, for the British Government, deeply embarrassing report by the British
National Audit Ofce in late 2009.
In a performance audit report on the British Governments responses to the catastrophic failures which aficted British
banks during the world nancial crisis which began in 2008, the National Audit Ofce (NAO) disclosed to Parliament and
to the British public for the rst time that the British Government had provided more than 62 billion emergency liquidity
assistance beyond that which the government had previously disclosed (NAO 20092010; Daily Telegraph, 27 November
2009, p. B2). The NAO report revealed that the Government and the Bank of England had decided to subvert a long standing

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parliamentary convention and keep secret from Parliament this additional nancial assistance to the banks. The indemnity
provided by the Government, notes the NAO, would normally have been notied to Parliament as a contingent liability
before it was granted. Because of the considerable sensitivity of the support operation at the time, the Treasury judged that it
was not in the public interest to do so (NAO 20092010, p. 6, emphasis added). If, as assured by Radcliffe, there is a selfinterested proclivity of public sector auditors to be an active partner in maintaining secrets, to remain silent about a matter
which may create serious embarrassment or political damage to the government, then this would have surely applied to the
disturbing contents of NAOs report. The report, as noted below, also demonstrates the complimentary roles of the public
sector auditor and legislative committees in ensuring the accountability of the Executive.
That the disclosures were made by the NAO almost a year after the assistance was provided recognises that the government may have never reported the payments directly and that, possibly, only the NAOs resolute determination to carry out
its mandate without being intimidated by the predictable reaction that this would elicit from the government allowed the
information to be provided to Parliament and to the public. Contrary to the convention which required that the Treasury
inform, even if in a condential manner, the Public Accounts Committee and the parliamentary Treasury Select Committee
of the type of action taken (NAO 20092010, pp. 2021), until the NAOs disclosures the chairmen of both committees had
been unaware of the very considerable loans which were needed to ensure the survival of the Royal Bank of Scotland (RBS)
and HBOS, both of which were now effectively publicly owned. Once aware of the NAOs ndings both chairmen criticised
the government for their blatant disregard of their responsibility to be accountable to the parliament, but especially accountable for the nancial stability of the British banking system at such a critical time (Daily Telegraph, 27 November 2009, p.
B2). The chairmen also praised the NAO for not colluding with the government in maintaining the secret any longer (Daily
Telegraph, 27 November 2009, p. B2). The NAO as an independent ofce of Parliament with legislated access to all aspects of
government nances had been able to achieve on this occasion that which other constitutional bodies were prevented from
doing or unable to do. In a similar manner, the alleged silence of the performance auditors in the case of the Cleveland City
School District performance audit used by Radcliffe as the major focus of his argument could be readily seen not as keeping
a secret but as another instance of public sector auditors recognising the limits and complimentarity of their mandate.

5. Cleveland City School District performance audit

After a long period of serious nancial problems, in 1996 the Ohio Auditor of State, in conjunction with private sector
auditors, was asked to conduct a performance audit of the Cleveland City School District (CCSD). The auditors mandate for
the performance audit which came from the Ohio Legislature required that The Auditor of State shall conduct a thorough and
expedited audit of the nance of the Cleveland Public Schools . . .. The performance audit was to focus on nancial practices
and controls, to make judgements about economy and efciency (p. 109), although allowed to examine other matters. The
implication of the terms of reference was that these matters would be related to controls and nancial procedures. In a
very large report, the auditors made numerous recommendations with respect to administrative deciencies, as required by
their terms of reference and their mandate. As a criticism, Radcliffe observes that the ndings of the performance audit were
in effect a managerial diagnosis of the Cleveland Schools and contained the implicit message that if the administrative
matters were corrected that all would be well, although, as party to the public secret, the auditors knew that the causes of
the problems were far more serious.
The auditors are criticised and condemned for not referring to other, far more serious social problems which most
observers are said to have known to be the real source of the nancial problems and educational disadvantage which has
blighted the districts children. This, according to Radcliffe, has the effect of presenting its problems as essentially nancial
ones amenable to managerial resolution (p. 112). The auditors know that updating CCSDs mainframe computers will not
alleviate the crushing poverty . . . and other burdens that Clevelands children face. But they know that they cannot say it,
least of all in an audit report to the Ohio Legislature. Yet, this is exactly what the terms of reference for the performance
audit required, irrespective that the real reasons for the problems experienced may be so disastrous and corrosive as to
make the auditors report an almost laughably futile response. Radcliffe concludes that as a result, the truth value of audit
ndings in areas marked by public secrecy is questionable (p. 122).
Certainly, as suggested by Radcliffe, the new public management has provided governments with the ability to dene
political problems as business problems (p. 107), thereby allowing governments to avoid the political consequences and
questioning of potentially embarrassing decisions. However, this is not the same thing as saying, as Radcliffe does, that in
every case auditors are colluding in creating this equivalence, that they see it as a good thing to collude and play by the
governments rules. It may simply mean that when the auditors carry out their work they have no choice but to evaluate
what they see as a business type problem. Performance auditing, as noted above, may be broad and sometimes uncertain
in its compass but its subject matter and objectives are normally well stated. Without any contrivance on the part of the
public sector auditor, better management techniques may indeed be the solution to the specic aspect of performance that
the auditors examine and criticise. As established earlier, at a much higher level of governance, certainly there may be the
opportunity to question the very programmes, and hence policy, in which the practices are carried out and which may have
caused the programme to be delivered in a costly, inefcient, poorly managed manner. However, by denition, these are
policy issues and the concern of the Executive and Parliament. They are not the explicit concern of a performance audit. To
move beyond the mandate of the auditor, to act ultra vires, would not be an option. Further, as noted above earlier, that the

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auditors report did not have to be the only response to the problems experienced and their causes or a response that would
silence other possible responses.
If the problems in the Cleveland City School District were so great, it is inconceivable that opposition members of the
legislature and legislative committees or the hawkish scrutiny of the press had not already highlighted the real source
of the problems; racial and economic disadvantage. They, and others, had a political interest in drawing attention to the
very signicant problems which underlay the nancial disadvantage of the schools. Radcliffe (p. 113) does recognise that
the extent of the problems were well known to politicians and auditors, having been identied in countless reports and
experienced in daily life, although auditing, concludes Radcliffe, does not provide a space for the expression of these truths.
6. Conclusion
Public sector auditors form part of an array of constitutional mechanisms which have developed to ensure that governments are made to be accountable for their actions. Unlike governments and legislatures, public sector auditors are provided
with the legislative authority to conduct audits with a high degree of independence or freedom from of government interference. Their independence is meant to ensure that they will be able to protect and further the public interest, to be the
means by which the legislature as the elected representatives of the people is provided with the means to hold the Executive
accountable. The independence of the auditor does not mean that no consideration is given to the impact that their work will
have on the government. However, to suggest as does Radcliffe, that the auditor is prepared habitually and consciously to
misrepresent matters under investigation to ensure that their ndings may be more palatable to government misrepresents
the extent to which this may be a consideration of the auditor. It also fails to recognise that the auditors mandate is not
unbounded, that each type of audit is to be conducted within given terms of reference consistent with the auditors mandate.
This may mean, as in the case of performance audits, that only certain matters are examined and are found in the auditors
reports. To say that some matters are excluded from the report when they are patently of some signicance and effect is
not, as Radcliffe suggests, the same as the auditor becoming party to a well known but unexpressed secret. The reality is
that these things, while known, may not be that which the performance auditor has a responsibility or the authority to
comment upon. This is especially so when they are matters of policy, matters which are the democratic right of the elected
government to determine not an unelected public servant.
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