Public Auditing in the Delegated Sphere – Implications for Governance

Abstract

Contemporary public services are regularly delivered by a broad range of decentralized providers across the public, private, and non-profit sectors. In these fragmented settings of ‘delegated’ governance, central administrative overview and accountability have become increasingly elusive objectives. Public audit institutions, on the other hand, occupy a unique position at the nexus of central administrative units and decentralized service providers. Our work addresses the often-underestimated role that public auditing plays in such organizational arrangements by unpacking how administrative units respond to audits that identify performance and coordination issues in the delivery of public services. Empirically, we examine survey data from organizations audited by the City of Vienna Court of Audit. We find that audits indeed make administrative units (re-)act – but also talk and listen to service providers. Thus, audits strengthen central administrative accountability and lead to (re-)engagement and improved relationship management in settings of delegated governance.