National Audit Office Research Articles

New development: Great expectations—whole of government accounting: An Australian perspective of its adoption, development and future use in the current environment

IMPACT While this article focuses on the Australian experience (federal and state levels), the issues/suggestions are relevant to countries that have adopted Whole of Government Accounting (WGA) or are considering doing so. A major issue is to encourage greater attention by, and involvement of, the parliament and its committees in reviewing and examining the outcomes as an important element of accountability to the general public for the use of the resources and to show trends over time. While there has been a greater focus on individual programme performance over recent years, the WGA have rated little discussion, let alone examination and questioning. For example, the finance commentary on the latest consolidated financial statements is largely a statistical examination, not an identification /analysis, of issues of concern nor of necessary action to improve financial performance. A recent initiative taken by the Australian government and the Australian National Audit Office (ANAO) is the conduct of audits of agencies’ annual performance statements. No doubt a catalyst has been the unprecedented financial difficulties being experienced by governments.

Analyzing Vulnerabilities of Disaster Risk Management Systems of Local Governments in South Korea: Evidence from National Audit Office Reports

The capacity of local governments to act as frontline disaster management agencies is crucial to urban sustainability and disaster risk management systems. However, vulnerabilities in the management systems can hinder the effectiveness of disaster risk management, affecting the resilience and sustainable development of urban areas. This study examines vulnerable areas of disaster risk management from a practical perspective, based on audit findings conducted by the Board of Audit and Inspection (BAI). The stages of disaster risk management are classified as prevention, preparedness, response, and recovery. The disaster risk management activities that local governments should undertake at each stage have been identified and summarized. The vulnerabilities and associated cases related to disaster risk management were comprehensively analyzed by compiling the results of local government disaster risk management audits conducted after 2015. This study revealed vulnerabilities in areas such as disaster management funds, prevention facilities, safety inspections, forecasting and warning systems, and resident evacuation, all of which are integral to maintaining urban sustainability. To avoid the recurrence of these issues, this study suggests that local governments should develop and implement improvement measures for each vulnerable area. The findings of this study can serve as valuable guidelines for local governments on ways to enhance their disaster risk management systems.

Challenges Faced by Arts Graduates in the Current Job Market: A Sri Lankan Perspective

Unemployment is a major issue for arts graduates in various countries, including Sri Lanka. In 2023, the Labor Force Survey reported an overall unemployment rate of 4.7%, with over 50,000 unemployed graduates, mostly from Arts and social sciences backgrounds in Sri Lanka. Therefore, the Sri Lankan government should develop appropriate policies to reduce unemployment. Consequently, research is needed to identify the factors and challenges faced by arts graduates in unemployment for policymakers. Numerous studies worldwide have explored the factors and challenges of unemployment among this group. The main objective of this study is to identify the challenges faced by arts graduates in the current Job market in Sri Lanka and to identify the causes of unemployment and propose recommendations to them. Quantitative research method was used to achieve the objectives of the study, the primary data were collected through a structured questionnaire administered to 120 Arts undergraduates from the South Eastern, Eastern, Peradeniya, and Jaffna Universities. Simultaneously, secondary data were gathered from books, research articles, University Grant Commission report, National Audit Office report, Sri Lanka Labor Force Survey report, and websites. The collected data was analyzed using Microsoft Excel. The study found that major challenges for Arts graduates include abundant job opportunities in the private sector. However, issues such as the necessary knowledge and skills often lead to prolonged unemployment. Many Arts graduates anticipate government jobs due to the perceived job security and pension benefits in the public sector. Simultaneously, Arts stream graduates who have completed professional courses and internship training are more likely to secure their first jobs immediately after graduation compared to those who haven't undergone such training. Nevertheless, a significant challenge is the limited employment opportunities for Arts graduates, both in the private and public sectors. The study indicates the necessity for substantial structural reforms on both the supply and demand sides to enhance the employability and employment rates of graduates. The government must take a leading role in these reforms to generate more job opportunities for arts graduates, while higher education institutes should initiate significant changes in study programs to cultivate intellectually rich and highly skilled graduates in arts and social sciences.

“2020 ОНЫ УЛСЫН ИХ ХУРЛЫН СОНГУУЛЬД НЭР ДЭВШИГЧДИЙН САНХҮҮГИЙН ЗАРЦУУЛАЛТАД ХИЙСЭН ШИНЖИЛГЭЭ”

Within the frame of this article, the authors aimed to clarify the relationship between the financial reports, financing structure, and cost comparison of the candidates in Ulaanbaatar by analyzing the financial reports of the candidates for the 2020 election of the State Great Khural issued by the National Audit Office. Additionally, the study involves analyzing the reports of candidates from the Mongolian People's Party (MPP), Democratic Party (DP), and National Labor Party (NLP) currently serving in Mongolian Parliament. The comparison includes examining public and local funds, elucidating spending differences and characteristics, and clarifying the impact of changes in election laws on candidate costs.

Do anticipated government environmental audits improve firm productivity? Evidence from China

We investigate the impacts of anticipated government environmental audits (GEAs) on firm productivity. We use a 2009 policy set forth by China's National Audit Office that required GEAs of local governments as an exogenous event to examine the effect of the policy announcement on firms’ total factor productivity (TFP). Our difference-in-differences tests indicate that TFP in heavily polluting firms improved more than other firms’ TFP after the announcement of the policy. We also find that to raise TFP, firms engage in green invention patents or receive government environmental subsidies. In addition, our cross-sectional analysis suggests that firms in regions where governments have strong environmental enforcement or that are in the eastern regions of China increase TFP more.

Prerequisites and practice of introducing integrated systems of medical care in England

The introduction of new conceptual approaches to public health protection is a trend of public health reform in Russia and European countries. The success of the implementation of public health policy in Russia depends both on the development of their own ideas and their implementation, on the study and use of the experience of foreign countries. For example, in England in the last decade, as part of the reform of the public health system, the idea of creating integrated medical care systems (ICS) has been actively developing and the experience of its implementation is of practical interest for Russian healthcare. 
 Goal. To study the experience of England in implementing integrated medical care systems and analyze the possibility of using its individual elements in Russia. 
 Materials and methods. The study was conducted on the basis of a comprehensive study of open reporting data of the Department of Health and Social Security of England, the National Health Service and the National Audit Office of England (NAO), as well as scientific reports on integrated public health management systems. 
 Results. The development of integrated public health management systems being a trend in world practice, contributes to the improvement of public health indicators. The study of the experience of implementing ICS in England showed the presence of a number of risks during its implementation.
 Limitations. When conducting research, there were no restrictions that could influence the preparation of the article.
 Conclusions. Dissatisfaction with the level of management and financing of the healthcare system in England served as an impetus for the start of reforms that contribute to improving the management of medical care to the population, and the introduction of integrated medical care systems. The analysis of the NAO auditors revealed the main risks of the success of the ICS implementation. Studying the experience of implementing ICS is useful for use in the implementation of Russian national projects in the field of healthcare and demography.

A national data linkage study to assess the extent, nature and outcomes of serious and organised crime prosecuted before the criminal courts in England and Wales

ObjectivesThe social and economic costs associated with serious and organised crime (SOC) are considerable: recently estimated by the National Audit Office to be £37 billion annually. Despite this, we know little about the extent and nature of SOC being prosecuted before the courts, or the outcomes associated with these cases.
 MethodsSecondary analysis of over 12.6 million linked, individual-level, de-identified records from the Data First initiative relating to the criminal courts and prison system in England and Wales (E&W) over an eight-year period (2013-2020).
 ResultsThis unique study provides estimates for the rate and volumes of SOC appearing before the Crown Court in E&W and describes the characteristics of the defendants charged with these offences, and their associated outcomes. Using a comparative design, the study also assessed the severity and geographic distribution of offending associated with SOC; the extent to which prosecutions were discontinued, dismissed, or resulted in an acquittal (and the factors most predictive of this outcome); and the rate and frequency of reappearances before the criminal courts over time.
 ConclusionThe findings contribute towards enhancing government and law enforcement resilience in this area by developing a better understanding of SOC and the effectiveness of responses to it. This evidence informs key Ministry of Justice priorities linked to the effective and efficient delivery of justice and upholding the rule of law.

Government audit supervision and enterprise mergers and acquisitions

ABSTRACT As an important part of the national political system, government audits play a significant role in supervising and restricting enterprises. Since 2010, the National Audit Office of China has repeatedly disclosed the problems regarding enterprises’ M&A to prevent the loss of state-owned assets. This study takes listed companies controlled by the central enterprises of A-shares from 2008 to 2018 as a sample to investigate the impact of government audit supervision on M&A. We find that government audit supervision reduces the number and scale of M&As. Further research shows that government audits can reduce enterprises’ M&A premiums and affect payment methods. Finally, government audits significantly improve the short- and long-term performance of M&As. These findings show that Chinese government audits positively affect corporate governance, curbing M&As that damage enterprise interests. This study provides micro-level evidence of the governance effect of government audits on the scientific decision-making of enterprises.

Can the rotation of chief accountants improve the accounting information quality of state-owned enterprises?

ABSTRACT This paper attempts to study the effect of the rotation of chief accountants of central SOEs. It is found that the rotation of chief accountants can improve the accounting information quality of SOEs. Mechanism analyses indicate that the above result is weakened when the tenure of chief accountants is long or after central SOEs carry out the pilot of establishing a standardised board or are audited by the National Audit Office. When further considering the types of rotation, the above result is only reflected when chief accountants come from SOEs in different industries or different cities or chief accountants are promoted. Economic consequence analyses indicate that the rotation of chief accountants alleviates the problem of over-investment and excess perks in SOEs by improving accounting information quality. In summary, the rotation of chief accountants can enhance their independence to improve the governance of SOEs and prevent the loss of state-owned assets.

Cohort profile: The South London Stroke Register – a population-based register measuring the incidence and outcomes of stroke

PurposeThe South London Stroke Register (SLSR) is a population-based cohort study, which was established in 1995 to study the causes, incidence, and outcomes of stroke. The SLSR aims to estimate incidence, and acute and long term needs in a multi-ethnic inner-city population, with follow-up durations for some participants exceeding 20 years. ParticipantsThe SLSR aims to recruit residents of a defined area within Lambeth and Southwark who experience a first stroke. More than 7700 people have been registered since inception, and >2750 people continue to be followed up. At the 2011 census, the source population was 357,308. Findings to dateThe SLSR was instrumental in highlighting the inequalities in risk and outcomes in the UK, and demonstrating the dramatic improvements in care quality and outcomes in recent decades. Data from the SLSR informed the UK National Audit Office in its 2005 report criticising the poor state of stroke care in England. For people living in the SLSR area the likelihood of being treated in a stroke unit increased from 19% in 1995–7 to 75% in 2007–9. The SLSR has investigated health inequalities in stroke incidence and outcome. SLSR analyses have demonstrated that lower socioeconomic status was associated with poorer outcome, and that Black people and younger people have not experienced the same improvements in stroke incidence as other groups. Future plansAs part of an NIHR Programme Grant for Applied Research, from April 2022 the SLSR has expanded to recruit ICD-11 defined stroke (including those with <24 h symptoms where there are neuroimaging findings), and have expanded the follow up interviews to collect more detailed information on quality of life, cognition, and care needs. Additional data items will be added over the Programme based on feedback from patients and other stakeholders.

Figures fighting figures – unpacking state authority's mis/trust in PISA statistics

ABSTRACT How can we understand the uncertainties in high-stake measures such as PISA in relation to the claims that different authorities make from them? In this paper, we use a rather remarkable case from Sweden involving conflicting interpretations of the PISA 2018 results at a national political level and a fight over statistics between two national agencies: National Agency for Education and the National Audit Office. The aim of this paper is to unpack processes of interpretations and claims that are often black-boxed in PISA debates: How can we understand the process that led up to the fight and what followed? Our data consist of media articles, broadcasts from the national television and radio (2018–2021), reports and memos from the two-state authorities involved in this debate, and email conversations between the two. Our results stress the need for further transparency in how PISA data are collected and calculated.

Probity or performance? 150 years of public expenditure reform, UK Defence 1850-2000

PurposeThis paper analyses public sector accounting and organisation reforms, focusing on the departments in charge of defence, military procurement and war between 1850 and 2000 in Britain. Over this period, three parliamentary acts, resulting from a power struggle between the Treasury and Parliament, produced the shift between two institutional logics: probity (spending properly) and performance (spending well). The purpose of this paper is to describe how the acts produced a shift between two institutional logics.Design/methodology/approachThe authors adopt Quattrone’s (2015) procedural notion of institutional logics and the consequent concept of “unfolding rationality”. Using documents from the National Archives, the authors analyse three reforms: The Exchequer and Audit Departments Act 1866 (towards probity), The Exchequer and Audit Departments Act 1921 (towards performance) and the National Audit Office Act of 1983 (towards performance and probity).FindingsFor a long time, the actors narrated in this story argued and acted as if probity and performance were incompatible. The two are now treated as compatible and equally important. Before that, the “incompatibility” was a rhetorical, or “procedural”, device. The authors argue that a procedural rather than substantive notion of institutional logics is more suitable to explain the trajectory that was the result of constant negotiation among actors.Practical implicationsThe study might contribute to the understanding of the increase in national defence-spending at continental level and the call for a common European Union (EU) military procurement strategy that followed the invasion of Ukraine. The war could produce changes in what is a traditional tension between two logics: sovereignty or efficiency.Originality/valueThe originality of this paper stands in highlighting the link between the institutional logic of public-administration accounting and military history. This link emerges also thanks to a very long time-horizon. Additionally, from a theoretical viewpoint, the authors have put Quattrone’s approach to the test in a context very different from the original one (the Jesuit order).

Research on Internal Audit Informatization Construction of J Company in Big Data Environment

In the new era, the Party and the state have entrusted new missions to internal audit. National Audit Office and General Secretary Xi has successively put forward the initiatives of "actively promoting big data audit" and "insisting on strengthening audit through science and technology and strengthening audit information construction". At the same time, the operation and management of modern enterprises often rely on the Internet, cloud computing and other high-tech means. Therefore, it is the main trend in the process of audit informatization to apply big data thinking, combine informatization means, integrate and develop computer audit, and promote the transformation and development of internal audit. This paper selects J Company, a representative company in the process of building an internal audit information system under the big data environment, as the research object, to comprehensively explore the problem of insufficient matching between the enterprise's current audit mode and development management, and based on the enterprise's information environment, according to the national big data strategy and the specific requirements of the enterprise in the field of audit information work, put forward practical suggestions and plans.

How does the portrayal of civilian teacher training schemes affect the appeal of them for military personnel?

ABSTRACT The dominant public discourse regarding the recruitment and retention of teachers is one that is often framed in terms such as ‘crisis’. Data from the Department for Education, the National Audit Office and bodies such as the Education and Training Foundation highlight challenges in filling vacancies across each part of the education sector. This is particularly acute in subject areas relating to Science, Engineering and Technology (SET). This paper analyses discourses relating to teacher training amongst tri-service personnel in the English context. Sources from publications such as FE Week and CTP (Career Transition Partnership) are addressed. In doing so, the paper compares educational and military sources in order to examine how the representation of a civilian teaching career varies between the two. This is about adding to the wider societal narrative regarding the ways in which military to civilian transition can be aided by the reframing of skills and experience acquired during military service.

The impact of the Auditor General on public administration control

This scientific paper aims to analyse the role and contribution of the Auditor General in the exercise of control in the public administration in Kosovo. The Auditor General, as an independent and impartial institution, plays a decisive role in ensuring transparency, accountability, and efficiency in the management of public resources (Assembly of the Republic of Kosovo, 2016, Article 4). In addition, the impact of the Auditor General’s reports and recommendations on improving governance, increasing public trust, and promoting effective decision-making within the public sector has also been discussed. The research methodology includes a combination of quantitative and analytical approaches to concrete actions by the Auditor General and the National Audit Office (NAO) in Kosovo. The paper identifies the main challenges and problems that affect the efficiency and effectiveness of public auditing, such as the lack of human and financial resources, political interference, non-implementation of audit recommendations, and the like. The paper concludes that the Auditor General plays an essential role in the exercise of control intending to improve the condition of the institutions and their employees as well as ensure transparency and accountability of the public administration in Kosovo, but it needs support and respect from the stakeholders to achieve its objectives.

Одитни мнения в публичния сектор – същност и видове

In order to reach the statement of an audit opinion, it is necessary to perform various activities that serve as a guarantor, so that the audited organization carries out its activities in accordance with the legal and by-law requirements and the general framework for financial reporting. The main purpose of the article is to clarify the nature and types of audit opinions expressed by the National Audit Office of Bulgaria for the period 2005–2020. The main conclusion reached is that public sector organizations should improve their internal control environment, which would help accounting.

The Effect of Air Pollution Control Auditing on Reducing Carbon Emissions: Evidence from China.

Analyzing the carbon-emission-reduction mechanism from the perspective of air pollution control auditing is of great practical significance for China to implement the dual-carbon strategy. Based on the panel data of 30 Chinese provinces from 2004 to 2018, we examine whether and how the auditing of air pollution control has an impact on carbon emission reduction by using multiple regression method and the mediating analysis. Our analyses show that air pollution control auditing can significantly restrain carbon emissions but has no impact on carbon emission intensity. Further research suggests that (1) the bottom-up audit represented by local audit institutions is more effective than the top-down audit represented by the National Audit Office; (2) air pollution control auditing follows a simple and direct method to curb carbon emissions by output reduction, regulation, and shutdown, rather than promoting technological progress and green transformation of enterprises in a high-quality development mode. Those findings provide an improvement direction for air pollution control auditing to contribute to carbon emission reduction and supply relevant policy references for implementing the dual carbon strategy.

Rationale of Establishing Public Accounts Committees: A Critical Review of Literature

According to the UK Parliament, “The Public Accounts Committee examines the value for money of Government projects, programmes, and service delivery. Drawing on the work of the National Audit Office the Committee holds government officials to account for the economy, efficiency, and effectiveness of public spending.” Therefore, the purpose of this study is to provide the background information on the creating of Public Accounts Committees (Parliament). The paper further attempts to cover issues relating to external audit and legislative scrutiny. The paradigm for the Public Accounts Committees is also covered in this article. In this article, a critical review of literature has been used as a methodology. The key literature reviewed is from Google Scholar and EbscoHost, Researchgate, and other scholarly databases. Further, websites for some Parliaments and associations for parliaments across the globe have been an invaluable source of information on this subject. From the literature that has been reviewed it can be concluded that both Public Accounts Committees (PACs) and Auditors General can help to attract Foreign Direct Investment (FDI) or international capital investment to a country by providing assurances on the integrity of public sector finances, especially if challenges faced in building their capacity and performing their functions can be overcome. Keywords: Public Accounts Committee (PAC), Auditor General’s Office, Legislative Scrutiny DOI: 10.7176/PPAR/12-6-03 Publication date: August 31 st 2022

Contrasting Perceptions of Construction Managers and Project Managers Around Failure in Light of Morris and Geraldi’s Institutional Context

In their 2011 paper titled “Managing the Institutional Context for Projects” Morris and Geraldi raised the importance of the institutional context in the management of projects. Building on that, this study proposes the conceptualisation and understanding of project-related failure and success through an institutional perspective. This is based on an understanding that projects are distinctive, time-constrained, undertakings meant to generate benefits for all associated stakeholders whose perception of failure varies. Yet, little attention has been given to explaining how such perception is influenced by underlying institutional contexts. Therefore, the aim of the study was to examine the knowledge base for contrasting perspectives of project managers and construction managers around project-related failure in light of the institutional perspectives. To do this, a systematic literature review (SLR) approach was adopted. The first finding of note from this SLR is the dominance of interest in and from the UK Construction Industry (UKCI). This may be attributed to the culture and structure of the UKCI driven by the autonomy and authority of organisations such as the National Audit Office (NAO). The findings further reveal that in the general Project Management (PM) literature, considerations of failure are more introspective and discussed more in terms of project outputs with the causes associated with project management limitations. Considering the three levels discussed by Morris and Geraldi (2011) the PM perspective of failure and success can be associated with the technical level of analysis of project outputs. In contrast, the Construction Management (CM) literature focuses predominantly on specific failures, and on external failures. Causes are more attributed to profitability and the wider supply chain and this can be associated with Morris’s strategic level focus on effectiveness and value. The results from this study call for a systemic approach by heeding the call of Prof. Peter Morris to consider the institutional context level in the perception and analysis of failure instead of solely focusing on output or technical level parameters of time cost and quality.

Contribution of Internal Audits on the Effectiveness of Procurement Assignments in Tanzania’s Local Government Authorities (LGAs)

The paper assesses internal audit effects on procurement in Local Government Authorities (LGAs). The data is from a structured questionnaire to 241 respondents from LGAs, Public Procurement Regulatory Authorities (PPRA), Internal Audit General office and the National Audit office. The study uses exploratory factor and multiple regression methods to analyse the data using STATA programme and finds that internal audit competencies, procedure and independence affect positively the contribution of internal audit to procurement by LGAs. Thus, the study recommends that internal auditors be exposed to different audit environments and implement strictly the Public Procurement Act (PPA). Employers should employ auditors with various skills. Auditors should know the procedure in PPA and the procurement cycle, which the entities have to follow. Lastly, authorities should enforce the auditors’ independence through providing sufficient resources for the internal audit functions, ensure the audit units access all information and discourage political interference in auditors’ work.