New PwC Report Offers Insights and Optimism for Internal Audit’s Future
September 20, 20234 Reasons They Still Cringe When the Internal Auditors are Coming
October 4, 2023Over the years, I have weighed in often on behalf of municipal/local government internal auditors who have been victims of the wrath of bureaucrats or politicians. I’ve long asserted that auditing in government requires navigating the “theater of politics.” Sadly, the stage at the local level tends to specialize in melodrama. I have called out retaliation against government auditors in Florida, Texas, Arizona and Tennessee, to name a few. The latest city where oversight has gone to die appears to be Jackson, Miss. (population 150,000).
Capturing my attention was a strange news report with the headline, “Jackson’s Internal Audit Division Disbanded.” I wanted to learn more, but the further I read, the more mysterious the story became. According to news reports, Jackson’s internal audit function ceased to exist after the mayor’s administration failed to present a budget to the City Council for approval. My first thought was that an administrative error must have occurred; someone simply forgot to include internal audit when the city’s budget went forward.
But the story took on a more ominous tone with this quote from the City Council’s president: “Last Thursday, someone in administration on the executive side made the decision to lock them (the internal auditors) out of their computers and to lock them out of their computers where they still were employed by the executive branch, and that to me rings bells because that means there’s the hiding of information.”
It is safe to say the City Council was not amused by what they felt was an effort to keep them from learning more about operations in the city. They immediately hired the four internal auditors as Chief Deputy Clerks, reporting to the City Council.
Good for them, but this story is still troubling on so many levels. Jackson, like many American cities, is in dire need of the kind of effective oversight that an internal audit function can bring. Over the summer, a federal judge issued an order transferring Jackson’s “deteriorating sewer infrastructure and inadequate operation and maintenance” under third-party management. That followed a similar action over the city’s drinking water system last year.
This hardly sounds like a city that should be defunding its internal audit function. While I applaud the City Council for hiring back the internal auditors, I would urge them (within constraints of the law) to reconstitute the internal audit division – not have internal auditors serve as “Chief Deputy Clerks.”
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