Performance auditing and performance improvement in government: public sector management reform, changing accountabilities and the role of performance audit
Public expenditure crises of the 1970s and 1980s led many governments to:
- firstly, enforce stricter financial climates that included the use of cash limits and cash planning to motivate public servants towards greater economy and efficiency; and
- secondly, to introduce a series of other reforms that gave pre-eminence to what has become colloquially termed the “new public management” (NPM).
Key to many of these reforms was the belief that NPM would lead to more publicly accountable management and that limited resources would not only be used more efficiently but also more effectively in terms of intended policy objectives. During the same period, but often in advance of progress towards NPM, many national audit agencies moved into what has come to be termed performance auditing. Interestingly, much of the motivation for expanding this audit mandate was supplier driven (i.e. by the audit agency itself) rather than demand driven (i.e. by government and/or parliament). There were of course some exceptions to this general trend but where the mandate was demand driven it was generally more restrictive than when supplier driven.