John Olsrud: Is There Such A Thing As Too Many Audits?


Judging from some articles and comments from readers, followers on this blog seem to think many of our problems could be solved by requiring more audits of governmental entities. More audits seem to be the easy answer whenever problems are perceived, especially in higher education. Now that the University System auditors have been moved to the State Auditor’s office, the issue of audits within the system is getting more attention than ever.

Remember Hamid Shirvani, the former chancellor of higher education who wanted 30 more auditors for the University System? If more auditors are the answer, why not hire 60 more, or 90? The question is, how many auditors are needed to make the system better? Are more audits and auditors the answer?

[mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#000000″ txt_color=”#ffffff”]If we want to reduce administrative costs, we need to find ways to accomplish that goal, and asking for more audits is often counterproductive to that end.[/mks_pullquote]

Please understand I know there are times when additional audits are necessary, especially when irregularities are uncovered or suspected. There also should be no dispute that recommendations contained in audit reports need to be addressed, which appears to be a problem. But there needs to be a balance. If we are trying to streamline the bureaucracy in higher education and trying to reduce, not increase, administrative costs, we need to take a good look at what we are asking for. Audits are expensive, and people involved in audits are not teaching our students—they are in the back rooms writing memos to each other and adding to the cost of government. Every audit not only takes the time of the people performing the audits, but they require countless hours on the part of the people being audited.

Performance audits are even more expensive than regular audits. Performance audits require the preparation of countless reports and reviews, which take enormous amounts of time and resources to prepare. All the time and resources that go into fulfilling the demands of the auditors means time and resources not available to fulfill the mission of the entity being audited. Performance audits often find accounting deficiencies that require, you guessed it, more accountants to correct. Then, after the agency has hired a roomful of additional accountants, the agency needs more human resources staff to make sure those new accountants’ personnel files are appropriately documented to assure the agency is prepared for the next audit.

Shirvani’s request for 30 more auditors was in response to the problems at Dickinson State University, where a former president played games to enhance student numbers at that institution. Maybe instead of more auditors, the answer lies in better protection for those employees who must have known something was wrong but feared for their jobs if they were not loyal to their president.

Perhaps protecting whistleblowers is just part of the solution, but hopefully we can look for answers other than hiring more people to perform administrative tasks in the back rooms of our institutions of higher education.

Based on my experience with this blog, I will be accused of being just another bureaucrat defending the status quo and opposing accountability. That is not a good reading of what I am saying. I just think this is a good time to raise the issue. If we want to reduce administrative costs, we need to find ways to accomplish that goal, and asking for more audits is often counterproductive to that end.