Performance audits as an art, not a science – an interview with Margaret Crawford, NSW Auditor-Gener
First published in The Mandarin in this interview I catch up with Margaret Crawford, the NSW Auditor-General. We talk about insights from her own career, international innovation in performance audits and the upcoming International Meeting of Performance Audit Critical Thinkers (IMPACT) in March.
Hi Margaret, thanks for making the time to talk today. You have an interesting background in that you have worked across all three levels of government — for the Brisbane City Council, at a senior level for departments in both Victoria and NSW and a stint as chief operating officer for the ATO.
Yes, that’s right. I don’t think it’s very typical for an auditor-general but it’s quite useful because working at those different levels across four states and territories and in really different sectors means that when I do any sort of audit I have some familiarity with the subject matter. I find that really helpful.
So you see that variety as a real asset you bring to the job?
I think it is. When I was approached to consider the role my first reaction was … wait a minute, I’m not an accountant, but then I stopped and thought about it. What I do have is a practitioner’s view of what it’s like to work in public sector management. That’s what I bring to the role. And there are plenty of other people in this organisation who are very good accountants, so I get support in that area as well.
My approach to the role is to be always looking at what we are doing from the other side and how our work can really make a difference.
How do you think most public servants feel when they hear the word “audit’”
When I hear that question I immediately put myself back into how I felt when I was an operational manager. The first reaction is probably a bit of fear, thinking am I going to get caught out for something or “why did they pick on me?” Once you get over that, most good public servants and senior people tend to say: OK what’s the opportunity I can take from an objective, independent assessment of whatever I am working on … how can I get the best out of this?
As Auditor-General, I approach audits from the same perspective. How do we get the best outcomes? Are there commonalities or themes we can take from an audit that might help people more broadly? What are the opportunities for everyone to do better in the future? What are some of the hardest people and culture challenges you have faced across your career?
I’ve been around for a while now so there’s an awful lot. But the one thing that has driven me crazy, probably since the very first day I ever walked into a job in government, is the acceptance of “this is how we do things around here” and people’s lack of preparedness to break out of that.
Public servants can get caught up in accepted practice rather than questioning “is this the right way to get the right outcome?” If we could all just ask that question instead of trying to second guess a minister, or believe that this is the way we do things around here. People taking the accepted state for granted; that’s been the biggest challenge I have had all through my career.
What are your thoughts on the future direction of performance audits?
Fundamentally, a performance audit will always be a performance audit. But for me it’s all about staying relevant. How do we make sure that we focus on the right things and provide the kind of insights I talked about before, the ones that question accepted practice and achieve better outcomes. The bottom line is, it’s got to respond to and reflect the changing nature of government. So, as government changes what it does or how it does things, we have to keep pace. What a performance audit shouldn’t do is get in the road. It should support rather than stifle innovation.
How often do you think performance audits actually get in the road? There’s always that risk. Because auditors do tend to get disconnected from the day-to-day workings of agencies. This happens because of independence issues and also the fact that agencies try to keep us at arm’s length. That can then lead to auditors falling back on what they know. If you are not connected, there is a risk of recommending the “stock-standard” approach. For example, more central control rather than assurance over devolved processes. What specific challenges have you faced as Auditor General in the performance-audit area? The biggest one is how to make sure we understand the business of government. How can we be close to it but still protecting independence and objectivity? Getting that balance right is really tricky.
The reason I think we have to stay close and be connected is because we have to get our facts right. If we don’t get that right, our judgements and conclusions are never going to be right. The only way to get your facts right is to really understand what is going on and that means having good access to information and cooperation from the agency you’re auditing. If you lose that then we come up with suggestions and recommendations that don’t hit the mark.
How do you do that? How do you stay close and maintain that objectivity? Is there a protocol or approach, or do you have to audit yourself at times?
Independence and objectivity are critical to a good audit. You can’t allow yourself to be captured. But I am reminded of sage advice Graeme Head (the former NSW Public Service Commissioner) gave to me at the very beginning of my appointment. He said independence doesn’t mean you have to be aloof or to cut yourself off from everything that is going on in the sector. So I continue to attend events and really reach out to colleagues across the sector to find out what is going on and to keep up to date.
At the same time if there is any potential conflict, that has to be declared. For instance in my case, because I worked in Family and Community Services, I had to separate myself from those audits for a number of years.
What are some of the emerging opportunities in the field of performance audit?
Performance audit is a very broad discipline and there are any number of great examples of innovation in practice, both here and overseas, so we must keep looking outward and try to learn from the work of others. For example in India, they are doing some really interesting work around gender inequity. In Canada, they are doing some audits in relation to their first nations peoples. These are areas where we can learn how they are approaching those audits and how we could adopt new approaches. This comes from staying connected to that big global network of auditors.
Opportunities also arise from new technologies and data, explicitly, using big data to help identify areas of focus and provide greater insights in any of the audits that we do. Analysis of data may reveal areas that we might otherwise miss. It helps you target issues for further exploration.
We are still at the very beginning of trying to use big data more effectively and, again, we are trying to do that in partnership. Here in NSW we are working with the Data Analytical Centre. They collect source data from different agencies and analyse this to see if they can find new approaches to “wicked” problems. We have similar interests so we approached them in one of our recent audits to see if we could work with them to use their data (with the agencies’ approval) to get better insights in our audit.
Apart from these broader opportunities what’s your personal focus going forward with your performance-audit program?
What I have learnt is that developing a performance audit program is very much an art, not a science. Everyone says, why did you choose that topic, not something else? We start developing the program through a lot of consultation. I’m always checking in with people asking where should we be focusing our efforts. I go out and speak to all secretaries of clusters and with the heads of independent agencies like ICAC and the Ombudsman. I’m always looking at where is the public interest and where are the big areas of risk. For example, in light of the investment the NSW government is making in new infrastructure, that is clearly an area of focus for our current performance-audit program.
I also look at themes in public-sector management like co-design, citizen engagement, using data, commissioning or working with others to deliver services and whole of government approaches. We try and pull all of that together to produce an annual program of around 18 to 20 performance audits. It’s a rolling, three-year program where we give people some advance warning of our areas of focus but we usually only lock in 12 months at a time. We are not the tabloid press so we don’t just go for the sensational. We are trying to make a difference and support good practice in government. It’s definitely an art!
Can you tell me a bit about the International Meeting of Performance Audit Critical Thinkers (IMPACT) conference that you are hosting on March 19-20?
New South Wales is hosting the conference on behalf of The Australian Council of Auditors General (ACAG). It’s a biannual event and it’s the perfect opportunity to really bring together all the things we have been talking about today. What are the changes in government and what are they going to be doing in the future and how, and therefore, how does performance audit keep pace with that, reflect that and be responsive to those changes?
We have a fantastic line-up of speakers who can really talk to issues relevant to the future of government and a lot of people who are going to be thinking through how we respond to that and stay relevant. If you want to hear interviews with prominent thinkers on People and Culture issues, you might want to check out my podcast.