THREE CHEERS FOR PERFOMANCE AUDITS

Two weeks ago, we were in a conversation with a couple of smart local government observers, and we mentioned that our work relied regularly on performance audits. The conversation took place on Zoom and so we were able to tell that our words seemed to be a bit mystifying to them.

That led us to a few polite queries, which uncovered the sad truth – they were pretty much unaware of the existence of performance audits altogether.

We believe, modestly, that we may make as good or better use of performance audits in our writing as anyone else out there. Not only do they help us uncover stories about individual entities, they also have aided us in identifying trends across a wide swath of cities, counties and states. For example, in April, we wrote a management news item about places with an inconsistent record of required safety inspections. We picked up on this by tracking audits from Oregon, Massachusetts, Dallas, Salt Lake City and elsewhere.

First, let’s describe, specifically what we mean by performance audits: We’re thinking of reports and studies that are usually generated by elected and appointed state and local auditors. But other branches of government do performance audits as well, including comptrollers. New York state’s comptroller Thomas DiNapoli, for example, churns out dozens of them – and not just for the state but for municipalities.

Explains the Ohio Auditor’s Office, “Performance audits, like financial audits, are conducted in three phases: planning, fieldwork, and reporting. Reports are written to be accessible to both government officials and taxpayers; the data are often presented visually to make the information more meaningful to all readers. . .

“Staffing and employee compensation, program results, contract management, transportation systems, and facility and asset use are all areas commonly included in a performance audit. Results might identify cost savings, duplicative or underused services that could be reduced or eliminated, and gaps and overlaps in services.”

In many places performance audits have a very good batting average. For example, a spring 2026 Louisiana Legislative Audit review considered 83 recommendations from previous years (mostly from 2023), with 77 (92.8%) either implemented or in the process of being implemented and six (7.2%) not implemented.

Even better was Colorado, where a report issued last November found that ‘During a 5-year period, July 2019 through June 2024, auditees agreed or partially agreed to implement 1,179 of the (Office of State Auditor’s) recommendations (98%).”

San Jose’s auditor’s office is particularly transparent about the success of its recommendations. In fact, according to the city auditor, “Our office provides a written report on the status of open audit recommendations to the City Council every six months . . . interactive dashboards allow users to view and sort open audit recommendations by department, type, date, potential budget savings, and target year.”

While the work from many performance shops is put to good use, it’s clear to us that performance audits don’t always have the impact that the performance auditors might like. In fact, it’s not uncommon for us to come across an audit that notes that only a handful of the recommendations of a prior audit about the same topic have been followed.

Notwithstanding the rate at which the recommendations are adapted, auditors can point to problems that require attention from elected leaders and program managers.

For example, in March, 2026, Oakland’s Office of the City Auditor took a close look at the city’s agencies that have the responsibility of providing oversight to the Oakland Police Department.  

Even though the numbers are improving, Oakland is still clearly a high crime city and sufficient oversight is critical.  Among the auditor’s findings were that “Vacancies, frozen positions, low minimum staffing requirements, and leadership turnover have hindered the police oversight agencies’ ability to fulfill their legally mandated duties.”

What’s more, “functional separation from the City Administration in matters of budget and hiring, for example – would help to ensure the police oversight agencies have sufficient resources and administrative authority to meet their legal mandates.” 

As the City Auditor Michael C. Houston, wrote, “In recent years the City has not provided enough resources to deliver on its stated values and principles. Our audit confirms that police oversight is an example of this. The city and the community have vocalized a commitment to rigorous police oversight, but the city has not given enough resources . . . to deliver rigorous police oversight.” 

It’s important to note that performance audits aren’t always the bearers of bad news. Sometimes after careful examination, they find that agencies and programs have been improving in their work.

Consider for example, the Atlanta City Auditor’s office June 2026 follow-up to a 2012 audit of its tax allocation district program, a designated area where future increases in local property tax revenues generated by new development are used to pay for public improvements in the district. According to the auditor, it made six recommendations back then and the city and its official economic development authority (Invest Atlanta) made all of them.

The audit found that “Invest Atlanta and the City of Atlanta have strengthened tracking, reporting and oversight of the Tax Allocation District (TAD) program.”  

According to the new audit, “The city has required Invest Atlanta to undertake third-party assessments every three years to determine the status of each tax allocation districts redevelopment goals.” Further, with the exception of one district, the remainder “have enough funds to pay off existing debt. . . “

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