Assessing the Effect of Performance Auditing on Value for Money in Public Sector Institutions in Somalia
This study utilizes PLS-SEM analysis of 162 Somali public sector respondents to demonstrate that while audit quality and institutional capacity significantly enhance value for money, the relationship is complexly mediated by managerial accountability, leading to recommendations for prioritizing audit quality and constructive accountability frameworks over mere volume.
Original paper licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). This is an AI-generated explanation of the paper below. It is not written or endorsed by the authors. For technical accuracy, refer to the original paper. Read full disclaimer
In the complex machinery of public governance, a fundamental promise exists between a government and its people: the state will use tax money wisely to build roads, run schools, and provide care, and in return, the people receive services that are worth the cost. This concept, often called "value for money," is not just about spending less; it is about ensuring that every dollar spent actually achieves its intended result. For decades, the primary tool used to check if this promise is kept has been the financial audit, a process that essentially asks, "Did you follow the rules?" and "Did you spend the money on the right things?" However, in many developing nations, following the rules does not always mean getting good results. A government might follow every regulation perfectly while still failing to deliver efficient or effective services. To solve this, a different kind of check has emerged called performance auditing. Instead of just counting coins, performance auditors look at how well a system works, asking if the government is achieving its goals efficiently and effectively. This approach is particularly vital in places like Somalia, a nation rebuilding its public institutions after years of conflict, where the gap between spending money and getting results can be dangerously wide.
A recent study by Dahir Abdullahi Mohamed at Somali National University dives deep into this specific challenge, investigating how performance auditing influences the value for money in Somalia's public sector. The researcher gathered insights from 162 key professionals working within the country's ministries, departments, and audit offices, including financial controllers, department heads, and auditors themselves. By analyzing their responses, the study mapped out the intricate relationships between the quality of audits, the independence of the auditors, the follow-up on audit findings, and the ultimate ability of the government to deliver efficient services. The goal was to understand not just if audits are happening, but what actually makes them work to improve how the country uses its resources.
The investigation revealed a clear and powerful truth: the quality of the audit matters far more than the sheer number of reports produced. When auditors produce high-quality work—defined by technical rigor, professional standards, and deep analysis—it directly leads to better value for money. This finding suggests that a single, thorough, and expert examination of a government program is worth more than a dozen superficial checks. The study found that audit quality was the strongest driver of efficiency and effectiveness, proving that the depth of the review is what helps public institutions eliminate waste and optimize their operations.
However, the path from an audit report to a better outcome is not always a straight line. The study uncovered a surprising and counterintuitive dynamic regarding how managers react to these checks. While high-quality audits are excellent for the system as a whole, the research found that they can sometimes create a defensive reaction among public managers. When the scrutiny is extremely intense, some administrators may become overly cautious, focusing on avoiding mistakes rather than taking the initiative to improve services. This suggests that while the audit itself is a powerful tool for finding problems, the pressure it creates can sometimes make managers hesitant to act, creating a temporary friction between the need for accountability and the need for swift action.
To bridge this gap, the study identified two critical factors that determine whether an audit actually leads to improvement. The first is institutional capacity, which refers to the internal strength of the government agency being audited. This includes having skilled staff, modern computer systems, and supportive leadership. The research showed that even the best audit cannot fix a problem if the agency lacks the internal tools and skills to implement the changes. A strong internal system acts as a catalyst, allowing the findings of an independent audit to be translated into real-world improvements. The second factor is the follow-up process. The study found that the most powerful driver of managerial responsibility was not the audit itself, but the rigorous process of checking back afterward to see if recommendations were actually carried out. When auditors return to verify that changes have been made, it forces managers to take ownership of the solutions.
Despite these positive drivers, the study also highlighted a complex reality in Somalia's post-conflict environment. While follow-up mechanisms are essential for holding managers accountable, the research showed that when this pressure is applied without sufficient support, it can sometimes lead to a negative outcome where the drive for accountability actually slows down the delivery of value. This indicates that in fragile settings, accountability cannot be purely punitive; it must be paired with constructive support that helps managers fix problems rather than just punishing them for them. The research suggests that for audits to truly work, they must be part of a broader system that builds up the internal capacity of institutions and supports managers in making the necessary changes.
The findings from this study offer a clear roadmap for improving public services in Somalia and similar contexts. It argues that the focus should shift from simply producing more audit reports to ensuring that the audits that are done are of the highest technical quality. It also emphasizes that publishing a report is not enough; there must be a mandatory, legally backed system for tracking whether the recommendations are implemented. Furthermore, the study calls for a balance in how accountability is enforced, suggesting that oversight bodies should provide the resources and training managers need to succeed, rather than just applying pressure. By strengthening the internal skills of government agencies and ensuring that audit findings lead to concrete actions, public institutions can move beyond mere compliance and start delivering the genuine value for money that their citizens need and deserve.
Drowning in papers in your field?
Get daily digests of the most novel papers matching your research keywords — with technical summaries, in your language.