Performance auditing in the Saudi public sector : its nature and effectiveness

Saudi Arabia has undertaken a wide-ranging programme of development planning since 1970, which has exerted influence on almost every aspects of the country. During the 1980s and 1990s, however, the Saudi government has been subjected to conflicting economic pressures which have brought about an increased need for more reliable information to enable the country's authorities to exercise full accountability concerning the efficient and effective use of available, scarce resources on the part of those entrusted with administering public programmes and activities. In a response to this need and in an effort to promote the efficient and effective use of public resources, the Saudi General Audit Bureau (GAB), in the late 1980s, widened the scope of its audit activities to incorporate performance audits, in addition to its traditional financial audits. This study was undertaken within the context of the GAB's ambitious effort to extend its audit activities. Since the subject of performance auditing is rarely studied within the Saudi context, a comprehensive description of the nature of performance auditing activities as practised by the Saudi GAB was felt necessary. In addition, this study addressed itself to assessing the degree to which these practices have been effectively operationalised. Due to the lack of a well developed framework which could be utilised to assess the effectiveness of the current practice of performance auditing in the public sector, the themes which have emerged from the literature have been used as a foundation to construct an evaluative framework for the purpose of articulating the main elements to be incorporated in the study. This study, therefore, can be characterised as a descriptive, analytical and empirical study of performance auditing in the public sector of a developing country. Despite the importance of the secondary data employed in this study, a questionnaire survey, especially designed for the purpose of this study, was the main method of data collection, however. Questionnaires were sent to two groups closely involved with, and/or affected by, performance auditing i.e. performance auditors and public sector managers. The results reported in this study revealed that the Saudi experience in the field of performance auditing shares, in various instances, a common base with what has been identified in the literature or reported in the practices of other state audit institutions. The research also indicated that moderate improvements have been brought into the Saudi public sector by performance auditing practices. The research, furthermore, identified various inadequacies inherited in the GAB internal and external, environment which prevented the full contribution of performance auditing to the public sector from being realised. External limitations include the vagueness of goals and objectives in public organisations, the lack of performance measures in the public sector and the lack of sound financial accounting and internal control systems, while the lack of sufficient audit staff, the lack of expertise from different disciplines and the lack of sufficient financial resources represent the major internal limitations. Based on these results, the study concludes that there is a need for real efforts to minimise the possible effects of the various inadequacies inherent in the GAB's internal and external environment to ensure that advances in performance auditing in the public sector are not only possible, but can be successful. In this regard, the study proposes some recommendations to overcome the reported deficiencies.