Designing Audit Apps for Armchair Auditors to Analyze Government Procurement Contracts

Abstract

Each year, governments around the world spend billions of dollars purchasing a wide variety of goods and services. These governments must spend their money wisely in order to eliminate fraud, waste, and abuse of taxpayer dollars. Although government contracting systems are supposed to be transparent, people may still take advantage of these systems to gain benefits, which leads to high-risk contracts and, sometimes, costly government frauds. Recently, governments in some countries have started open data initiatives in order to make government operations more transparent to their citizens. With the open data, a new type of auditor, called an armchair auditor, could play an important role in monitoring government spending. An armchair auditor could be anyone who has an interest in government expenditures and who usually uses technologies to perform analyses on open data. Few studies have discussed how armchair auditors can better use the open data and what data analytics tools could be applied. To that end, this paper proposes a list of audit apps that could assist armchair auditors in analyzing open government procurement data. These apps could help investigate procurement data from different perspectives, such as validating contractor qualification, detecting defective pricing, etc. This paper uses Brazilian federal government procurement contract data to illustrate the functionality of these apps; however, the apps could be applied to open government data in a variety of other nations.

The Transformation of Government Accountability and Reporting

“…For example, aircondition sensors could capture the air quality across a city and create a heatmap of air pollution (Dai et al 2019). Government databases would provide information regarding activities of each government agency, such as contracting and procurement processes (Dai and Li 2016), fund spending, COVID-19 vaccine management, etc. Web-crawlers would also be used to crawl news, social media, and reports from non-government organizations to collect content regarding government performance and evaluation.…”

“…Furthermore, the contingencies of government are very different from business, as two other dimensions are of major importance: (1) the importance and maintenance of the infrastructure, and (2) the quantity and quality of government services. Although the charter, legislation, and some stakeholders of the Governmental Accounting Standards Board (GASB) may not feel comfortable with these dimensions, they encompass a data structure linked with an ever-enlarging set of exogenous variables, allowing for ''armchair auditing'' 1 (O'Leary 2015a; Dai and Li 2016). These exogenous variables are progressively providing stakeholders and government management with ever more significant information needs.…”

Do FOI laws and open government data deliver as anti-corruption policies? Evidence from a cross-country study

“…As Margetts (2006: 203) eloquently wrote, "digital government can only be transparent to a digital society". However, the available research on open data (Birchall, 2015;Dai & Li, 2016;Lourenço, 2015;Worthy, 2015a) suggests that only a small fraction of the population is able to access, and analyse, and thus, benefit from published government datasets. Most citizens do not have time, capacity, and interest to browse the government's accounts at their leisure (Munro, 2015;Wheeler, 2012;Worthy, 2015aWorthy, , 2015b, leaving "any army of armchair auditors" 6 too few in numbers or poorly equipped to win any major battle.…”

A Quantifiable Complexity Measure to Evaluate Transparency in Government Financial Data.

“…In an attempt to examine the feasibility and viability of the armchair auditor concept, Dai and Li developed a set of analytics that examine procurement data published by the Brazilian government (Dai and Li, 2016). They argue that, empowered by such advanced analytics, the armchair auditors are more likely to identify fraud, waste, and abuse in government financial reporting (Dai and Li, 2016). In an extension of this research, Kozlowski, Issa & Appelbaum (2018) While the open data initiatives have increased in the recent years, the same is not true about audit crowdsourcing.…”

“…In other words, the concept of armchair auditors has proven to be more daunting than originally anticipated. The complexity of the armchair audit process impedes its transparency (Dai and Li, 2016).…”