Elected or Appointed Township Auditors? A Balanced Analysis

In local governance such as in Haycock Township, the role of knowledgeable, independent, and unbiased township auditors is essential to ensure financial accountability and transparency, which can be fundamental to building public trust.

In Pennsylvania, Township Auditors can be either elected or appointed. Having worked with both, several times, I can fairly state that each has advantages and disadvantages that can impact on taxpayer perceptions and the overall efficiency of financial oversight. This outline discusses what I have found to be the pros and cons of both elected and appointed township auditors, and provides insight as to my personal position on the topic.

The Role of Township Auditors

Whether appointed or elected, Township auditors are charged with the duty of reviewing township financial records, reporting on compliance with Pa. laws, and testing the accuracy of many financial reports. Their oversight helps ensure that public funds have been used appropriately and in accordance with law.

As a former Township Treasurer, who has worked with both elected and appointed auditors several times, I can attest to the fact that properly prepared audits and audit reports can not only identify what has transpired in the past, but perhaps equally important, can provide guidance to township financial staff as to how they can best improve their accounting work and future recordkeeping.

Benefits of Elected Township Auditors

One possible advantage of elected township auditors can be their direct accountability to the voters. Since these auditors are chosen through elections, they tend to be more responsive to community desires, for better or worse. For example, in 2020, a small township in Ohio saw a jump in community engagement after electing their auditors, resulting in a significant increase in public participation during budget discussions. In addition, the rate of pay for elected auditors is typically lower than appointed professional auditors.

Challenges of using Elected Auditors

The system of elected auditors is not without some challenges.

This is because in most cases, elected township auditors do not possess the same level of formal education and training as do professional auditors, which typically hold high levels of education in accounting, such as in the case of CPA's who typically oversee the auditing process, mandatory continuing training to obtain their continuing education credits as required to maintain their state licensing.

Elected auditors often face pressures to satisfy voters and particular interest groups, which can sometimes lead to compromises in integrity and objectivity. For instance, an auditor under political or peer pressure may overlook significant budget discrepancies, while others may claim improprieties that do not exist, according to their allegiance to opposing factions and at times to satisfy political pressures and in an effort to punish political or personal opponents. Other times, elected auditors are free of such baggage and can do the job as well as can appointed auditors,.

In addition, the fundamentals of the election process in all positions can result in voters selecting candidates based on popularity instead of qualifications. This concern is illustrated by a study from the National Association of State Auditors, which found that only 42% of elected auditors had formal training in auditing, compared to 78% of appointed auditors, especially those holding advances accounting degrees, such as required of CPA's.

Evaluating Appointed Township Auditors

Appointed township auditors should undergo a competitive selection process by the Supervisors which is focused on qualifications and experience. In 2019, a Pennsylvania township reported a 60% decrease in future financial discrepancies after appointing an auditor with a decade of public sector experience, as that auditor was able to not only report on prior finances, but could also make recommendations on future improvements.

One key advantage of appointed auditors is the stability they provide. Appointed Auditing Companies with longer terms of service, allows them to develop expertise in the particular Townships finances, allowing deviations from the norm to stand out for special attention. With an independent and consistent review process, there is a higher likelihood of noticing deviations from standard financial accounting practices.

Nevertheless, the appointed system has some downsides that need careful consideration.

Drawbacks of Appointed Auditors

A potential disadvantage is the perception of diminished accountability. Appointed auditors may not face the same level of scrutiny from citizens as elected officials do. This discrepancy can create a disconnect between their role and community interests.

Finally, without election campaigns, public knowledge about an appointed auditor's work may be limited. This lack of awareness can reduce transparency and engagement in financial matters, ultimately affecting community trust in the audit process, and if Appointed Auditors are used, the selection process must be public and transparent.

Summary of the Pros and Cons

Elected Auditor Benefits: Direct accountability to constituents.

Elected Auditor Concerns: Potential compromise of audit integrity due to personal or political bias; possible lack of qualifications; frequent disruptions due to election cycles. Possible failure to complete the audit in a timely manner, costing the municipality state funding.

Appointed Auditor Benefits: Professional expertise and mandatory training and testing ; stable positions and continuity; greater likelihood of unbiased and objective audits. |

Appointed Auditor Concerns: Possible lack of direct accountability to the electors, possibility of reduced public participation. Possibility of increased costs.

The Community Perspective

The impacts of having elected vs. appointed auditors largely depends on the community objectives expectations. A community prioritizing control and influence about the audit outcome will sometimes lean toward elected auditors, despite the inherent risks. Conversely, a community seeking technical expertise and consistency over local control and influence may prefer appointed auditors.

Encouraging public engagement in either case can help bridge the gap, ensuring that residents understand and respect the auditor's work, irrespective of how they are selected. Transparency initiatives, such as community meetings and accessible reports, can significantly improve public trust and awareness, thus strengthening fiscal governance.

Final Thoughts and my position:

The choice between elected and appointed township auditors clearly offers both benefits and challenges. Elected auditors can enhance community trust, but may struggle with independence from political pressures and fail due to a lack of training and experience. On the other hand, appointed auditors usually bring professionalism and consistency but might suffer from a intimate knowledge which may reduce direct public engagement.

Ultimately, the Supervisors should aim for a balance that aligns auditing methods with community needs when making this important decision. By fostering open communications and increasing public awareness, regardless of which method is chosen, we can create a more accountable and effective auditing environment.

Due to the potential of auditing expenses being reduced, I lean towards using our Elected Auditors and would expect to vote that way - but only if I am convinced that the auditors have sufficient training and qualifications to complete the audit properly in a timely manner, and without any political or personal agenda. I will make this independent decision by the actions of the candidates throughout this election cycle and months before the decision must be made. I will keep an open mind and vote in the best interest of all township taxpayers.