CONTINUOUS MONITORING IN MUNICIPALITIES : “TRUST IS GOOD, BUT CONTROL IS BETTER” ‐ VLADIMIR LENIN

Abstract

Opportunities to audit and monitor automatically and more frequently have been given much attention by the academic world. Organizations that have applied continuous monitoring and auditing have improved their overall organizational performance. However, research into the adoption of CA and CM has mostly been conducted in the private sector. The feasibility of implementing CM and CA in governmental organizations and the potential benefit in the public sector are still unclear. Therefore, this research aims to contribute to the literature by specifically examining adoption of CM and CA in the public sector. The study determines whether continuous monitoring and auditing methodology could be applied in municipalities in order to improve reliability of data, efficiency of processes, risk management, contract monitoring and control over financial transactions. A multiple case study approach is used as research design. Desk research, reviewing documents, exploratory interviews, semi-structured interviews and focus group sessions were held with representatives of six municipalities, common arrangements and a medium-sized accounting firm. In total 35 interviews and two workshops were executed. The results of the research are that continuous monitoring can in fact be applied, and that there is a need for continuous monitoring in the public domain. In addition, the results show that continuous monitoring is feasible from a technological, social, legal and economic perspective. The extent to which continuous monitoring could be applied depends to a large extend on the internal conditions of the municipalities.