Auditing and compliance in public procurement – an empirical assessment

Abstract

Purpose This study aims to empirically evaluate the effectiveness of government auditing of local authorities’ compliance with the procurement rules. Design/methodology/approach A diff-in-diff approach is used where the measure of compliance is (changes in) the incidence of private litigation under the Public Procurement Act, in audited vs non-audited municipalities. Further, semi-structured interviews were conducted with chief procurement officials. Findings No statistically significant effect is found. While strong effects of audits can be ruled out, the statistical results and the interviews do not, however, contradict a modest but long-lasting effect. Originality/value Few studies have addressed the effect of public procurement auditing on compliance. This study develops an empirical framework and presents empirical results.