Performance auditing in Italian municipalities: a relational approach to the construction, deployment and effects of an ‘audit(ing)-net’

Background: Despite a general agreed definition is lacking, performance auditing (PA) in the public sector is commonly understood as an independent and objective examination of government programs and activities regarding their economy, efficiency, and effectiveness, aiming to lead to improvements. Moreover, PA has traditionally been conceived as an activity involving two subjects: an auditor and an auditee. This approach aligns with the auditing frameworks in place in countries in which PA has been thoroughly examined, specifically those with a managerial administrative culture of public administrations, such as the Anglo-Saxon and Scandinavian ones. In these countries performance-oriented ideas facilitated the early adoption of PA, with the practice currently considered mature. In contrast, countries with a legalistic tradition, including Italy and the other Mediterranean European countries, experienced a more gradual and often less satisfactory process in introducing PA. These countries still lack complete institutionalisation of PA. This absence of institutionalisation is observable in the fact that PA can arise from the efforts of various subjects who, in different capacities, contribute to its ultimate results and forming what I refer to as an ‘audit(ing)-net’. Purpose: The purpose of this research is to investigate how the relationships established between the subjects composing the audit(ing)-net affect how PA is performed, and the results produced through it. Design/Methodology/Approach: Drawing on relational sociology, this research theorises that the mutual interdependencies between subjects generate social relations. Social relations represent new entities with distinct properties that differ from the individual characteristics of the subjects involved in the relationship. Social reality is made of the effects produced by social relations and the relationships between them. A case study is conducted from two Italian municipalities. Data are gathered through semi-structured interviews with subjects, both internal and external to the organisation, involved in PA in the two municipalities. The Interview data are triangulated with the examination of various documents regarding the performance system, produced both by auditors and the municipalities themselves. The collected data are analysed relying on the methodological support of network analysis. Findings: The relationships built within the audit(ing)-net are rooted in a predominantly bureaucratic-compliance culture. The significance of sanctions and remuneration linked to individual performance is pivotal in shaping both the interactions between the net’s participants and the resulting impacts on the net. The propensities and unique background of the subjects have the potential to make the outcome of the relationships unfold differently. This could have an overall positive effect on the functioning of the net in view of a gradual embrace of a culture of performance. Originality: The use of a theoretical lens that draws on relational sociology represents the original feature of this research. Additionally, by incorporating the concept of ‘hybridity’ within relational sociology, this study values the influence of the context and of the different relationships of which each subject can be part on the process leading to the construction of relationships. Moreover, this research stands as one of the initial studies delving into the analysis of how PA is carried out in a country marked by a prevalent legalistic and bureaucratic culture.