Inclusive growth of any state may be elusive yet practically possible to attain. On a macro-level, the review and analysis done by various think tanks will elucidate the present state of affairs at the national and local levels. On a micro-level, the review and analysis at local levels of the government will determine the extent of citizens` current engagement in regulatory governance. From risk society to audit society through risk regulation regimes, the intention is to mitigate the risks, specifically financial risks and operational risks in the public sector, through many different ways but more so through citizens` participatory audit. Power (1997) believed that the state has become increasingly and explicitly committed to an indirect supervisory role withous assuming a decisi ve function. The state cannot play this indirect role without assuming the efficacy of these practices at the foot of a regulatory hierarchy. Audit is not simply a solution to a technical problem; it aoso makes possible ways of redesigning the practice of government. The supreme Audit Institution (SAI) in a specific country, normally spearhead and accommodate citizens` engagement through citizens` participatory audit in order to promote transparency and accountability in public service. Various activities and approaches have already been adapted by different SAIs across different countries to signify citizens` engagement. Motivations from responding citizens may initially be for enjoyment and personal benefit to tokenis, to citizen power(Arnstein, 1969). The quest for the suitable features of an inclusive, extensive or representative and sustainable regulatory reform framework, so as to effect a truly active citizen engagement through citizens` participatory audit, may be long, winding and difficult. However, different local government units may face different risk regulation regimes which should be addressed through a devolved function of internal audit. The dichotomy of ex ante scrutiny/audit and ex post scrutiny/ audit may have their respective intended purposes. Howevver, with long standing audit findings remaining unresolve, anchored on weak internal control on certain accounting cycles, it will be worth looking at the merits of internal audit, As per Administrative Oredr # 70 fo 2003 issued among government agencies, local government units included were mandated to have an Internal Audit Service unit in their respective jurisdictions. The internal audit function may have not been properly and comprehensively applied in all the transactions of certain local government units. Thus, as a supplement, the option of involving the citizens to be pro-active and be engaged through citizens` participatory audit, may be the bitter pill that will necessitate the elusive cure to the administrative illnesses of weak internal control and poor record keeping that most local government units have experienced for a long period of time. Grounded on new public governance theory (Osborne, 2010) of government-sciety relationships, aggravated further with the challenges brought about by climate change, 21 < sup >st < /sup > Century private and public organizations are pressd to look for opportunities which will encourage and eventually institutionalize risked-based regulatory policies at national and local levels. By adapting World Bank prescribed community-driven development model, community financial management system and community procurement system are networks of activites that would demand efficient, effective and economic utilization of natural and fiscal resources. As a good governance feature, tight internal control system will have to be in place and will be achieved through internal audit and assurance. This paper will showcase the merits of the National Community-Driven Development Program, spearheaded by the Philippine Department of Social Welfare and Development since 2003, specifically on the community procurement system which inteegrates citizens` participatory internal audit duly aligned to the Government Procurement Reform Act of 2003 (R.A. 9184). With limited Commission on Audit (COA) personnel to conduct ex ante audit and ex post audit, the paper posits the institutionalization of the devolved function of citizens` participatory internal audit across the wider realm of government transactions at the community livel, This specific inclusive regulatory governance reform framework is envisioned to be introduced by bold and innovative policy makers in government, to be promoted by development profeessionals in the private sectro and social change advocates in the civil society. The regulatory reform framework will orchestrate collaborative and engaging citizens` to be politically active, concerned, involved and committed people to state affairs. The extent of capacity building issues, challenges and prospects as wellas idcntification of possiblc conscqucnccs and ramifications will bc cxplorcd accordingly.