Optimizing Value in Performance Audits

Optimizing Value in Performance Audits

Presentation to the Joint CMA, CGA and FMI Professional Development Workshop By: Tara Anderson and Jessie Carson February 26, 2013

Session Learning Objectives • Think strategically to use performance

audits effectively to influence change • Plan effectively so that performance audits

influence the most positive changes • Be innovative in product mix and use of

staff resources to optimize value

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Session Outline

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Background – Performance Audit and role of the Office of the Auditor General

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How can we be strategic in the use of performance audits to influence change most effectively? (Think Strategically)

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How do we plan a performance audit in a way that influences the most positive change? (Plan Effectively)

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How can we be more innovative in our product mix and use of staff resources to optimize value in performance audits? (Be Innovative)

A Definition of Performance Audit Performance audits examine the wider management issues of an organization or program and whether it is achieving its objectives effectively, economically, and efficiently. They are sometimes called ‘value for money’ audits because they can advise whether there is value received for money being spent. 4

B.C. Government Structure

Crown

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Legislative Assembly

Cabinet

Independent Officers

Ministries & Crowns

Legislative Branch Executive Branch Judicial Branch

Judiciary

Role of the Legislative Auditor • Audit function is a critical link in the chain of

public accountability • Assurance that information from government

activities and handling of public money is appropriate, credible and complete

• Independence: the cornerstone • Report to citizens’ elected representatives, not government • Non-partisan appointment • Enabling Legislation: Auditor General Act

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Role and Mandate The Auditor General Act enables the Auditor General to: • Conduct audits of any organization in the

Government Reporting Entity • Access information, documents and explanations • Summon witnesses • Report on findings • Conduct audits of individuals or organizations in

relation to transactions of government funds 7

Mandate for Performance Audit The Auditor General’s mandate includes auditing: • whether government operations are economical,

efficient and effective • compliance with financial and administrative provisions of Acts • the adequacy of accountability information provided to the Legislative Assembly • whether the terms and conditions of grants, transfers, loans, indemnities, etc., or collection of money are complied with 8

1. Think Strategically • How can we be strategic in the use of

performance audits to influence change most effectively? • Risk-based approach • Expert advice • ‘One bite at a time’ • Long-term planning

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Think Strategically Risk-based approach • Risk-based office audit plan • Overall strategic planning process • Selecting performance audits • Risk-based approach in planning individual

performance audits

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Think Strategically Expert advice • Advisory panel for overall office strategic plan • Expert advisors within a specific area for

performance audit • E.g. Health sector advisory panel

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Think Strategically ‘One bite at a time’ • How do you eat an elephant? • Identify themes • Look for ‘ripple effect’ • Influence beyond the specific audit topic

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Think Strategically Long-term planning • Look at areas to influence over 3-5 years • Performance audit plan: 18-months • Updated every 6 months

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2. Plan Effectively • How do we plan a performance audit in a way

that influences the most positive change? • Focus on key areas • Internal challenge process • Communication • Recommend with care

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Plan Effectively Focus on key areas • Strategic themes identified • zero in on the most important topics • how to identify the key areas to audit – what

to include or exclude in scope

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Plan Effectively Internal challenge process • Need a process in place to produce a high-

quality audit plan for each performance audit • Is this the right audit, with the right focus, at

the right time? • OAG’s Challenge Committee

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Plan Effectively Communication • Communications plan - how can we influence

before, during, after and outside of engagement • Communicating with auditees and key

stakeholders throughout every audit phase • Consider different communications channels

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Plan Effectively Recommend with care • Choose wording carefully • Examine feasibility closely • Clear with auditee and internally • Goal is to maximize uptake so that existing

practices are improved

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3. Be Innovative • How can we be more innovative in our

product mix and use of staff resources to optimize value in performance audits? • Think outside the traditional report • Eliminate silos

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Be Innovative Think outside the traditional report • Alternatives to traditional audit report: • Information pieces • Examinations • Guidance

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Be Innovative Eliminate silos • Use of financial audit staff (non-busy season)

and IT staff for performance audits • Work selected to best utilize their financial

skill set and experience • Plan and communicate across portfolios • Office wide scheduling of resources • Changing the culture

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Contact Auditor General of British Columbia 8 Bastion Square, Victoria, BC V8V 1X4 [email protected] [email protected] www.bcauditor.com 250.419.6100 22