Performance Audit

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1. Hire us to deliver a PA

There will be times when you need external resources to deliver your PA program.

This can be for a variety of reasons including unforeseen staff constraints, unplanned audits (e.g. ministerial referrals) or emerging risk areas requiring an audit.

You need a team that can hit the ground running and deliver your audits to consistently high standards.

Whether fully outsourced, joint delivery, or specialist input, you can rest assured that we will support you to fully deliver on your PA mandate.

Here are some examples of our thinking on the progression of performance auditing:

Conor (1:18) There are three main scenarios or purposes where you might find it useful to take a discovery approach. The first one is audit topic validation: in that scenario, you may not be fully confident that this audit is going to deliver enough value. The second one would be where you want to understand the level of depth that’s required to conduct the audit, and as part of that you might also want to figure out what the deliverable looks like. And then the third scenario is where you need to understand how you’re going to undertake the audit, what are the lines of inquiry, what’s the information and evidence available to you and how far that can take you? They’re the three main scenarios. There may be one or more of those reasons for why you decide to take a discovery approach…’

Conor (6:57) With all this more open data becoming available, that means that the power is going to vest in the hands of the users, which is you and me and members of the public. That creates a question in the minds of performance auditors and internal auditors. If the public has that information, that data available to them, then they’re going to expect us as auditors to be using that wisely and giving them insights from what’s available…

Why is an efficiency focus important for auditors

There are a few important matters of context.

  1. Stimulus measures and redirection of public funds to essential services.
    These demand a heightened focus on probity, value for money and removing waste.Governments cannot afford to spend money on programs and services that are not maximising resources to achieve their objectives.
  2. Members of the public need assurance that their hard-earned tax dollars are not being wasted. They also need confidence that any mistakes will be identified and rectified. That lessons have been learned and that those mistakes will not be made again.
  3. Governments are increasingly using data, technology and innovating. The public expects to see this translate into more efficient government.

Citizens do not want to spend time on overly complicated processes.

Audit offices need to ask: can my government improve in these areas?

Efficiency audits can answer this question. They find opportunities for cost savings, minimising inputs. They also find ways to use existing resources to maximize outputs… Read the full article

2. Uplift your team’s data capability

You know the importance of using data in every PA.

But you may not currently have the internal capability to use data, or the resources for standalone data training. So how can you make sure your team is not missing out?

We overcome this by working with your team to execute a PA using data as a key focus. Your team learns and applies data skills and techniques while delivering an audit.

It’s a practical solution that elevates your team’s data capability and also delivers on your audit program.

Here are some examples of our thinking on using data in performance auditing:

If we are looking to use data as part of an audit, we need to know what broad approach we will use before we start.

How specifically we will scope and plan the use of data. How we will determine what to profile and what to test.

Each of the approaches detailed here will satisfy a different need.

Why is this important to auditors?

We need a plan. We need to decide on an approach.

If we don’t, we may not get the outcome that we’re looking for. We may not satisfy the audit objective.

Four of the more common approaches

The four approaches detailed in this article have different levels of complexity.

Not an exact science, but it looks something like this:

Read the full article

Conor: Terminology is always a bugbear for people working in the audit world. The six things we’re going to run through: (1) analytics versus using data; (2) algorithm versus model; (3) data custodian versus data owner; (4) AI versus machine learning; (5) open source versus open data; (6) big data versus big data…   Yusuf: So why is this important for auditors?   We generally try to do things in a logical structured way.  The challenge we find with using terminology incorrectly is that it does create situations where  you don’t have clarity about what it is that you’re doing and how it is that you ask for what  you need.  As a head of audit, if you’re asking one of your team to do something, if you’re using the wrong terminology for it, you may get ambiguous responses – meaning some people may understand exactly what you mean, some people may interpret it differently…

Using data for our audits can help improve efficiency.

But not only in a traditional sense.

Using data can help us with:

  1. Audit efficiency [Internal focus]
  2. Auditing efficiency, or efficiency as an audit objective [External focus]
  3. Making consumption of audit deliverables more efficient [Internal and external focus]
  4. Making remediation more efficient [External focus]

..Read the full article

3. Evaluate the quality of your PAs

Auditors strive for the highest levels of quality in their work. You want to make sure that your work aligns with the relevant auditing standards, can withstand scrutiny and delivers real insights and impact to your audience.

A fresh set of eyes helps to ensure consistently high standards.

An independent, impartial evaluation of performance audits (and assurance reviews) demonstrates your commitment to ongoing improvement.

You may want to combine hot reviews (in-flight), warm reviews (after fieldwork, before you table your audit report) and cold reviews (after you table your audit report).

You may also find value in a broader evaluation of your PA function over a defined period (e.g. in preparation for your office’s legislated strategic review).

Here are some examples of our thinking about what a QA review should focus on:

Remind me: what is ‘Public Value’?

Progressive organisations recognise the important role of audit and assurance activities in helping create and sustain value.

Public Value is achieved through the delivery of programs and services to achieve collective community outcomes e.g., programs to improve kids’ school results or to help the elderly stay active in their communities.

The concept of Public Value was first discussed 25 years ago by Mark Moore from Harvard University.[2]

It is based on the following interlinked factors:

  • The production of valued outcomes…
  • Within available resources and capability constraints and…
  • In an accountability framework (formal or informal).

Things that performance auditors are good at measuring and evaluating. Read the full article

Conor: Every auditor out there will understand that sometimes taking something very complex and explaining it in simple terms, it’s not actually easy to do in and of itself. The risk being that if sometimes if you try and oversimplify something, you can slightly change the message and that’s quite a significant issue. So for example, if you’ve got a particular performance audit finding, and you’ve done a lot of complex analysis to arrive at that finding, and you try to simplify it for the ease of, for example, a member of the public to understand what you’ve done, you have to make sure that you’ve got the quality over not just what you’ve done with what you’re conveying so that you’re not actually misleading members of the public…

Conor (1:38) It’s around the quality of the product, but also delivering maximum impact. Same reasons, but the scale is slightly bigger for performance audits. They are a costly operation. They can take a long time. They’re resource intensive, not just for the auditors delivering the performance audit, but also for those entities and public sector employees. The onus really is on us to make sure that they’re actually delivering something valuable, that they are digestible, so that decision-makers whether they be parliamentarians or senior public sector employees can do something over that investment of time and resources…

4. Develop a forward work program

Every audit office needs to select audits that will deliver optimal value for their oversight committees, public sector agencies and the public.

It’s likely that you will develop a forward work program (a.k.a strategic audit plan) with a multi-year horizon, to focus your activity in those years.

An effective work program means you need to select the right audits, to be done at the right time and using the most appropriate tools and techniques.

We can enhance your strategic audit planning, combining insights and experience from various jurisdictions to identify the most significant public sector risks. We will challenge your identification, assessment and selection of PA topics.

You will have a defensible work program that covers the issues that matter most.

Here are examples of our thinking on how to frame your strategic audit planning:

Assurance leaders are seldom presented with an opportunity for a strategic reset. You must leverage the opportunity a crisis provides to ask the questions that shape your work:

  1. Are we focusing on the right things given the changing needs of our business? For example, are we helping to ensure that our organization is meeting customer/citizen needs?
  2. Do we have the right balance between BAU audits, project/active audits, management requests and advisory engagements? Should we be undertaking BAU audits at all during a crisis?
  3. Are we aware of, and properly considering, emerging risks (e.g., heightened cyber threats, work health and safety, bandwidth and connectivity, cash flows, revenue loss, supply chain disruption)?
  4. Do we have the right skills within the team to deliver on the revised audit plan, and are we structured correctly to deliver it?
  5. Are we making best use of our unique position (e.g. with a view across the organisation, not just within existing silos) to maximise our impact and contribute to new organisational priorities?

Read the full article

Conor The first objective is bias and ethics. The second will be providing sound decision-making support, and thirdly, we’ll talk about … where we’re not maximising the opportunity. And then we’ll move on to some considerations. We’ll take about things like model accuracy. The first objective. Bias and ethics. What are some of the main things we need to be thinking about there when we’re auditing AI? …

Why is an efficiency focus important for auditors?

There are a few important matters of context.

  1. Stimulus measures and redirection of public funds to essential services. These demand a heightened focus on probity, value for money and removing waste.Governments cannot afford to spend money on programs and services that are not maximising resources to achieve their objectives.
  2. Members of the public need assurance that their hard-earned tax dollars are not being wasted. They also need confidence that any mistakes will be identified and rectified. That lessons have been learned and that those mistakes will not be made again.
  3. Governments are increasingly using data, technology and innovating. The public expects to see this translate into more efficient government.

Citizens do not want to spend time on overly complicated processes.

Audit offices need to ask: can my government improve in these areas?

Efficiency audits can answer this question. They find opportunities for cost savings, minimising inputs. They also find ways to use existing resources to maximize outputs…

Read the full article