What are the core elements of a performance audit report?
There is no standardized format for an audit report. Rather, auditors general choose a presentation and communication style that suits their jurisdiction and office practices. That said, performance audit reports commonly include:
- audit objective(s) and sub-objectives (the key questions the audit will answer)
- a conclusion against the objective(s)
- well-defined scope (programs, time period, geography)
- criteria, against which performance is assessed, derived from authoritative sources
- findings, both positive and negative, backed up with evidence
- recommendations to entity management to correct identified deficiencies
What do performance audits assess?
Performance audits focus on the implementation of policy and programs and the delivery of public services.
They typically look at the following areas and ask the following questions:
- Systems and processes – Are management systems and internal controls well designed and operating as designed?
- Results – Are intended results being achieved? Are entities monitoring and reporting on their own performance?
- Compliance – Is the program or entity operating in accordance with applicable laws, policies, and specified authorities?
- Risk management – Is the entity appropriately managing significant risks related to achieving program outcomes and safeguarding public funds?
- Governance and oversight – Have entities established effective governance practices and regimes?
Performance audits generally do not assess the merits of policy, the adequacy of program resources, or the future state of policies and programs.
Legislative performance audits in Canada are conducted in accordance with auditing and assurance standards of the Chartered Professional Accountants of Canada. In a recent three-year period, legislative audit offices in Canada conducted and reported about 430 performance audits.
How do we choose what to audit?
The public sector auditing environment continues to grow in complexity. Albertans’ expectations regarding transparency and accountability continue to rise. At all times, we are responsible for making the “highest and best use” of the resources entrusted to our office. We want to be confident that we are doing the most relevant and significant performance audits.
Who makes sure problems identified by the auditor are fixed?
Legislative auditors make recommendations to entity management aimed at correcting the observed problem and preventing its reoccurrence. Well-designed recommendations are results-oriented, specific enough to allow for assessing progress, and practical, such that the entity can implement them in a reasonable time frame.
Many legislative audit offices monitor and report on the level of audit recommendations’ implementation by entities. Such monitoring is often based on a self-assessment by the entities. We examine management’s implementation plans and perform procedures to determine whether management has implemented our recommendation(s) when management has asserted they have been implemented. We repeat our recommendations if we do not find evidence they have been implemented. We may also issue new recommendations for matters that come to our attention in the course of our assessment.
Note, however, that audit entities are not accountable to the legislative auditor. They are accountable to the legislature through the Public Accounts Committee (PAC). Thus, PACs play a vital role by holding entities to account and helping improve delivery of public services.
How Can Albertans Get Involved?
We want to inform you of our plans and engage you in a conversation about what we do, so that we can focus our work in those areas which will make the greatest difference to those we serve—Albertans.
We invite Albertans to review our 2022-2023 Program of Work for a brief overview of the audit work we expect to conduct, and welcome comments on the list of intended audits.
As end users of government programs and services, Albertans are a rich source of knowledge and information about government performance and operations. Effective communication with Albertans on our proposed performance audit program of work is essential as we continue to refine our planning processes. We welcome your input on the following questions:
- Given your personal experience with government programs and services, or based on what you think is most important to Albertans, would you focus in different areas than those we have selected? If so, what are those areas, and why would you choose them?
- Do you have any comments on the listing of potential audits?
You can send us your comments on these questions by emailing us at firstname.lastname@example.org. All contributions will be completely confidential. As we update our program of work, we’ll provide information on how Albertans’ input has been taken into account.