What are performance audits?
Performance audits are reviews designed to determine how efficiently and effectively an agency is carrying out its functions.
Performance audits may review a government program, all or part of a government agency or consider particular issues which affect the whole public sector.
Where appropriate, performance audits make recommendations for improvements relating to those functions.
Why do we conduct performance audits?
Performance audits provide independent assurance to Parliament and the public that government funds are being spent efficiently and effectively, and in accordance with the law.
They seek to improve the efficiency and effectiveness of government agencies and ensure that the community receives value for money from government services.
Performance audits also assist the accountability process by holding agencies accountable for their performance.
What is the legislative basis for Performance Audits?
The legislative basis for performance audits is contained within the Public Finance and Audit Act 1983, Part 3 Division 2A, (the Act) which differentiates such work from the Office's financial statements audit function.
Performance audits are not entitled to question the merits of policy objectives of the Government.
Who conducts performance audits?
Performance audits are conducted by specialist performance auditors who are drawn from a wide range of professional disciplines.
How do we choose our topics?
Topics for performance audits are chosen from a variety of sources including:
■ our own research on emerging issues
■ suggestions from Parliamentarians, agency Chief Executive Officers (CEO) and members of the public
■ complaints about waste of public money
■ referrals from Parliament.
Each potential audit topic is considered and evaluated in terms of possible benefits including cost savings, impact and improvements in public administration.
The Audit Office has no jurisdiction over local government and cannot review issues relating to council activities.
If you wish to find out what performance audits are currently in progress just visit our website at http://www.audit.nsw.gov.au
How do we conduct performance audits?
Performance audits are conducted in compliance with relevant Australian standards for performance auditing and operate under a quality management system certified under international quality standard ISO 9001.
Our policy is to conduct these audits on a "no surprise" basis.
Operational managers, and where necessary executive officers, are informed of the progress with the audit on a continuous basis.
What are the phases in performance auditing?
Performance audits have three key phases: planning, fieldwork and report writing.
During the planning phase, the audit team will develop audit criteria and define the audit field work.
At the completion of field work an exit interview is held with agency management to discuss all significant matters arising out of the audit. The basis for the exit interview is generally a draft performance audit report.
The exit interview serves to ensure that facts presented in the report are accurate and that recommendations are appropriate. Following the exit interview, a formal draft report is provided to the CEO for comment. The relevant Minister is also provided with a copy of the draft report. The final report, which is tabled in Parliament, includes any comment made by the CEO on the conclusion and the recommendations of the audit.
Depending on the scope of an audit, performance audits can take from several months to a year to complete.
Copies of our performance audit reports can be obtained from our website or by contacting our Office Services Manager.
How do we measure an agency's performance?
During the planning stage of an audit the team develops the audit criteria. These are standards of performance against which an agency is assessed. Criteria may be based on government targets or benchmarks, comparative data, published guidelines, agencies corporate objectives or examples of best practice.
Performance audits look at:
■ processes
■ results
■ costs
■ due process and accountability.
Do we check to see if recommendations have been implemented?
Every few years we conduct a follow-up audit of past performance audit reports. These follow-up audits look at the extent to which recommendations have been implemented and whether problems have been addressed.
The Public Accounts Committee (PAC) may also conduct reviews or hold inquiries into matters raised in performance audit reports. Agencies are also required to report actions taken against each recommendation in their annual report.
To assist agencies to monitor and report on the implementation of recommendations, the Audit Office has prepared a Guide for that purpose. The Guide, Monitoring and Reporting on Performance Audits Recommendations, is on the Internet at www.audit.nsw.gov.au/publications/better practice/better practice.htm
Who audits the auditors?
Our performance audits are subject to internal and external quality reviews against relevant Australian and international standards. This includes ongoing independent certification of our ISO 9001 quality management system.
The PAC is also responsible for overseeing the activities of the Audit Office and conducts reviews of our operations every three years.
Who pays for performance audits?
No fee is charged for performance audits. Our performance audit services are funded by the NSW Parliament and from internal sources.
For further information relating to performance auditing contact:
Stephen Horne
Assistant Auditor-General,
Performance Audit
(02) 9275 7278
email:
stephen.horne@audit.nsw.gov.au