Performance auditing in the public sector

Performance auditing 

Increased competition, a shrinking world, the decentralisation of operations as well as the desire of management to monitor the overall operations of the organisation has increased the number of internal auditors finding themselves involved in performance audits (also known as operational or value-for-money auditing). Such a shift enabled internal audit – with the objectives of its perspective and the rigor of its processes – to once again become an independent advisor and value creator to management.

Performance auditing is a technique used by internal auditors to evaluate the economy, efficiency and effectiveness of the organisations’ operations so as to assure management that its strategic objectives are being carried out and whether or not they can be improved on. The scope of the audit is expanded beyond the verification of financial controls or compliance with policies as it looks for the existence of management measures such as leadership, employee empowerment, teamwork, risk assessment, management information, communication, resource allocation, productivity measurement, etc. Performance auditing therefore requires flexibility, imagination and analytical skills to provide organisations with innovative solutions and new ideas.

Performance auditing is often a huge step for an organization but as with every new initiative, the potential benefits to be gained significantly outweigh the efforts to get there.

Facilitator: Deon van der Westhuizen

Participants will be able to:

• Identify situations in which performance audit will add value
• Gain knowledge of the legislative framework for performance auditing
• Gain the required skills to perform the planning, execution and reporting phases of a performance audit.

Course Objectives

• To facilitate understanding of the objectives of performance audit and the value that performance auditing adds (outcome: to be able to identify situations in which performance audit will add value)

• To transfer knowledge with regard to the legislative framework for performance auditing in the public service environment (outcome: knowledge of the legislative framework for performance auditing)

• To transfer knowledge with regard to the theory of the performance audit methodology and performance audit process and to practice conducting a performance audit (outcome: trainees who are skilled to perform the planning, execution and reporting phases of a performance audit).

Course Content

• Definition and why performance auditing is necessary
• What are outside consultants auditing at the moment?
• Value creation versus value preservation
• How does risk and opportunity link to performance audits?
• Scope and objectives of a performance audit and how does it link to the control objectives
• Strategic planning and key performance indicators – a prerequisite for performance audits
• Economic use of resources, the objectives, criteria, risks, tools to manage and measure
• Efficient use of resources, the objectives, criteria, risks, tools to manage and measure
• Effective use of resources, the objectives, criteria, risks, tool to manage and measure
• The other three E’s – equity, environment and ethics
• Pre-engagement and planning phase
• Developing audit objectives and criteria
• Execution phase – practical case study – application of theory
• Audit working papers and evidence
• Reporting phase – the layout of a performance audit report – looking at three performance audit reports that have been published as a best practice example

Assessment

Case studies will be done throughout the course and multiple choice questions will be completed and marked after each session.