How to prepare for a performance audit

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Are you a public sector entity or local government about to participate in a performance audit? We’re here to help.

Read on to understand more about what a performance audit is and how to prepare for one to ensure you get the most value from it, and that the process runs smoothly.

What is a performance audit?

The Queensland Audit Office (QAO) audits the performance of government service delivery. This gives parliament and the community independent assurance that public money has been used well, that results meet expectations and that entities or local governments are delivering services efficiently, effectively and economically.

Our audits are not just a compliance activity—we include better ways of delivering public services in our audit findings, conclusions and recommendations.

Our audits are governed by Section 37A of the Auditor-General Act 2009, and we adhere to the Auditor-General of Queensland Auditing Standards, which incorporate Australian Standards. These ensure the audits are of appropriate quality and are evidence-based.

Performance audits do not question the merits of government policy objectives—rather, they assess how well the objectives are being achieved. 

What’s the audit process?

Performance audits have three main phases.  

Phase 1: The planning phase is where QAO conducts preliminary research. We contact the entity to be audited, develop a program to guide them, and provide an audit strategy to make sure our work will add value to them.

  • we hold a formal ‘key audit meeting’ with the entity’s contact officer (and whomever else they’d like to bring) to discuss the audit scope and field work
  • we send you an engagement letter and audit strategy via formal, written correspondence.

Phase 2: The conduct phase is where QAO collects audit evidence, conducts detailed testing, analyses findings, and discusses the findings regularly with the auditee.

  • we hold status meetings to discuss preliminary findings and discuss further field work required
  • we hold a formal key audit meeting to discuss the end of conduct brief and where required issue formal, written correspondence about what we have found.

Phase 3: The reporting phase is where QAO provides a draft report to the entity for their comments on accuracy of the facts and fairness of findings. We then finalise the report for tabling in parliament and issue it as ‘proposed’ for 21 days to the accountable officers.

  • we offer to meet and discuss the preliminary and proposed reports when they are issued.

Throughout the audit, a representative of QAO’s audit team may also attend the public sector entity’s audit committee meetings to provide audit updates.

Here’s what to do to prepare

Public sector entity or local government staff need to:

  • understand the audit objectives, scope and timing—these are outlined in the audit strategy
  • review their own relevant strategies, plans, and datasets to make sure they are up-to-date and readily available
  • compile relevant documentation on how they monitor and measure the effectiveness, economy and efficiency of the activity to be audited. They should also have the most recent self-assessment results ready
  • check that staff likely to be needed will be available at the times set out in the audit strategy.

Importantly, entities should also determine how they will communicate:

  • internally regarding the audit, and
  • with other associated entities where appropriate.

Lastly, the QAO audit team will need a suitable on-site working space.

Important! The point of contact

Entities nominate a contact officer for QAO. They need to be:

  • of sufficient seniority and command of the audit topic to authoritatively represent the views of the agency and brief their chief executive
  • available throughout the term of the audit.

The contact officer is responsible for keeping their internal stakeholders informed of the audit’s progress at critical points to ensure ‘no surprises’.

QAO’s access to information

To enable QAO to provide checks and balances, the Auditor-General Act 2009 allows us to collect the evidence we need to reach an informed conclusion. This evidence may include data, documents, interviews with staff involved in the delivery of the public services and interviews with key stakeholders. In some cases, where parties to the audit are not cooperative, we can compel testimony and documents. We rarely do this and prefer to work together through effective collaboration and communication.

Recognising the sensitive information that we obtain, we have strict confidentiality provisions to safeguard information.

The report to parliament

Our performance audits become written reports which are tabled in parliament.

We issue a proposed—that is draft—report prior to tabling in parliament. We give the accountable officer 21 days to submit a written response, which we usually include in the final tabled report.

We may also issue a preliminary report prior to the proposed to give entities an opportunity to correct matters of fact and ensure the report is balanced and fair.

Once tabled in parliament, the report is referred to the relevant parliamentary committee. The committee may hold an inquiry into the report, but it is not obliged to do so. Public sector entity staff may need to update the committee on the implementation of audit recommendations.

You can see our most recently tabled reports here: www.qao.qld.gov.au/reports-resources/parliament

The report recommendations

Each performance audit report includes recommendations on how to improve the service delivery area that we have audited.

By accepting these recommendations, the entity agrees to resolve gaps in performance and improve service delivery. We also often include best practice advice throughout the audit and in the final report.

Down the track

QAO writes to entities within two years of an audit to ask for an update on their progress in fulfilling our recommendations. Depending on this advice we may schedule a follow up audit on the topic and publicly report the results of this.

Entities also often report progress on implementing QAO recommendations to their audit committees.

We seek agency feedback via a survey sent to the audited entity from an independent external research provider. The survey seeks entity views on the audit process and the parliamentary report. QAO uses these results to improve, and to report on our own performance.

More information

Please contact QAO anytime for further advice and support at: qao [at] qao [dot] qld [dot] gov [dot] au. We also welcome your suggestions for future performance audit topics: www.qao.qld.gov.au/contact-us

We publish our three-year program covering what we intend to audit every year on our website: www.qao.qld.gov.au/audit-program. Keep an eye out for this year’s Strategic Audit Plan 2019-2022, due to publish in May 2019.