CAUBO Internal Audit Seminar – VFM/Performance AuditingCarol BellringerJune 15, 2008
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Outline
VFM/Performance auditing in the Office of the Auditor General, Manitoba
Process overview Measuring success Examples of VFM audits issued by the
OAG and other legislative auditors
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VFM auditing at the OAG
OAG mandate – prohibits comments on the merit of policy
VFM vs Special Audits Evolution of practice – VFM auditing
standards/assurance standards Purpose Challenges – future auditing standards Solutions
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Process overview
Determining audit focus Audit planning Audit field work (evidence gathering) Audit reporting Public reporting (report to the
legislature)
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Determining audit focus
Knowledge of business including issues and risks
Audit objectives KEY COMMUNICATIONS– Correspondence with senior officials– Meet with senior officials, discuss
operational issues and risks
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Determining audit focus
Internal sign-off with executive team Priorities within the office Staffing considerations Budget and scheduling issues Sensitivities?
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Audit planning
Criteria Audit Plan KEY COMMUNICATIONS: DM/CEO
meeting to discuss draft criteria DM/CEO acknowledgement of the
suitability of the audit criteria and audit plan
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Audit planning
Objectives Scope Approach Timeliness
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Audit field work (evidence)
Facts Findings Conclusions Recommendations KEY COMMUNICATIONS:– Ongoing with officials on emerging findings– Senior officials updated periodically– Wrap up with officials
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Audit field work (evidence)
Internal updates Consistency with previously issued
reports Differences from past reports Have similar recommendations been
made before? Why not implemented? ROOT CAUSE
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Audit reporting
Draft report Final report Meetings with officials to discuss draft DM/CEO given the opportunity to
include comments – meet if necessary Final report to Ministers – 14 days
required by Auditor General Act
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Audit reporting
Editing in-house – result is as intended to be issued
Consider errors/tone/ “big picture” Anyone “named” given the chance to
review the report Tight time frame but with some flexibility GOAL is buy-in
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Public reporting (RTL)
Must be tabled in the Legislature prior to public distribution
In-session vs out-of-session Media Mailing to interested parties (“green
policy”) Cannot be accessed under FIPPA until
released
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Measuring success
Follow-up process starting in year 3 Public Accounts Committee Department of Finance follow-up Informal follow-up Other measures
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VFM audits issued by the OAG
Audit of the Department of Conservation’s Management of the Environmental Livestock Program
Audit of the Province’s Management of Contaminated Sites and Landfills
Audit of Workplace Safety and Health Audit of the Child and Family Services
Division, Pre-Devolution Child in Care Processes and Practices
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Other audits issued by the OAG
Special Audit: Rural Municipality of La Broquerie
Special Audit: Image Campaign for the Province of Manitoba
Special Audit: Property Transactions in the Seven Oaks School Division
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Livestock Program
Regulation vs other Canadian jurisdictions Processes to ensure operators comply with the
key provisions of the Regulation? Did Department use information to further its
efforts to protect surface and groundwater from contamination?
Sufficient consultation on common issues?
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Livestock Program - Regulation
Livestock Manure and Mortalities Management Regulation under The Environment Act
Legislation to ensure the protection of the environment from potential harmful effects of livestock manure and mortalities
Legislation was more comprehensive and proactive than in some other provinces
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Livestock Program - Regulation
Areas not addressed or more stringent in other jurisdictions:– Controls where operators have multiple species
– Minimum acceptable storage capacity for manure storage
– Controls to address the effects of chemical fertilizers combined with manure application
– Submission of contingency plans
– Controls re: winter spreading
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Livestock Program - Issues
Described the Regulation in the context of other Provincial initiatives
Subsequent issuance of the report of the Clean Environment Commission
Moratorium by the Provincial Government on expansion in certain areas
Lobbying by producers & environmentalists
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Contaminated Sites
Entities in the Government Reporting Entity and Municipalities
Required to comply with Public Sector Accounting (PSA) Standards
Must report and/or disclose in Public Accounts its environmental liabilities
Province requires municipalities to comply with PSA standards
Includes Manitoba’s Universities and Colleges
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Objectives
Whether processes were sufficient to identify contaminated sites and estimate costs associated with remediation of these sites for financial statement accounting/disclosure?
Monitoring by the Department of Conservation to ensure compliance?
Licensing, permitting and monitoring landfills to ensure compliance?
Finance’s compilation of costs re: remediation adequate? Province and municipalities reporting liabilities re landfills?
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Conclusions
Policies and procedures for the management of contaminated sites were not sufficient
Majority, policies and procedures not in place
Majority not preparing financial statements in accordance with PSA standards
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Conclusions
Conservation’s monitoring procedures were not sufficient
Finance’s processes for the compilation of costs were sufficient
Did not address liabilities for mines or buildings containing asbestos
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Survey Findings
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Survey Findings
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Survey Findings
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Survey Findings
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Survey Findings
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Survey Findings
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Survey Findings
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Other reports
Enhancing Audit Committee Practices in the Public Sector (2006)
A Guide to Leading Edge Internal Auditing in the Public Sector (2006)
www.oag.mb.ca (reports and resources)
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Other reports
British Columbia:– Government's Post-secondary Expansion - 25,000
Seats by 2010 (December 2006
– Ministry of Advanced Education, Training and TechnologyValue-for-Money AuditAccountability Relationship of the Ministry With the Science Council of British ColumbiaMinistry Role in the College System
– http://www.bcauditor.com/AuditorGeneral.htm
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Other reports
Alberta:– Accountability in the Education System (2004)
– April 2008 report:Non-credit programs (clarify standards and expectations, monitor)Recommendations from Financial Statement audits, information technology
– www.oag.ab.ca (searched for education – 38 reports)
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Other reports
Ontario:– 2007: Universities, Management of
Facilities– 2006: Community Colleges, Acquisition of
Goods and Services– 2005: Student Assistance, follow up– www.auditor.on.ca