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Planning and Programming for Effective Use of External Audit Resources. Victor Rezendes Managing Director Strategic Issues U.S. General Accounting Office. Key Questions All Organizations Must Answer to be Effective. Who and what are we, what do we do now, and why?

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Planning and Programming for Effective Use of External Audit Resources

Victor Rezendes

Managing Director

Strategic Issues

U.S. General Accounting Office


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Key Questions All Organizations Must Answer to be Effective

  • Who and what are we, what do we do now, and why?

  • What do we want to be and do in the future, and why?

  • How do we get from here to there


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Benefits of Strategic Planning

  • Increased effectiveness

  • increased efficiency

  • Improved understanding and better learning

  • Better decision making

  • Enhanced organizational capabilities

  • Improved communications and public relations

  • Increased political support

Source: Creating and Implement Your Strategic Plan, John M. Bryson and Farnum K. Alston


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Excuses for Avoiding Strategic Planning

  • Lack of support

  • Planning will not lead to perfection

  • We are too big/or too small

  • We have a union

  • We have policies and goals to take care of this

  • We do not know where to start

  • We did this years ago

  • We are perfect already

Source “Creating and Implementing Your Strategic Plan”, John M. Bryson and Franum K. Alston


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Organizational Transformations

  • 9 Key Practices

  • leadership

  • Integrated mission & goal

  • clear principles & priorities

  • goals & timeline

  • implementation team

  • line of sight

  • communication strategy

  • employee involvement

  • world class organization

  • High Performing Organizations

  • results-oriented

  • matrixes

  • flatter & more horizontal

  • employee empowerment

  • proactive approaches

  • leveraging technology

  • sharing knowledge

  • managing risk

  • forming partnerships

  • Current State

  • process-oriented

  • stovepipes

  • hierarchical

  • inwardly focused

  • micro-managing

  • reactive behavior

  • avoiding technology

  • hoarding knowledge

  • avoiding risk

  • protecting turf


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Key Elements of theStrategic Planning Process

  • Develop/

  • Revise:

  • Mission

  • Values

  • Goals

  • Develop/

  • Revise:

  • Themes

  • Strategic

  • Objective

  • Strategies

Internal

Review and

Agreement

External,

Internal

Scans

Publish

Plan

Consult

Key

Stakeholders

Client

Stakeholder

Input

Review

Authorities

Develop

Agreement


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Effective Use of Resources Begins with Strategic Planning

  • Start with the client and end with the client

  • Build consensus by involving a variety of internal and external parties

  • Focus on strategic results

  • Set high expectations

  • Think horizontal and longer term but update frequently

  • Publish the plan for transparency reasons

  • Use the plan as a framework for all other key organizational decisions, with appropriate linkages (e.g. performance measurement, rewards, recruiting and training)

  • Be accountable for results through measurement and publication


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Realign Resources to Focus on the Plan

  • Understand the strategic objectives and align the organization to meet these objectives

  • Encourage matrix management

  • Enhance efficiency, flexibility, and accountability by reducing layers of management and numbers of organizational units

  • Realign as needed

  • Develop workforce plans to support the strategic plan


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Maximizing Value and Managing Risk Within Resource Constraints

  • Focus management resources on activities with the most value and risk based on

  • Assess and designate risk levels for each engagement

  • Adjust review and other processes to reflect the level of value and risk


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Ontario Internal Audit DivisionRisk Model

Scope of Risk Management

Risk that results from:

Risk that results from:

Environmental Risks

  • The business that you are

  • in (volatility of external

  • factors)

Organizational

And

Cultural

Risk

Strategic Risk

  • The direction that you

  • plan on going

Operational

Risk

  • Carrying out your

  • objectives

  • Systemic issues

  • Culture and values

  • Commitment

  • Learning and

  • management systems

  • Having to comply with

  • laws, regulations,

  • standards and policies

Compliance

Risk

Financial

Risks

  • Obtaining, committing

  • and using economic

  • resources

Informational Risks

  • Relying on information

Source: Jacques R. Lapointe, Chief Internal Auditor & Assistant Deputy Minister,

Internal Audit Division, Management Board Secretariat, Toronto, Ontario


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Institutional Risk Management

  • Establish protocols (policies, procedures, transparency) for dealing with clients and audited organizations

  • Client feedback (e.g. surveys)


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Key Enablers for Effective

Performance Management

  • People

  • Process

  • Technology

  • Environment

The most important of the four is PEOPLE —

an agency’s human capital.


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developed an overall workforce plan

intensified recruiting efforts in areas requiring specialized skills and expertise

implemented succession planning

created inventory of staff knowledge and skills

enhanced training programs

revamped and modernized your performance appraisal system and compensation system and linked it to our Strategic Plan

enhanced rewards and incentives to attract and retain high quality staff with specialized skills

established office of opportunity and inclusiveness to ensure that all staff are treated fairly and their differences respected

employee preference and feedback surveys

Develop a Skilled Workforce


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Conclusion

  • SAI’s work needs to be professional, objective, fact-based, non-partisan, non-ideological, balanced and fair

  • Our work should be focused on building the future, not the past

  • Strategic planning is vital if we are not going to repeat the the same problems

  • Planning and programming helps us assume better utilization of resources

  • Assuring the effective use of external audit resources is an issue that all SAIs face, and we have much to learn from each other through knowledge sharing, benchmarking and best practices information


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