Caubo internal audit seminar vfm performance auditing carol bellringer june 15 2008
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CAUBO Internal Audit Seminar – VFM/Performance Auditing Carol Bellringer June 15, 2008. 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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Presentation Transcript

Outline
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


Vfm auditing at the oag
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


Process overview
Process overview

  • Determining audit focus

  • Audit planning

  • Audit field work (evidence gathering)

  • Audit reporting

  • Public reporting (report to the legislature)


Determining audit focus
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


Determining audit focus1
Determining audit focus

  • Internal sign-off with executive team

  • Priorities within the office

  • Staffing considerations

  • Budget and scheduling issues

  • Sensitivities?


Audit planning
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


Audit planning1
Audit planning

  • Objectives

  • Scope

  • Approach

  • Timeliness


Audit field work evidence
Audit field work (evidence)

  • Facts

  • Findings

  • Conclusions

  • Recommendations

  • KEY COMMUNICATIONS:

    • Ongoing with officials on emerging findings

    • Senior officials updated periodically

    • Wrap up with officials


Audit field work evidence1
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


Audit reporting
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


Audit reporting1
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


Public reporting rtl
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


Measuring success
Measuring success

  • Follow-up process starting in year 3

  • Public Accounts Committee

  • Department of Finance follow-up

  • Informal follow-up

  • Other measures


Vfm audits issued by the oag
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


Other audits issued by the oag
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


Livestock program
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?


Livestock program regulation
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


Livestock program regulation1
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


Livestock program issues
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


Contaminated sites
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


Objectives
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?


Conclusions
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


Conclusions1
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









Other reports
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)


Other reports1
Other reports

British Columbia:

  • Government's Post-secondaryExpansion - 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


Other reports2
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)


Other reports3
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


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