helping the nation spend wisely performance audit and evaluation: common ground with internal audit...

HELPING THE NATION SPEND WISELY

Performance audit and evaluation: common ground with Internal Audit ?

The UK National Audit Office experience

Jeremy LonsdaleDirector-General, VFM auditEuropean Commission Internal Audit

ServiceConference

13 October 2009


Structure of the presentation

Audit: some background Performance audit Evaluation Similarities and differences Implications for Internal Audit Conclusions


Audit: some background

Encompasses a wide range of activities Long history Governed by professional standards and

often has legal status In public sector undertaken by

organisations with statutory authority End result often a certificate, opinion,

discharge Performance audit more recent approach 20-30 years of methodological development


Characteristics of external audit

Independence Coverage: regularity to outcomes Accountability focus Checking against agreed criteria Gathering evidence to form judgement Providing assurance Making recommendations Public findings


Performance audit

Economy, efficiency, effectiveness Resource use Establishing what has happened What has been achieved Shortcomings and weaknesses Good practice and success


Performance audit

Not commenting on policy Limited timescales For publication Usually fitting within wider

accountability processes


National Audit Office VFM work

Study selection Study design Fieldwork Analysis Clearance Reporting and publication Supporting parliamentary process Follow up and impact


Focus of our work

Programme and project management Individual organisation - agency Cross-government - procurement Systemic issues - innovation


Trends

Focus Methods Staffing and skills Reporting Mindset Additional products


Evaluation: some background

Developed in last 20-30 years in many countries

Broad definitions, approaches and methods Purposes:

– increase knowledge– improve management and delivery– justify policy or programme or alterations to them

Undertaken by wide range of practitioners in a range of settings


Similarities between performance audit and evaluation Both forms of assessment Rooted in idea that possible to scrutinise and

understand problems and offer solutions Both examine public sector programmes and

activities Aim to gather and make use of robust, objective

evidence and form judgements Make use of a range of quantitative and qualitative

methods; systematic and well tested procedures Design tailored to needs of particular study;

contrast with financial audit


Similarities 2

Both disciplines concerned with the quality of what they do and have developed quality assurance arrangements

Shape of work depends on the skills and experience of practitioners

Generate reports to enlighten, advise and recommend to others

Often recognise that formal reporting not sufficient; developing other ways to share conclusions and recommendations


But…..

Will (must) always be significant differences and audit shouldn’t try to be evaluation

Different mindset – always accountability flavoured

Different status and institutional setting – government role to evaluate its own programmes

External audit always public Differently commissioned and different

relationship to commissioners Different objectives Clearly some methods that audit would not use


External audit/Internal Audit: collaboration Collaboration on projects – joint work Share knowledge and insights informally Planning External audit draw on internal audit –

reduce testing Audit committees – provide specialist input Secondments – both ways Advise management on quality Joint training


Implications

Clear can work together but need to guard independence

Need to acknowledge differences Links with evaluators may be easier than

external audit But – IA has clear checking, compliance

perspective, evaluation more exploratory IA more organisational and administrative

than evaluation IA may need to look at quality of evaluation


Some final thoughts

Subject matter – scope for greater IA attention to VFM ?

Methods – scope for IA to draw on wider range as EA has done ?

Role – scope for widening activities as EA has ?

Quality assurance – scope to draw on approaches used by EA ?

But ultimately IA should do what it does best

helping the nation spend wisely performance audit and evaluation: common ground with internal audit...

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