Performance audit work plan (“risk assessment”)
The Auditor’s Office is required to use Generally Accepted Government Auditing Standards (GAGAS, or “Yellow Book”) to conduct audits. One of the standards is to ensure there are no personal or external impairments to their independence when conducting audit work. Examples of such impairments include preconceived ideas, biases, or external interference that could lead to slanted audit findings (Standard 3.07 and 3.10).
The first place to eliminate the possibility of impairment on a performance audit is in choosing which agency programs or processes to audit. In financial audits, the programs to audit as well as the audit work are prescribed. For performance audits, auditors have broad discretion about what will be audited.
A best practice for independently choosing audits is to objectively assess the risk of an agency or program in achieving its key mission. Audit organizations typically use this type of “risk assessment” to rate agencies or programs. One common assessment tool incorporates scoring agencies or programs in the following areas:
- Significance (Ex: Size of budget, number of people served)
- Susceptibility (Ex: Number of previous audit findings, time since last audit)
- Sensitivity (Ex: Amount of news coverage, level of citizen interest)
Agencies or programs that have higher scores in these categories (example: a program with a large budget, previous audit findings, and recent negative news coverage) are more at risk of not achieving their mission, and therefore would have a greater likelihood of being chosen for an audit. Using this type of evaluation inserts more objectivity into developing the auditor’s work plan.
State Auditor’s work
The Auditor’s Office is developing their next performance audit work plan. They have purchased a technology solution to more objectively assess agency programs, and are working with a consulting company to assist them in learning how to best use the tool.
How agencies will be involved
Audit staff will need to populate the tool with agency information. Agencies will be contacted to ensure that the auditors are accurately interpreting information they have already obtained about the agency. Certain agency staff may be invited to see how the new tool works and participate in evaluating programs for audit consideration.
Additional information
-
State Auditor’s web page on their audit work plan, or risk assessment.
-
Expectations for Agency Involvement: Meetings in Early October
- Discussion topics for initial agency meetings
-
Memo to Separately Elected Officials from Auditor on 09/15/09
-
Information from the Auditor about Planning Future Performance Audits
Contacts
-
For questions about the State Auditor’s audit work plan, please contact Larisa Benson, State Auditor’s Office, (360) 725-9720, or Kimberly Cregeur, Governor’s Liaison on Performance Audits & Review, (360) 902-0888.