Information paper on the performance audit in the public sector

FEE’s project “Getting involved in public sector assurance” starts off with this information paper on the performance audit; an independent examination on whether the activities of public organisations are economical, efficient and effective and how they can be improved. (Update: our information paper on the compliance audit is now also available)

The project is part of FEE’s ongoing contributions to improving public sector financial management. This has become especially relevant since the financial and fiscal crisis have decreased the trust of citizens who push public sector organisations to deliver value for money. With this pressure the demand grows for assurance services that enhance the information on which government or public management base their decisions. The European accountancy profession can play a role in making this information more transparent and reliable. With “Getting involved in public sector assurance” FEE starts exchanging best practices to this end.

Visit our web pages to stay up to date on FEE’s work on audit audit & assurance and public sector policy.

Links to further guidance and information

INTERNATIONAL GUIDANCE

• International Standard on Assurance Engagements (ISAE)
– ISAE 3000 (Revised) Assurance Engagements Other than Audits of Reviews of Historical Financial Information

• International Standards of Supreme Audit Institutions (ISSAI)
– Fundamental Principles of Performance Auditing
– ISSAI 3000 Implementation Guidelines for Performance Auditing
– ISAAI 3010 Performance Audit Guidelines: Key Principles – Appendix

• Books
– Performance Auditing: A Measurement Approach
– Performance Auditing, Contributing to Accountability in Democratic Government
EUROPEAN GUIDANCE

• European Court of Auditors
– Audit Methodology
– Performance Audit Manual
– Special reports

• European Commission
– Internal audit conferences Performance Audit

• European Organisation of Supreme Audit Institutions
– Literature on performance auditing and Supreme Audit Institution
NATIONAL GUIDANCE IN EU COUNTRIES

BELGIUM

French
• Centre d’information du révisorat d’entreprises
– L’audit (de performance) dans les secteurs public et non marchand
• Advanced : Audit performance dans les secteurs public et non marchand (14-118f)

Dutch
• Performance Auditing, Een inleiding
• Spoor financieel management en prestatiemeting, De praktijk van performance audit: een drielandenstudie
• De (performantie-)audit in de publieke sector en de non-profitsector

FINLAND

English
• Performance Audit Manual
• Performance Audit Risk Analyses

Finnish
• Toiminnantarkastuksen ohje

GERMANY

• Federal Level

– The German Court of Audit (“Bundesrechnungshof”)
– Federal Budget Law (“Bundeshaushaltsordnung”)

• State Level
– Regional Audit institutions (Landesrechnungshöfe)
– e.g. Landesrechnungshof NRW
– Budget Law For Each State (“Landeshaushaltsordnung”)
– e.g. Budget Law For NRWBudget Law For NRW

• Local Level
– Local laws (“Gemeindeordnung”/ “Kommunalverfassung”) require audit institutions on the local level („Örtliche Rechnungsprüfung” and “Überörtliche Rechnungsprüfung“)
– e.g. Gemeindeordnung NRW (§§ 103, 105)
– e.g. Audit Institution in NRW: Gemeindeprüfungsanstalt using Performance indicators/benchmarks
– Further guidance on the Website of the Ministry of Interior in NRW

ITALY

• Guidelines for financial and performance auditing of local governments
• National legislation on measurement and evaluation of public sector entities performance
– Legislative Decree n. 150/2009

LATVIA

• FRTAP Latvia: Seminar on audits of municipalities

NETHERLANDS

• Performance audits manual
• Doelmatigheids- en doeltreffendheidsonderzoek
• Grote-projecten procedure

NORWAY

English
• Guidelines for Performance Auditing
• Auditing standards for the office of the Auditor General of Norway

Norwegian
• Veileder brukerundersokelser
• Veileder i resultatorientert revisjon
• Veileder i undersokelsesdesign
• Veileder i utarbeiding og brav sporreskjema
• Retningslinjer for forvaltings revisjon

SLOVENIA

Slovenian
• Priro?nik za revizije smotrnosti poslovanj

SPAIN

English
• Court of Audit Organic Act
• Court of Audit Functioning Act

UNITED KINGDOM

English
Cross UK audits and audit of central government in England
• National Audit Office (United Kingdom)
– Guidance on evaluating value for money (VFM) of PFI/PPP projects (dating from 2007)

– Older guidance on VFM audit (issued in 2003)
http://www.psc-intosai.org/media/17421/united_kingdom_-_quality_mattters.pdf
http://www.psc-intosai.org/media/17425/united_kingdom_-_vfm_handbook.pdf
and more generally,
http://www.psc-intosai.org/subcommittees/performance-audit/technical-documents/by-language/
This page also provides links to other SAI guidance on performance audit, in English and other languages.

• Local public audit in England
– Guidance is currently provided on the Audit Commission website, although this will soon be withdrawn as soon as the abolition of the Commission is completed. The guidance currently comprises codes of Audit Practice for local government and health, and guidance on VFM conclusion
http://www.audit-commission.gov.uk/audit-regime/codes-of-audit-practice/
http://www.audit-commission.gov.uk/audit-regime/codes-of-audit-practice/value-for-money-conclusion/
Future responsibility for the Code has passed to the National Audit Office; a final draft code for use in future has been laid before Parliament for approval and is available at
http://www.nao.org.uk/keep-in-touch/our-surveys/consultation-code-audit-practice/

Wales Audit Office
• Code of Audit Practice for financial audit and a Statement of Practice for local government improvement audit, assessment and special inspection work

Audit Scotland
•The principles underpinning the approach to Best Value audit in local government
http://www.audit-scotland.gov.uk/docs/corp/2009/bv_audit_best_value.pdf
http://www.audit-scotland.gov.uk/docs/corp/2011/110520_codeofauditpractice.pdf
http://www.audit-scotland.gov.uk/docs/health/2009/bv_audit_best_value_nhs.pdf
http://www.audit-scotland.gov.uk/docs/central/2009/bv_audit_best_value_central_gov.pdf
http://www.audit-scotland.gov.uk/work/bestvalue_home.php

• Performance Audit Standards

• Audit diagnostics – Best value toolkits

• Other scrutiny guidelines and information
http://www.audit-scotland.gov.uk/work/scrutiny/strategic.php
http://www.audit-scotland.gov.uk/work/scrutiny/joint_scrutiny.php
http://www.audit-scotland.gov.uk/work/scrutiny/memoranda.php

• Self-evaluations

• Performance/ best value audit work programme

Northern Ireland Audit Office
• The NIAO practice guides

• VFM standard

Non-European

UNITED STATES

• U.S. Government Accountability Office
– Performance Auditing: The Experiences of the United States Government Accountability Office
– Government Operations: Assessing Internal Controls in Performance Audits
– ASOSAI; Fifth ASOSAI Research Project: Performance Auditing Guidelines, October 2000