REPORTING PROCESS

1. REPORTING PROCESS DAY 6 SESSION NO.3 (THEORY) BASED ON CHAPTER 6 PERFORMANCE AUDITING GUIDELINES RTI, MUMBAI / CH 6

2. Learning Objectives In this previous session we discussed: • Characteristics of good report. Focussed reporting • Focussed Reporting • Reporting process: Discussion papers & Risk involved with discussion papers • Discussion papers and audit observations • Exit conference & Field audit report • Draft performance audit report RTI, MUMBAI / CH 6

3. Cont… In this session we will discuss: • Level of details in the report • Forwarding of the draft report & response of the entity  • Observation of the SAI headquarters on draft report & second journey of the report to SAI headquarters • Final report: its contents, structure and data contained in the report  • Enhancing the presentation & readability of the report: quality assurance of reporting RTI, MUMBAI / CH 6

4. Level of details in the report • Emphasis on quality of performance audit report implies inter alia that it should be self contained in the sense that a reader is able to understand the scope, audit objectives, audit criteria and evidence used, audit findings and conclusions in a logical manner. • While the final report is meant for the Parliamentarians/legislators, the draft report is oriented toward the entity (secretary of the ministry), which should contain sufficient details, particularly in relation to the evidence, RTI, MUMBAI / CH 6

5. Cont… • Their sources and methods of evidence gathering and evidence analysis in support of the audit findings and Conclusions to enable him/her to send the response in proper perspective. • One way to achieve this balance could be to write the draft report as designed for the final report and add all relevant information containing details of sampling of units and transactions/documents, sources and methods of evidence gathering, evidence analysis (where applicable), etc. as supporting annexes with cross-references to enable the entity appreciate the audit findings and conclusions and relate them to the evidence and its analysis. RTI, MUMBAI / CH 6

6. Forwarding of the draft report to the Government • subject of the performance audit and reference to previous dialogues; • gist of major audit findings and recommendations along with the risks and materiality of the issues; • attention to the orders of the government issued on the recommendation of the parliamentary/legislature committee, setting time limit for formal response, (when specific time limit has not been set, the Accountants General may follow that set by the parliamentary committee or any other legislature committee as a reference point); RTI, MUMBAI / CH 6

7. Forwarding of the draft report to the SAI Headquarters • invitation to a formal discussion and presentation of the audit findings and conclusions; and • the expected value additions to the programme management, if the recommendations are implemented. It should consists of : • A copy each of the draft performance audit report and the forwarding letter to the secretary of the ministry/department • evidence for each audit finding and conclusions along with test of evidence against the standards of relevance, competence and reasonableness, sources of evidence, evidence analysis along with cross-references to the findings and conclusions; RTI, MUMBAI / CH 6

8. Cont… • copies of basic documents referred to in the report viz. rules, orders, acts, correspondence etc., with cross-references; • details of all correspondences, meetings, presentations, etc. with the entity with cross-reference, where applicable; • complete audit management process documentation from the stage of audit planning (implementation guidelines) to the processing of the draft report, • An assurance memo in the prescribed form • period during which audits were conducted in the field along with break up for each stage/unit; and • names and designation of the members of the audit team and supervisory officer. RTI, MUMBAI / CH 6

9. Response of the entity • The written response to the draft performance audit report may be achieved through correspondence, personal meetings and presentation of the draft audit report. • The Accountants General are encouraged to facilitate a formal presentation of the draft performance audit report before the secretary of the ministry and his team. • Since the audit report is presented to the Parliament/state legislature, it is crucial that the response of the entity has the approval of the secretary of the ministry/department. The Accountants General may evolve procedures to assure that the response by the entity is issued by or with the approval of the secretary and an indication to this effect is given in the latter case. RTI, MUMBAI / CH 6

10. Observation of the SAI headquarters on draft report • The observations in relation to the audit findings and conclusions, recommendations, evidence, drafting, etc. by the SAI headquarters is a combination of quality control, quality assurance and supervision measures. • It also facilitates review by the SAI top management to ensure that appropriate procedures have been followed by the Accountants General in implementation of the audit. RTI, MUMBAI / CH 6

11. Second journey of the report to SAI headquarters • On receipt of the response of the entity and observations of the SAI top management, the Accountants General may incorporate the modifications, warranted by them and forward the draft report along with a response sheet to the SAI headquarters for approval of the report. RTI, MUMBAI / CH 6

12. Final report • On approval of the report by SAI top management, the Accountant General may send the bond copy of the report with appropriate annotations for formal approval of the report by Comptroller and Auditor General, after which the report stands cleared for printing of the prescribed numbers of copies, signature copies for signature of the Comptroller and Auditor General in ink and others with his facsimile signature. • The signed copies of the report should be forwarded to the government for placing it on the table of the Parliament/state legislatures. Simultaneously, intimation on forwarding of the report along with a copy of the report is to be sent to the secretary to the President/Governor in respect of the reports relating to the Union and state governments respectively RTI, MUMBAI / CH 6

13. Contents of the report • contain title, signature and date, objective and scope of audit, addressee (not necessary when formal procedures exist for its delivery); • be complete; • identify the subject matter viz. areas of performance audit and the legal basis of audit; • provide assurance that audit has been carried out in accordance with generally accepted procedures in compliance with the standards; and • be timely. RTI, MUMBAI / CH 6

14. Discussion papers (During audit) Entity response/minutes of discussion Audit observations (Towards close of entity audit) Entity response, exit conference/Interview Draft field audit report (After conclusion of audit) Chief of Entity Entity response Forwarded to SAI HQ Observation for SAI HQ Draft Performance Audit report Issued to entity-in-chief (secretary) Entity response Final performance audit report Approval of report by SAI top management Bond copy of report Approval of CAG to the bond copy Printing of the report and signature copies to SAI, HQ Signature of CAG in the printed copies Issue of signed report to government with intimation and a copy to secretary to the President/Governor Copies of report with facsimile signature of CAG to Parliament/legislature on demand. RTI, MUMBAI / CH 6

15. Structure of the report • Title • Highlights • Recommendations • Introduction scope of Audit • Audit objectives • Audit methodology • Audit findings: • Lessons learnt and sensitivity to error signals • Acknowledgement • Graph, charts, diagrams, photographs, etc • Glossary of terms • References or bibliography Data in the report RTI, MUMBAI / CH 6

16. Data in the report • Excessive statistical data diminish the readability of the report. Accountants General will be called upon to secure a balance between the readability of the report and at the same time render it convincing through inclusion of the statistical information. • Care should be taken to make sure that the audit findings and conclusions are stated with the help of logic emerging out of the audit procedures and that the main issues are not underplayed in the maze of statistical data RTI, MUMBAI / CH 6

17. Enhancing the presentation and readability of the reports The distinction in presentation between the highlights of significant audit findings and explanation of technical procedures etc. may be achieved with help of formatting and publishing techniques, including different backgrounds and font colours for the two. RTI, MUMBAI / CH 6

18. Quality assurance of reporting Quality assurance of reporting process and the final output is assured by:- • Adherence to the auditing standards and the guidelines; • Transparent audit and audit management process documentation of entire reporting process; • Concurrent supervision and control by the Accountant General; RTI, MUMBAI / CH 6

19. Cont… • quality control assessment and review by SAI top management before approval of the report; and • Technical inspection by SAI and peer review of the performance audit process. RTI, MUMBAI / CH 6

20. Session Summary In this session we discussed: • Level of details in the report • Forwarding of the draft report & response of the entity  • Observation of the SAI headquarters on draft report & second journey of the report to SAI headquarters • Final report: its contents, structure and data contained in the report  • Enhancing the presentation & readability of the report: quality assurance of reporting RTI, MUMBAI / CH 6