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Receiving a Performance Audit

Receiving a Performance Audit. Steven P. McKerney, CPA Director of Internal Audit Washington State Department of Transportation Association of Government Accountants Olympia, WA November 2, 2006. Performance Audits Compared to Other Audits. Performance Audits

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Receiving a Performance Audit

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  1. Receiving a Performance Audit Steven P. McKerney, CPADirector of Internal AuditWashington State Department of Transportation Association of Government AccountantsOlympia, WANovember 2, 2006

  2. Performance Audits Compared to Other Audits • Performance Audits Generally assess a program’s effectiveness, efficiency, and results. May also assess compliance with legal or policy requirements. • Authority for Current Performance Audits at WSDOT: • Senate Bill (ESSB) 6839 • Initiative 900 • Fiscal Audits Assess how assets are safeguarded, the integrity and reliability of financial data, internal controls, accounting practices, and compliance with financial related laws.

  3. Current Performance Audits of WSDOTJuly 2006 – September 2007 • Highway Program • Ferries Division • Administration and Organizational Structure • Traffic Congestion (Management & Improvement to the State Highway System) • Collection of State Debt

  4. Performance Audit StandardsGovernment Auditing Standards - 2003 Revision • Requirements of Auditors (Value to the Public and the Auditee) • General Standards Address the auditor’s independence to allow for an objective view, free of personal, external, and organizational impairments. Also contains specific requirements for professional judgment, competence of staff, and quality control by the audit organization. • Fieldwork Standards Contains requirements for adequate planning and supervision of each audit, as well as gathering and use of evidence in an audit. • Reporting Standards Addresses the content and critical elements of each audit report, requiring that each report be complete, accurate, and objective. This section of the standards states that “…the entire report be balanced in content and tone.”

  5. Preparing for the Audit • Involve Agency Management • Audit Protocols • Audit Scope • Government Auditing Standards • Establish a Point of Contact for Your Agency • Establish Working Groups

  6. Preparing for the Audit • Assign Roles • Analyze Audit Scope • Work with agency experts • Anticipate and gather information helpful for the audit before it starts • Consider possible Audit Criteria • Provide orientation sessions for the auditor • Field questions • Fill document requests • Set interviews • Monitor audit progress • Track and report time spent • Official response to audit reports

  7. Coordination with the Auditors • Written Protocols with the Auditor • Assign Contacts for each Audit Objective • Contacts provide direction on requests for documents and interviews • Biweekly Meetings with the Audit Staff • Audit Conclusions and Recommendations – In writing throughout the audit

  8. Communication • Early and Frequent Communication • Copy of Documents Provided to the Auditor • Regular Updates on Audit Status to Agency Executives

  9. Lessons Learned – So Far • Facilitating Access to Staff and Records -WSDOT has put much effort into this- • Beyond simply a legal requirement • Helps establish much needed trust in this process • State Audit staff have expressed appreciation • Time Commitment • At many levels of the organization for each audit • Audit Criteria • Important to review this with the auditor • Also important to let this develop throughout the audit

  10. Lessons Learned – So Far • Management Involvement • Good Lines of Communication

  11. Thank You Contact Information Steve McKerney WSDOT Director of Internal Audit (360) 705-7004 mckerns@wsdot.wa.gov Eric Thomas Performance Audit and Performance Reporting Manager (360) 705-7936 thomaer@wsdot.wa.gov

  12. Attachment -Audit Scope-Current Performance Audits of WSDOTJuly 2006 – September 2007 • Highway Program Audit Scope • Consumable Inventory & Supply Management • Hot Mix Asphalt procurement strategy • Maintenance operations • Highway Project Delivery

  13. Attachment -Audit Scope-Current Performance Audits of WSDOTJuly 2006 – September 2007 • Ferries Division Audit Scope • Capital Construction • Vessel Refurbishment • Terminal Maintenance • Operations (Management Policies, Risk Management, Purchasing) • Performance Measures • Human Resources • Revenue Opportunities • Pooling IT Systems

  14. Attachment -Audit Scope-Current Performance Audits of WSDOTJuly 2006 – September 2007 • Administration & Organizational Structure Audit Scope • Administrative Costs • Organizational Structure’s impact on resources

  15. Attachment -Audit Scope-Current Performance Audits of WSDOTJuly 2006 – September 2007 • Traffic Congestion (Management & Improvement to the State Highway System) Audit Scope • Transportation project selection • WSDOT's use of performance measures to assess its efficiency and effectiveness to address congestion. • WSDOT’s use of resources to address traffic congestion • Compliance with RCW 47.06.130 (2) (Multimodal corridor analysis)

  16. Attachment -Audit Scope-Current Performance Audits of WSDOTJuly 2006 – September 2007 • Collection of State Debt Audit Scope • Collection Efforts for Accounts Receivable • Account Write Offs

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