System of methodological audits in CZSO

1. System of methodological auditsin CZSO (Final review, 27th March 2009) Jiří Kubín, CZSO

2. Methodological audits in CZSO – short historical hindsight (1/3) • New Top Management of CZSO was established in May 2003. • First goals were identified, e.g. to recognize the status quo in key statistical areas. 2

3. Methodological audits in CZSO – short historical hindsight (2/3) • Methodological audits were proposed by Jiří Křovák, 1st vice-president of CZSO, directly in May 2003. • General principles of methodological audits, competences and liabilities of auditors, expected outputs of audits (minimal range of final report) were worked out. 3

4. Methodological audits in CZSO – short historical hindsight (3/3) • Czech Statistical Council agreed to Principles of the system of methodological audits including time schedule on 1st July 2003. • System of methodological audits startedin the Quarterly National Accounts Departmentduring the4th quarter 2003. 4

5. Roles in methodological audits 5

6. Goal of methodological audit • Generally: methodological audit is a management tool. • The goal of methodological audit is to explore adequacy of used methodological possibilities, principles, tools and practices, correspondence between standards and practice of EU statistical service. 6

7. Verified practice • Auditing group usually consists of 3 external and 2 internal experts. • Outcome: Final report, prepared according to the general scheme. • Final report is discussed by the Top Management, the Head of Auditing Group and Director of Department. • Time schedule of further stepsis prepared and monitored.7

8. General scheme of Final report(selected items) • Audit assignment including rough time-schedule • Correspondence between standards and practice of EU statistical service • Satisfaction of users needs (statistical outputs) • Assessments - sufficiency of written methodology documentation   - quality dimensions of output (like in EUROSTAT quality report) - benchmarking 5. Suggested further actions and improvements (including miscellaneous opinions of auditing group members)8

9. Time schedule of the methodological audit (1/4) Middle of the previous quarter (Q-1) Audit assignment, suggestion of the Auditing Group (Vice-president, Director of the Department) NO – searching for a new auditor (Q-1) Agreement of the external auditor ??? YES, agreement with the external auditor (Q-1) 9

10. Time schedule of the methodological audit (2/4) (The End of Q-1, beginning of Q) 1st meeting of the Auditing Group. The importance is stressed by participation of the Vice-president. First methodological documents prepared at the discretion of the audited Department (printed, electronic). They often include technical specification of the statistical project. (first month of Q) Prepared documents studied by members of Auditing Group. 10

11. Time schedule of the methodological audit (3/4) (usually beginning of the second month of Q) 2nd meeting of Auditing Group: Exchange of knowledge and opinions, further details requested from audited Department. Auditing group specifies the deadline of the delivery of the revised documents and the date of the next meeting. (Provable contacts between Auditing groupand audited Department via Secretary of Auditing group by E-mail.) (usually the endof the second month of Q) 3rd meeting of Auditing Group: Discussion of revised documents. First version of Final report, preparation of detailed questions for audited Department. 11

12. Time schedule of the methodological audit (4/4) (usually beginning of the third month of Q) Audit meeting at audited Department.All members of Auditing G, experts from audited Dep. Direct questions and answers are useful as they lead to full clarification of status quo in the given statistical area. (The End of Q) Based on the acquired knowledge, Auditing G completes Final report (modifications via e-mail) which is signed at the last meeting of AG. (usually beginning of Q+1) Final report is discussed by the Top Management (including the President of CZSO), the Head of Auditing Group and Director ofDepartment. Time schedule of further steps is prepared and monitored. 12

13. Roles in auditand closing remarks President of CZSO approves Audit assignment, members of the Auditing Group, time schedule of further steps after Final report discussed by Top Management Vice-president monitors the formation of the Auditing Group, approves bonus payment for external auditors Head of Auditing Group (external auditor) manages the work of the Auditing Group Secretary of AG Communication, organisational and methodological support, monitoring abidance by rules Director of audited D prepares requested documents and the work of his/her experts Provable E-mail communication between AG and AD got right in practice. Scheduled output of the system of Methodological audits during 2003 to 2008: 23 Final reports. All of them are finished by 10th December 2008. 13

14. List of audits – 1/4 • Quarterly National Accounts • Industrial Production Index • Construction Statistics • Annual National Accounts • Quarterly survey as a support of GDP preliminary estimate • Annual Structural Survey 14

15. List of audits – 2/4 • Consumer Price Statistics • Agricultural, Construction and Services Prices Statistics • Labour and Earning Statistics • Household Budget Survey • Environmental Statistics • Industrial Prices Statistics and External Trade Prices Statistics 15

16. List of audits – 3/4 • External Trade Statistics • Tourism Statistics • Agricultural Statistics • Public databases • Population Statistics • Statistics on Public Health and Safety at Work 16

17. List of audits – 4/4 • Retail Trade Statistics • Information Society Statistics • Energy Statistics – production of electricity and other energy sources, energetic balances • R&D and Innovation Statistics • Statistics of Financial, Governmental and Non-profit Organisations 17

18. Ratio of significant findings to findings of lower significance in methodological audits finished in 2007 and 2008

19. Auditors during the 1st round of methodological audits – short overview Altogether 120 auditors (some of them asked repeatedly), actually 92persons - 60external expertsand 32 experts from CZSO Among them • 14 University Professors, • 1 senator of the Parliament of Czech Republic, specialists from other national institutions and financial sphere: • Czech National Bank, • Ministry of Finance • Ministry of Industry and Trade, • Ministry of Labour and Social Affairs, • Ministry for Regional Development, • Customs Administration of the Czech Republic, • Czech Moravian Confederation of Trade Unions. 18

20. Final Review by the Czech Statistical Council On 27th March 2009 the Czech Statistical Council evaluated the first round of methodological audits to be satisfactory and highly appreciated the work of Auditing Groups and Audited Departments. Reports from the second round, when the gained experience will be exploited, are anticipated. Arrangements for the second round of methodological audits are almost completed. 19

21. Acknowledgements Professors of University of Economics, Prague: Prof. Stanislava Hronová and Prof. Jaroslav Jílek Prof. Stanislava Hronová contributed to the successful start of the auditing cycle in a decisive way. Prof. Jaroslav Jílek led four Auditing Groupperfectly.

22. Thank you for your attention. jiri.kubin@czso.cz