Performance Audit: ‘ Managing for Results’ to ‘Value for Re$ources’

1. Performance Audit:‘Managing for Results’ to ‘Value for Re$ources’ ICGFM Miami Conference & Training 2008 May 22, 2008 . Jean-Baptiste Sawadogo Strategic & Results-Based Management Consultant Leader One Inc Tel. +1 613 721 8087; E-mail: JeanBSaw@aol.com “The one people call when they really want results” Leader One Inc

2. Performance Audit:The Wave of the Future • ‘Performance Audit’ is about audit on ‘Value for Re$ources’ (VfR); it is a paradigm shift in Public Financial Management • Early forms of performance reviews (Assessments, Evaluations and Audits) have put the spotlights on “Spending” vs. “Results”, leading to ‘Managing for Results’ • In turn, ‘Managing for Results’ is now driving the rising wave of ‘Performance Audits’ • The leadership of ‘Public Finance’ functions is key in ‘Managing for Results’ to get ‘Value for Re$ources’ Leader One Inc

3. Global Realities and Milestones • Finance is finite AND “Do more with less!” • Starting with the global recession of the early 1990s • Finance is not everything • CIDA’s Strategic Review and Renewal Exercise (1990+) • Results-Based Management (RBM) at CIDA (1993+) • Office of the Auditor General of Canada Report (1993+1995) • Aid Effectiveness Principles adopted by DAC-OECD (1996) • Assessing Aid: a World Bank report (1998) • Results for Canadians - a Government-wide RBM Policy (2000) • Many OEDC countries have adopted a results-focus (+ - 2000) • The Millennium Declaration on the MDGs at the UN (2000) • ‘Managing for Development Results’ – WB and OECD (2002) • Paris Declaration on Aid Effectiveness DAC-OECD-led process (2005+) • Beyond Finance, there is a global consensus on the focus on results Leader One Inc

4. A New Global Imperative:‘Managing for Results’ • Demands on governments and their agencies to deliver and to be accountable for results • Demands on international organizations to “focus on results” (UN; Multilaterals; NGOs; etc.) • Demands on private firms to perform better : both financially and socially (ethics; responsibility) • Demand for innovative results-focused management approaches • Increasing demand for a new type of audit > Performance Audit Leader One Inc

5. What is ‘Performance Audit’? • Performance Audit is “… a systematic, purposeful, organized and objective examination of government activities; … designed to promote accountable government; … includes the examination of economy, efficiency, cost effectiveness and environmental effects of government activities ...” • “A focus on performance covers both the benefits accomplished for [citizens] and due process and fairness in the delivery of services”. (Excerpts adapted from the Performance Audit Manual, Office of the Auditor General of Canada - June 2004; pages 13 and 17) Leader One Inc

6. What is ‘Managing for Results’? • A deliberate, systematic, rigorous pursuit of results through the practice of Management; it is a way of thinking; a way of doing business: • Designing/planning; implementing; monitoring; reporting; evaluating; auditing; managing risks; communicating • Linking of ‘Re$ources’ with ‘Results’ committed to • Two “brands” of results-focused Management • Original: ‘Results-Based Management’ (‘RBM’)1 - Inputsvs. Results (Results are outputs, outcomes, and impacts) • Consensus: ‘Managing for Development Results’ (‘MfDR’)2 1Original “brand”: Canadian International Development Agency (CIDA); 1993+ 2Subsequent consensus “brand”: DAC-OECD-led consultative process 2002+ Leader One Inc

7. A Seven-Point Overviewof ‘Managing for Results’ • ‘Misconceptions’ • Principles • Words • Tools • Crosscutting Issues • Functional Stakeholders • ‘Rewards’ Leader One Inc

8. 1. Top ‘Misconceptions’ • ‘Managing for Results’ is ‘Monitoring & Evaluation’ • Attribution of ‘Results’ is impossible • The ‘impact’? Don’t bother! Leader One Inc

9. 2. Top Principles • Partnership/Participation • Transparency • Broad application (even to Audits) Leader One Inc

10. 3. Top Words • ‘Result’: an expected or actual achievement (i.e. an output, an outcome or an impact) • ‘Activity’: it is NOT a ‘Result’; it IS the ‘doing’ that supports the achievement of a result • ‘Indicator’: it is ONLY a measure to assess progress towards or achievement of a result Leader One Inc

11. 4. Top Tools • The Logical Framework Analysis (LFA) or a simpler Logic Model at the very least • The Performance Measurement Framework (PMF) • The Implementation Plan (including Work Breakdown Structure/activities; budgets; reporting; risk management; operations strategy; communication strategy) Leader One Inc

12. 5. Top Crosscutting Issues • Gender Equality Mainstreaming : responding to the specific issues for girls, boys, women and men • Sustainable Environment Mainstreaming: not only dealing with regulatory compliance, but also, with developmental sustainability • Knowledge Management & Sharing - addresses a 4th RBM principle: ‘Learning by Doing’ Leader One Inc

13. 6. Top Functional Stakeholders • Managerial functions - corporate and line • Performance review functions (Monitoring, Reporting and Evaluation) • Financial functions (Budgeting, Accounting; Control; Procurement; Audit) Leader One Inc

14. 7. Top ‘Rewards’ • ‘Guaranteed’ ‘Value for Re$ources’: right results at the right efficiency (effectiveness and cost optimization for results vs. a potentially costly strict ‘lowest cost’ approach) • Capacity to demonstrate relevance and communicate performance - ‘Results’ vs. ‘Re$ources’ (both the good news and the bad news) • ‘Rewards’ – recognition; access to more funding; competitive funding is an emerging practice (excellent illustration by GAVI’s DQA1) 1GAVI Alliance’s Data Quality Audits Leader One Inc

15. Summary and Conclusion • ‘Performance Audit’ is the wave of the future in Public Financial Management • ‘Managing for Results’ is the road to ‘Value for Re$ources’ (VfR) in Public Service • Performance review functions (M&E) have been promoting MfR; Financial functions need to catch up with MfR for a greater VfR • Audit professionals’ acumen and leadership, especially with ‘Performance Audit’, is crucial in keeping Public Financial Management’s focus on getting ‘Results’ with public ‘Re$ources’. Leader One Inc

16. So, Exercise Your Results-Focused Leadership! • For additional Information: • Office of the Auditor General of Canada; Performance Audit Methodology: http://www.oag-bvg.gc.ca/internet/English/oag-bvg_e_859.html • OECD-World Bank; Managing for Development Results: www.mfdr.org • Leader One Inc: e-mail to: JeanBSaw@aol.com Leader One Inc