The Auditor-General’s Role in Auditing Performance Reporting:

1. The Auditor-General’s Role in Auditing Performance Reporting: • 2014 • Image here • Presentation for the Indonesian Ministry of Finance • Shilinka Smith: Director, Research and Development

2. What is performance? • Financial (e.g. return on investment) • Non-financial • Service delivery (i.e. supply of goods and services) • The effect of service delivery (i.e. benefits to society)

3. Elements of performance – older language • Inputs • Resources used to produce outputs • Outputs • Goods and services supplied to external customers • Outcomes • The effect on, or changes to, our world (i.e. the community, society, economy, environment etc.)

4. Elements of performance – new language For strategic intentions – the strategic objectives that the agency “intends to achieve or contribute to” over a minimum 4-year period. For expenditure – agencies provide a concise explanation of “what is intended to be achieved” with annual appropriation (money).

5. External Reporting • For external users • e.g. Parliament and public (taxpayers, ratepayers) • Governed by legislation and “generally accepted accounting practice” (GAAP)

6. External Reports • Forecast reports – beginning of the year • Central government: Statements of Intent (SOI) • Local government: Long-term Council Community Plans (LTP) • End of the year: Annual report • Financial statements • Report against intentions in the forecast report • Statement of Service Performance • Audit report

7. Annual Report has financial and performance information • Statement of Service Performance • Describe each class of output • Report on the performance measures • Actual revenue & expenses vs budget

8. Audit requirements • Legislation requires the Auditor-General to audit the: • Financial statements in the Annual Report • Statement of Service Performance (SSP) • Public Audit Act • A-G is auditor of every public entity (s14) • Must audit statements a public entity is required to have audited (s15) • May examine matters concerning efficiency, effectiveness, legislative compliance, waste, probity / prudence (s16)

9. Audit requirements • Consider the quality of the information: • Performance story (strategy ↔ operations) • Outcomes and impacts (identified, well specified) • Main measures and targets (the vital few) • Output classes (identified, well specified, sensibly grouped) • Links between outcomes/impacts and outputs (“intervention logic”) • Output performance measures and targets (quantity, quality, timeliness)

10. Audit requirements • Verify the Statement of Service Performance content • In accordance with normal audit procedures • Issue an audit opinion (as per revised Standard) • Complies with GAAP • A true and fairly reflection of the entity’s performance for the year

11. Reporting our audit findings • To the entity: • Management Letter • To the Minister and Select Committees • Ministerial Letter • Management control environment, appropriateness of Statement of Service Performance, legislative compliance, systems & controls • Graded: Very good – Good – Needs Improvement – Poor • To the entity, Parliament, and the Public • Audit report • Audit opinion on SSP and financial statements

12. Questions • ? • Image here