NSW Auditor-General's Report
Improving road safety:
Young drivers
PERFORMANCE AUDITING
What are performance audits?
Performance audits determine whether an agency is
carrying out its activities effectively, and doing so
economically and efficiently and in compliance with
all relevant laws.
The activities examined by a performance audit may
include a government program, all or part of a
government agency or consider particular issues
which affect the whole public sector. They cannot
question the merits of Government policy
objectives.
The Auditor-General’s mandate to undertake
performance audits is set out in the Public Finance
and Audit Act 1983.
Why do we conduct performance audits?
Performance audits provide independent assurance
to Parliament and the public that government funds
are being spent efficiently, economically or
effectively and in accordance with the law.
Through their recommendations, performance
audits seek to improve the efficiency and
effectiveness of government agencies so that the
community receives value for money from
government services.
Performance audits also focus on assisting
accountability processes by holding managers to
account for agency performance.
Performance audits are selected at the discretion of
the Auditor-General who seeks input from
Parliamentarians, the public, agencies and Audit
Office research.
What happens during the phases of a
performance audit?
Performance audits have three key phases:
planning, fieldwork and report writing. They can
take up to nine months to complete, depending on
the audit’s scope.
During the planning phase the audit team develops
an understanding of agency activities and defines
the objective and scope of the audit.
The planning phase also identifies the audit criteria.
These are standards of performance against which
the agency or program activities are assessed.
Criteria may be based on best practice, government
targets, benchmarks or published guidelines.
At the completion of fieldwork the audit team
meets with agency management to discuss all
significant matters arising out of the audit.
Following this, a draft performance audit report is
prepared.
The audit team then meets with agency
management to check that facts presented in the
draft report are accurate and that recommendations
are practical and appropriate.
A final report is then provided to the CEO for
comment. The relevant Minister and the Treasurer
are also provided with a copy of the final report.
The report tabled in Parliament includes a response
from the CEO on the report’s conclusion and
recommendations. In multiple agency performance
audits there may be responses from more than one
agency or from a nominated coordinating agency.
Do we check to see if recommendations
have been implemented?
Following the tabling of the report in Parliament,
agencies are requested to advise the Audit Office on
action taken, or proposed, against each of the
report’s recommendations. It is usual for agency
audit committees to monitor progress with the
implementation of recommendations.
In addition, it is the practice of Parliament’s Public
Accounts Committee (PAC) to conduct reviews or
hold inquiries into matters raised in performance
audit reports. The reviews and inquiries are usually
held 12 months after the report is tabled. These
reports are available on the Parliamentary website.
Who audits the auditors?
Our performance audits are subject to internal and
external quality reviews against relevant Australian
and international standards.
Internal quality control review of each audit ensures
compliance with Australian assurance standards.
Periodic review by other Audit Offices tests our
activities against best practice. We are also subject
to independent audits of our quality management
system to maintain certification under ISO 9001.
The PAC is also responsible for overseeing the
performance of the Audit Office and conducts a
review of our operations every three years. The
review’s report is tabled in Parliament and available
on its website.
Who pays for performance audits?
No fee is charged for performance audits. Our
performance audit services are funded by the NSW
Parliament.
Further information and copies of reports
For further information, including copies of
performance audit reports and a list of audits
currently in-progress, please see our website
www.audit.nsw.gov.au or contact us on
9275 7100.
Performance auditing