The Swedish National Audit Office The Challenges of

The Swedish National Audit Office The Challenges of Performance Auditing and how to make it sustainable TONY ANGLERYD 1

The main messages • • • PA is a very important public task Don’t wait with getting it fully implemented Standards are (soon) universally applicable It’s demanding and take time to introduce Get advanced and use it as a tool for PAR 2

Managing public services Resources Behaviors Processes Outputs Outcome Define inputs Spending Give Directives Regulate Define outputs Set objectives Compliance Performance Management control 3

Performance Auditing An independent examination of the economy, the efficiency and the effectiveness of government undertakings, programs and organizations, with the aim of leading to improvements. q Decisions/intentions by the legislature q Ad hoc basis and performance q A lot of time must be spent on learning (what is and how could it be) 4

Auditors have various loyalties FINANCIAL OR COMPLIANCE AUDITING Ø Regulations and accounting standards PERFORMANCE AUDITING Ø Economy, efficiency and effectiveness

General principles • Defined audit mandate • Freedom to select what, when and how • Free from improper influence • Based on general aims of legislature • Requires specialised skill 6

Aspect Performance auditing Financial auditing Basic question Are policies, programs and organisations performing well, or can they be more economical, efficient and effective? Are the financial operations legally and regularly executed and are the accounts and the internal control system reliable? Focus on Policy, program, organisation, activity and management Financial statement (transactions, accounting, key control procedures) Education Economics, political science, sociology. . . Not expert in audited areas. Don´t know the answers. Accountancy and law. Ane xpert in the field. Know most of the answers and are able go give advices. Methods Sources All kinds. Vary from audit to audit. A lot of information sources Standardised format. Information from the auditee Feature Output-driven, research-like values Process-driven, professional values Reporting Ad hoc. Varying content. Delivers analyses to promote learning and change. Informative outputs. Annual report. More standardised. Delivers assurances and opinions. Less informative outputs. 7

Performance Auditing and politics • Political decisions are taken for granted • PA examines whether intentions are met with and may explain shortcomings by existing regulations • PA may suggest altered regulations to improve performance and to get intentions implemented PA does not challenge politics! It helps politics getting implemented 8

PA LIGHT Is the management system sound? PA TRADITIONAL Does the performance meet the criteria set? (objectives, intentions, principles, expected, what could be) PA ADVANCED What are the obstacles for good performance?

The coordinates of auditing Compliance FA Authority/Unit PAL Program/Services PAT PAA Renewal/change 10

Introducing PA is not a quick fix • Political and administrative environment • Internal culture, resources and competence “It took us many years to introduce it” 11

Success factors (1) • • • Actively involved and engaged top management Awareness that PA is demanding and requires changes External support, proper mandate and sufficient funding Established networks with the academic society Staff with potentials Interesting, well founded and reader-focused audits 12

Success factors (2) • • A competent operational manager Proper recruitment process Building competence step by step Knowledge sharing culture Capacity for professional in-house training Conditions, standards and guidelines Good quality management 13

How to get started • • • Focus on pilots and themes Internal and external awareness Mobilize staff with potentials Seek partnership and support Learning by doing Academic society 14

How to maintain the momentum • • • Staff with the right profile Operational manager Policies, standards and procedures Recruitment process Planning and follow up Manuals and quality assurance 15

Few public tasks can compete • • Making performance publically known Addressing the tuff questions Challenging poor practices Providing incentives for change Promoting accountability Helping preventing fraud and corruption Serving the open society and democracy Execute its function regardless of financial management system 16

Key factors for sustainability - an assessment scheme 1. 2. 3. 4. 5. 6. Support from the parliament Constructive relations with the government Established strategic partnerships Management involvement and capacity Organisational capacity Ability to produce audits of good quality 17

SCORE 0 = Not met 1 = Met to a little extent 2 = Met to some extent 3 = Met to a large extent 4 = Long term self sustainability 18

THE PARLIAMENT 0 1 2 3 4 Proper respected mandate Well informed Realistic expectations Set procedures Supportive Advises acted upon 19

THE GOVERNMENT 0 1 2 3 4 Well informed Set procedures Trust and respect Supportive Advises acted upon 20

THE STRATEGIC PARTNERS (ACADEMIC SOCIETY) 0 1 2 3 4 Well informed Established network Engaged in training Engaged in quality assurance Assisting in recruitment 21

MANAGEMENT INVOLVEMENT 0 1 2 3 4 Personal involvement Relevant competence Supportive leadership Internal awareness 22

MANAGEMENT TOOLS 0 1 2 3 4 Policy documents Procedures Planning/follow up Quality control Recruitment 23

ORGANISATIONAL ISSUES 0 1 2 3 4 Operational manager Separate unit Sufficient resources In house training Progressive/non bureaucrat org Competent staff (profile) 24

PROVEN PRODUCTION SKILL 0 1 2 3 4 Advanced methodological skill (scientific) Broad design & investigative skill (research) Good theoretical insights (public admin) Good communication skills Good ability to “twist and turn” Good writing skill (reader friendly) Managing comprehensive analysis Managing all subjects and topics Consistently objective, fair and reliable 25

It’s not always easy – what needs to be done! Thank you for your attention 26