Practice 2b. Assure performance reports: Audit, attest to, assure, or certify external performance reports.
The Government of Alberta publishes its Annual Report, now in its twelfth year, as mandated by the Government Accountability Act. The report is in two parts: “Consolidated Financial Statements” and “Measuring Up.” “Measuring Up” reports progress on government performance measures by comparing actual performance results to desired results set out in the government’s business plan. Separate annual reports of each Government Ministry have performance information at a more detailed level.
The Office of the Auditor General (OAG) has been checking reported performance measures and supplemental information, to some degree, in “Measuring Up” since 1995 and in ministry reports since 1997. The OAG presents the results in a “Report from the Auditor General of Alberta on the Results of Applying Specified Auditing Procedures to Performance Measures” which is included by the government in the published Annual Report. The OAG carried out an assessment of the relevance and sufficiency of measures in the 2002 – 2005 “Measuring Up” reports, and will update this assessment based on the 2007 report. The OAG has refined its checking procedures over time (see “tools” for recently used checking steps).
In 2006, the following changes were made to the Specified Auditing Procedures reports:
- The report more clearly indicates what assertions (reliability, comparability, understandability, and completeness) are reported on. It also describes what is not reported on: an opinion is not expressed on whether the set of measures is relevant and sufficient to assess the performance of the organization in achieving its goals.
- Responsibilities of management and auditor for performance information are described.
- The use of plain language to describe procedures.
The OAG has developed a multi-stage strategy to eventually advance to a higher level of assurance concerning performance information. New assurance approaches are piloted on performance information in “Measuring Up” before being considered for roll out to the ministry performance reports. Using this staged approach, the Auditor General can keep ministries aware that their performance data must be relevant, reliable, understandable, and comparable to prior years, without discouraging their performance reporting, and can match the audit office’s capacity to do the work from year to year. Before referring to its review of Measuring Up information as an “audit,” the OAG aims to increase its degree of control risk assessment and level of assurance in testing the information. Next steps in advancing to an audit of “Measuring Up” include developing an audit proposal by OAG which would assess the readiness of management and auditors for such an audit, and obtain agreement on the criteria for an audit as well as the form and timelines for reporting.
The amount of time that audit staff devote to this practice remains at approximately 2,000 hours per year for “Measuring Up,” and about 8,500 hours per year to checking ministry measures. To guide ministries that will undergo audits of performance measures, in 2002 the OAG published a brief client service document with “tips” on preparing for and communicating with auditors conducting such audits.
The OAG has been able to add credibility to performance measures in government and ministry annual reports by way of this process. Users of annual reports – including the general public, members of the legislative assembly, and public accounts committees – now have assurance relating to reliability, comparability, understandability and completeness in relation to the business plan for performance measures in government and ministry annual reports. The reliability of the information is reflected by increased use by the legislature. In particular, in Public Accounts Committee meetings in recent years, there have typically been more questions on non-financial performance that on the financial statements.
- Improving Communication Between You and the Auditors: Tips for Ministries on Audits of Performance Measures, (April 2002) (PDF)
- Measuring Up, (2008-2009)