Writing audit reports by objectives rev

Writing Audit Reports by Objectives_

Training Course Debrief SessionPresented to:Internal Oversight and Compliance (IOC) Team

By:Richard A. Murray Program Analyst – IOCOffice of Personnel Management 11/15/2011

Debrief Disclaimer NotesThis deck reflects an unofficial - high-level post-training debriefing presented I delivered to the Internal oversight and Compliance team (IOC) at the Office of Personnel Management, Washington DC, on November 15, 2011.The concepts discussed throughout this deck were formally presented during a three (3) day working session conducted at the Graduate School USA in Washington, DC. The total session comprised a mix of instructor led lectures, case studies, group projects, reading assignments and other relevant activities designed to optimize and re-enforce better knowledge transfer and understanding.The content and all of the materials herein reflects an overall summary of my particular classroom observations, interpretation, interactions with other attendees, personal notes, topic summaries and other understandings ascertained over the course of the training session. While I believe this deck to be factual accurate and representative of the subject matter presented during the three day session, I make additional claims, nor hold the Graduate School USA responsible or liable for any comments or statements made in this debriefing presentation.

Nov. 15, 2011 Richard A. Murray (IOC) – Debrief Session 2

1. Concept of telling a story – the report

2. Three audit objective elements:

− IS, IF1 & IF2

3. Formula for writing objectives

− Objective = Subject + Performance Element

− Formulating a Yes/No question about the subject & performance aspect

− Consequences : Significance

4. Defining critical audit Performance Aspects

5. Review of the Finding Schematic Model

− Criteria / Condition / Effect / Cause / Recommendation

Key Course Discussion Topics

Nov. 15, 2011 3Richard A. Murray (IOC) – Debrief Session

6. Process vs. Performance Aspect Buzzwords

7. Results vs. Process auditing produce different findings

8. Overall Objectives with Sub-objectives

9. The Finding Synopsis

− Quick-shot Summary (executive summary like)

10.Advance Organizers

− Executive Summary

− The Topic Sentence

− Adding Captions

− Visual Aids

Key Course Discussion Topics (Cont’d)


The audit report…• Demonstrates a potential systematic business

unit, or organizational problem

− May apply to other units outside of the one being audited

• Helps formalize corrective actions

• Provides a history of the problem (Condition)

• Gives credit where credit is due

• Provides perspective for new management

• Sets up institutional memory

• Shows response to mandates, laws, requirement, etc.

Concept of telling a story


General Class Take-aways• Appendices – many agencies have begun moving

scope, methodology and other specialty data to the end of the report

• Executive summary should be a maximum of 150 words and two (2) pages!

• Performance aspects drives the findings

• Sub-objectives help define topic sentences for the report

• A finding is the answer to the questions in the audit objectives

• Match data to the elements − Data is non-targeted information− Evidence is data/information used to support the finding

• Criteria Performance tie backs:− Industry Stds, laws, Regulations, Policies, Historical Stds, Best

Practices, etc.

Data

Evidence


Three Audit Objective Elements:

• IS - there a problem?−Criteria Condition

(expected) (Actual)

• IF1 - yes, does it matter?− Effect (Tangible impact)

• IF2 - it matters, what would have to change to solve it?− Cause

Yes or No?

Performance Aspects drives the finding!


In a Perfect World…• IS: Criteria Condition overlap = no

problem

• IF1: Effect illustrates the consequences for the mission when criteria & condition do not overlap

• IF2: Cause illustrates the significance of the consequences−What caused the condition?


In a Perfect World…• IS: Criteria Condition overlap = no

problem

• IF1: Effect illustrates the consequences for the mission when criteria & condition do not overlap

• IF2: Cause illustrates the significance of the consequences−What caused the condition?

Critical: It is always advisable to identify the problem condition comparedto the criteria first, before focusing on process or procedural effects!


The Findings Schematic

Criteria(Expected Performance)

Condition(Actual Performance)

Effect(Consequence)

Cause(Significance)

Recommendation



Condition(Atual Performance)

Effect(Consequence)

Cause(Significance)

Recommendation


CriteriaCondition

(Expected /Actual Performance)

CriteriaCondition

(Expected /Actual Performance)

Effect(Consequence)

Cause(Significance)

Recommendation

By fixing the “Cause” you eliminate thecondition &

eliminate the “Effect”



Performance Aspects

Time - Promptness- Frequency- Duration- Timeliness- Due DateQuantity- Completeness- Amount- Numbers- Sufficiency- Min./Max.

Quality- Eligibility- Safety- Accuracy- Security- Satisfaction (specs)Cost- Budgets- Expenses- Revenue- Opportunity Cost- Excess Cost

Process Buzzwords

Process Hints- Procedures- Practices- Controls- Methods- Systems- Process- Protocol- Etc.


Results vs. Process ObjectivesDepends on the type of questions being

asked• Produce different kinds of findings• Can be tied to either a process buzzword or performance

aspect

Objective A:

Are agency supply centers paying vendors for purchased supplies in a timely manner?

Objective B:

Are agency supply centers, in paying vendors for purchased supplies, following prescribed procedures intended to assure that vendors are paid in a timely manner?

Nov. 15, 2011 14

Performance Aspect

Process Aspect

Richard A. Murray (IOC) – Debrief Session

Executive SummaryI. Background Section

• Two finger high rule – no more than two paragraphs, each no more than two fingers high; using well defined topic sentences

II. Objectives Section• State the purpose or the aim of the audit or program review

III.Results in Brief Section• A brief statement of the problem (refer to IS, IF1, IF2 &

Finding synopsis)

IV.Recommendation Section• What action(s) is required to solve the problem

V. Management Comment Section• Include enough commentary to show whether mgmt concurs

or not with the finding / recommendationsNov. 15, 2011 15Richard A. Murray (IOC) – Debrief Session

Report Outline TemplateI. Introduction

A) BackgroundB) ObjectivesC) ScopeD) Methodology

II. Results of AuditA) Finding Synopsis Paragraph B) Discussion of Finding / TopicsC) Recommendations


Report Outline TemplateI. Introduction

• All about establishing creditability!• Remember, primary audience is/are readers outside of the

audit!

A) Background• Who was audited• Program’s target population• Program mission/purpose• Description of audited entity’s responsibilities• Statutory basis for the program• Organizational structure

B) Objectives• Why we (program review team) undertook the assignment• The underlying purpose of the audit; including identifying

issues outside of the scope – (GAGAS par. 8.10)


Report Outline TemplateI. Introduction (Cont’d)

C) Scope• What was covered / Where / When• May include population size, dimensions, transactions, etc.

D)Methodology• Identify analysis design and state why the design was

chosen• Record sources of data used and any limitations in data


Report Outline TemplateII. Results of Audit

• Sufficient, appropriate evidence to support the findings and conclusions in relation to the audit objectives

A) Finding Synopsis – (Everything leads to the finding)• Finding may be presented in synopsis form for the

convenience of the reader – establishes a quick/brief overview or summary of finding before entering an extensive discussion of details

• If a finding can not expressed in synopsis form, you probably don’t understand the finding, or no finding exists

• Refer back to IS, IF1 and IF2 • Answer effect and cause objectives, where appropriate• Keep the number of number low – no more than 5 numbers• Keep sentences relatively short – readable on the fly


Report Outline TemplateII. Results of Audit (Cont’d)

• Sufficient, appropriate evidence to support the findings and conclusions in relation to the audit objectives

B) Discussion of Finding / Topics• Present evidence• Consider difference audience for overview versus detail • State consequence (Effect) in quantitative terms, when

possible

C) Recommendations• Relevant to findings / cause• Doable, practical and time sensitive


Questions & Comments

Documents

Writing audit reports by objectives rev