public sector audit

UK Public Sector Audit

Audit has traditionally focused on government agencies whether the
primary focus has been on accounts, effectiveness or security.  There is another
way of looking at society as a dynamic collection of entities and services that
are intended to deliver policy objectives safely and effectively.  Audit can be
carried out with policy objectives as the primary focus yet still reveal the
need to re-engineer components and services to improve effectiveness,
accountability or security.

Public sector accounts are prepared for Parliament and
should reflect their interests by setting out the costs and benefits of
programmes managed by clients.  The move in recent years towards commercial
style accounts is misguided and leads to meaningless activities such as valuing
heritage assets whilst making it very hard to assess the costs and benefits of a
programme that involves many organisations each with their own accounts. 
International Accounting Standards are intended to enable investors to assess
profitability which is very different from the needs of Parliament where the
interest lies in the effectiveness of funded programmes.

To deliver best value public sector auditors need to be
reorganised to follow policies from the cradle to the grave.  Auditors can
advise on formulating policy in a way that will deliver measurable outcomes. 
Auditors can follow the process of turning policy into lower level policy
instruments that deliver components and services able to deliver the outcomes
that the policy requires. 

In following policy implementation the auditor will be able
to draw on experience of services and organisations involved in the successful
delivery of policy outcomes and provide advice at all levels using the
principles of sound governance based on established and shared standards such as
COBIT, ITIL, PRINCE and the ISO 27000 family.

The family of governance standards has a following
worldwide and across sector boundaries.  This is in sharp contrast to the way
that audit is currently carried out with the auditor focused on a client
responsible for only a part of the policy formulation or delivery.  The new kind
of public sector auditor would be a part of an integrated team with knowledge of
the governance principles, experience of best practice and knowledge of all the
bodies and services necessary to deliver the policy outcome.

Reports could be handled exactly as they currently are with
Parliament as the primary customer but accountability would extend beyond the
commissioning central government body to everyone involved in the delivery chain
being subject to questioning by the Public Accounts Committee.

Shifting the focus from the delivery machinery to the
objectives to be achieved would enable Parliament to vote resources against
measurable outcomes with time cost and quality constraints.  Eventually this
would evolve into a system of programme accounting with resources being voted to
an Agency charged with delivery of that programme and accountable for delivery
back to Parliament.