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Practice Guide to Auditing Efficiency

Project and operations management

Table 1(d) - Knowledge of business questions for an audit of efficiency focused on application processes

Note: Additions to the questions and risks in the Practice Guide are shown in italics.

Potential Risks to Efficiency

Knowledge of Business Questions

  • Application-processing functions are not managed and conducted with due regard to efficiency.
  • Controls are excessive in relation to similar well-managed organizations.
  • Program design does not support efficiency.
  • Standards of service are not met.
  • Does the organization have documented operations and/or project management systems and practices that demonstrate due regard to efficiency?
  • How does the organization optimize its available production capacity, facilities, equipment, and personnel to produce the targeted volumes of outputs (goods and services)? For example, are there systems for monitoring the utilization of major resources (such as staff and information systems)?
  • Are resources targeted to the most significant risks? For example, can management demonstrate how resource allocation is connected to the risk assessment?
  • Does the organization understand the flow of work (e.g., peak processing times and periods) and allocate resources to match this flow?
  • How does the organization measure performance and efficiency? What are the key performance indicators and targets related to efficiency? Are targets and standards being met?
  • Does the organization have means of tracking the performance and efficiency of operations where the outputs are difficult to measure? For example, does the organization monitor achievement of milestones and target dates?
  • Has the organization performed an assessment of controls over efficiency? If so, did the assessment include comparisons with other organizations?

Source: Many of these questions have been adapted from Northern Ireland Audit Office’s Improving Public Sector Efficiency: Good Practice Checklist for Public Bodies (2010), as well as from recent audits of efficiency.