Table 1(c) - Knowledge of Business questions for an audit of efficiency focused on a regulatory inspection and enforcement function
Note: Additions to the questions and related risks from the Practice Guide are shown in italics.
Potential Risks to Efficiency
Knowedge of Business Questions
- Resource budgets are not based on the level of inspection and enforcement activity.
- Organizational culture does not stress the need for efficiency.
- Personnel are not deployed to foster efficiency.
- Inspection staff are not fully utilized.
- Costs of activities and programs are not known, or are not regularly collected and reviewed.
- Does the organization have service level standards?
- Has the organization identified and analyzed the input costs for all its major services and programs?
- Does the organization have information on the unit costs of delivering its main services and how the unit costs are changing over time?
- Does the entity collect and analyze cost information for major components of the enforcement strategy? For example, is the cost of performing an inspection collected and monitored?
- Does the organization have information on how costs change in response to changing levels of activity?
- What are operating budgets and resource levels? Are operating budgets established based on unit costs or performance standards (for example, output/input ratios), or on historic funding levels? If the budget is based on unit costs or performance standards, what are the costs or standards reflected in the current budget?
- How is the budget for the enforcement function established? Is it based on historical amounts, or on the level of activity in inspection and enforcement programs?
- What are full-time equivalent (FTE) resource levels in relevant business units? How does the organization optimize the allocation of its personnel to its different services or business units? For example, does it use staffing formulas or other allocation methods? Does the allocation method consider workload or production levels?
- How does the organization maximize the utilization of allocated personnel to achieve its operational and strategic goals? For example, is staff utilization monitored? How is it monitored?
- Is staff utilization data collected and monitored? Are staff utilization targets met?
- Is there a staff scheduling system? If so, does it provide for optimal utilization of staff?
- Are there defined staff utilization standards or guidelines? For example, staff might be required to spend a minimum of X percent of their time in the field performing inspections, a maximum of X percent writing reports, and a maximum of X percent on administrative tasks.
- Are there required competencies for all staff? Does staff meet the required competencies? Have any competency gaps been identified? If so, is there an identifiable cause for the gaps (such as the fact that the labour market cannot meet demand)?
- Has the organization identified clear roles and responsibilities for managers and personnel delivering on efficiency objectives? If so, provide examples.
- Do senior management performance contracts (setting out annual performance objectives) include specific targets and measures related to the efficiency of the programs or services under a manager’s control? If so, provide examples.
- Are incentives used to encourage managers and personnel to improve efficiency and meet established targets? If so, provide examples.
- What type of training is provided to managers and personnel in relation to efficiency?