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Practice Guide to Auditing Efficiency

Strategic Planning

Table 1(b) - 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

  • Monitoring and enforcement strategy is not based on a thorough analysis of the regulated population and risk assessment.
  • Opportunities for shared services have not been explored.
  • Senior management challenge of the status quo is not sufficiently rigorous.
  • Has management identified the regulated population? Has management analyzed the population to provide key statistics on population size, location, composition, and so on?
  • Is there a high-level enforcement and monitoring strategy setting out the approach to determining and monitoring compliance?
  • Is the monitoring strategy based on a sound risk assessment, including a thorough identification and analysis of the regulated population?
  • How does the strategic plan reflect the importance that the organization is placing on efficiency? Does the plan reflect specific, strategic efficiency initiatives in key areas such as shared services, human resources, procurement, asset management, IT systems, and business process redesign?
  • Has the organization assessed the risks and potential consequences of inefficient operations?
  • Has the organization assessed the feasibility of switching to less costly methods including shared services (particularly with other inspection functions in government), rationalizing the range of goods or services provided, and restructuring the organization, where appropriate, to function more efficiently?

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.