The Purpose of Performance Audits
The purpose of performance audits conducted by the Office of the Legislative
Auditor General is to help legislators oversee and
evaluate state agency operations and state program results. The basic questions these audits answer are:
Is an agency being run as efficiently as it could be?
Is a program meeting the needs of the public?
Is an agency or program serving as the Legislature intended?
The Office of the Legislative Auditor General wants to be responsive to the needs and concerns of legislators, as well as Utah taxpayers.
It conducts audits by the request of members of the Legislature, allegations raised by the public, or concerns raised from previous audits.
Audits fall into three categories:
Operational Audits--determining if an agency is operating at the least possible cost to the taxpayer
Program Audits--determining if state programs are meeting their objectives..
Compliance Audits--determining if administrators are following what the legislators intended.
So how does the Legislative Auditor General's office go about checking to see if agencies and programs are functioning as they should?
Just how is an audit conducted? Once an audit request has been reviewed and approved by the Audit Subcommittee, auditors are assigned
to a project. Naturally, a first consideration in assigning auditors is who is available, but much attention is paid to auditors' skills and strengths too.
The audit team gets together to talk about the audit and the kind of things it will be looking for once it starts work "in the field." Some of the talk
will be based on why the audit was requested, and planning ways to find out if the complaint(s) can be supported with evidence. Once the
"conceptualizing" is completed, the team meets with the director and key staff of the agency. Introductions are made, office space is set up,
and general audit procedures are explained.
The next step is conducting a preliminary survey. Quick tests are set up to see how valid the complaints are. If the audit is not the result of
allegations, the team sets up tests based on what it has discussed and decided might be areas worth investigating. These tests give a quick
review and check of management control. From the survey or "risk assessment," the investigation can be channeled into areas needing further
and more extensive investigation. The results of the investigations are called audit findings, and five elements compose any finding.
The first element of an audit finding is termed the statement of condition. It describes what exists, what is happening in a program or agency.
The next element is criteria. Criteria are measures and the acceptable levels of those measures are used to decide if the agency or program is
meeting its goals. Third is effect--asking the question "so what?" Effect is a measure of the difference between the desired (criteria) and the
actual (statement of condition). Usually the hardest to prove is cause, or why the effect happened. To make a finding real, an auditor must
show the cause of the problem because the cause leads to the last element; the recommendation. Plans must be made to correct the deficiency
or there is no purpose for doing an audit.
Various methods are used to develop the findings. Sometimes the auditor uses accounting and financial methods to show findings in cost areas.
Sometimes procedures such as flow-charting are done to show up weaknesses in work processes. Employee activities are observed, or
employees might be interviewed by the auditor. Auditors like to ask a lot of questions because they are not experts in every field they may
be auditing. They do have skills in recognizing good management practices because the results are about the same everywhere.
That is what performance auditing is really about--recognizing good management practices. Legislative auditors are the watchdogs of
state government. They ensure state agencies and programs are carried out as they were intended, in an efficient way, and serving the
public in the most effective way known.