Day 4 (1700) Session 5a Sawadogo Presentation

Performance Audit: ‘ Managing for Results’ to ‘Value for Re$ources’ ICGFM Miami Conference & Training 2008 May 22, 2008 . Jean-Baptiste Sawadogo Strategic & Results-Based Management Consultant Leader One Inc Tel. +1 613 721 8087; E-mail: [email_address] “ The one people call when they really want results”

Performance Audit: The Wave of the Future

‘ Performance Audit’ is about audit on ‘Value for Re$ources’ (VfR); it is a paradigm shift in Public Financial Management

Early forms of performance reviews (Assessments, Evaluations and Audits) have put the spotlights on “Spending” vs. “Results”, leading to ‘Managing for Results’

In turn, ‘Managing for Results’ is now driving the rising wave of ‘Performance Audits’

The leadership of ‘Public Finance’ functions is key in ‘Managing for Results’ to get ‘Value for Re$ources’

Global Realities and Milestones

Finance is finite AND “Do more with less!”

Starting with the global recession of the early 1990s

Finance is not everything

CIDA’s Strategic Review and Renewal Exercise (1990+)

Results-Based Management (RBM) at CIDA (1993+)

Office of the Auditor General of Canada Report (1993+1995)

Aid Effectiveness Principles adopted by DAC-OECD (1996)

Assessing Aid: a World Bank report (1998)

Results for Canadians - a Government-wide RBM Policy (2000)

Many OEDC countries have adopted a results-focus (+ - 2000)

The Millennium Declaration on the MDGs at the UN (2000)

‘ Managing for Development Results’ – WB and OECD (2002)

Paris Declaration on Aid Effectiveness DAC-OECD-led process (2005+)

Beyond Finance, there is a global consensus on the focus on results

A New Global Imperative: ‘Managing for Results’

Demands on governments and their agencies to deliver and to be accountable for results

Demands on international organizations to “focus on results” (UN; Multilaterals; NGOs; etc.)

Demands on private firms to perform better : both financially and socially (ethics; responsibility)

Demand for innovative results-focused management approaches

Increasing demand for a new type of audit > Performance Audit

What is ‘Performance Audit’?

Performance Audit is “… a systematic, purposeful, organized and objective examination of government activities; … designed to promote accountable government; … includes the examination of economy, efficiency, cost effectiveness and environmental effects of government activities ...”

“ A focus on performance covers both the benefits accomplished for [citizens] and due process and fairness in the delivery of services”.

(Excerpts adapted from the Performance Audit Manual,

Office of the Auditor General of Canada - June 2004; pages 13 and 17)

What is ‘Managing for Results’?

A deliberate, systematic, rigorous pursuit of results through the practice of Management; it is a way of thinking; a way of doing business:

Designing/planning; implementing; monitoring; reporting; evaluating; auditing; managing risks; communicating

Linking of ‘ Re$ources ’ with ‘ Results ’ committed to

Two “brands” of results-focused Management

Original: ‘Results-Based Management’ (‘RBM’) 1 - Inputs vs . Results (Results are outputs, outcomes, and impacts)

Consensus: ‘Managing for Development Results’ (‘MfDR’) 2

1 Original “brand”: Canadian International Development Agency (CIDA); 1993+

2 Subsequent consensus “brand”: DAC-OECD-led consultative process 2002+

A Seven-Point Overview of ‘Managing for Results’

‘ Misconceptions’

Principles

Words

Tools

Crosscutting Issues

Functional Stakeholders

‘ Rewards’

1. Top ‘Misconceptions’

‘ Managing for Results’ is ‘Monitoring & Evaluation’

Attribution of ‘Results’ is impossible

The ‘impact’? Don’t bother!

2. Top Principles

Partnership/Participation

Transparency

Broad application (even to Audits)

3. Top Words

‘ Result ’: an expected or actual achievement (i.e. an output, an outcome or an impact)

‘ Activity ’: it is NOT a ‘Result’; it IS the ‘ doing ’ that supports the achievement of a result

‘ Indicator ’: it is ONLY a measure to assess progress towards or achievement of a result

4. Top Tools

The Logical Framework Analysis (LFA) or a simpler Logic Model at the very least

The Performance Measurement Framework (PMF)

The Implementation Plan (including Work Breakdown Structure/activities; budgets; reporting; risk management; operations strategy; communication strategy)

5. Top Crosscutting Issues

Gender Equality Mainstreaming : responding to the specific issues for girls, boys, women and men

Sustainable Environment Mainstreaming: not only dealing with regulatory compliance, but also, with developmental sustainability

Knowledge Management & Sharing - addresses a 4 th RBM principle: ‘Learning by Doing’

6. Top Functional Stakeholders

Managerial functions - corporate and line

Performance review functions (Monitoring, Reporting and Evaluation)

Financial functions (Budgeting, Accounting; Control; Procurement; Audit)

7. Top ‘Rewards’

‘ Guaranteed’ ‘Value for Re$ources’: right results at the right efficiency (effectiveness and cost optimization for results vs. a potentially costly strict ‘lowest cost’ approach)

Capacity to demonstrate relevance and communicate performance - ‘Results’ vs. ‘Re$ources’ (both the good news and the bad news)

‘ Rewards’ – recognition; access to more funding; competitive funding is an emerging practice (excellent illustration by GAVI’s DQA 1 )

1 GAVI Alliance’s Data Quality Audits

Summary and Conclusion

‘ Performance Audit’ is the wave of the future in Public Financial Management

‘ Managing for Results’ is the road to ‘Value for Re$ources’ (VfR) in Public Service

Performance review functions (M&E) have been promoting MfR; Financial functions need to catch up with MfR for a greater VfR

Audit professionals’ acumen and leadership, especially with ‘Performance Audit’, is crucial in keeping Public Financial Management’s focus on getting ‘Results’ with public ‘Re$ources’.

So, Exercise Your Results-Focused Leadership!