Auditor General for Local Government Review Released

The Government of British Columbia has released a review on the governance and operations of the Auditor General for Local Government (AGLG). Mr. Chris Trumpy conducted the review over a three-week period in March and April of this year. B.C. local governments were not consulted as part of the review.

The report includes the disclaimer that it is not “audit quality” given the brief period over which it was produced, and that it is intended to help the Audit Council and Office of the AGLG to improve performance and strengthen accountability.

One of the findings in the report is that time was not spent following the appointment of the AGLG on how the responsibilities set out in the Auditor General for Local Government Act would work in practice. One of the recommendations as recruitment process are underway for a new AGLG is to ensure time is set aside to establish a shared understanding of roles and responsibilities between the Audit Council and the AGLG.  The report also recommends the development of an accountability framework for the AGLG and Audit Council that balances the independence of the Office with the need for accountability.

The report also highlighted the current staffing configuration for the office, which provides five support positions alongside seven audit positions. The report noted that not all seven audit positions were filled, leading to “significant reliance on contracted resources.” In 2014/15, $200,000 was budgeted for contracted resources, but the actual spending was $900,000. It was recommended by Mr. Trumpy that the new AGLG review the balance between: support and audit staff; the amount of contracted to resource staff; and the opportunity to acquire lower cost services “from other public sector entities that do not jeopardize independence.”

The report also found that the manual used by auditors was still in draft form and in some cases was not being followed. In many cases contracted audit firms commenced work without signed off scope statements. Scope changes were also made that affected the ability of contractors to deliver audits on time and on budget. In some cases, AGLG staff had to step in to perform audit work when the contract for an audit was out of money.  “This change in role,” writes Trumpy, “meant that compensating controls had to be put in place and that work was done twice.”  The report recommends that the Audit Plan Manual be completed to address the gaps identified in the report and that it be adhered to.  Trumpy also recommends that the manual recognize that a “one size fits all” audit approach may not be appropriate in all cases.

The report also recommends that the AGLG, in consultation with the Audit Council, establish benchmarks and report out against them. Benchmarks could include percentages for: audits completed under budget; audits completed on time; auditees who felt the audit was well done; and potential benefits identified.

It is expected that legislative changes to the Auditor General for Local Government Act will be introduced in the fall of 2015. The Government of British Columbia’s news release in connection with the report is available online.

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