Define Performance Auditng

I am very proud of the performance audits which our audit teams are doing for the city of Denver. When I am at neighborhood meetings people often ask me what is a good definition of performance auditing? This week at the Auditor's Office we asked ourselves that very same question.

Let us consider one definition of performance auditing offered for our auditors during a recent training session held for our Internal Audit staff.

"The systematic assessment of ongoing performance for advising management whether its objectives are carried out throughout a disciplined and independent appraisal that focuses on managements important objectives."

Let's talk about this definition. Performance auditing looks at management's systems. The audit assesses the performance of a department or agency to see if the entity's system follows the best business practices in serving its mission for the citizens of Denver. Notice in this definition the assessment of performance the appraisal has to be disciplined. I take that to mean a competent appraisal based on analysis by trained auditors.

The independence of the auditor's office is essential to any effective performance audit. The auditor's office must have unfettered access to all documents and city employees in working on their audits. We have had some recent examples where agencies have tried to limit our access to information essential to good performance audits. In some of our city's agencies there appears to be a tone from the top of the agency saying; "Don't tell the auditor's office anything." This definition insists on clear, concise and comparable information applicable to any audit situation.

The Yellow Book, the nickname for the rules and regulations of the Comptroller General of the United State back up all our audits in Denver. That independence and systematic backup, one of the strongest for any local government in our nation, is set in our city charter.

Performance audits can help city agencies focus on the core question: "Here is why we exist now and here's where we want to be." And these important core questions have to apply to our Auditor's Office as well.