There really weren’t any forward-looking ones, at least not upfront. They had some generic elements under governance, but that was it.
What the REAL criterion should have had
It is pretty simple — is there a plan in place going forward that addresses major issues, is risk-based, and is written down. There are lots of bells and whistles beyond that, things like cost and timelines, but the most basic element is “Do they have a plan?” » Read the rest
When I read the Office of the Auditor General’s audit of Phoenix, I was beyond disappointed (A disappointing audit of the Phoenix problems). In part, I think it is because I am too familiar with audits from my previous job where I read just about every audit done by my department in the last nine years, plus some of the broader OAG ones. Yep, I’m a public admin geek. I was even somewhat amused when I saw the news coverage about how aggressive the report was in its condemnation. And, if you weren’t a regular reviewer of audits, you might just go with the press conference and some of the findings and think, “Okay, they’re being appropriately harsh”.
Except the OAG knows how to be harsh when something isn’t working, and the language they would use for that kind of screw-up wasn’t present in the report. So let’s look at the report and see what they COULD (or even should?) » Read the rest
As a civil servant, I was incredibly disappointed with the recent Phoenix audit, although maybe I just expected too much of it. Things that should have been clearly there, I would have thought, were in fact absent. Wording that I expected to be extremely harsh was toned down. Recommendations that would seem to be obvious ways forward were missing in action.
A friend asked me earlier this week where my indignant anger was at the fiasco and I think part of my passivity was because I knew the audit was coming. And I expected it to be a bombshell…a true blockbuster for its impact. Based on the actual wording, it seems more like they were going for a children’s firecracker that fizzled.
I expect three things from an audit:
A clear articulation of the project’s goal and what they were trying to do;
A clear indication of assessment/analysis of performance based on evaluation against an objective standard; and,
Clear indications of recommendations for a way forward and response by the organization how they’re going to address the recommendations.
I was a bit surprised by a recent Ontario Court of Appeal decision that upheld the 2014 decision against the accounting firm of Deloitte and Touche. Basically, the courts found them liable for auditing Livent Inc (Garth Drabinsky and company) and giving it an unqualified “clean audit” statement over several years despite the fact that Drabinsky and others involved were well-known for being creative with their financing and accounting. After Drabinsky sold off the business, it collapsed because it was a giant fraud.
Until these cases, there was a Supreme Court case (Hercules Managements Ltd. v. Ernst & Young) precedent that has generally been interpreted as saying “if a company goes belly up, even for fraud, you can’t sue the auditors for missing it”. Given this precedent, which has been binding for some time (1997), Deloitte might be surprised too, and chances are that an appeal will be launched to take it the Supreme Court — and with an $118M settlement against it, an appeal could be worthwhile. » Read the rest