Tag Archives: audit

The Phoenix audit we could have had – Part 3

PolyWogg.ca
December 14 2017

This is my last post on the Phoenix audit by the Office of the Auditor-General. In the first of three parts (The Phoenix audit we could have had – Part 1), I talked about governance and oversight. Part two (The Phoenix audit we could have had – Part 2) dealt with the level of details provided in terms of the state of pay. In both areas, there were missed opportunities galore.

Today I want to talk about the way forward.

What were the criteria?

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?”

What did the audit find?

The audit found that

  • Departments and agencies had significant difficulties in providing timely and accurate pay information and in supporting employees in resolving pay problems
  • A sustainable solution will take years and cost much more than the $540 million the government expected to spend to resolve pay problems

What COULD the audit have found?

… Read the rest

The Phoenix audit we could have had – Part 2

PolyWogg.ca
December 14 2017

Earlier, I ranted about the actual audit of Phoenix that was done by the Office of the Auditor General (A disappointing audit of the Phoenix problems). And in my post yesterday (The Phoenix audit we could have had – Part 1), I talked about what I expected to see or at least thought we could have seen, regarding governance and oversight. 

Today I want to talk about the current state of pay requests outstanding.

What were the criteria?

There were two elements to the state of pay, and the first one was:

Problems related to paying public service employees are identified, and the nature and impact of these problems are understood.

To understand the first problem, the auditors relied upon the following documents.

  • Pay Disbursement Administrative Services Order, 2011
  • Directive on Financial Management of Pay Administration, Treasury Board
  • Policy on Results, Treasury Board
  • Directive on Results, Treasury Board
  • Supporting Effective Evaluations: A Guide to Developing Performance Measurement Strategies, Treasury Board of Canada Secretariat
  • COBIT 5: Enabling Processes, Information Systems Audit and Control Association, ISACA

As with the review yesterday, the policy on results, directive on results, guide to PM strategies, and COBIT 5 are virtually worthless to the exercise.… Read the rest

The Phoenix audit we could have had – Part 1

PolyWogg.ca
December 12 2017

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?) have said, but didn’t.

What were the criteria?

Let’s go in reverse order, and start with the third criterion that the auditors set up in their audit. They based that criterion on a bunch of documents, including:

  1. Financial Administration Act
  2. Public Service Employment Act
  3. Department of Public Works and Government Services Act
  4. Shared Services Canada Act
  5. Pay Disbursement Administrative Services Order, 2011
  6. Policy on Internal Control, Treasury Board
  7. Directive on Financial Management of Pay Administration, Treasury Board
  8. Policy on Terms and Conditions of Employment and the Directive on Terms and Conditions of Employment, Treasury Board
  9. Policy Framework for People Management, Treasury Board
  10. Policy Framework for the Management of Compensation, Treasury Board
  11. COBIT 5: Enabling Processes, ISACA

Now, here’s the thing.… Read the rest

A disappointing audit of the Phoenix problems

PolyWogg.ca
November 23 2017

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.

This audit doesn’t do any of those three things.

Understanding what an audit actually does

Most people hear the word audit and they immediately think of audits like what happens to taxpayers when they get audited by Revenue Canada or the Internal Revenue Service.… Read the rest

Articles I Like: The first rule of fraud – blame the auditors?

PolyWogg.ca
January 12 2016

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.

Appeal court Justice Robert Blair ruled Friday that the original trial judge was correct in concluding Deloitte was negligent in its work on the audit of Livent’s 1997 year-end financial statements, as well as the interim statements for the second and third quarters of 1997.

… Read the rest

Articles I Like: KK Rusch on royalty statements, audits

PolyWogg.ca
May 3 2012

One of my favorite bloggers writing about the publishing industry is Kristine Kathryn Rusch, a former “upper-midlister” who has moved into the world of self-publishing and prefers the results. She has lots of history in the traditional publishing world, ranging from short-story mags to full-length novels, and everything in between, and probably every form of publisher alive. However, unlike the evangelical nature of some of the newly converted, Kris’ posts tend to be more practically oriented — here’s a business issue related to publishing, here’s her experiences with it, here’s how she thinks it fits into a current business model, and here’s what she thinks is the best option for her. She’s not trying to convert the masses, she’s sharing info with the masses. It’s a great balance, and she treads it well. One of her latest posts is about royalty statements, and, basically, how screwed up they are. But she also goes on to talk about two other issues that I think are great — basket accounting and the audits by DOJ of the “colluders” who are being sued for the agency model agreements they colluded upon. See excerpts below:

Over a year ago, I wrote a blog post about the fact that my e-book royalties from a couple of my traditional publishers looked wrong.

… Read the rest