Research on scenario of “performance audit” in Bangladesh

Q: How long have you been working with the OCAG?

A: Over seventeen years, I have been working under OCAG.
Q: How do you get involved in the performance audit?
I have worked directly in the Performance Directorate for two years, and at the FMRP project is
also for two years, which also worked for Performance audit.
Q: Does OCAG enjoy the freedom to conduct the performance audit?
A: OCAG enjoy freedom for auditing but dependent on the government for the regulatory
aspect. For recruitment, promotion of employees or expansion of the department, even for
financial matters, depends on related ministries.
Q: How performance audit can help to ensure the accountability regime in the public
organisation?
A: Performance audit examines the public management and finds out loopholes of
management. Performance audit also recommends auditees for further development. We
should emphasise extensive Performance Audit training where auditors will find the actual
scenario of an auditee organisation through Performance Audit. A considerable number of
auditors are getting training every year, and they are also contributing to the government.
Q: Tell me more …….
A: Conducting the performance audit on public expenditures also guides public institutions on
the effective management of public resources and contributes to establishing this awareness in
the public administration.
Q: Is there any tradition of giving training or formal briefing to the performance audit team?
A: Categorically, there is a directive in the OCAG strategic plan that a certain percentage of
performance audits must be conducted. Evaluate the stakes for a performance audit,
understand the entity, evaluate whether there is a capacity to audit or not. Training is a part of
that. Regular training activities were organised in the Performance Audit Directorate, now FIMA
is organising it.
Since performance audit is a new concept in Bangladesh, we have arranged it and trained
various in-house experts before sending them to any audit. They have trained on how to
conduct a performance audit before sending them to the field audit. The OCAG and other
directorates are very much concerned in this regard. Therefore, it can be said that those who
have performed performance audits have taken training first and then sent it to the field.
Q: Did you get any training on performance audits?
A: I have developed some inbuilt experiences by reading various journals, reports and reviewing
working manuals. I was involved in conducting performance audit activities in the country by
organising some training locally. I have participated in such activities for two and a half years as
a director.
Q: Is the method or criterion time befitting or need to be modified?
A: We have been trying to perform the performance audit following the INTOSAI standards and
the guideline. We have also tried to adopt other international practices. Canadian guideline is
being followed in performing performance audits as it prevailed in the country since long.
performance audit is very challenging and to perform such audits is very tough by maintaining
that standard from field level to writing report. The matter is judgmental, unlike any other
regulatory audit. As a result, the concept of a performance audit is being changed due to
auditors' different views and perspectives. As a result, if two persons are sent for the same
audit, it will be seen that their concept will differ even if two persons have the same objection.
Since the matter is judgmental, it is a big challenge, so the two persons think from two angles.
Q: Is there any different code of ethics for performance audits?
A: We have international standards and a code of conduct developed by OCAG, but it is not
following properly as the accountability system is not ensured yet.
Q: Is there any separate training system for a subject-oriented audit?
A: When we identify the subject matter, we train our audit team according to the guidelines.
The audit team is sent to the field according to the design on how to perform performance
audits. They have to follow the guideline to perform an audit. It is not like that they can do
whatever they want. They try to materialise the audit following the Audit Design Matrix (ADM).
OCAG provide training through FIMA, but those are common issues. OCAG should arrange
training for performance auditors according to their needs.
We should emphasise extensive Performance Audit training where auditors will find the real
experience of a Performance Audit. A huge number of auditors are getting training every year,
but it is not outcome-focused. In selecting trainees, we found that most of them are not related
to a field audit; thus, they cannot contribute to the audit. So, the quality of training and
selection procedure of audit should be reviewed.
Q: Does the auditor have to follow the ADM, or can he improvise the matrix if he wants?
A: Performance audit means for up-gradation. Other audits have such limitations, but there are
no boundaries for the performance audits. The auditor can make recommendations to the
management on any matter. It is not like that the auditor has to follow the guidelines or follow
the law; he can develop a new view by thinking from a different angle. There is no such
obligation in Bangladesh or even in international practice.
Q. What kind of problems do you face while conducting the performance audit?
A: Performance audit is a new concept for SAI, Bangladesh. Developed countries have not made
much progress in performance audits. In Bangladesh, usually, performance audit does not
follow the fundamental grammar of the audit.
Since this concept is new, it is not easy to explain what a performance audit is. The auditees
only recognise financial audit and regulatory audit as an audit; they are not familiar with
performance audit as a different approach. Those who are auditing are also facing challenges,
and those who are being audited are also facing challenges. As a result, a misunderstanding is
growing between the two parties. That is why performance audit cannot be materialised.
When we send a team for a performance audit, they raise objections like a compliance audit.
Due to the lack of knowledge among our auditors, they ultimately convert the compliance audit
into a performance audit framework then prepare a report. It is the biggest challenge for
performance auditors.
Q: How does the auditee consider an audit recommendation?
A: At the beginning of the audit, when we explain the performance audit to the auditee, they
usually appreciate it as this is a good concept and a new one. But when the report is placed
before auditees at the end of the audit, they no longer get that flavour they expected, so they
are discouraged.
Since the performance audit report is similar to the compliance audit, the stakeholders are not
happy with the new concept. Another big challenge is evidence, as the performance audit is
judgmental. Due to a lack of evidence against many judgments, when the stakeholders
challenge the auditee, they (auditee) usually oppose it. Since we do not have evidence, they
take this opportunity and deny it directly. And termed it a fabricated one and claimed that the
report was prepared to demean the auditee.
Q: Does the auditee provide documents against their argument or give a broadsheet reply?
Or neglect the observation?
A: Since the auditee has a concept on compliance audit, they give a broadsheet reply like a
compliance audit, not like the performance audit. It is also a problem for effective
communication.
Q: In the case of audit follow-up, is there a tendency to respond similarly to a compliance
audit?
A: Most audit users and auditors work with a mindset within the compliance audit atmosphere.
So far, only one performance audit has been discussed in the present Parliament before the
COVID-19 pandemic. PAC also did not show much interest in the performance audit.
Q: What is your recommendation for the implementation of a performance audit?
A: Auditors need to be adequately trained. You have to give proper training otherwise an
excellent report cannot be expected from them. A seminar on performance audit needs to be
conducted with auditees. We have to make them understand that we want to bring them under
the new audit. It is essential.
Q: Is the timeframe of performance audit time befitting?
A: Sometimes, it is not possible to perform an audit within the stipulated time. At first, it seems
like a straightforward issue, but when we go to evidence collection practically, we realise it is a
significant issue. Then it cannot be covered within the specific timeframe. Then we carry out an
extension program or any other subsidiary program. It is a worldwide practice, not only in
Bangladesh. Performance audits cannot be completed within the stipulated time. OCAG should
emphasise the frequency of audit.
Q: Is it possible in the context of our country?
A: It is pretty challenging in the context of our country. Our mindset is to make the program so
that it has to be completed and made report within the stipulated time. The problem is that it
becomes difficult to report by collecting evidence within the stipulated time. But then auditors
finished their duty by making so-called reports without collecting proper evidence according to
the subject meter. As a result, these reports lose their importance.
Q: Do you face any pressure while conducting an audit or during the audit?
A: I have no such experience as performance audits have never been conducted extensively.
Q: Are they enjoying complete freedom?
A: Yes, it can be said.
Q: What kind of behaviour do you expect from the auditee?
A: Performance Auditor expects cooperative behaviour from auditees. Auditee considers
performance audits as an audit for ensuring accountability. Everyone wants to enjoy
independence; the auditee manager feels embarrassed when someone held him accountable.
The auditee does not want to accept it and linger to provide information during the audit. And
they do not cooperate with the auditor.
Q: Any suggestions on how to overcome this problem?
A: Of course, both parties need to change their mindset. If I cannot convince them that an audit
is a management tool, the audit will face a negative situation.
Q: What initiatives can be taken to change the mindset of the auditee?
A: Sometimes you have to organise workshops and seminars with the auditees to aware them.
A seminar with high officials of the auditee is a must before going to perform a performance
audit. If we fail to do it, they will continue to think of auditors as the opposite party, as they do
now.
Q: What is the opinion of PAC? Are they satisfied?
A: Since only a few reports have been discussed in Parliament, it does not make sense to realise
their attitude. As the committee changes with the change of government in our country, each
committee reacts differently, so there is no routine work among them. PAC always emphasise
the quality report with current issues. If the PAC had adopted a plan to discuss a certain
amount of performance audits per year, there would have been pressure for OCAG and the
auditee. It is up to them to decide when the committee will discuss what issue, and the OCAG
has no chance to decide on it. As a result, this thing is not getting any importance.
Q: Does PAC have any written instructions? Or do they come up with the instruction during
the meeting?
A: When discussions are held in the PAC, they welcome the audit report conceptually. But in
our country, auditors lack competence and a lack of commitment to the responsibility; it is not
possible to give audit reports by maintaining that standard. As a result, they lost interest in it.
Q: What is the progress of performance audits since the beginning?
A: Performance audits were nowhere to be found in the nineties. Performance audits have
been given importance since 2010. Although, we have worked on performance audits under
various banners. In 1995, a guideline was issued by the OCAG. It was not used during any audit.
The guideline was to perform a performance audit alongside the compliance audit. There was
no such idea that a specific audit could be performed separately. Even Canada has had its first
audit since 2008, then in India and Pakistan. Therefore, we cannot say that performance audit
has been started in our country since the '90s. The concept was there but was never
implemented.