Académique Documents
Professionnel Documents
Culture Documents
Page
Acknowledgement v
Introduction 1
Background 1
Establishment of the Value-for-Money (VFM) Division 1
Expectations of stakeholders 1
Objectives of this paper 2
Project phases 2
Conclusionphases I and II 10
iii
Performance audit manual 10
Conclusion 17
Bibliography 18
Appendices 19
iv
Acknowledgement
I would like to express my gratitude to all those who helped to make it possible for me to
complete this strategy paper. I want to thank the National Audit Office of Tanzania for
allowing me to attend the fellowship program and prepare this strategy paper. In this
regard, I specifically want to thank the Controller and Auditor General of Tanzania,
Mr. Ludovick Utouh; the Deputy Controller and Auditor General, Dr. Frank Moses Mhilu;
and the Assistant Auditor General (Value-for-Money Audit), Mr. Gregory G. Teu.
I am grateful to Mr. Gregory G. Teu, Mr. Carl Ake Gerden (Baba Zulu), and all VFM
division staff for their valuable comments and guidance in writing this paper.
I acknowledge with gratitude the sincere and dedicated service of the officers and staff
of the Canadian International Development Agency, the Office of the Auditor General of
Canada (OAG), and CCAF-FCVI for their commitment to ensuring the success of the
fellowship program. Their collective effort enabled this program to be co-ordinated well in
a harmonious environment.
I am grateful to the management of OAGCanada and its staff for hosting and training
me. I am especially grateful to Sheila Fraser, Auditor General of Canada, for giving her
support, taking her time to talk to the fellows, and taking us to parliamentary briefings.
I am deeply indebted to my mentors, Mr. Edward N. Wood, PrincipalPWGSC team and
Mr. Martin D. Dompierre, DirectorPractice Development group, whose help, stimulating
suggestions, and encouragement helped me in reviewing documents and writing this
paper.
I would like to express my gratitude to Mr. Ronnie Campbell, Assistant Auditor General
of Group 3 for granting me adequate office space, and to the Public Works and
Government Services Canada team for their valuable help, suggestions, interest, and
support.
I also want to express my gratitude to Mr. Rick Smith, Ms. Antonine Campbell,
Ms. Donna Bigelow, and Ms. Deborah Noel-Lambert of the International Relations team
and Ms. Rita Gudziunas-Mankowski of the Professional Development Group for their
generous help and service, fruitful suggestions, steady encouragement, and wise
counsel.
Thank you to Mr. Michael Eastman, Ms. Caroline Jorgensen, Mr. Geoff Dubrow, and
Mr. Marc Maloche of CCAF-FCVI for their support and friendship, and a special thanks
to Ms. Jorgensen with whom I spent the most time.
I also want to thank Manfred and his wife Patricia Kuhnapfel for their friendship, daily
support, wise counsel, and constant guidance.
Last, but not least, I thank my family: my lovely parents Lucca G. Haule and
Margreth Kuchaka Haule for giving me life in the first place, for their care and love, for
raising and educating me, and for their unconditional support and encouragement to
pursue my interests; my lovely young sisters Christina and Winnie Haule, and my young
brothers Hawasi and Samweli Haule for supporting me, keeping in touch, and
encouraging me to keep moving forward. Many, many thanks to all!
v
Executive Summary
The National Audit Office of Tanzania (NAOT) has the key role and responsibility of
carrying out value-for-money audits, including providing the Parliament of the United
Republic of Tanzania with audit reports each year so that it can exercise its oversight
role.
The audit quality management framework in a supreme audit institution (SAI) should
generally consist of the following elements:
audit performance,
continuous improvement.
provide minimum guidance for auditors that helps determine the steps and
procedures that should be applied in audits (audit standards constitute the
criteria or the yardstick against which the quality of the audit results is
evaluated); and
Achieving and maintaining a high level of audit quality is affected as much or more by
key management factors, such as NAOTs capacity to show leadership and manage its
audit and human resources, than by technical factors, such as auditing standards and
procedures. However important the latter may be, achieving quality depends not only on
professional knowledge and training but also on trust, transparency, openness, and the
elimination of fear.
vii
To develop a quality management framework for NAOT, I determined that we first
needed a performance audit manual. An interim QMF will precede the manual and the
final QMF.
The first two phases will involve developing the performance audit manual and the
interim QMF, which will cover clear objectives, stated criteria, conclusions against
objectives, and consultation of experts.
The next two phases will involve developing the final QMF and policies and
implementing them in Tanzania.
viii
Introduction
Background
1. The National Audit Office of Tanzania (NAOT) is the supreme audit institution of
the Government of Tanzania. Its mandate is enshrined under articles 143 and 144 of the
Constitution of the United Republic of Tanzania of 1977 (revised 2000). The main
function of NAOT is auditing government revenue collection and expenditure as
appropriated by Parliament in order to bring about greater transparency and
accountability in the management of public resources (Exhibit 1). NAOT is headed by
the Controller and Auditor General whose powers and functions are stipulated in the
Public Finance Act No. 6 of 2001 (revised 2004).
2. The VFM Division was established in 2003 following the mandate given to the
Controller and Auditor General by Public Finance Act No. 6 of 2001 (Revised 2004) to
carry out value-for-money audit (to establish the economy, efficiency, and effectiveness
of any expenditure or use of resources by any ministry or department).
Expectations of stakeholders
Exhibit 1
Objectives and targets of the National Audit Office of Tanzania (20062009)
Objective Target
1. Complete audit and production of To ensure that timely and high-quality audit
high-quality audit reports in a timely services are provided to all statutory clients
manner
3. Raise staff competence and To raise the staffs competence and professional
professional skills skills and the institutional capacity of NAOT to
provide value-added services to clients
1
Objective Target
6. Address key human resource To address key staff issues for enhancing staff
challenges morale/motivation
4. To meet its objectives and targets, NAOT needs to strengthen the quality of its
products (audit reports). This can be achieved by having an audit Quality Management
Framework (QMF) and necessary audit manuals to provide guidance to auditors and
support staff when carrying out their audit work, and ensure that they meet national and
international standards.
enable our Office to be more effective and efficient when performing audit
work,
Project phases
2
expected and encourage the exercise of professional judgment. It should contain
the policy statement, audit guidance, and tools to assist auditors in conducting
audits.
Phase III. Specify key elements of the Quality Management Framework. This
step would allow the Office to determine the level of assurance we are aiming at
and the existing tools/instruments that would be used to provide that assurance.
Phase IV. Develop the missing tools/instruments. These include the policies,
guidelines, or standards that should be prepared to enable NAOT audit
practitioners to provide assurance to senior management.
10. A SAIs audit quality management framework should consist of the following
elements (Appendix A):
audit performance,
continuous improvement.
3
11. There are three main types of quality assurance:
internal review,
Internal review
12. The internal review is conducted by staff members from different structural units,
independent from the audit being reviewed. The reviewer selects a sample of audits,
examines them in detail using the criteria from the quality management framework and
performance audit manual, and reports the results, along with recommendations for
improvement. Internal review can be either by quality control (hot review) or by quality
assurance (cold review).
13. Quality control is a process through which an SAI seeks to ensure that all phases
of an audit (planning, execution, reporting, and follow-up) are carried out in compliance
with the SAIs rules, practices, and procedures.
14. A quality control system ensures that audits are timely and comprehensive and
adequately documented, performed, and reviewed by qualified staff. In this context,
quality takes account of the following factors, among others:
the scope and completeness of the planning and performance of the audit;
15. Quality assurance is an assessment process that focuses on the operation of the
quality control system. It is a review after the audit has been completed by persons who
are independent of the audit under review. Quality assurance involves the examination
of specific audits; however, the purpose of the review is not to criticize specific audits.
Rather it is to determine what controls were intended to be applied to those audits and
how they were implemented, and to assess any gaps in the controls and ways of
improving audit quality.
4
External peer review
16. The peer review technique assesses the extent to which a SAI meets
international standards. Such review generally involves experienced auditors from other
SAIs.
18. Feedback from auditees and parliamentarians can help the SAI understand
auditees and parliamentarians needs and expectations. The benefits of feedback can
be achieved by ensuring that the SAI has a close relation and good communication with
auditees and parliamentarians, and that auditees understand the SAIs role and quality
control policy.
19. A quality management framework includes quality control procedures and quality
assurance functions (both internal and external). It also includes the management
processes that can have an impact on the quality of a SAIs audit work and results, such
as leadership and management of human resources and external relations.
20. The reasons for developing a quality management framework include the
following:
5
Establishing a quality management framework
21. When establishing a quality management framework in the National Audit Office
of Tanzania, the different types of tasks to be carried out throughout the audit process
must be considered.
23. Initial implementation. The first task during the implementation phase is to
itemize existing operational procedures and instructions, in order to determine the quality
rules and quality assurance tools that are already in place. Based on this information,
the VFM Division, in cooperation with the Technical Support, Research and Consultancy
Unit, should identify areas for action. These areas should then be used to develop
quality criteria and minimum quality assurance requirements, to be set down as quality
specifications. Together with the Technical Support, Research and Consultancy Unit, the
VFM Division should take the necessary action to incorporate this information in the
performance audit manualfor example, as descriptors or operational instructions.
Another task to be carried out in the implementation phase is to develop methods for
ongoing self-monitoring, such as self-assessment.
24. In line with the above-noted description of tasks, the following stages can be
identified in implementing a quality management framework: 2
defining a quality policy,
identifying areas for action,
1
Accountability, Performance Reporting, Comprehensive AuditAn Integrated Perspective, by Guy Lecrec, W. David
Moynagh, Jean-Pierre Boisclair, Hugh R. Hanson, 1996 CCAF-FCIV Inc, page 332.
2
Quality Management in the Internal Audit Activity, IIR Audit Standard No.3, by German Institute of Internal Auditors (IIR),
12 August 2002.
6
creating the necessary structures,
26. The areas where action is required to establish a quality management framework
should be identified on the basis of the defined quality policy. This task involves creating
the necessary structures, defining quality criteria, and itemizing the existing quality rules
and quality assurance tools as a basis for formulating specific actions.
27. To involve all audit staff in quality management, it is advisable to form a quality
team. During the implementation phase, this team should provide the driving force
behind the quality and change process. It will be actively involved in all aspects of the
implementation phase.
28. During the implementation phase, an important task of the quality control team is
to define the minimum requirements for high-quality performance audit work and to write
corresponding quality specifications.
7
The role of NAOT leadership in achieving quality
31. Achieving high-quality audit work and audit results is only possible if staff at all
levels in the audit process have a clear idea of what they are aiming at and what is
expected of them. It is up to the senior management of NAOT to provide a clear vision of
the aims and objectives of the Office and to set the tone at the top concerning how the
objectives are to be achieved. This means not only defining a clear audit strategy but
also developing ways to ensure that the message is effectively communicated to NAOT
staff and is continually reinforced. It also means embracing the need to change how
things are donestarting at the top, where necessary, and developing a strategy to
overcome the reluctance of some staff to accept change.
33. Based on its mandate, the Unit should develop its strategy, which will set out its
goals and how to achieve them (including decisions on whether it will carry out hot as
well as cold reviews, how a sample of audits should be selected for review, how the
results will be disseminated, and how its role should be best communicated to NAOT
staff and management).
34. If the unit has an element of hot authority (this decision needs careful
consideration and justification), it is important to ensure that staff carrying out and
managing the audits are not relieved of their responsibilities by the Units interventions.
35. The Unit should have a direct link to the further development of audit methods
and guidance so that lessons learned are clearly and easily used to improve
performance.
Management
36. Senior management in NAOT need to formulate clear strategy and objectives for
their institution and communicate them effectively to staff. It is particularly important for
senior management to monitor progress and to receive and carry out timely feedback
and evaluation on the activities and results.
37. In planning annual work programs and individual audits, management need to
take proper account of constraints in time and personnel resources. They need to
identify management priorities where necessary, so that the final audit results can attain
the necessary levels of quality.
8
Human resources
promote the personal development and skill levels of its staff by providing
them with appropriately tailored skills and professional development training
programs at all levels;
take steps to encourage and recognize good audit staff (for example, naming
auditors or audit teams of the year and sending staff on special training
courses or seminars); and
submit report drafts to auditees for clearance and comment to help ensure
that the audit observations are accurate and balanced,
develop specialized training for audit staff at all levels to manage business
relations with auditees.
9
External peer reviews
Conclusionphases I and II
42. During my time in the OAG, I focused on phases I and II. I developed a quality
management framework structure, identifying QMF key tools/instruments and a strategy
for accomplishing phases III and IV.
43. The key elements of the quality management framework in Appendix 1 are
composed of policies that NAOT currently has and those that need to be developed. I
am asking the NAOT Executive Committee to approve a proposed quality management
framework, and the Office to develop the policies needed and a performance audit
manual.
10
Creating the necessary structures
46. To involve all audit staff in quality management, it is advisable to form a quality
team. During the implementation phase, this team should provide the driving force
behind the quality and change process. It will be actively involved in all aspects of the
implementation process.
47. Typically, a performance audit manual is based on the various documents issued
by the National Board of Accountants and Auditors (NBAA) and other international
auditing bodies, but it provides more detail and is designed according to the nature,
mandate, and circumstances of the individual office. Among other things, a performance
audit manual covers the following subjects and elements of a quality management
framework:
the actions that should be taken at each step to ensure quality, including the
required supervision and review;
policy and procedures for issues such as confidentiality of the auditee and
office information, reliance on and coordination with third-party work/internal
audit, and communication with the public.
11
Interim quality management framework
48. The interim quality management framework will assure NAOT management that
the performance audit manual to be developed will meet quality standards based on
criteria established for the interim QMF. It could include such things as clear objectives
that can be concluded against, suitable criteria that focus the audit and provide a basis
for developing observations and conclusions, sufficient and appropriate evidence to
support the contents of the audit report, objective evaluation of the evidence against the
criteria to develop observations and conclusions, and recommendations on positive
changes that can be made for the most serious deficiencies reported.
49. The purpose of a performance audit manual is to help ensure that the staff of
NAOT use a consistent and appropriate methodology in all its audits. To this end, a
manual is used both as a central element in training new auditors and as a reference
document for auditors to use when questions of practice and procedure arise in an audit.
50. A performance audit manual and standards will provide the following benefits to
NAOT:
They will provide minimum guidance for the auditor in determining the
auditing procedures that should be followed in the audit.
One element of quality assurance regimes is the preparation and the use
of audit manuals, which detail how practice in the office will be conducted.
Typically, these manuals are based on various documentsprovide more
detail and are designed with the nature, mandate and circumstances of
the individual office in mind. 3
12
Preparing a performance audit manual
51. A group of performance auditors will prepare the performance audit manual, and
they will be assisted by outside experts and advisors. This team will rely heavily on
methodological guidance developed by other SAIs and on data collection and analysis
techniques developed in the academic research community.
52. A common approach is to have a performance audit manual setting out broad
principles and standards, with more detailed guidance contained in separate annexes or
other subsidiary publications (Appendix C).
54. The performance audit manual will be communicated by various means in the
NAOT, such as hard copies, training programs, seminars, workshops, staff meetings,
office instructions, library, and pilot audits.
55. The manual will be available through the NAOT website, depending on the
restrictions on distributing some or all information in the manual information (for
example, material purchased from private sector firms, or for other reasons).
56. A substantial number of SAIs have done some form of self-assessment (for
example, EUROSAI members 4 ) in developing a performance audit manual. The
information provided by other SAIs self-assessment provides a useful tool in reviewing
the type of weaknesses and problems identified, successes and benefits gained, and
opportunities and other experiences related to the manual. The information also helps
NAOT to identify issues and requirements that it needs to address in preparing the
performance audit manual.
57. The self-assessment results indicated that some SAIs had no performance audit
manual; instead, they relied mainly on local and foreign audit literature. Other SAIs had
only loose instructions and guidelines. In still other cases, a performance audit manual
existed but needed to be revised. Weaknesses identified included the following:
4 The Implementation of Audit Manuals, Co-Rapporteurs: Brian Vella (National Audit OfficeMalta) and Hejduck Bohdan
(Supreme Audit OfficeCzech Republic), 30 June 2000. page 1216 and page 3841.
13
the lack of certain audit techniques and other elements in the INTOSAI
implementation guidelines, such as audit sampling, audit evidence, risk
analysis, quality assurance, analytical procedures, and evaluation of internal
controls;
the use of different performance audit manuals from various countries and
organizations (resulting in inconsistent audit work);
58. In spite of the weaknesses and problems identified through some form of self-
assessment, a number of successes and benefits have been achieved within a short
time. These include the following:
59. The identification of weaknesses and problems, the assistance from outside
sources, and the will of the NAOT to move forward will help the Office to identify
opportunities for improving its performance audit practice and bringing it in line with more
advanced SAIs. The opportunities include the following:
14
carrying out joint performance audit with other SAIs using similar audit
methodologies and techniques; and
60. The review of the progress and experiences of other SAIs relative to
performance audit manuals revealed a number of issues that NAOT needs to address.
These include the following:
Use pilot audits as a learning and development tool for applying the
performance audit manual. More information on best INTOSAI audit practices
is required as well as further familiarization with the work carried out by
AFROSAI member states.
Organization structure
Establish a framework for the manual needs, with a focus on priority subjects.
Ensure that the manual has a formal basis and a logical and appropriate
structure.
Ensure that persons directly involved in preparing the manual and other
methodological material are trained appropriately.
Review and revise the performance audit manual periodically to bring it in line
with the latest relevant auditing developments.
Collect various audit instructions and directives available in NAOT and add
them to the performance audit manual. Streamline audit methodologies and
techniques to ensure that audits have a consistent approach.
15
Implement and revise the performance audit manual gradually so that audit
staff can manage changes adequately.
Include a code of ethics for professional conduct in the manual. This should
be issued to all NAOT staff.
Carry out practical training on the performance audit manual, in such areas
as evaluation of internal controls, sampling, and risk and materiality analysis;
Obtain feedback from audit staff on their experiences using the performance
audit manual.
Ensure managements support for the manual and commitment to its use.
Ensure that the manual is available to all relevant audit staff in NAOT.
61. To prepare and implement a performance audit manual, there are nine strategies
for NAOT to consider (Appendix D).
16
Conclusion
62. Achieving and maintaining a high level of audit quality is affected as much or
more by key management issues, such as NAOTs capacity to show leadership and
manage its audit and human resources, than by technical factors, such as auditing
standards and procedures. Achieving quality depends not only on professional
knowledge and training, but also on trust, transparency, and openness.
63. The high professional level of staff in NAOT indicates their potential to promote
and implement whatever changes may be needed to achieve the highest standards in
audit quality. These standards in quality can be achieved only when
quality is built into the entire audit process, with emphasis on good planning;
64. To develop and use a performance audit manual, NAOT needs to plan, manage,
and monitor the process expertly and carefully through a long-term strategy.
17
Bibliography
Code of Ethics and Auditing Standards issued by Auditing Standard Committee at the
XVIth Congress of INTOSAI in 1998 in Montevideo, Uruguay and approved by the
XVIIth Congress of INTOSAI in Seoul, 2001.
Draft Guidelines on Audit Quality Management System by 7th ASOSAI Research Project,
December 2004.
External Audit of the Quality Management System for Annual Audits, Office of the
Auditor General of Canada, by PriceWaterHouseCoopers, January 2000.
Public Finance Act No. 6 of 2001 (revised 2004), Parliament of the United Republic of
Tanzania.
Quality Control Model for Performance Audit by Swedish National Audit Office (SNAO),
June 2003.
Quality Management in the Internal Audit Activity, IIR Audit Standard No. 3, by German
Institute of Internal Auditors (IIR), 12 August 2002.
18
Appendices
Appendix A
Key elements of a performance audit quality management framework for the National Audit Office of
Tanzania (NAOT) 5
2. Vision, mission, core NAOT has its own vision, mission, core values, and auditing Vision, mission statement, and core values
values, and auditing standards, which conform to the audit quality management
standards framework.
Strategic plan
INTOSAI auditing standards
Performance Audit Manual and guidance*
3. Strategic direction The strategic plan prescribes the broad contours for medium- Strategic planning exercise: vision, mission,
and planning term progress of the organization and should help in values, including focus areas of NAOT senior
establishing goals and delineating ownership and management.
responsibility. The plan also incorporates the vision, mission,
and the core values of NAOT, with the objective of improving
the quality and impact of audit, promoting excellence in audit,
and improving the quality of governance.
5
Adapted from Guidelines on Audit Quality Management System of ASOSAI and VFM Quality Management Framework of the Office of the Auditor General of Canada.
19
Appendix A (continued)
4. Strategic audit NAOT has strategic audit plans that define the goals and Strategic audit plan of NAOT**
planning objectives to be achieved through audit and the strategic
measures to attain them.
5. Portfolio and risk NAOT undertakes work that is within its jurisdiction and Article 143 of the Constitution of the United
management authority to audit and for which it efficiently and effectively Republic of Tanzania
manages the risks involved in performing the audit
assignment.
Public Finance Act No. 6 of 2001
While planning for audit, NAOT has considered all deserving Strategic plan of NAOT**
and significant program/entities that are vulnerable to risks Strategic audit plan for performance audit**
and/or are seen as important and relevant for review by
Parliament and the public. Performance Audit Manual and guidance*
Client survey results
Request by Parliament
6. Resourcing and Audit teams possess the required qualifications, collective Government of Tanzania and NAOT human
recruitment knowledge of the subject matter, competencies, and the resources rules, policies and guidance***
auditing proficiency to enable them to carry out the audits and
fulfil the audit mandate. Performance Audit Manual and guidance*
Professional development curriculum
7. Training and The audit teams designated to carry out the work have NAOT training plan
capacity building adequate technical training and proficiency.
Government of Tanzania and NAOT human
resources rules, policies and guidance***
NAOT training policies and guidelines
8. Performance The staff members receive timely and constructive feedback Performance appraisal system (OPRAS)
management and on their performance and have access to counselling and Government of Tanzania and NAOT Human
appraisal guidance to manage and develop their careers. resources policies and guidance***
20
Appendix A (continued)
9. Personnel welfare Personnel welfare and benefit measures are in place to Personnel welfare policies
and benefits motivate staff to give their best.
Audit performance
10. Audit planning The work is adequately planned and the audit issues are Performance Audit Manual and guidance*
selected on the basis of risk, their relevance to NAOTs
mandate, significance, and auditability. Pre-study memo and work plan/examination plan
Criteria are suitable for audit to be conducted efficiently and Executive committee advisory board*
effectively.
11. Staffing the audit Adequate staffing is provided for audit to be conducted Performance Audit Manual*
efficiently and effectively
Staffing policy
Reshuffle/reassignment policies
12. IT tools Appropriate IT tools are available in NAOT as a measure of Software support tools
audit quality improvement.
13. Other tools and Appropriate guidance and audit tools and techniques are Office intranet/website
guidance available, useful, and applied consistently.
Best practice guides*
21
Appendix A (continued)
14. Conducting the audit All audits are conducted with due regard for efficiency and Performance Audit Manual*
economy (time spent and resources used) and in accordance
with the legal mandate, policies, and practices of NAOT. Approved audit plansapproved budget and
human resources
The audit teams deliver the audit in time, in accordance with
NAOTs principles and policies, and audit costs are justified. Progress reports
Electronic tools
Sampling guides*
15. Consultation and Consultation is sought from experts and specialists with Performance Audit Manual and guidance*
advice appropriate competence, skill, knowledge, judgment, and
authority to ensure due care and authoritative opinion when Quality reviewer
dealing with unusual, unfamiliar, and complex issues. Executive committee advisory board*
Subject matter experts, to provide advice and
support
Audit forum
16. Supervision and Personnel working in the audit team receive an appropriate Performance Audit Manual and Guidance*
review level of leadership and direction so that they are encouraged
to perform to their potential and to ensure that audits are Government of Tanzania and NAOT human
properly carried out. resources rules, policies, and guidance***
Adequate supervision of all audit personnel is provided to Assignment and annual performance reviews
ensure that audits are properly carried out.
All audit work is reviewed by a senior member of the audit
staff before the audit reports are finalized to bring more than
one level of experience and judgment to the audit task. The
review will ensure that all evaluations and conclusions are
soundly based and are supported by competent, relevant,
and reasonable audit evidence.
22
Appendix A (continued)
17. Evidence Sufficient, appropriate, competent, and relevant evidence Performance Audit Manual*
is obtained to provide a reasonable basis to support the
conclusion expressed in the report. Confirmation of findings resulting from field work
with the audited entities
Review by NAOT senior management of some
important reports and conclusions and their
rationale
Quality assurance review
18. Documentation The system of documentation in NAOT is designed to ensure Performance Audit Manual*
that all the audit processes are duly recorded and available
both for subsequent follow-up and for future audits. Quality assurance review
19. Reporting and The audit report is relevant, coherent, and written in plain and Performance Audit Manual*
follow-up clear language for the readers.
Clearance of report with audited organisation(s)
There is effective review of all findings, conclusions, and and third parties where applicable
recommendations before they are finalized.
Review and quality assurance before issue of the
report
Post-audit quality assurance review
Follow-up/monitoring of audit recommendations
Final review by the Controller and Auditor
General of Tanzania
23
Appendix A (continued)
20. Communicating Post-tabling audit messages are communicated clearly and Guidance on preparing communications to
audit messages consistently. Parliament****
Guidance on pre-tabling briefings & briefing
requirements****
Guidance on press releases and response to
media enquiries****
21. Feedback from Clients and parliamentarians perceive information and audit Tracking of NAOT recommendations taken up by
clients and processes as useful. the Parliament of Tanzania
Parliamentarians
Analysis of external communications (media,
public enquiries, reference in debate)
Survey of the Public Accounts Committee (PAC),
Local Authorities Accounts Committee (LAAC),
other standing committees, and government
officials on the audit reports and whether they
have perceived them as useful
22. Relationship Effective and productive relationship exists between PAC/LAAC discussions of the audit reports
between PAC/LAAC and PAC/LAAC and NAOT regarding consideration of the audit
other standing reports by the PAC/LAAC. The examinations by the PAC/LAAC reportsrecommendations of the
committees and NAOT legislative committees are intended to focus public attention PAC/LAAC
on the audit findings and to point to where corrective action is NAOTs analysis of the scrutiny of the report by
being taken and where attention is needed. PAC/LAAC and other standing committees of
Parliament
24
Appendix A (continued)
Continuous improvement
23. Internal audit An effective internal audit system exists in NAOT to help the Internal Audit Manual, policies, and guidelines
organization achieve effective management of its operations,
sustain the quality of its performance, and ensure compliance Action taken in NAOT on the internal audit
with internal control policies and procedures. reports
24. Internal quality An effective internal quality assurance review mechanism Internal quality assurance manual, policies, and
assurance review exists to provide feedback on how effectively individual guidelines
performance audits are conducted in compliance with
applicable standards, policies, and guidance and meet Action taken in NAOT on internal quality
expected quality requirements. assurance review reports
25. Peer review There is an institutional mechanism for periodical peer review Peer review reports
of NAOTs quality assurance system.
NAOTs policy and program on peer review of
the audit practices
Action taken on peer review report
26. Lessons learned Audit experience is assessed and opportunities for Lessons learned philosophy
improvement are identified and implemented.
Survey instruments
Note:
* It is not in place and needs to be developed.
** It is in place but does not address issues of performance audit strategy in detail.
*** It is in place but most of the policies are issued by the Public Service Department.
**** It is one of the tasks to be carried out under the National Audit Office Development Program.
25
Appendix A (continued)
Tone at the top Vision, mission, core, Strategic direction Strategic audit Portfolio and risk
values and auditing and planning planning management
standards
Audit planning Staffing the IT tools Other tools and Conducting Consultation Supervision Evidence
audit guidance the audit and advice and review
Communicating audit messages Feedback from clients and parliamentarians Relationship between PAC/LAAC and NAOT
Continuous improvement
Internal audit Internal quality assurance review Peer review Lessons learned
26
Appendix B
Strategies for establishing and streamlining a quality management framework at the National Audit
Office of Tanzania (NAOT)
Strategy 1Set up a steering committee Define a quality policy. NAOT Executive August 2007
to provide direction on the preparation Committee
Review and approve a proposed quality
and implementation of a quality
management framework (Appendix A) and
management framework (QMF).
adopt it.
Strategy 2Set up a committee or Identify areas for action. Writing team on Quality September 2007 to
writing team to prepare policies for the Management Framework January 2008
Develop an interim quality management
interim quality management framework. policies and the VFM
framework that will provide criteria for developing
Division
a good performance audit manual.
Strategy 3Write policy for the final Develop relevant policies that are needed and NAOT Executive February 2010 to
quality management framework and update those that are outdated. Committee, writing team September 2010
create the necessary structures. on QMF policies, VFM
Draw up quality specifications and define quality
Division, and Technical
criteriathat is, key instruments to be used to
Support, Research and
ensure quality (Appendix A).
Consultancy Unit
Ensure that there is internal quality assurance
review personnel within the Technical Support,
Research and Consultancy Unit who will carry
out both hot and cold reviews.
Strategy 4Disseminate the Ensure that quality management is transparent, VFM Division, Training October 2010 to
implementation process. measurable, and mandatory. Unit, and Technical December 2010
Support, Research and
Develop and disseminate a corresponding
Consultancy Unit
project plan, incorporating responsibilities and a
schedule.
27
Appendix C
6
Proposed contents for a performance audit manual
Chapter 1Organization, legal basis, and policy of the National Audit Office of
Tanzania
Vision statement, mission statement, NAOT organization and job descriptions, mandate of
NAOT and scope of the audit, objective of the public sector, policy statement, government
policies and policy relevant to performance audit, code of ethics, distribution of information
(website, intranet, hard copy)
Basic concepts and definitions, VFM strategy and deciding what to examine, planning and
examination, carrying out an examination, evidence and documentation, tools and
techniques, VFM audit methodology
The benefits and objectives of planning, NAOT strategic and corporate plans, individual
audit plans, different levels of planning, audit risk, audit materiality, auditor communication
of audit plan, audit objective, scope, and criteria.
Supervision and review of audit staff, audit programs and checklists, audit approach,
materiality and risk assessments, audit evidence, audit tools and techniques, access to
information and powers of auditor, security and confidentiality, audit documentation
(current working paper files, permanent working paper files, official correspondence,
retention of audit documentation), audit findings, conclusions, observations and
recommendations, exit conference with management, audit quality review.
Form and content, management letters, quality assurance of Performance audit report,
reporting to Parliament and to the general public, relationship with the Public Accounts
6
To be discussed and approved by the Strategic Committee on Performance Audit Manual in consultation with a writing
team for the Performance Audit Manual.
28
Appendix C (continued)
Committee (PAC) and the Local Authorities Accounts Committee (LAAC) and preparation
for hearing for PAC/LAAC, privileged and confidential information, report distribution,
follow-up of audit reports, presenting data in reports, report preparation, publication of
reports, PAC hearings on reports, government response.
Appendices
29
Appendix D
Strategy 1Set up a steering Formulate a strategy for new performance audit Strategic Committee on February, 2008 to
committee to provide direction on policies, manual, code of ethics, standards, and Performance Audit Manual July 2008
preparing and implementing the methodologies to be developed by a committee or (committee includes
performance audit manual. team. members of senior
management staff, VFM
Develop a framework for a comprehensive
Division, Technical Support
performance audit manual.
Research and Consultancy
Identify conditions favouring the implementation of Unit and consultant)
methodologies developed by NAOT.
Analyze the consequences of the practice on the
professional competence and training of the
NAOT staff, its structures and organization, and
the effect of new methodologies on current output
and quality of work.
Strategy 2Establish a committee or Formulate a performance audit manual, Committee on August 2008 to
writing team for the performance audit standards, code of ethics, methodologies, and Performance Audit Manual July 2009
manual. other guidelines relating to performance audit
(VFM Division)
work.
Strategy 3Collaborate (Technical Collaborate with private sector audit and Committee on August 2009
Support Unit) with other local and accountancy firms; the National Board of Performance Audit Manual
foreign organizations on a useful means Accountants and Auditors (NBAA); foreign SAIs and Technical Support,
to provide new concepts for the (for example, Swedish National Audit Office, OAG Research and Consultancy
performance audit manual. Canada); International Federation of Accountants Unit
(IFAC); professional institutions; INTOSAI, and
AFROSAI-E.
30
Appendix D (continued)
Strategy 4Prepare and develop the Ensure that the performance audit manual takes Committee on September 2009
performance audit manual according to into account the Lima Declaration, INTOSAI Performance Audit Manual
international auditing standards and in a auditing standards, NBAA standards and the IFAC
structured, gradual, and focused way. International Standards on Auditing (for
government commercial enterprises).
Ensure that the performance audit manual,
standards, code of ethics, and methodologies
adopted are not in conflict with any provisions of
the INTOSAI auditing standards.
Strategy 5Communicate the contents Ensure that each NAOT staff member has access Executive Committee, VFM Continuous
of the performance audit manual and to the performance audit manual through hard Division, Training Unit,
make the manual available to all copies, the internet, website, training programs, Technical Support,
relevant audit staff. seminars, workshops, staff meetings, office Research and Consultancy
instructions/circulars, library, and pilot audits. Unit, and IT Unit
Strategy 6Ensure management Senior management should view the performance Executive Committee and Continuous
support in disseminating and applying audit manual as a management tool in providing Strategic Committee on
the performance audit manual. assurance that operations are managed well. Performance Audit Manual
They should ensure that new or revised
information for the manual is properly
communicated to staff and that the necessary
human and financial resources are available in
carrying out this activity.
31
Appendix D (continued)
Strategy 7Provide appropriate Prepare a training program needed to spread this VFM Division, Training October 2009 to
training to NAOT staff to ensure knowledge throughout NAOT. Unit, and Technical November 2009
professional competence in operations, Support, Research and
Develop an audit skills matrix by identifying all the
as required by the performance audit Consultancy Unit
professional training requirements of NAOT audit
manual.
staff.
Develop programs to provide such training, keep
track of the professional development of NAOT
staff, and identify areas where they require further
training following dissemination of the
performance audit manual.
Strategy 8Develop a system to Ensure that provisions in the performance audit Strategic Committee on Continuous
monitor quality assurance of manual are adhered to. Performance Audit Manual January 2010
implementation of the performance audit
Develop a monitoring system to ensure quality
manual to ensure that provisions in the
assurance of the implementation of the
manual are being adhered to reliably,
performance audit manual.
professionally, and consistently.
Strategy 9Update the performance Establish policies and procedures for preparing VFM Division and February 2010
audit manual periodically. and continuously updating the performance audit Technical Support,
manual to bring it in line with the latest relevant Research and Consultancy
performance auditing development. Unit
32