Leader One Inc1 Performance Audit: ‘ Managing for Results’ to ‘Value for Re$ources’ ICGFM Miami Conference & Training 2008 May 22, Jean-Baptiste Sawadogo Strategic & Results-Based Management Consultant Leader One Inc Tel ; “The one people call when they really want results”

Leader One Inc2 Performance Audit: The Wave of the Future ‘Performance Audit’ is about audit on ‘Value for Re$ources’ (VfR); it is a paradigm shift in Public Financial Management Early forms of performance reviews (Assessments, Evaluations and Audits) have put the spotlights on “Spending” vs. “Results”, leading to ‘Managing for Results’ In turn, ‘Managing for Results’ is now driving the rising wave of ‘Performance Audits’ The leadership of ‘Public Finance’ functions is key in ‘Managing for Results’ to get ‘Value for Re$ources’

Leader One Inc3 Global Realities and Milestones Finance is finite AND “Do more with less!” o Starting with the global recession of the early 1990s Finance is not everything o CIDA’s Strategic Review and Renewal Exercise (1990+) o Results-Based Management (RBM) at CIDA (1993+) o Office of the Auditor General of Canada Report ( ) o Aid Effectiveness Principles adopted by DAC-OECD (1996) o Assessing Aid: a World Bank report (1998) o Results for Canadians - a Government-wide RBM Policy (2000) o Many OEDC countries have adopted a results-focus ( ) o The Millennium Declaration on the MDGs at the UN (2000) o ‘Managing for Development Results’ – WB and OECD (2002) o Paris Declaration on Aid Effectiveness DAC-OECD-led process (2005+) Beyond Finance, there is a global consensus on the focus on results

Leader One Inc4 A New Global Imperative: ‘Managing for Results’ Demands on governments and their agencies to deliver and to be accountable for results Demands on international organizations to “focus on results” (UN; Multilaterals; NGOs; etc.) Demands on private firms to perform better : both financially and socially (ethics; responsibility) Demand for innovative results-focused management approaches Increasing demand for a new type of audit > Performance Audit

Leader One Inc5 What is ‘Performance Audit’? Performance Audit is “… a systematic, purposeful, organized and objective examination of government activities; … designed to promote accountable government; … includes the examination of economy, efficiency, cost effectiveness and environmental effects of government activities...” “A focus on performance covers both the benefits accomplished for [citizens] and due process and fairness in the delivery of services”. (Excerpts adapted from the Performance Audit Manual, Office of the Auditor General of Canada - June 2004; pages 13 and 17)

Leader One Inc6 What is ‘Managing for Results’? A deliberate, systematic, rigorous pursuit of results through the practice of Management; it is a way of thinking; a way of doing business: o Designing/planning; implementing; monitoring; reporting; evaluating; auditing; managing risks; communicating Linking of ‘Re$ources’ with ‘Results’ committed to Two “brands” of results-focused Management o Original: ‘Results-Based Management’ (‘RBM’) 1 - Inputs vs. Results (Results are outputs, outcomes, and impacts) o Consensus: ‘Managing for Development Results’ (‘MfDR’) 2 1 Original “brand”: Canadian International Development Agency (CIDA); Subsequent consensus “brand”: DAC-OECD-led consultative process 2002+

Leader One Inc7 A Seven-Point Overview of ‘Managing for Results’ 1. ‘Misconceptions’ 2. Principles 3. Words 4. Tools 5. Crosscutting Issues 6. Functional Stakeholders 7. ‘Rewards’

Leader One Inc8 1. Top ‘Misconceptions’ ‘Managing for Results’ is ‘Monitoring & Evaluation’ Attribution of ‘Results’ is impossible The ‘impact’? Don’t bother!

Leader One Inc9 2. Top Principles Partnership/Participation Transparency Broad application (even to Audits)

Leader One Inc10 3. Top Words ‘Result’: an expected or actual achievement (i.e. an output, an outcome or an impact) ‘Activity’: it is NOT a ‘Result’; it IS the ‘doing’ that supports the achievement of a result ‘Indicator’: it is ONLY a measure to assess progress towards or achievement of a result

Leader One Inc11 4. Top Tools The Logical Framework Analysis (LFA) or a simpler Logic Model at the very least The Performance Measurement Framework (PMF) The Implementation Plan (including Work Breakdown Structure/activities; budgets; reporting; risk management; operations strategy; communication strategy)

Leader One Inc12 5. Top Crosscutting Issues Gender Equality Mainstreaming : responding to the specific issues for girls, boys, women and men Sustainable Environment Mainstreaming: not only dealing with regulatory compliance, but also, with developmental sustainability Knowledge Management & Sharing - addresses a 4 th RBM principle: ‘Learning by Doing’

Leader One Inc13 6. Top Functional Stakeholders Managerial functions - corporate and line Performance review functions (Monitoring, Reporting and Evaluation) Financial functions (Budgeting, Accounting; Control; Procurement; Audit)

Leader One Inc14 7. Top ‘Rewards’ ‘Guaranteed’ ‘Value for Re$ources’: right results at the right efficiency (effectiveness and cost optimization for results vs. a potentially costly strict ‘lowest cost’ approach) Capacity to demonstrate relevance and communicate performance - ‘Results’ vs. ‘Re$ources’ (both the good news and the bad news) ‘Rewards’ – recognition; access to more funding; competitive funding is an emerging practice (excellent illustration by GAVI’s DQA 1 ) 1 GAVI Alliance’s Data Quality Audits

Leader One Inc15 Summary and Conclusion ‘Performance Audit’ is the wave of the future in Public Financial Management ‘Managing for Results’ is the road to ‘Value for Re$ources’ (VfR) in Public Service Performance review functions (M&E) have been promoting MfR; Financial functions need to catch up with MfR for a greater VfR Audit professionals’ acumen and leadership, especially with ‘Performance Audit’, is crucial in keeping Public Financial Management’s focus on getting ‘Results’ with public ‘Re$ources’.

Leader One Inc16 So, Exercise Your Results-Focused Leadership! For additional Information: o Office of the Auditor General of Canada; Performance Audit Methodology: bvg.gc.ca/internet/English/oag-bvg_e_859.htmlhttp:// bvg.gc.ca/internet/English/oag-bvg_e_859.html o OECD-World Bank; Managing for Development Results: o Leader One Inc: to: