The Commission on Audit (COA) is now robustly enhancing its capability to deliver its performance audit mandate to help government agencies better perform their mandates. In the 1980s, the COA performed a cyclical comprehensive review of government agencies which include financial, compliance, and performance audits.
In 2015, during the development of COA’s 2016-2022 Strategic Plan, external stakeholders urged COA to focus more on performance audits.
As a result, COA requested International Investment Initiative technical assistance from the USAID to support the development of performance audit policy and practices aligned with the International Standards of Supreme Audit Institutions of the International Organization of Supreme Audit Institutions, and quality assurance strategies used by the U.S. Government Accountability Office (USGAO). A partnership for the COA’s Performance Audit Initiative was then formed between COA and USAID which paved the way for the launching of five pilot audits for performance auditing.
In 2017, COA established a dedicated office to conduct performance audits – the Performance Audit Office under the Special Services Sector. Thereafter, it entered into a three-year agreement with USAID and the USGAO through its Center for Audit Excellence (CAE), called the Philippine Performance Audit Partnership Project. Through this partnership, which was recently extended until 2024, COA has become a recipient of the shared knowledge and skills of USGAO CAE in the conduct of performance audits.
Also, COA is currently participating in the ISSAI Implementation Needs Assessment for Performance Audit under the Regional Knowledge and Support Technical Assistance on Strengthening Performance Audit Capacity in Asia and the Pacific of the Asian Development Bank-INTOSAI Development Initiative (ADB-IDI).
What then is performance auditing? In the public sector audit context, there are three types of audits according to ISSAI: financial audit, compliance audit, and performance audit. Financial audit concentrates on obtaining substantial evidence on whether the financial statements are prepared, in all material respects, in accordance with the applicable standards and framework. On the other hand, a Compliance audit assesses whether activities, financial transactions and information comply, in all material respects, with the authorities that govern the audited entity. In contrast, the performance audit focuses on Economy, Efficiency, and Effectiveness (three Es). Like the other two types of audits, there are also three parties in a performance audit: the auditor, the responsible party, and the intended users.
Performance audit emphasizes distinctively the significance of value-for-money as it examines how taxpayer pesos are spent by the government, whether the intended impact is achieved, and provides factual information to help the government attain its objectives economically and more efficiently. It also covers a wide spectrum of government activities, including organizational, financial, and administrative functions. Since the subject of performance audit also varies, it could be a single program, policy, entity or fund, outcomes, or systems.
It seeks to deliver new information, knowledge, and value by making new analytical insights and recommendations, available to stakeholders in the form of audit reports. On this account, performance audit is geared towards adding value to the citizens through the improved undertaking of government activities by identifying waste and inefficiencies, opportunities to maximize return on investment in public services, and risks to the achievement of policy goals, and how to address them.
With this in mind, COA engaged its performance audits on programs aligned with the Philippine Development Plan and the 2030 Agenda for Sustainable Development of the United Nations General Assembly. Through this, the COA takes an active role in ensuring the achievement of the collective long-term vision and aspirations of the Filipino people for the next 25 years as stated in Ambisyon Natin 2040.
Since 2017, COA has already delivered 14 performance audit reports corresponding to the seven areas identified in the Supreme Audit Institutions-Performance Measurement Framework (SAI-PMF). These are the national economic development, education, environment, health, social security, and infrastructure. Audited programs include the Pantawid Pamilyang Pilipino Program (4Ps), In-City Resettlement Housing Program (ICRHP), Disaster Risk Preparedness Program, School-
Based Immunization Program, Health Facilities Enhancement Program, Bureau of Fire Protection Modernization Program, Government Assistance to Students and Teachers in Private Education Program, National Greening Program, Herd Build-Up and Carabao Development Programs, National Health Insurance Program, COVID-19 Assistance to Restart Enterprises Program, and the follow-up audit on Disaster Risk Preparedness Programs of Malabon City and Quezon City, and the 4Ps. Reports are available at the COA website: https://www.coa.gov.ph.
As of date, the COA has five ongoing audits, namely: Solid Waste Management Program; the Small Business Wage Subsidy Program; the COVID-19 Adjustment Measures Program; the National Climate Change Action Plan and the of National Housing Authority.
The continuance of the capacity building of auditors with the help of international experts will also be the foundation of a performance auditor development program that will further promote the delivery of the COA’s performance audit mandate.
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Roland Café Pondoc is a Commissioner of COA