Text PAQ 1.37 Performance and compliance audits

Required:

(a) Discuss the relevant criteria against which the Auditor-General will check TCSL’s compliance with the terms of the funding agreement.

TCSL must comply with the Department’s ‘Guidelines for procurement of medical equipment’ when purchasing the accelerator. We are not provided with this document, but it is likely to contain rules about approved suppliers, the tendering/purchasing process (including the type of supplier/equipment documentation required), and so on. The auditor will gather evidence about TCSL’s purchases of the linear accelerators and assess whether the guidelines were followed. If the guidelines are specified with a great deal of detail, the audit will focus on ensuring that these guidelines were followed as specified. If the guidelines are expressed loosely (e.g. ‘the firm should obtain a number of quotes’), the auditor will need to use more judgement to assess compliance than if the guidelines are expressed precisely (e.g. ‘the firm will obtain 3 quotes’). The auditor will have to decide if the number of quotes obtained in those circumstances is sufficient to satisfy the loosely expressed guidelines. Are two quotes sufficient? If three quotes are required, the auditor could decide that two quotes are not sufficient, unless there are extenuating circumstances (e.g. there are only two possible suppliers worldwide).

(b) Identify two criteria the Auditor-General can use to examine how well hospitals manage waste.

The performance audit examines economy, efficiency and effectiveness. Notice, compared to the compliance audit above, much more judgement is involved in this type of engagement. The Auditor General would consider criteria across all three dimensions (not just financial). Some possibilities include:

• Economy – cost of disposing of waste, cost of employees in waste disposal area, cost of transport of waste, tipping fees etc. – partition into general and clinical waste
• Efficiency – waste by weight, volume, and/or cost per patient, per department or ward (general and clinical)
• Effectiveness – Extent of achievement of hospital’s planned improvements; Total reduction in general and clinical waste (volume, cost, method of disposal); effectiveness at sorting general and clinical waste.