Category Archives: Finance

How Queensland Audit Office uses data analysis to improve its auditing

What can we learn from the way that the Queensland Audit Office uses data analytics in their audits? Dyfrig Williams had an early morning phone conversation to find out.

As I previously mentioned on my post on the Wales’ Audit Office’s Cutting Edge Audit project, I’m looking to identify ways of making better use of data and technology in order to transform the way that we work. I’d come across this article on how Queensland Audit Office are using audit data analytics to gain greater insight, and through my well-travelled colleague Tom Haslam I managed to organise an early morning conversation between myself and my colleagues (Steve Lisle and Nigel Blewitt) and Daniele Bird, the Assistant Auditor-General for Performance Audit in Queensland, Ben Jiang the Assistant Director for Audit Analytics and David Toma, their Assistant Director for Performance Audit Services.

What is the Queensland Audit Office doing?

Back in 2014, they decided to look at opportunities to use more sophisticated data visualisation tools in order to get a better insight into their audited bodies. They trialled and tested Qlikview, which can be accessed via the web or desktop software. They set up a data analytics team in 2015, all of whom were former auditors branching out into the world of data analytics. The team undertook initial training, but their development from there was centred on self-learning. The team first planned to work on Performance Audit. However the focus moved to Financial Audit, as the recurring datasets meant they could work more efficiently and effectively, compared to the very different types of datasets that are needed for each performance study.

The importance of relationships

Our seminars on early closure of accounts in 2015 and 2016 have made it clear to me that both the auditor and the audited body have to work together closely in order for audit to work more effectively. Whilst the Queensland Audit Office had built processes and automatic systems to collect data, they still faced questions from clients about security and what they were going to do with the data. They built an internal Frequently Asked Questions page so that audit team leaders could re-assure organisations and build trust, and they also took the burden of change away from the audited bodies by enabling them to dump the unformatted data with the office. The analytics team did the work to transform and clean up the data, and they’re now able to offer unique insights as they gather data from such a wide range of bodies. They can quickly identify and access an overview of issues, as well as benchmark clients’ performance and show how they compare to their peers (which you can see in the slide below). They also use the tools to undertake exercises like Benford’s Analysis, which clearly identifies outliers. This is particularly useful in identifying fraud.

A graph showing lots of dots togther and a clear outlier on the value of bad debt

How Queensland Audit Office gains insight to the value of bad debt

Performance Audit

The Data Analytics Team is now also supporting Performance Audit staff. The team is using text mining, for example to see what teachers are identifying as development goals. This has enabled them to produce Wordclouds and text summaries of the top 10 statements. They also use these tools to sweep the text of Hansards.

The team is also looking at how it can help staff to choose performance audit topics. It’s running sentiment analysis tools on Twitter feeds in order to support the strategic planning process. This helps them to understand the issues that are out there in the wider world and what people are saying about them. Although the technology has been built for Twitter, it could also be used for networks like LinkedIn, which would enable auditors to access different users and perspectives. They’ve also built social media analysis tools that rank tweets. It grades them and enables auditors to focus resources on important messages.

Creating a positive working environment

Daniele, Ben and David acknowledged the importance of leadership from the top in creating the right environment for the work of the Data Analysis Team to flourish. They’ve received high level support from the previous Auditor General and the current Acting Auditor General. This is something that we’ve seen from our own Auditor General in the development of the Cutting Edge Audit project, and hopefully the findings from our own work can help to provide a base for us to develop our own ways of working. It was really interesting to hear how the organisation is continuously looking to develop their work to build on current practices. They’re currently looking at whether moving from Qlikview to Qlik Sense could provide further advantages.

The work of the Data Analytics Team has achieved efficiencies, mainly around saving time that can be reinvested in future work, but they’re also looking to save more to do more. The rapidly changing environment and limited public finances presents a challenge for every public service. Queensland Audit Office have faced that challenge head on and are working in a different way to provide a better service. Not only that, but their staff’s work is now more meaningful and interesting, and auditors are further developing their critical thinking skills. I’ll be thinking about our Good Practice Exchange principles as we reflect on our conversation with the Queensland Audit Office, so that we think about how we might adapt this approach in order to ensure that our work, like the services we audit, are delivering the best possible outcomes for the people of Wales.

Who knew that Faster Closure of Local Government Accounts would benefit front line service provision?

How can faster closure of local government accounts improve public services? Ena Lloyd examines what we can learn from English Local Authorities.

Faster closure of local government accountsCurrently, Local Government Accounts have to be signed off by 30 September in Wales. The Treasury in Whitehall would like to enable the Whole of Government Accounts to be made available by that date, and so there is every likelihood that the sign off date is going to move forward to 30 July in a few years’ time.

I’ve been chatting to a number of Local Authorities across England where they have already brought the date forward of Faster Closure of Local Government accounts, to hear their thoughts on their approaches. There seem to be three themes emerging from the discussions:

Technology

The reality is, technology has evolved, and by now it’s reasonable to expect that most financial processes are automated. So, at worst, ‘ faster closure’ can be seen as an opportunity to review current financial systems. Supporting financial teams to work smarter, not harder. Also it’s a great opportunity to pause and reflect to think about building in resilience into the process too.

The Band Aid Approach

The opening thoughts seemed to have a clear theme: there is no hiding from the fact that change is tough. Especially, when financial colleagues have been used to the same processes and worked to the same timescales for a number of years. It’s understandable. I can hear the argument that, if it’s not broken…………..

The idea of change was worse than the reality. That may sound rather a glib comment to make. Many reflected on the fact many financial colleagues spent more than half of their working year on ‘closing down the accounts’. The impact of this on colleagues left them feeling as if they were working in the past and in a kind of bubble too.

The benefit of ‘faster closure’ for financial staff is that they spend far less time focusing on the past, and, given that I work for the Wales Audit Office, I say the next bit with a smile on my face, the external audit is over much quicker. The relationship with the external auditor has changed in that they are involved much more in year, sharing their thinking and potential changes. Adopting a ‘no surprises approach’.

Benefits Realisation

Probably the biggest benefit of ‘faster closure’ is the improved service financial colleagues now provide front line services. They are able to devote far more time to budget setting and monitoring. More importantly, by engaging at a much earlier stage with Service Managers about what management information they need to run their service, can only be of benefit to public services.

And isn’t that what it’s all about at the end of the day?

Accounting against the Clock

Faster Closure of accounts in Wales – are we all up for the challenge?

Accounting

The Good Practice Exchange will shortly be holding two Faster Closing seminars in Cardiff and North Wales. John Herniman from our Senior Leadership Team shares his views on Faster Closing and what it means for Wales.

We’ve heard a lot in recent months about the faster closing of accounts. In England, both Oldham and Westminster Councils beat their previous records for closing their accounts, doing so by the end of May. Closer to home, Torfaen County Borough Council closed its 2014/15 accounts in record time, 10 weeks ahead of the deadline. There is also the continued pressure to speed up the publication of the annual Whole of Government Accounts into which Local Government bodies accounts are consolidated.

As we all know, the current deadlines for the production and audit of Local Government bodies’ accounts are 30 June and 30 September respectively. The Welsh Government has recently consulted on bringing these dates forward to 31 May and 31 July over the next few years. Whilst the earlier deadlines may seem like a distant challenge not to be concerned about just yet, the scale of the changes required for practitioners and auditors alike means that planning needs to start now.

What are the benefits?

As daunting as it might seem, we know that there are many benefits of faster closure. These include, but are not limited to, improving the timeliness of reporting to stakeholders and having earlier assurance over the previous year’s position before embarking on major financial decisions for the future. The private sector and other parts of the public sector all close their accounts earlier so the question for me is ‘Where do we start?’

Faster Closure in Wales

Our Good Practice Exchange seminars in October and November will give us insight into how particular organisations started their journey. These seminars are not going to be focused on detailed processes but rather the organisational and cultural changes needed to start the journey. Further seminars and workshops will be held over the coming years exploring the more detailed aspects of faster closing.

The organisations involved will share with us their approaches and most importantly, the lessons learnt from achieving earlier closure of accounts. For me personally, hearing about the challenges that they faced at the early stages and how they overcame them will be of particular interest

A new challenge

There is no doubt that the faster closing agenda will bring major challenges for both practitioners and auditors as we work together to develop and learn from new ways of working. I remember the last time the closure dates were brought forward, from the end of December to September. Back then that sounded impossible but it quickly became the norm with the tighter deadlines being achieved.

Faster closure is a learning curve for all of us; insights from Torfaen, Oldham, Kent and Westminster will provide us all with a chance to be working from the same page so that we have a good starting point as we embark on their faster closing journey.

From Financial Audit to Good Practice Exchange

Michelle Davies has recently been working with us at the Good Practice Exchange. It’s been great to have her on board, and we’ve been learning from her about her work and vice versa. In this blog Michelle tells us about her experiences of working with us.

Michelle DaviesI’ve recently completed a Good Practice project where I helped deliver the Facing Financial Challenges Webinar (which you can watch in full on Vimeo). For those of you who don’t know me, I’m normally found working in the Mid and West Wales Financial Audit Cluster working on the exciting stuff – Local Government and Health Accounts!

So, Why I did I want to get involved?

I was both curious and ignorant as to what went on with the Good Practice Exchange Team, what do they do and how do they do it, what circles do they move in, what are their goals in our organisation? After working in Financial Audit in the West for over 10 years, I was desperate for a change of scenery. Getting out and about more, even working in the Cardiff office was a change of scenery.

I learnt loads of new skills, from different approaches to researching topics which I had little or no knowledge of at all. And as for social media, well it would be safe to say I am a little rusty around the edges; I needed to move with the times and the promise of being taught how to ‘tweet’ was appealing. Don’t you just love it when people say “it’s easy?”

I guess to work differently; sometimes you have to work with different people. Although a little daunting at first, you soon learn personalities and expectations. You can learn so much from other people, a kind of inner confidence starts to grow as you bounce ideas off colleagues and share their experiences and excitement.

What I learnt

Researching
Firstly I had to research the subject area, surfing the web, trawling through the current relevant reports, any conferences, seminars, identify potential speakers and produce a scoping document to present with my findings and identify the key themes for discussion.

Briefing
Armed with my research material, I sat and discussed my findings with Ena and Anthony Barrett to agree on a punchier title and to identify speakers that were able to discuss current, relevant good practice identified within the public sector. I learnt the importance of does the title say what it does on the tin?

I held my first speakers briefing with Guy Clifton from Grant Thornton over the telephone, explaining the webinar structure, format and timings and taking away additional housekeeping issues he had for the Good Practice Exchange Team to confirm.

Social Media, i.e. twitter schedules and live tweeting
I had a lesson in tweeting and was asked to tweet live at a few seminars, helping the Good Practice Exchange Team when they were short staffed or at a larger event where there were several workshops running at the same time. A lesson in tweeting, was as I discovered, not always going to ensure it goes smoothly on the day!

Confidence in getting it done
Ummmm, what do I do now, what do I do next, am I doing this right, all my worries and part of the learning curve. Ena would smile at me and say, what do you think, tell me what you feel, what is your gut instinct? Now go and do it!

Behaviours
The Good Practice Exchange Team use a different way of working, they need to be ambidextrous within the team. You learn to work backwards. The team know what they want to achieve, so how do they get there, their focus is on impact.

The good, the bad and the ugly

I’ll do the ugly first – helping on an external seminar specifically to tweet live, I connected to the wifi, ok, sitting at the front of the audience listening to Huw Vaughan Thomas deliver his opening speech – I’m connected but hey – no internet! No matter what I tried it just wouldn’t work! At the end of the opening speech I managed to get Dyfrig’s attention and he miraculously connected my machine, phew! To play catch up I started copying and pasting from a twitter schedule – it wouldn’t work! It took about 15 attempts and a rising temperature before I realised that there were too many characters! Ok – no stopping me now…. except every photo I took of the speakers to upload with their key messages would appear upside down! No photos then!

The bad – well actually I don’t have any bad experiences, so far they have all been good or ugly, and even the ugly one is funny now. You learn from your experiences and I have, tweeting live at the webinar last week went well – phew!

The Good – I have thoroughly enjoyed my experiences, I have learnt a new set of skills and gained an inner confidence and passion that was missing. I have been fortunate in meeting many people from all walks of life, with a range of skills and personalities, some impressive, some humbling, some inspiring, and some eager and switched on.

What I would say to anyone else who wants to get involved

Do it! – You won’t regret it and if you have any concerns and worries I can help you overcome them. The sharing of information this way is important to the future of both our organisation and public services.