Internal audit: how to turn strategy into real results

EU4PFM continues to strengthen the capacity of the State Customs Service’s internal auditors – this week marked the second training session in the summer training series.

This time, EU4PFM International Experts on Public Internal Financial Control (PIFC), Manfred van Kesteren and Markus Erlmoser, shared practical experience on how to develop an internal audit strategy and turn it into a real planning tool – rather than a formal, tick-box document.

Drawing on the Dutch example, Manfred van Kesteren showed how annual planning helps translate strategy into concrete organisational results and outlined lessons the State Customs Service could take on board. “A strategy only makes sense if you can measure whether it is being achieved,” the expert noted.

To check whether a strategy is actually “working,” the expert suggested asking four simple questions:

• Stakeholders – are we creating value?
• Internal processes – are we working efficiently?
• Learning and development – are we improving?
• Resources – can we sustain high performance?

According to the expert, the success of internal audit is measured not by the number of reports issued, but by the value that stakeholders see in it.

Markus Erlmoser shared Austria’s experience in audit planning and explained how to measure the added value of internal audit, which KPIs are used, and how a so-called “audit universe” is built. The expert also focused on performance audit – an independent review of public measures, projects and procedures based on the “3E” principle (economy, efficiency, effectiveness).

This is a relatively new field in auditing compared to financial or compliance audit, yet it is the one that generates the most valuable new information for citizens, policymakers and decision-makers. That’s because performance audit answers key questions such as:

• Are we getting the most out of budget resources?
• Could the budget be spent more efficiently or more wisely?

This approach encourages learning and change by providing new information and drawing attention to challenges from different perspectives.

This summer training series for the State Customs Service’s Internal Audit Department aims to strengthen the team’s professional competencies and support the implementation of new National Internal Audit Standards aligned with the international GIAS standards.