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Presentation to the

State Agency Internal Audit Forum

May 18, 2012

Performance Measures for Internal Audit

IALDP

Project Objectives

Performance Measures Defined

Four Categories of Performance Measures

Results of Survey

Best Practices

Agenda

Determine what performance measures are used by Internal Audit functions and identify best practices

Project Objective

Performance Measure

A quantifiable indicator of entity achievement that includes the specific types:

Outcome

Output

Efficiency

Explanatory/Input

Institute of Internal Auditors Austin Chapter Research Committee

December 2011

76 Responses

Six Countries

Survey

Respondents by Industry

Performance

Cost / Efficiency

Customer Satisfaction

Employee Development

Four Categories of Performance Measures

Included in this category were:

Percentage of Audit Plan projects completed;

Results of external quality assurance review;

Annual performance appraisal of the Chief Audit Executive;

Number of recommendations implemented; and

Planned for the future.

Performance

Included in this category were:

Percentage of overall time spent on assurance and consulting services; and

Audit report released within required timeline .

Cost / Efficiency

Included in this category were:

Results of client satisfaction surveys;

Responsiveness to Board and Audit Committee requests; and

Leadership in providing information on governance, risk, and controls.

Customer Satisfaction

Included in this category were:

Percentage of audit staff with professional certifications; and

Percentage of audit staff meeting continuing professional education requirements

Employee Development

Respondents With Metrics in Multiple Categories

Performance Metrics

-

5

10

15

20

25

30

College or

University

Federal

government

For profit Local

government

Non-profit Other State

government

Undefined

7

4

8 10

3 5

22

1

-

-

3 -

1

1

4

-

Respondents with "Performance" Metrics

No Metrics

Has Metric(s)

Cost/Efficiency Metrics

-

5

10

15

20

25

30

College or

University

Federal

government

For profit Local

government

Non-profit Other State

government

Undefined

6 4 3

7

3 3

17

1

1

-

8

3

1 3

9

-

Respondents with "Cost/Efficiency" Metrics

No Metrics

Has Metric(s)

Customer Satisfaction Metrics

0

5

10

15

20

25

30

College or

University

Federal

government

For profit Local

government

Non-profit Other State

government

Undefined

7

3

7 8

2 4

19

0

1

4 2

2

2

7

1

Respondents with "Customer Service" Metrics

No Metrics

Has Metric(s)

Employee Development Metrics

-

5

10

15

20

25

30

College or

University

Federal

government

For profit Local

government

Non-profit Other State

government

Undefined

7

3 5

8

2 2

15

1

-

1

6 2

2 4

11

-

Respondents with "Employee Development" Metrics

No Metrics

Has Metric(s)

Measure performance

Measure different categories

Measure what matters

Monitor progress

Best Practices

Engage the workforce

Maintain flexibility

Assess the measures periodically

Report the measures

Keep it simple

Best Practices (cont.)

Different shops use different measures

Only you can determine what performance measures are best for your audit shop

One size does not fit all

Conclusion

Questions?

Betsy Schwing – betsy.schwing@tdhca.state.tx.us Scott Mattingly – scott.mattingly@dps.texas.gov Mike Hardison - michael.hardison@tceq.texas.gov Eleazar Garcia – eleazar.garcia@tjjd.texas.gov