Performance Audit: Definition, Implementation, and Examples

mengenal apa itu audit kinerja

There are several types of audits, one of which is the Performance Audit. Audit is part of monitoring and checking in financial institutions. Audits are conducted periodically to ascertain whether the reported financial statements match the reality on the ground.

The following is a definition of a performance audit along with examples of its implementation in accordance with established standards, as well as how it differs from other types of audits.

Definition of Performance Audit

Performance audit is a type of audit or check on the implementation of tasks, work performance, and functions of a division body that exists in agencies or institutions both government and private, but is generally carried out by government agencies, especially in the bureaucracy and administration division.

A performance audit assesses economy, efficiency, and effectiveness in achieving objectives and compliance with regulations and policies. It also compares performance with criteria and informs interested parties of the results.

In general, performance audits consist of several aspects, which are usually known as the 3E aspects. This aspect consists of three things, namely Economic Aspects, Work Efficiency Aspects, and Work Effectiveness Aspects.

These three aspects aim to provide an assessment of an achievement, target, or achievement of the audited division in an agency.

Dalam audit kinerja khusus instansi pemerintah, telah diatur oleh Peraturan Pemerintah (PP) Nomor 60 Tahun 2008 tentang sistem pengendalian intern pemerintah yang memberikan kewenangan dan otoritas kepada seluruh Aparat Pengawas Intern Pemerintah atau biasa disingkat dengan APIP, untuk melakukan segala jenis audit yang diutamakan pada penguatan dan area yang sedang diperbaiki atau Area of Improvement to later be raised to level 3 or fall into the category of integrated.

It is hoped that through this audit process, the APIP division will be able to plan and carry out audits in the PKPT or Inspectorate Annual Supervision Work Program at government institutions in the Republic of Indonesia.

Performance Audit Implementation

Ilustrasi dokumen terkait proses audit
Illustration of the performance audit system implementation process (Source: Unsplash)

In conducting an audit, there are several objects that are targeted. In general, these objects are divided into two large groups, namely objects or divisions with large budgets and objects or divisions with small budgets.

In the implementation of performance audits in government agencies, this object is called OPD where the audited OPD is an OPD with a large budget scale and mandatory and essential functions and implementation in the continuity of bureaucracy and government administration.

As well as several divisions with optional services. Implementation must also be coordinated with local governments such as pemkot or city government, pemkab or district government, and pemprov or provincial government. 

The government will provide direction to the Inspectorate and APIP to develop a plan, which will be reported by the Inspectorate to the local government and given permission.

After the approval of the plan by the local government, a performance audit is conducted. In government institutions of the Republic of Indonesia, the audit process will focus on the concept of key performance indicators or KPIs, with the basis for testing is to make comparisons between predetermined targets and achievements achieved in a period and data in the field.

In addition, this technique generally uses other means such as public service surveys, benchmarkingThe process of mapping the activities that occur over a period of time.

Example of a Performance Audit of a Government Agency

Audits are also based on the organization's risk assessment or detected based on the results of previous audits based on the interests of stakeholders, organizations, or other parties for certain reasons.

The performance audit will also be carried out if fraud or misappropriation of a program or other activity is detected, especially activities or programs that are still running or will be implemented. The implementation is designed in several specific stages, namely: 

A. Introduction

To find out the picture of the auditee towards a program to be audited.

B. Conclusion Generation

The implementation of a detailed and structured audit to obtain an overview and framework of the performance of the audited OPD, generally uses five aspects in the form of planning, budgeting, implementation, administration and bureaucratic systems, and public services.

There are some government agencies that are only audited through the stages of bureaucracy and public services. These are generally at the sub-district and village levels.

Procedure for Performance Audit Implementation

The procedure for conducting performance audits (AK) in government agencies in the Republic of Indonesia generally includes many stages. The following are the stages and procedures related to audits conducted by APIP and Inspectorate.

  1. Initial conversation with auditor and collection of general information about the audited activity, discovering management elements or areas that require additional examination to refine conclusions.
  2. Then conduct management control testing regarding the implementation of Good Corporate Governance (GCG) by audit management and its organization. This is done to provide sufficient assurance about the success of operations, compliance with applicable regulations and laws. Thereafter, the substance testing priorities were selected and organized, the TAO was changed to Firm Audit Objectives (FAO). It aims to gain more evidence through the substance testing and goal development stages.
  3. What APIP does next is to measure and evaluate IKK by comparing the achievement of performance indicators with the predetermined objectives and analyzing to identify the causal factors.
  4. An operational assessment of procedures and methods of procedures, organizations, and programs with the aim of evaluating the achievement of an objective or target using the 3E method, which is conducted against some or all objectives.
  5. The last is the creation of KKA or Audit Work Card.

Difference between Performance Audit and Financial Audit

The following are the differences between financial audits and performance audits.

  1. A performance audit assesses whether or not the audit has achieved the targeted performance objectives and outcomes.
  2. Performance audits focus on a program and work achievements in an organization, especially government organizations or agencies.
  3. The academic basis of a performance audit is to cover Economic, Social, Political and Community aspects. In contrast to financial audits that have more structured and neat standards.
  4. The assessment criteria for performance audits are more subjective depending on the reason for the audit.
  5. The methods used in performance audits are more varied and the structure and content of reports are more diverse and unstructured, and publication is more secretive and not periodic or regular. ad hoc.

That's some detailed information about the definition, procedures of performance audits, along with the differences with financial audits.

A performance audit is an arrangement and implementation of an audit that is used to check and evaluate and assess the feasibility of performance and function in an agency that is generally specialized by government agencies.

Performance audits are usually conducted by the government through several official institutions that collaborate with local governments through APIP and Inspectorate. Audithink provides services and consulting related to audit planning, and execution. Please contact us for more information regarding the audit.

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