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B&G REPORT.

How have local audit shops evolved during the pandemic?

Multiple changes are affecting local government auditors as they adjust FY2021 audit plans, change work habits and contemplate potential large budget reductions.



Several surveys of local shops over the last five months detail some of the major changes. The most recent survey was released by the Minneapolis internal audit office at the end of August and included responses from 23 peer audit shops around the U.S.


Among the findings:


· Given telework experience during the height of the pandemic, more than half of audit offices plan to “formally implement remote work” going forward. Only 14 percent said they would not do that. More than 80 percent envisioned a future work environment that would be a hybrid of work at home and in the office.


· The majority of respondents had not previously considered a pandemic or other long-recurring event in disaster recovery or business continuity plans. Only about a quarter had done so. About half are now revising plans to include the potential of a pandemic going forward.


· About half of respondents said their audit plans had changed because of the pandemic and another 26 percent said they were intending to make changes; 57 percent said they had currently performed or were planning an organization-wide risk assessment. The following areas were identified as the major “high risks” in the current environment: IT and cybersecurity; police and public safety, human resources; finance and payroll and health.




A similar survey was conducted between April and June by the Austin City Auditor. It found that some audit work was being delayed because of staff or auditee availability and that audit shops were turning to projects involving a shorter duration and narrower scope. There was a general focus by auditors on finance and internal controls.

Several surveys of both private sector and public sector audit shops also have been conducted in recent months by the Institute of Internal Auditors (IIA). The IIA surveys reveal accelerating worries expressed by public administration audit organizations about budget issues.


In a survey conducted in April 2020, 21 percent of public administration audit shops expected a decrease in their budgets. But in a survey two months later, half said they expected to experience budget reductions over the next 12 months.

 
 
 

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