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Institutional Mechanism for Peer Review Institutional Mechanism for Peer Review in IA&ADin IA&AD

Peer Review Board (PRB) at Headquarters: Composition Chair Person: ADAI (Inspection) Participating Members:

– Other ADAIs/DAIs– President, Institute of Public Auditors (IPA) or any member of

the Central Council of IPA or any senior expert of the level of retired DG/PAG and above nominated by President, IPA

– Secretary, Audit Advisory Committee (DG-Audit)– Secretary, Government Accounting Standards Advisory Board

(DG-Accounts)– Economic Adviser to IA&AD – Deputy Director General, NIC on deputation to IA&AD

Director (Peer Review) to be the Secretary of PRB

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Peer Review BoardPeer Review BoardPRB was kept under abeyance (for one

year from 17-08-2005)PRB revived by CAG with effect from

7-08-2006All Final Review Reports directly

submitted to CAG through ADAI (Inspection)

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Functions of Peer Review BoardFunctions of Peer Review Board

The Peer Review Board (PRB) may meet once in a year

PRB to review the final peer review reports and monitor signals received from field offices for planning both compliance and rectification measures

PRB may advise C&AG about measures to be taken to improve the effectiveness and efficiency of the field offices

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Peer Review – Present FrameworkPeer Review – Present FrameworkWho will be peer reviewed and who will conduct peer

review? Any Office of IA&AD can be subjected to Peer

Review. The Chair Person, Peer Review Board (ADAI,

Inspection) will select the offices to be subjected to Peer Review as well as the offices to conduct the Peer Review.

ADAI(Inspection) will inform the Office selected for Peer Review as well as the Team Leader of Peer Review Group about the selection.

Factors to be considered:– Independence– Competence– Credibility

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Peer Review – Present FrameworkPeer Review – Present Framework

What will be peer reviewed? (Broad Parameters for Peer Review)

In the case of an AUDIT OFFICE the following aspects will be reviewed.

Performance Measures, Effectiveness, General Quality Control and General Management Practices

Financial Statement Audits {Regularity (Financial) Audit} Performance Audits/Reviews Transaction Audits {Regularity (Compliance) Audit} and

application of VLC system in auditing services

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Peer Review – Present FrameworkPeer Review – Present Framework

What will be peer reviewed? (Broad Parameters for Peer Review)

In the case of an ACCOUNTS OFFICE the following aspects will be reviewed.

Performance Measures, Effectiveness, General Quality Control and General Management Practices

Accounts, GPF and Pension Wings Review of Application of VLC system in

accounting services.

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Peer Review Peer Review Composition of PRG for Audit OfficesComposition of PRG for Audit Offices

ADAI (Inspection) Coordinator

Director (Inspection) Secretary to Peer Review Board

PAG/AG/DGA/PDA Team Leader

Group Officer of the (If requested by the Team Leader Team Leader to provide continuity)

Members of team2 Assistant Audit Officers To be drawn from Office of

Team Leader

1 Assistant Admn Officer From Inspection Wing, Hqrs.

1 Assistant Audit Officer From ITA Wing of the office under Review

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Peer Review Peer Review Composition of PRG for A&E OfficesComposition of PRG for A&E Offices

ADAI (Inspection) Coordinator

Director (Inspection) Secretary to Peer Review Board

PAG/AG/DGA/PDA Team Leader

Group Officer of the (If requested by the Team Leader Team Leader to provide continuity)

Members of team3 Assistant Accounts Officers To be drawn from Office of

Team Leader

1 Assistant Admn Officer From Inspection Wing, Hqrs.

1 Assistant Accounts Officer From ITA Wing of the office under Review

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Peer Review will have the following three stages:

Stage I - PlanningStage II - ExecutionStage III - Reporting

Peer Review ProcedurePeer Review ProcedureThree StagesThree Stages

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Stage I: Planning Stage I: Planning Notifying the OfficeNotifying the Office

The Office selected for Peer Review will be supplied with a format for indicating the General Profile of the Office and Model Check-list for Peer Review

The formats to be filled and sent to the Team Leader of Peer Review Group, with a copy to Director (Inspection) at Headquarters

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Stage I: Planning Stage I: Planning Operational Plan for Operational Plan for

Peer Review in IA&ADPeer Review in IA&AD

Terms of Reference of PRG Planning with reference to the strategic and long term operational objectives

of the office. Compliance with the technical standards of the Department i.e.

– Whether the accounting and auditing services are being performed as per the Departmental standards, manuals and instructions. (This will supplement the existing internal reviews.)

– Whether the auditing and accounting methodologies and practices conform to best international practices as adopted by the department.

– Whether proper system (including documentation system) for maintaining the quality of the work

Initiatives designed to strengthen the knowledge and skills, professional competence, adherence to professional standards and overall effectiveness of the office

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Stage I : PlanningStage I : PlanningModel Checklist for Peer ReviewModel Checklist for Peer Review

For Audit Offices:The Model Checklist was designed to provide

guidance to assist the Reviewer in reviewing the following aspects of functioning of a field office.

Performance Measures, Effectiveness, General Quality Control and General Management Practices

Financial Statement Audits {Regularity (Financial) Audit} Performance Audits / Reviews Transaction Audits {Regularity (Compliance) Audit}and

application of VLC in auditing services

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Stage I : Planning-Stage I : Planning-Model Checklist for Peer ReviewModel Checklist for Peer Review

For Accounts & Entitlement Offices:

The Model Checklist was designed to provide guidance to assist the Reviewer in reviewing the following aspects of functioning of a field office.

Performance Measures, Effectiveness, General Quality Control and General Management Practices

Accounts Wing, GPF Wing, Pension Wing and Application of VLC in accounting services

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Operational Plan for Peer Review Operational Plan for Peer Review Stage I: PlanningStage I: PlanningSample SelectionSample Selection

Criteria for Sample Selection:The leader of the Peer Review Group can

select the sample for review at his discretion The factors that may be considered in

selecting the sample include:– The profile of the Office– The size and nature of audits undertaken– The responses to the Model Checklist

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Review Process Time Schedule Cumula-tive days

1. Chair Person, Peer Review Board (PRB)

Reviewer to receive communication & questionnaire with terms of reference

Day 15

2. Reviewee to complete the questionnaire and send it to reviewer

Within one month Day 45

3. Reviewer to call for any other information if required after evaluation of the questionnaire

Within one week Day 52

4. Reviewee to reply the additional information asked by the reviewer

Within 15days Day 67

Stage-I: Time FrameStage-I: Time Frame

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Operational Plan for Peer Review Operational Plan for Peer Review Stage II - ExecutionStage II - Execution

In case of Review of an Audit Office: The answers to be verified by the Peer Review Group,

based upon a review of the office’s working paper files on– Selected specific audits of financial statements – Selected performance audits / reviews– Local audits and– Vouchers subjected to Central Audit

The questions to be applied to the sample chosen for review

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Review Process Time Schedule Cumula-tive days

1. Reviewer to carry out the review by visiting the office of the reviewee after fixing date as per mutual consent

One week (including

½ day for briefing)

Within 2 & ½ months from date of notifi-cation

Stage II: Time FrameStage II: Time Frame

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Stage-III: ReportingStage-III: Reporting

The Team Leader of the PRG should prepare a preliminary report and send the same to the Office reviewed for comments.

After receiving the reply, the Team Leader shall prepare a final report and submit to ADAI (Inspection) Chair Person, PRB.

The PRG should prepare working papers that provide sufficient detail to support the review conclusions and recommendations.

The documentation should be appropriately filed, and tailored to meet the specific circumstances of the review engagement and terms of reference.

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Stage-III: ReportingStage-III: Reporting

The Report should state specifically whether the system of quality control has been designed so as to carry out auditing / accounting services in a manner that ensures compliance with technical standards of the Department

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Review Process Time Schedule

Cumulative Days

1. Reviewer to send preliminary report to Reviewee for comments

Within 15days after completing review

Day 90

2. Reviewee to send representation to reviewer to submit final report to ADAI (Inspection) Chair Person, PRB

Within 15 days

Day 105

Stage III: Time frameStage III: Time frame

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Monitoring ProgressMonitoring Progress

A System of Monthly Progress Reports to ADAI (Inspection) introduced from 2006-07

Reports to be submitted by the Team Leader / HoD of Reviewer and Reviewee Offices