In my previous blogs about Public Sector Audit (PSA) I have shared what we get up to in terms of specific tasks throughout the year as well as explaining the CIPFA qualification. In this entry I am going to try to answer the question “Why PSA?”.
The purpose of an audit (as per my CIPFA exam guide) is to give users of accounts assurance that the amounts stated in the accounts are true and fair, and free from material misstatement. When you think of the users of a company’s accounts, this would usually be the shareholders looking to see what the profit for the year has been. However if you think about all of the stakeholders of a public body’s accounts then everything gets much more interesting; there are the taxpayers, whose money funds the organisations; the government, whose policy objectives focus around the working of public bodies; and the media, who report on these matters to the masses, to name a few. You can see from above that pretty much everyone is affected by the way that public money is spent, and that’s why it’s imperative that those who hold the public purse are held accountable for their spending decisions. That’s where we come in, like calculator yielding superheroes (OK so that’s an exaggeration).
The range of services provided by the bodies which we audit in PSA is vast; from emergency rescue services, to transport provision, and agricultural services, and the amount of money that is involved is mind-boggling. I mentioned above that the purpose of an audit is to give assurance to a number of diverse user groups. In order to do this we undertake a multi-staged audit, from planning and the interim (where we speak to clients to get to know their organisation and structure), to final accounts audit, where the majority of detailed audit testing is undertaken. In terms of the practical aspect of the job, in many of the audit tests which we undertake we share the same practices as our colleagues in the commercial field, just on a larger scale. What makes public sector audit different is how the information we provide about an organisation is used and who is affected.
Another difference between audit in the public sector compared to a commercial business is the variety of work that we undertake. As well as the audit of financial statements, we get the chance to certify grants. This is what I have been doing recently and usually what fills the period from October to Christmas (among other things such as mulled wine and woolly jumpers). This can cover anything from housing benefits to capital grants and therefore offers the opportunity to learn about aspects of our client’s organisations that we may not have come across before. This is a good opportunity to really step up and take responsibility as for many grants, even as a trainee you can complete every stage from planning to conclusion. It requires lots of interaction with client staff which is perfect if like me, you like to talk and sometimes as a result you get included in their tea round – a true win win situation.
Unless you’ve been living under a rock for the past couple of years you will have been exposed to frequent news stories about public sector budget cuts, which makes it all the more important that our public money is being well spent. What makes PSA interesting for me is if you take the profit incentive away (as most public sector organisations aim to set a balanced budget) a whole world of targets and goals opens up; from quality deliverance targets, to procuring the best mix of economy, efficiency and effectiveness for a building project. Looking at how organisations work within the constraints of their budget in order to achieve their goals really makes me think about the little things that other people may overlook .
Think of Council tax, many see this as a necessary evil which we all must face. Before I began working for Grant Thornton I saw the money leaving my bank but I never really thought of the links before between the tax I pay, the services I get for this, and whether or not I get my money’s worth. When you think about it in that way, you see why it is especially important that spending is made on the right things that benefit the community as a whole as opposed to on extravagant luxuries, such as a Ferrari for the Chief Executive. This is what I think is the main difference between working in PSA as opposed to commercial audit; no one would bat an eyelid (apart from to gape in jealousy) if the CEO of a multi-million pound private sector business was driving a Ferrari, but you’re sure going to care if it’s been bought with your hard earned salary deductions which you thought were going towards schools/hospitals/leisure facilities in your local area.
So you have heard about the variety of work we undertake and how keeping a check on public money should be important to us all, so instead of asking “Why PSA?” I say “Why not?!”.