Jul 27, 2015

Performance Audit: Strategy of the Supreme Audit Institution

Alma Shehu, Amantia Patozi, and Melina Kabo from State Supreme Audit (KISH), Albania attended the CEF workshop on Performance Auditing to learn about the European best practices in performance auditing that were presented by Jussi Bright, a representative of the European Court of Auditors (ECA), and Ivan Ignjatov, from Macedonian Audit Authority for Audit of Instrument for Pre-Accession Assistance, both lecturers being renowned experts in the field. Albanian participants shared impressions about the workshop and performance auditing plans of their institution.

If we want to be equal among our European colleagues, we have to respect the fundamental principles of audit profession: the level of individual competences and capacities, ethics, and the establishment of an appropriate institutional function.

We had the opportunity to gain knowledge in performance auditing, which has been applied in Albania for several years now, but represents a new type of audit for ALSAI. Performance auditing is gaining importance, as the recently changed mission of ALSAI states that it needs to inform the public and the Parliament about economic, efficient and effective use of public funds in the central and local governments. Moreover, it needs to contribute to better governance, to become more transparent and accountable.

Our institutional strategy translates our mission in a specific plan regarding how we want to develop performance auditing in the future. ALSAI Institutional Strategy of 2013–2017 puts emphasis on improving and increasing the number of performance audits. By the end of 2017, we intend to quadruple the current number of performance audits. We aim to achieve this goal by training our staff, who will demonstrate professionalism in carrying out this type of audit, which will then improve the policy making of the central and local governments.

Following the idea that Mr. Bujar Leskaj, Head of ALSAI, expressed in the Commission of Economy and Finance in the Parliament of Albania in December 2011, ALSAI is facing a strong challenge to focus on performance audit work because it represents a key accountability institution in Albania. ALSAI’s performance audit will change the mentality that audit is not an end in itself, but primarily an instrument for preventing corruption and abuse of public property, and for improving and counseling the institution being audited.

As mentioned earlier, performance audit is not a completely new type of audit. In the past, we have successfully executed several performance audits, such as:

  • On the administrative territorial division of the Republic of Albania
  • Implementation of the National Strategy for waste management in case of Fier City
  • The necessity performance liberalization of the electricity market
  • The performance of the Directorate General of Railways
  • Road User Safety
  • Food service in hospitals in Tirana


To further improve our capacities, we are developing a Performance Audit Manual and adopting English Performance Indicators according to the British experience. Pursuant to Article 39 of the ALSAI Organic Law, ALSAI develops its own institutional capacity development system, to improve professionalism of and adherence to national auditing standards and international standards by INTOSAI. Staff training within institution and abroad is increasingly important in this regard.

So, performance auditing is becoming one of the most important activities for our institution. The CEF workshop that we attended was very helpful in achieving our goals because the program was very carefully designed. It focused on applying theoretical and practical ideas, and on presenting concrete experiences. This kind of approach is valuable for enhancing our professional work.

Some of the topics that lecturers addressed during this workshop included:

  • Performance audit of economy, efficiency, effectiveness
  • Specific methodology applied in performance audit
  • Performance audit at the ECA and the latest developments in international audit standards related to performance auditing
  • Responsibilities and roles in performance auditing (internal and external auditors)
  • Development of audit objectives questionnaire
  • Drafting an audit plan and designing a matrix
  • The importance of collecting and analyzing relevant data audit
  • Key risks and messages related to performance auditing


We share the opinion that performance auditing is of paramount importance in ensuring operational performance of institutions. The final goal is to increase the welfare of citizens by reviewing how economically, efficiently and effectively public institutions spend public funds. In line with this goal, we agree with the statement that was expressed during the workshop, namely that "performance audit is an audit for healthy finances and assessment for the design of public money."

Performance has an organic connection with the management. The management should work in accordance with the administrative principles and practices, thus providing advanced management of time, resources, facilities, and finance. The role of the performance auditor is to observe the effectiveness of performance by assessing the results and impacts of each activity.

The workshop allowed auditors from Albania, Bosnia and Herzegovina, Bulgaria, Georgia, Hungary, Kosovo, Lithuania, Moldova, and Romania, Slovenia, and Turkey to exchange positive experiences and ideas. The participants shared the same concern that in the institutions of former communist countries, where democracy is still fragile and institutional culture not fully consolidated, the level of educational and performance standards are far from being a tangible reality. Similarly, performance auditing has been a novelty for ALSAI, introduced by the Law No.154/2013 “On the organization and functioning of the supreme audit institutions”. The Albanian Parliament passed this law in December 2014. Throughout the period of discussing the Law in the Commission of Economy and Finance, ALSAI insisted that the draft articles should be kept as proposed because the proposed provisions were based and stemmed directly from the definitions of international auditing standards of INTOSAI.

Another issue discussed at the workshop was the practical work of performance auditors. Lecturers from the ECA and Macedonian IPA Audit Authority noted that we need to use the three E's during our performance audit. Namely, when planning an audit, we have to pay attention to economy and efficiency, while not compromising effectiveness. And also vice versa: whenever effectiveness is audited, the economic and efficiency ratios should be examined as well.