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Professional standards for conducting audits in government have been promulgated by the comptroller general of the United States and published in Government Auditing Standards. One requirement of Government Auditing Standards is that audit organizations receive an external peer review at least once every three years. The objective of a peer review is to determine whether an audit organization’s internal quality control system is in place and operating effectively. Also a peer review provides assurance that established policies and procedures and applicable auditing standards are being followed. The Association of Local Government Auditors (A.L.G.A.) has developed a program to assist local government auditors in meeting this peer review requirement.
The A.L.G.A. peer review program has enjoyed considerable success since its inception in 1991. In addition to the many local government audit organizations that have had peer reviews conducted by A.L.G.A., other government associations have adopted our program. These include the Virginia Local Government Auditors Association, the California Association of State Auditors, and the Association of Pacific Island Public Auditors.
| The Review Process | A.L.G.A.'s peer review process consists of a team of audit professionals, external to the audit organization under review, assessing the adequacy of the organization's internal quality controls and its overall level of compliance with Government Auditing Standards. The process has three phases: (1) preparation; (2) the site visit; and (3) reporting.
| | Preparation | During preparation, the audit organization contacts its A.L.G.A. region coordinator who forms a peer review team. After the reviewers and representatives of the audit organization have signed a review agreement, the organization provides the review team with background information and a description of its quality control system, and coordinates travel and hotel accommodations. Preparation usually takes about two months.
| | The Site-Visit | The review team spends about a week on-site at the audit organization's offices, reviewing audit working papers and administrative files, as well as interviewing audit management and staff.
| | Reporting | At the conclusion of the site visit, the review team prepares a report containing its opinion regarding the organization's compliance with Government Auditing Standards. When appropriate, reviewers also prepare a letter to management that provides recommendations for improvements. Much of the reporting process is completed during the site visit to give audit management the opportunity to respond to the reviewers' findings and to provide any clarifications that are needed before the reviewers finalize their report. The report is issued within one to four weeks following completion of the site visit.
| | Peer Review Guide | Instructions and forms needed to conduct a A.L.G.A. peer review are contained in A.L.G.A.’s Peer Review Guide. The audit organization to be reviewed and review team members will all need a copy of the Guide. Full A.L.G.A. member organizations are entitled to free copies of the Guide on CD, or the Guide is available for download at the Peer Review links on this website..
To help prepare for a successful peer review, it is recommended that an audit organization first conduct a self-assessment using a check list provided in A.L.G.A.’s Peer Review Guide.
| | Cost of a Peer Review | A.L.G.A.'s peer review program was designed to keep costs at a minimum. The organization receiving the peer review pays for the travel, lodging, and out-of-pocket expenses incurred by review team members, but it does not pay for the time/salary of reviewers. Instead, the reviewed organization agrees to send its own staff to other jurisdictions to perform peer reviews.
Review coordinators work with the organization being reviewed to keep travel costs low. For example, whenever possible, coordinators recruit from the pool of trained volunteers located in the same region as the audit shop undergoing peer review.
| | Review Coordinators | If you have questions about the A.L.G.A. peer review program, are interested in having a peer review performed by A.L.G.A., or would like to serve on a peer review team, please contact your A.L.G.A. review coordinator. To identify and contact your review coordinator, please visit our Peer Committee page or contact our member services office for assistance. |
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Peer Review