Have you ever wanted to be a contender? Dreamed you'd take that long walk down that brightly-lit Atlantic City runway, cameras flashing in the dark auditorium like fireworks? Knowing that all your friends from high school are awestruck at how far you've come? Gratified that all of your hard work and planning paid off?

Ok, maybe deciding to have a ALGA peer review isn't quite the same type of effort as deciding to compete to become Miss America (no sports metaphors here), but to a manager worried about the work involved and the impact on precious resources, it may seem as challenging. Moreover, once the commitment is made, and the review undertaken, there is no going back to the pre-review stage. Once you're crowned, you're a Miss America for life. Once committed to peer review, the reviewing never stops.

Happily, while it took the current Miss America 4 years to achieve her goal, and personal trainers, voice coaches, talent advisors, and cosmeticians to help, peer review, according to 4 audit directors who had the experience, is not that complicated. I interviewed four audit directors or deputies, whose offices had undergone peer review between July 1998 and November 1999 to understand how much time it took them to prepare for the review, and to learn what they did to get ready. Brief descriptions of the offices interviewed in sidebar.

Preparing For Your Peers
Why would an auditor volunteer to be audited? Granted, the peer review requirement is a part of the Government Auditing Standards. Nonetheless, most local government audit offices have not been reviewed. None of the four directors I interviewed reported that their Councils or Boards were applying pressure to get the review done. Initiation of the peer review process in their offices represented a personal and professional commitment to demonstrate conformance to standards. All agreed that they would continue to be peer reviewed even if the standards were revised to eliminate the requirement.

For all the offices contacted, the recent review was not their first. For some, it was the third time they had been audited. These `contenders' represent a variety of sizes, audit approaches, and geographic locales. In spite of the diversity of their offices, the four individuals interviewed had similar philosophies about the reasons to take the plunge, and about preparing for review. Aside from compliance with standards, having a peer review is a marketing and public relations tool, they agreed. Those interviewed agreed that it is important for them to be able to answer to their management, and to those whom they audit, that they, too, are audited. One manager commented that it was good to know that they were not missing a needed element or service in how the work was performed, while another stated that the self-assessment involved in preparation was valuable.

Staff Costs
While not a scientific survey, I asked the managers about staff resources devoted to the peer review efforts. All reported that the preparation for the review was the task of either the director or a deputy, assisted at times by one other audit manager, and aided by one administrative person. Auditors-in-charge contributed to workpaper reviews. One office reported that their first peer review took a year to get ready for, while their second took just a month. The first review cost 213 staff hours to prepare for, and the second, 85. Another reported that their second review cost 50 staff hours. A third reported that their third review took 76 hours. All reported that the learning curve was steep.

A positive attitude helped, but the prospect of being audited challenged even these auditors. All suggested that the best way to prepare for peer review was to serve on a team. Two suggested that staff should all participate on reviews, as a valuable way to understand the process. To further ease anxiety of auditors thinking about review, two directors reported that the reviewers worked with them to ensure fairness. For example, reviewers put more weight on audits done after offices initiated conformance to GAS, although all audits within the 3-year peer review scope were included. Non-traditional special projects were not included in the review scope. One manager suggested that, after preparing, if the consensus is that the office is not ready for review, the review should be rescheduled rather than try to ‘force fit’ existing work into the proper form.

Two Costly Steps
One common factor that had the greatest influence on how expensive it was for an office to get ready for the reviewers was the completeness and currency of office policy and procedures. One office reported that their first review took 600 hours to prepare for, because they had to develop a policy and procedures manual, and that their third review took 400 hours, because procedures had changed. Another reported that their first review took a year to prepare for, because the policies and procedures had to be re-drafted. While they had policies and procedures, they did not reflect how the work actually was done. A second resource-intensive step in preparation for the review team, was the review and repair of workpapers. The ideal for documentation is to achieve workpapers that can stand alone, without verbal explanation. Outside reviewers will not share the easy knowledge of issues, technical information, or jargon, for example, that office staff have. Workpapers must also document compliance to GAS.

Several of those interviewed reported that they pre-reviewed all audits within the 3-year review scope, using the ALGA peer review checklist as a guide. One office brought staff in on a Saturday to do the review. As a result of pre-review, interviewees reported they discovered that the workpapers were not sufficiently laying out the work done, and that too much explanation was required. Consistency in documentation styles also had to be addressed. Each element on the ALGA checklist had to be documented in the workpapers. Indexes had to be complete, and any missing element needed for the standards had to be explained. This led to creation of additional workpapers to explain gaps. Another costly step involved managers pitching in and filing workpapers, and completing administrative paper-work for audits. Several staff resigned just before the peer review, leaving workpapers incomplete for issued reports.

Permanent Changes
All four managers reported permanent administrative changes. All now include in their policies and procedures the requirement that the ALGA checklist be prepared for every audit as a part of the quality control process. One individual stated that his office now strives for better documentation of the internal quality assurance process, and for clarity in workpapers. One reported that the framework of audits was systematized, and workpapers have been standardized. Policies and procedures and audit administrative tasks are kept current, and workpapers filed. Auditor independence statements were made routine. Continuing education files are kept in order, and government training is tracked.

Once a young woman becomes Miss America, she can no longer comfortably toss on a ragged sweatshirt and cut-offs, and leave her face bare, to run to the store. National Enquirer could be lurking behind the produce. Like Miss America, once an office has been peer reviewed, staff will always be reviewing for compliance to GAS.