Peer Review Program Overview

Written by Alan Ash

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.

Peer Review Corner

Changes Made and Changes on the Horizon - Summer 2010

New Regions & Coordinators

After analyzing historical trends in peer review activity, and guesstimating future demand, the Peer Review Committee is moving from four regions to six. These changes will be effective July 1, 2010. If you are already working with a coordinator on a review, you will likely continue to work with that same coordinator. If not, your current coordinator will work with you on the transition. Here are the new regions:

REGION/COORDINATOR	STATES/DISTRICTS/NATIONS
I - Lisa Skapura¹	Canada, Connecticut , Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont
II - TBD²	Kentucky, North Carolina, South Carolina,Tennessee, Virginia, West Virginia
III - Gary Chapman	Alabama, Florida, Georgia, Mississippi
IV - Alan Gutowski	Arkansas, Illinois, Indiana, Iowa, Louisiana, Michigan, Minnesota, Missouri, Ohio, Texas, Wisconsin
V - Erin Kenney	Arizona, Colorado, Idaho, Kansas, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Utah, Washington, Wyoming
VI - Matt Weller	Alaska, California, Hawaii, Nevada

¹In addition to coordinating region I, Lisa Skapura is the coordinator for all Red Book peer reviews.

²The committee is working on a coordinator for region II at this time. As soon as a coordinator is selected, contact information will be posted on the ALGA web site. In the meantime, shops in region II should contact the committee chair to request a peer review.

Committee Membership Changes

The term of the peer review committee chair is two years and it was two years ago that Alan Ash completed his outstanding work leading the committee. So, beginning in July Drew Harmon will take over committee leadership. Drew is one of the most experienced and committed reviewers and review coordinators ALGA has ever had. For Drew, there is good news and bad news. The good news is that two new members are joining the committee, Kelly Hammond and Wendy Simeon. Both are trained, experienced reviewers that will be great additions to the committee. The bad news is that the committee is losing Theresa Weatherman and LaVonne Griffin-Valade. Both Theresa and LaVonne have done a tremendous job working on committee projects, writing and revising review guides, and coordinating reviews.

Training

This has been a huge year for peer review training. In addition to the pre-conference workshop, training occurred at the fall 2009 Virginia Local Government Auditors Association conference, and at ALGAs regional training events in Phoenix and Portland. Over 100 attended training this year. The committee also provided a breakout session on Red Book peer reviews at the conference.

Red Book Review Guide

As announced at the conference, the Red Book Review Guide is complete. By the time this quarterly is printed, the revised guide should be posted on the web site.

Government Auditing Standards, Exposure Draft

GAO anticipates issuing an exposure draft of revised Government Auditing Standards this summer. After a comment period and further revisions, new standards are expected in early 2011. As soon as the new standards are issued, the Peer Review Committee will get to work on revisions to the Review Guide. Along with updating the Review Guide, the committee will update the workshop training materials.

Mike Taylor is the Peer Review Committee Chair