Audit Balanced
Scorecard
Audit Balanced
Scorecard as running a corporate or government or not-for-profit
enterprise becomes increasingly complicated, more sophisticated
approaches are needed to implement strategy and measure performance.
Purely financial evaluations of performance, for example, no longer
suffice in a world where intangible assets, relationships and
capabilities, increasingly determine the prospects for success.
According to
Kaplan, a Harvard Business School professor of
accounting, and Norton, president of Renaissance Solutions, make a
key contribution by describing and illustrating the Audit Balanced
Scorecard, a multidimensional approach to measuring corporate
performance that incorporates both financial and non-financial
factors. The concept of an Audit Balanced Scorecard originated in a
study group of 12 companies that met throughout 1990; since then,
the authors have worked with several companies, including FMC
Corporation, Brown & Root Energy Services, Mobil and CIGNA, to
create scorecards and use them as a systematic means to implement
new organizational strategy.
Though still in
the preliminary stages of development, Audit Balanced Scorecard
could represent the emergence of a new era of management
sophistication, in which both the hard and soft variables of work
life are taken into account in a rigorous, testable fashion.
The objective
of the Audit Balanced Scorecard was to assess whether Centrelink’s
BSC was based on key elements of better practice principles and its
use assists Centrelink to understand and communicate its performance
against its strategic goals. The criteria developed for this Audit
Balanced Scorecard were based on a literature review, expert advice,
previous experience in the use of performance information and
Centrelink’s own expectations of the way the BSC would assist them
in performance management. The major issues encompassed by the
criteria were:
According to
the Australian National Audit Office In establishing the criteria
for this audit (ANAO) recognized that there is no one right way to
develop and use the Audit Balanced Scorecard and agencies need to
adapt it to their particular circumstances. However, there are some
principles that underpin the Audit Balanced Scorecard approach and
these are embodied in the audit criteria.
The Audit
Balanced Scorecard revealed a need for clearer alignment of Agency
business planning, annual reporting and the Balanced Scorecard.
While some aspects for an adequate project management framework have
been defined and implemented, there were weaknesses in the project
definition, planning and control. Without firm commitments and plans
from all branches, it was difficult for the project to establish and
maintain an implementation schedule. Successful delivery of all
project components will require both strengthening the overall
planning and project management framework. The audit also found that a
clearly defined data selection and acquisition strategy and plan
were not yet developed to address the gaps and weaknesses in the
CCRA performance measurement framework.
The scope of
the Audit Balance Scorecard included an examination of the National
BSC and scorecards that had been established at the Area (Area
Support Offices) and local level (Customer Service Centers). This
allowed the ANAO to examine the use and effectiveness of the BSC
throughout Centrelink’s levels of administration and across its
delivery network (around 300 sites across Australia). The audit
also included an examination of some functional scorecards for
business support services. A functional scorecard is usually
developed by groups within an agency, such as Information Technology
or Human Resources Management, so that their specific contribution
to the agencies goals can be clearly specified and measured.
