value-added auditing
Value-added auditing (VAA) is a proven method for looking at effectiveness of an organization’s operational and financial performance. It has its roots in the US Government Accountability Office (GAO) “Yellow Book”. The Yellow book is an in-depth look at the activities (processes) that affect finances. VAA has evolved to fully integrate a full process (operational) perspective while understanding the financial effect on the organization. Greg Hutchins, author of “Value-Added Auditing: The Standard Manual of Risk-Based Process Auditing” describes VAA in his book as "the process for conducting practical, cost effective, risk based audits in many different functional areas".
Value-added auditing can be defined as a systematic, objective appraisal by independent auditors to determine whether i) financial and operational controls are reliable, ii) organizational risk is identified and managed, iii) compliance to external requirements (NFPA, OSHA, etc.), iv) conformance to ISO 9001, NIAHO and other applicable standards, v) efficient use of resources and vi) the organizations objectives are effectively achieved. While this is an exhaustive definition, it demonstrates the depth and value of the VAA. In a simplified form, VAA is a true organizational performance audit.
Getting to this degree of performance internal auditing does not happen overnight. Most all audit programs that we’ve seen in healthcare are still in the ad-hoc stage. So, logic tells us to begin to move toward this level of performance auditing utilizing a measured approach. First, get education. Then practice was you've learned. Finally, perfect what you've been practicing.. Most organizations state that the move to true performance auditing takes about 4 years. Regardless of the length of time, each cycle of education, practice and perfect takes your auditors and their findings to the next level and makes the gains more sustainable.
The four steps in the lifecycle of VAA include:
Each of these steps contains multiple components. We organize these components into levels of complexity to allow for a gradual change using the measured approach. Utilizing your time and resources over a planned timeline will better ensure sustainable success. Remember, a typical implementation may take up to four (4) years to implement a sustainable VAA program. Sustainable performance is not a sprint...Slow and steady wins the race!
For more information about how implementing a Value-Added Auditing program can help drive your hospital's performance, click on the "Contact Us" button below for more information or download the associated white paper below.
Value-added auditing can be defined as a systematic, objective appraisal by independent auditors to determine whether i) financial and operational controls are reliable, ii) organizational risk is identified and managed, iii) compliance to external requirements (NFPA, OSHA, etc.), iv) conformance to ISO 9001, NIAHO and other applicable standards, v) efficient use of resources and vi) the organizations objectives are effectively achieved. While this is an exhaustive definition, it demonstrates the depth and value of the VAA. In a simplified form, VAA is a true organizational performance audit.
Getting to this degree of performance internal auditing does not happen overnight. Most all audit programs that we’ve seen in healthcare are still in the ad-hoc stage. So, logic tells us to begin to move toward this level of performance auditing utilizing a measured approach. First, get education. Then practice was you've learned. Finally, perfect what you've been practicing.. Most organizations state that the move to true performance auditing takes about 4 years. Regardless of the length of time, each cycle of education, practice and perfect takes your auditors and their findings to the next level and makes the gains more sustainable.
The four steps in the lifecycle of VAA include:
- Managing the VAA
- Planning the VAA
- Conducting the VAA
- Reporting VAA results
Each of these steps contains multiple components. We organize these components into levels of complexity to allow for a gradual change using the measured approach. Utilizing your time and resources over a planned timeline will better ensure sustainable success. Remember, a typical implementation may take up to four (4) years to implement a sustainable VAA program. Sustainable performance is not a sprint...Slow and steady wins the race!
For more information about how implementing a Value-Added Auditing program can help drive your hospital's performance, click on the "Contact Us" button below for more information or download the associated white paper below.
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