Home : Reports and Publications : Audit & Evaluation : Contribution Audit Policies and Processes for WDP and ICIP – March 2004
Appendix D
Budget Requirements: Assumptions and Calculations
Budget Calculations
The following table presents estimated external auditor fees for conducting contribution audits in accordance with the policies outlined in this report. The table provides an estimate of fees assuming a sample size based on a 100% compliance rate. The table also provides an estimate of current audit fees.
Key assumptions used to calculate the estimates follow the table and should be used in conjunction with the information presented in the tables. The estimates are provided for illustrative purposes only. Actual fees could differ significantly from the estimates.
| Recommended Audits | ||||
| Small Sample | Stratum | Total | ||
| High Risk | Random | |||
Sample Size |
10 |
25 |
35 |
|
Fee per Audit |
5,000 |
5,000 |
5,000 |
|
Total Fee |
$50,000 |
$125,000 |
$175,000 |
|
| Current Audits | ||||
| ICIP Audits | Stratum | Total | ||
| High Risk | High Dollar | Random | ||
Current Sample |
5 |
5 |
5 |
15 |
Fee per Audit |
5,000 |
5,000 |
5,000 |
5,000 |
Current ICIP Fee |
25,000 |
25,000 |
25,000 |
75,000 |
| WDP Audits | Stratum | Total | ||
| High Risk | High Dollar | Random | ||
Current Sample |
5 |
20 |
10 |
35 |
Fee per Audit |
5,000 |
5,000 |
5,000 |
5,000 |
Current WDP Fee |
25,000 |
100,000 |
50,000 |
175,000 |
| Total Current Audits | Stratum | Total | ||
| High Risk | High Dollar | Random | ||
Échantillon actuel |
10 |
25 |
15 |
50 |
Honoraires moyens par mission de vérification |
5,000 |
5,000 |
5,000 |
5,000 |
Honoraires actuels – total |
$50,000 |
$125,000 |
$75,000 |
250,000 |
Assumptions
- The sample size of the high-risk stratum is assumed to equal the sum of the estimated number of high-risk projects as outlined in the WDP and ICIP RBAFs. The actual size of the stratum will depend upon WD's redesign of its risk assessment tool, and the re-calculation of risk associated with current and future projects. The final sample size for this stratum could be significantly larger than the current 10 projects identified.
- The sample size of the random stratum assumes an average of 540 active projects a year across in total. The sample size was calculated based on a suggested minimum sample size and assumes a compliance rate among the audited projects of 100%. The random stratum sample size must be increased to reach the desired confidence level and margin of error if the actual compliance rate is lower.
- The estimate of fees is based on an average cost per audit of $5,000 as budgeted in the current RBAFs for WDP and ICIP. WD needs to confirm CAC's audit fees in light of the new policies and processes.
- Fees do not include GST or any expenses incurred by auditors, or any costs incurred by WD in connection with contracting the auditors.