ASSIGNMENT 2 FOR WB TRAINING PROGRAMME : PROBLEM TREE

INTERNATIONAL DEPARTMENT

Supporting information

Assignment Problem tree analysis

In all assignments it is important to remember the definition of Performance audit, as

formulated in the standards: (ISSAI 300:9, 10)
(9) As carried out by SAIs, performance auditing is an independent, objective and reliable
examination of whether government undertakings, systems, operations, programmes, activities or
organisations are operating in accordance with the principles of economy, efficiency and effectiveness
and whether there is room for improvement.
(10) Performance auditing seeks to provide new information, analysis or insights and, where
appropriate, recommendations for improvement. Performance audits deliver new information,
knowledge or value by:
• providing new analytical insights (broader or deeper analysis or new
• perspectives);
• making existing information more accessible to various stakeholders;
• providing an independent and authoritative view or conclusion based on
• audit evidence;
• providing recommendations based on an analysis of audit findings.
ASSIGNMENT 2 FOR WB TRAINING PROGRAMME

INTERNATIONAL DEPARTMENT

In Performance audit the term audit problem is used to assist in identifying the
appropriate focus of the audit. In principle a performance audit can include more than
one audit problem, however the risk with this approach is that the audit will be
complex and time consuming to perform. Normally, the audit problem is identified
during the pre-study (and documented in the pre-study memorandum). To
understand of the audit problem you must have gained enough knowledge and data
that allows you to make a judgment based on preliminary observations.
Audit questions and audit sub-questions are recommended by the standards to plan
for collection of audit evidence. To define your audit problem and audit objective, it is
normally useful to understand how different problems are related to each other. There
are several techniques to get an overview and find relations with each other. On many
occasions, mind mapping techniques have proven to be an effective approach. One
such technique which we are going to practice in this exercise is the problem tree
analysis. There are several similar techniques; but they are based on similar
approaches, i.e., to find structure and get an overview by illustrating the overview,
categorize and sort the content.
In the problem tree you organise your observations in relation to each other. The
problems are defined hierarchically according to how they influence each other.
Main factors connected to each other in the problem tree can be categorized in terms
of problems, causes and consequences. Any factor in the tree can be called a
“problem”. As you go up-wards in the tree you will see the consequences/effects of not
addressing the audit problem or not addressing it enough. To develop a tree
downwards the auditors can use the question: “WHY? When you go up you ask the
question ‘WHAT IS THE CONSEQUENCE/EFFECT?
The problem tree is thus a tool that can be used both to scrutinize the causes of the
problem (downwards) and to identify the consequences of the problem (upwards).
You can use the tree for your thinking both upwards and downwards. What is the
purpose of drawing the problem tree, is it to find out the causes or the consequences,
or both?
An example of a problem tree analysis is found below. The audit is about current
crisis with the Covid-19 with the focus on the healthcare sector (this audit is still in
progress and the presented problem tree is an early working version).
 problem
Overall
social
High rates of Covid-19 disease

the overall
soc. prob.
Causes of
Transmission is out of control Patients are not treated sufficiently and adequately

Families Lack of Insufficient Insufficient

indicators
Insufficient Oxygen

problem
Lack of

of audit
Lack of tech. Lack of nurses

Deeper
causes,
PCR testing staying in protective public hospital supplies and
medicines resources and doctors
hospitals equipment information capacities delivery

Government activities, processes or functions tackling the social problem and

Procurement
process + - + - - + + + -

its causes. Potential audit problem / focus of the audit.

Supervision
and
reporting
- + - + - - - - -
Patients
process
protocol/
+ - + - + + - - -
algorithm

Recruitment
and
reallocation - + - - - - - - +
of med. staff

Budget
priorities,
use of special + - + - + + + + +
funds and
donations
The problem tree consists of four layers (marked by the blue boxes on the right-hand side
from the problem logic tree):
- Layer on top is overall social problem,
- Two main causes of the overall social problem,
- Deeper level of causes, i.e. the issues tackled by the government,
- Government activities/processes tackling the problem.
Government activities or processes that can be audited are in vertical order on the left-hand
side. All the government activities and measures in the crisis are very intertwined, and it takes
effort to decide what areas are the most feasible to look at in this moment. To help this,
several causal relations have been discussed, which resulted in the below matrix with “+” and
“-” signs.
These signs mark the logic of which government activity/process tackles which problem.
Where there is a “+” sign, it means that there is a strong and direct causal correlation between
the government activity and the problem. Where there is a “-” sign, it means that there is no
correlation, or the correlation is weak or indirect.
The logic is immediately obvious. For example, if we start from the first block of government
activities on the left – the procurement process, if it fails, it will cause insufficient availability
of PCR tests, less people will be tested, less people will know they are infected, and this will
increase transmission rate. The same applies for procurement of protective equipment.
Similarly, inefficient procurement will cause insufficiency in oxygen supplies, and the patients
will not be able to receive adequate medical treatment, which can increase fatalities.
However, there is neither a direct connection between procurement and the fact that
hospitals allow family members to visit the diseased, nor with for instance inherent lack of
hospital capacities, nurses and doctors. The same logic can be applied to all five government
activities/measures.