Yang v State of Queensland (Queensland Audit Office)
[2017] QIRC 89
•4 October 2017
QUEENSLAND INDUSTRIAL RELATIONS COMMISSION
CITATION: | Yang v State of Queensland (Queensland Audit Office) [2017] QIRC 089 |
PARTIES: | Yang, John Cheng-Hsiang v State of Queensland (Queensland Audit Office) |
CASE NO: | TD/2016/15 |
PROCEEDING: | Application for Reinstatement |
DELIVERED ON: | 4 October 2017 |
HEARING DATES: | 15 to 17 May 2017 |
MEMBER: | Deputy President Bloomfield |
ORDERS : | 1. The Application is dismissed. 2. No order as to costs. |
| CATCHWORDS: | INDUSTRIAL LAW – APPLICATION FOR REINSTATEMENT – performance issues – performance improvement plan (PIP) – allegation that duties performed carelessly, incompetently or inefficiently – show cause notices request for further and better particulars – further show cause notices – consideration of response – decision taken to terminate applicant's employment – reinstatement application lodged – evidence about applicant's performance considered – dismissal found not to be harsh, unjust or unreasonable – application dismissed |
| CASES: | Industrial Relations Act 1999, s 77 |
| APPEARANCES: | Mr John Cheng-Hsiang Yang, in person, for the Applicant. Dr M Spry, Counsel instructed by Ms P Tyquin and Ms S Tucker of Crown Law for the State of Queensland (Queensland Audit Office), the Respondent. |
Decision
Background
Mr John Yang seeks reinstatement to his former position as Audit Manager (PO5) with the Queensland Audit Office (QAO), having worked with that organisation from 6 September 1999 until his termination on 12 February 2016. Mr Yang's employment was terminated by the delegated officer, Mr Anthony Close, Deputy Auditor-General, pursuant to ss 187(1)(a) and 188(1) of the Public Service Act 2008 (the PSA) on the basis Mr Yang had performed his duties carelessly, incompetently or inefficiently.
Mr Yang alleges that his termination was harsh, unjust and unreasonable on a number of grounds (see paragraphs [3] and [4] below). Because Mr Yang's evidence in support of his reinstatement, as well as that given by QAO's witnesses in reply, relies very heavily on the contents of correspondence between Mr Yang (either personally or through his legal representatives) and QAO, it is necessary to set out in some detail the chronology of relevant events concerning Mr Yang's employment and termination, as follows:
· September 1999 - commenced employment with QAO.
· July 2008 - appointed as an Audit Principal (AO7).
· Approximately October 2013 - transferred from audit responsibilities for QAO in the Shared Services area of the State Government, reporting to an Audit Manager (AO8), to a similar role in the Energy and Resources Audit Sector, reporting to a new Audit Manager (AO8), Mr Ben Jiang. At around this time, roles previously classified as AO were converted to professional officer (PO) roles, with AO7 roles converting to PO5 and AO8 roles converting to PO6.
· 13 May 2014 - Mr Jiang completes a performance review for Mr Yang, covering the period from October 2013 until March 2014. He assesses Mr Yang as meeting expectations in six out of 10 categories and as needing improvement in four out of 10 categories. This compares to Mr Yang's self-assessment in which he rates himself as only needing development in one area, also identified by Mr Jiang, "functional/technical skills".
· 16 December 2014 - Mr Yang attends a meeting, with the subject identified as "Performance" on his Outlook calendar, with Ms K Johnson, Assistant Auditor-General, Mr P Brahman, Assistant Auditor-General, and Mr N George, Energy and Resources Sector Director. Mr Yang's evidence was to the effect that he was not provided with an agenda before the meeting and did not have a support person with him. During the meeting he was advised that his performance was below the expected standard for an Audit Manager (PO5) and that this had been ongoing for "quite some time" (see Schedule 1 to Mr Yang's original Application for Reinstatement filed on 4 March 2016. However, he later changed this to "had been unsatisfactory for a number of years" in his Witness Statement, filed on 31 January 2017). He is told he is to be placed on a Performance Improvement Plan (PIP).
· 22 December 2014 - Mr Yang receives a draft PIP by email and attends a meeting to discuss QAO's expectations of him with Mr George and Mr Jiang. In his Application, Mr Yang said he had no support person present and did not sign the PIP. Later, in his Witness Statement (Exhibit 1), he alleged that at no point was he informed that a formal PIP process had begun and that he was required to deduce that he was participating in a PIP from various versions of the PIP presented to him over time, as well as from general statements made in meetings relating to the PIP.
· 19 January 2015 - Mr Yang writes to Ms Johnson and Mr Brahman outlining his concerns about the way the PIP was implemented. In particular, he said:
oif there was any area where his performance was perceived to be below expectation, he expected to be: advised formally where those areas were; advised what the circumstances were that were causing the perceived gaps in QAO's expectations; and, invited to discuss additional training that targeted the specific areas of concern to QAO;
othey informed him that: he did not have "an audit mindset" and, therefore, did not belong at QAO; he should immediately seek other employment and, if he refused, he would have until the end of February 2015 to show cause why his employment should not be terminated; he would be given two audit jobs to manage and to demonstrate his ability to meet the requirements of his role; he would receive no assistance during January or February; and, his work would be scrutinised during that period;
oMr Yang also took issue with the points recorded in the PIP (see copy of this document below), asserting that they were generalisations, before going on to highlight his achievements during 2014 which, he said, had not been recognised.
· 22 January 2015 - Mr Brahman responds to Mr Yang's complaints and, inter-alia, makes the following points:
oQAO is conducting a PIP, not a disciplinary process;
oalthough no formal agendas are being sent, the next meeting (scheduled for 27 January 2015) is to discuss the PIP, the deliverables, the associated timeframes, QAO's expectations, Mr Yang's feedback and any support he may require;
ohis letter of 19 January 2015 contains a number of statements that are grossly inaccurate - with particular reference to the assertion his employment would be terminated at the end of February if he did not meet QAO's expectations, and that he would receive no assistance during January and February.
· 16 February 2015 - Mr Yang lodges a grievance under the Queensland Public Service Award - State 2012 (the Award) relating to the conduct of Ms Johnson and Mr Brahman. In it, he alleges that Ms Johnson and Mr Brahman have not conducted the PIP process in a reasonable manner and that they have not complied with QAO's Policy P5 ''Unsatisfactory Performance and Conduct" in their carriage of the process, which has caused a denial of natural justice.
· 25 February 2015 - As the next-in-charge above Ms Johnson and Mr Brahman, Mr Close provides a detailed (10 page) response to Mr Yang's grievance. In the course of his response, Mr Close highlighted the outcome of Mr Yang's performance review (by Mr Jiang) in May 2014, which identified a number of areas of his performance which needed improvement. Mr Close also said that since that review Mr Jiang had provided feedback on Mr Yang's work documents and had also tried to assist him in developing his planning skills. Despite this assistance, there remained a number of concerns with performance which led to the meeting on 16 December 2014. Without going to the letter in detail, Mr Close provided a detailed response to Mr Yang's grievance and highlighted that the PIP is a supportive process "designed to assist you in understanding concerns with your performance, the steps required to be taken by you in addressing these concerns, and also guidance as to how your performance will be measured during the course of the PIP". In concluding, Mr Close recorded that he did not consider there was any basis to cease the PIP at this time and that he also did not consider there was any basis upon which he should give over the supervision and management of the PIP process to an independent party. This was because, for the reasons outlined in the letter, he considered that Ms Johnson's and Mr Brahman's actions to date were appropriate and consistent with QAO's performance policy.
· 2 March 2015 - Mr Yang engages an Occupational Therapist (OT), "to help me cope with QAO's PIP process", who attends a PIP process meeting with Mr George and Ms Natalie Townsend, Principal Adviser - HR, on that day.
· 10 March 2015 - the OT provides a report to QAO in which he noted the skills said to be required by an Audit Manager as well as management's reported performance deficits for Mr Yang. From this information, the OT recorded that it was his view that the two main areas of performance deficits were Mr Yang's difficulty meeting timeframes, with consequent loss of quality, and planning and client strategies. In order to address such matters, the OT recommended, inter alia, that Mr Yang's current workload be temporarily reduced to allow him to address work performance deficits and that QAO should address issues related to planning and risk management decisions with Mr Yang as they arose.
· 12 March 2015 - on behalf of QAO, Ms Townsend responds to Mr Yang about the OT's report of 10 March 2015. In doing so, she highlighted the duties of a PO5 Audit Manager, noting that it was expected that anyone in such role would be able to work across a number of different low to medium risk financial audits at any one time, balancing the competing demands from those audits. Drawing on information provided to her from other Directors outside of the Sector in which Mr Yang worked, she challenged the assertion of the OT (as expressed to him by Mr Yang) that Mr Yang's current workload was excessive and unmanageable. She also recorded "further, throughout the PIP and in the meetings that I have been present for, you have consistently stated you were on track for meeting the timeframes and did not require any extensions. Additionally, resourcing requirements have also been discussed at these meetings and when Mr George offered you alternative resources you declined these offers and said that you were able to undertake the work yourself.'' Ms Townsend also recorded that she believed the issues and expectations had been clearly identified in the PIP, particularly as they have explicit columns which articulate the issues, the areas requiring improvement, the deliverables Mr Yang is required to achieve, and expectations of him under the PIP. Further, the PIP process involved weekly meetings with Mr George during which he had canvassed any impediments or issues Mr Yang might be experiencing, provided feedback on the work that had been submitted, and checked progress against the PIP and whether Mr Yang was on track to meet the deliverables.
· 9 April 2015 - the PIP process concludes, after three extensions.
· 22 April 2015 - Mr George finalises a summary document for the PIP process, at Mr Close's request, and discusses its contents with Mr Yang and his support person, the OT.
· 13 May 2015 - at approximately 4:15pm, Ms Townsend delivers a "First show cause notice - liability for discipline" letter to Mr Yang, on behalf of Mr Close, which asks him to show cause as to why he should not be disciplined pursuant to s 187(1)(a) of the PSA on the grounds that he has performed his duties carelessly, incompetently or inefficiently. Mr Yang challenges the document on the basis his legal representatives had sent correspondence to QAO several days earlier, about his "unresolved" grievance.
· 13 May 2015 - at approximately 4:30pm, Ms Townsend informs Mr Yang by email that QAO has not received any correspondence from his legal representatives. At around 5:00pm the legal representatives send the letter directly to Ms Townsend by email. The correspondence, which had been sent to QAO's generic email address on 11 May 2015, was addressed to Mr Close and informed him that Mr Yang believed his grievance had not been addressed and/or resolved, on the basis Mr Close's response (of 25 February 2015) did not address the substance of the grievance and nor did Mr Close consult Mr Yang as required by the Award.
· 20 May 2015 - Mr Close responds to the 11 May 2015 correspondence by informing Mr Yang that he had responded to his 16 February 2015 grievance on 25 February 2015 and, since that time, Mr Yang had not raised any concerns with the response nor attempted to escalate the matter in any way. Indeed, he had continued to participate in the PIP process with a support person and had not raised any further concerns with that process. Finally, Mr Close said that Mr Yang's assertion that the grievance remained unresolved, nearly three months after he received Mr Close's response, was disingenuous. Mr Yang was reminded that his response to the show cause letter was due by 28 May 2015.
· 27 May 2015 - Mr Yang's legal representatives lodge an Industrial Dispute Notification in the Queensland Industrial Relations Commission (the Commission). A conciliation conference is conducted on 16 June 2015 but does not resolve the matter.
· 6 July 2015 - Mr Yang's legal representatives lodge an application for an Injunction in the Commission which seeks orders:
ocompelling QAO to comply with the status quo provisions in the dispute provisions of the Award;
orestraining QAO from continuing with the show cause process while the grievance procedure is still being followed; and
orestraining QAO from taking any further action that would result in non-compliance with the status quo provisions in the Award.
· 23 July 2015 - on the advice of his legal representatives, Mr Yang discontinues his application for an Injunction. In the course of informing Mr Close of this decision, Mr Yang's legal representatives seek further and better particulars in respect of the conduct said to underpin the performance allegations against Mr Yang and how the conduct satisfies the grounds for disciplinary action under s 187(1)(a) of the PSA.
· 30 July 2015 - Mr Close responds to the request for further and better particulars by referring to the issues of concern identified in the PIP as the list of issues with Mr Yang's performance as an Audit Manager, as well as the feedback given to him by Mr George at the PIP meeting on 9 April 2015 in relation to those issues. In concluding, Mr Close wrote:
"Having considered the available evidence, I consider that you may have performed your duties:
oCarelessly in that it is alleged you have consistently submitted work that required significant amendment and was not properly reviewed before submitted. I refer to you attachments 8, 9, 11 and 13 to my letter dated 13 May 2015;
oInefficiently in that it is alleged you have consistently spent more time to complete tasks to the required standard that [sic] was reasonably necessary and have not appropriately identified and addressed resourcing issues in a timely manner. I refer you to attachments 11, 16 and 18 to my letter dated 13 May 2015;
oIncompetently in that it is alleged you have consistently failed to meet deadlines set and reasonable timeframes for the provision of work, and consistently failed to manage multiple tasks and conflicting deadlines and the quality of work you provided was not consistently up to the level expected of a manager. I refer you to attachments 11, 12, 16, 17, 18, 19 and 20 to my letter dated 13 May 2015."
· 17 August 2015 - Mr Yang's legal representatives respond to the show cause notice dated 30 July 2015. In the course of doing so, they question the level of detail provided by Mr Close, stating that particulars have not been provided which link specific conduct to the grounds on which potential disciplinary action is based. As such, they seek further particulars in connection with Mr Close's belief that Mr Yang performed his duties carelessly, inefficiently or incompetently.
· 24 August 2015 - Mr Close informs Mr Yang that he has decided to appoint an external provider to conduct an independent review of the processes conducted to date, and the adequacy of documentation provided to him, to establish if there is any further clarity that could reasonably be provided in order for Mr Yang to be able to provide a response. He places the show cause process "on hold" while the review is being undertaken, and undertakes to provide a copy of the reviewer's report to Mr Yang after it is received by QAO.
· 2 September 2015 - based on feedback from the independent reviewer, Mr Close forwards a "reworked" first show cause notice to Mr Yang for his consideration and response within 14 days. Where attachments are referenced in Mr Close's allegations that Mr Yang has performed his duties carelessly, inefficiently or incompetently, details of the relevance of each attachment is recorded.
· 16 September 2015 - Mr Yang's legal representatives respond to the revised show cause notice on his behalf. In the course of their response:
othey take issue with the PIP process, which was said to be poorly designed in that it inhibited Mr Yang's ability to improve his performance on the basis he was not given clear standards he needed to achieve to be considered competent;
othey reject the assertion that Mr Yang's work was substandard, in that it was simply due to a difference of opinion between professional auditors; and
othey argue that as a result of the unreasonable workload, the lack of training and specific coaching support, Mr Yang needed to spend a substantial amount of personal time to deal with the additional workload imposed by the PIP process.
· 16 September 2015 - Mr Close, Ms Johnson and Mr Brahman receive a briefing note from Ms Townsend in which she records the outcome of a performance review meeting the previous day between Mr Yang, Mr George, Mr Alan Flynn (a PO6 Audit Manager and Mr Yang's direct supervisor from approximately late May 2015) and herself, during which concerns about Mr Yang's performance over the July to September 2015 period were canvassed. The main areas of concern were identified as:
otimeliness of the work undertaken and not meeting the required timeframes;
othe quality of the work being delivered and significant rework being required;
opoor customer focus to both internal and external clients;
otechnical knowledge and capabilities not to the standard required for an Audit Manager.
Ms Townsend also recorded that because of these deficiencies Mr George had reached the view, as an Engagement Leader under the Australian Auditing Standards, that he was unable to ethically assign Mr Yang to an audit. The briefing note recommended that consideration be given to suspending Mr Yang on full pay while a show cause process was instituted. Mr Close approved the recommendation and forwarded the briefing note to the Auditor-General for his consideration.
· 8 October 2015 - the Auditor-General signs correspondence to Mr Yang which informs him that he has received information which alleges that between July and September 2015 Mr Yang may not have performed his role as an Audit Manager to a satisfactory standard, including the standards imposed by the Auditing and Assurance Standards Board. On the basis he reasonably believes that Mr Yang may be liable for disciplinary action, the Auditor-General advises Mr Yang of his suspension from duty on normal remuneration, effective from receipt of the letter. Mr Yang is also informed that his suspension will remain in place until Mr Close (as the delegated officer) has had an opportunity to consider the material before him and to determine an appropriate course of action.
· 9 October 2015 - Mr Close signs a letter headed "First show cause notice - liability for discipline July to September 2015" which informs Mr Yang:
ohis response to allegations about his performance over the period December 2014 to April 2015 had been received but no decision had yet been made in relation to those allegations;
osince April 2015 the performance of his duties as an Audit Manager had continued to be the subject of supervision and monitoring;
ohis performance in that period had been consistently below the required standard and expectations of an Audit Manager (PO5) in the following areas: technical skills; written skills; client interaction and engagement; and, supervision of team members and the management of audits;
ohe was now being afforded the opportunity to show cause why disciplinary action should not be taken against him in relation to his alleged unsatisfactory performance for the period July to September 2015, full details of which were set out in the (eleven page) letter.
· 4 November 2015 - Mr Yang's legal representatives provide a response to the various allegations about unsatisfactory work performance contained in the (second) show cause letter dated 9 October. As was the case with their response to the earlier show cause correspondence, Mr Yang's solicitors again highlight the (alleged) "unreasonable and excessive workload expected of Mr Yang and a lack of appropriate training and coaching support" as a result of which, it was said, he had to spend a substantial amount of personal time to deal with the additional workload imposed by the earlier show cause process while dealing with the responsibilities imposed on him during QAO's busiest period of the year (July to early September).
· 22 December 2015 - a second show cause notice (of 32 pages) from Mr Close is forwarded to Mr Yang. In this correspondence, Mr Close records his findings in relation to the allegations concerning Mr Yang's performance of his duties in the period December 2014 to April 2015 (Part A) as well as his findings in relation to the concerns about Mr Yang's performance of his duties during the period July 2015 to mid-September 2015 (Part B). Mr Close records that, in respect of each of the relevant periods, he was satisfied that Mr Yang performed his duties carelessly, incompetently or inefficiently and that he was liable for disciplinary action pursuant to s 188 of the PSA. In this respect Mr Close advised that he was considering that the disciplinary action that should be taken was termination of Mr Yang's employment and called upon him to show cause why that penalty should not be imposed.
· 19 January 2016 - Mr Yang's legal representatives respond to the second show cause notice by highlighting that the proposed penalty of termination of employment was, in the opinion of the firm, manifestly excessive when compared to previous decisions taken in Queensland public service departments (seven examples are given). Instead, the legal representatives suggest that, on the basis of Mr Yang's length of service and the fact he had not been advised of any performance concerns before December 2014, an appropriate penalty in the circumstances would be:
(a)an at level transfer or redeployment within QAO or the Queensland public service; or
(b)in the event an at level transfer or redeployment is not available - a demotion of one level together with salary maintenance for 12 months, at the end of which Mr Yang is to be reassessed as to his suitability to be returned to his current position; and
(c)the placement of Mr Yang on a performance management plan for a period of six months.
· 12 February 2016 - Mr Close emails Mr Yang with his decision on disciplinary action. In it, he canvasses the points raised by Mr Yang's legal representatives in their letter of 19 January 2016 and his reasons for deciding to reject their arguments for a lesser penalty than termination. The letter also sets out 30 facts and/or factors Mr Close took into account in ultimately deciding that the appropriate penalty was termination of Mr Yang's employment.
Mr Yang's arguments as to why his termination was harsh, unjust and unreasonable
In Schedule 2 of his Application for Reinstatement, Mr Yang recorded a number of reasons why he believed his dismissal was harsh, unjust and unreasonable, which covered nine distinct topics and ran to five pages. Without being exhaustive, some of the points made by Mr Yang were:
·for four or five years prior to being moved to the Energy and Resources team in QAO, he had worked in the Shared Service environment. In this area he used a customised version of QAO's audit methodology and documentation software (IPSAM), which he helped develop;
·in the new team he was required to operate under QAO's standard IPSAM file structure, which he only had limited opportunity to use prior to late 2013. He was not familiar with the different IPSAM file structure and was offered no training or coaching to assist him to transition to the new work environment;
·the outcome of the PIP process was pre-determined. The PIP was used as a systematic and intimidating exercise designed to change the staffing profile of QAO without the need to go through a redundancy process;
·throughout the PIP process there was a lack of objective standards for him to follow and there was no training or coaching which specifically addressed the alleged performance deficiencies;
·there was no time specifically allocated for him to do his PIP and related activities. His allocated hours to each job remained unchanged and he was expected to perform his normal duties in addition to the PIP and related tasks;
·the report prepared by his OT, which specifically requested that additional time be allocated to his training and coaching, was dismissed by QAO;
·the first show cause letter was issued in May 2015 while his grievance was still ongoing and unresolved;
·the show cause letter covering the July to September 2015 period was issued without going through a PIP process;
·no consideration had been given to the fact that his spouse had given birth to a daughter in August 2014, including the fact that he only took a few days of parental leave during the month of September - a busy period for QAO;
·he had been consistently assigned work with timeframes that were impossible for him to meet without detriment to the quality of the final product;
·he was "yelled at", "called names" and "labelled" by both Ms Johnson and Mr Brahman in the meeting of 16 December 2014. The labelling included "lack of an audit mindset" and "not a fit to QAO";
·QAO's actions "were designed to undermine and humiliate me, to reduce my ability to perform and self-confidence, to cause stress and to harm my reputation in the QAO, with the hope that I will resign voluntarily";
·Mr Close "have blanketly disregarded every single explanation, or reasonable excuses provided by myself";
·in addition:
"I was bullied to submit my resignation in January 2016 [sic] or I would be put through a PIP process for which I was advised in an abusive tone by Ms Johnson and Mr Brahman, in that I would be guaranteed to fail, which would result in the termination of my employment and a tainted employment record which would diminish my opportunity to be transferred to another department or be re-employed by the Queensland public sector. These actions only ceased when I lodged a formal grievance on 16 February 2015";
·the terminology "audit mind-set" does not have a dictionary or generally accepted meaning in the accounting/audit field:
"In the context of the conversation it was used by Ms Johnson and Mr Braham [sic] to refer to my academic background in Management and Law, in addition to my Accounting qualification, which have [sic] resulted in my thinking process being considered different from what QAO considered as an ideal auditor..."
In the course of his response to the affidavit of Mr Flynn (see below), Mr Yang made the following comments about his alleged treatment by QAO during the relevant period:
"27. Overall, throughout the period between late 2014 and late 2015, I feel that I had been working in a bully-tolerant organisation, where I had been:
·denied information or knowledge necessary for undertaking work and achieving objectives;
·denied training needs that specifically target the alleged deficiencies of the area of my work;
·deprived of resources to do my job;
·not given recognition and appropriate credit or positive feedback for my accomplishment;
·denied support by my superiors or manager;
·given more responsibilities however a removal of my authority;
·constantly overruled, ignored, sidelined, marginalised, ostracised;
·set goals and deadlines that were unrealistic and unachievable;
·frequently or constantly criticised;
·encouraged to feel guilty, and led to believe I was always the party at fault;
·placed in situations where I was required to defend myself, my explanations and evidence of achievements were always ridiculed, overruled, dismissed or disregarded;
·frequently subject to nit-picking and trivial fault-finding;
·subject to excessive monitoring, supervision, micro-management and recording;
·placed in the circumstances where concerns or doubts were raised about my performance or standard of work, while a large portion of these concerns or doubts could hardly be quantified;
·threatened, shouted at and humiliated during the meetings;
·the subject of complaints that were trivial and could not be substantiated by senior staff members, and that I believed came from a common origin;
·forced to work long hours without remuneration and under threats of dismissal;
·receiving unpleasant or threatening email [sic] and hand delivered letters and correspondence immediately prior to weekends and holidays;
·invited to 'informal' chats or meetings which turned out to be Performance Review meetings or disciplinary hearings;
·facing unjustified disciplinary action on trivial charges;
·subject to unwarranted and unjustified verbal or written warnings;
·denied representation at meetings, often under a threat of disciplinary action;
·put under [sic] trivial, unsubstantiated incidences from previous years as a basis of poor performance;
·consistently coerced and intimidated into resignation;
·denied the right to earn my livelihood including being prevented from getting another job in the Queensland Public Sector."
Notwithstanding the number and range of matters recorded by Mr Yang in paragraphs [3] and [4], he only raised a handful of such matters with witnesses called by QAO. Even when he did, he rarely did so in a manner which required the witness to justify or substantiate the actions and/or steps they had taken in a particular situation.
For example, when questioning Mr George about the OT's report of 10 March 2015, Mr Yang simply invited Mr George to identify the specific action he had taken to address the recommendations concerning workload and stress identified by the OT. In response, Mr George said that he had met with Mr Yang on, in effect, a weekly basis to help him address his workload issues and how he should manage his various commitments. In addition, the PIP timeframes had been extended to reduce stress levels and some of the work had been given to other staff to undertake.
Somewhat revealingly, Mr Yang's questioning of Mr George disclosed concerning gaps in his apparent level of knowledge about some of the internal practices of QAO insofar as they related to the conduct of audits and the keeping of basic time records. Such matters included:
· the reasons why client strategies were prepared and delivered in advance to Audit and Risk Committee (ARC) members;[1]
· the nature and purpose of "hot reviews" and the circumstances under which they might be undertaken;[2]
· the nature and purpose of "prompts" in the IPSAM files, as well as the need to respond to/address them;[3] and
· how he was meant to record the time he spent on audits, PIP review meetings, and the like.[4]
[1] T2 - 18 and 19.
[2] T2 - 19 to 22.
[3] T2 - 21 to 23.
[4] T2 - 27 to 33.
In relation to the last point immediately above, Mr Yang somehow came to the conclusion that any time he spent in the PIP review sessions with Mr George was to be charged to a client. In this respect, he complained that he had not been provided with a specific budget to address the performance improvement process, which meant the time he charged to a particular audit was being unfairly inflated in comparison to other staff.[5] However, as Mr George clearly explained, such time was supposed to be charged to a specific QAO "overhead" code covering such matters, which, he said, Mr Yang should have been aware of given his position as an Audit Manager (PO5) and his length of service with QAO.
[5] See T2 - 33 to 39.
The PIP process - December 2014 to April 2015
In order to understand the nature and content of the PIP process which commenced on 22 December 2014, I have attached to this decision (as Annexure 1) a copy of the document that was provided to Mr Yang at his meeting with Mr George and Mr Jiang on that date. (Note: for reasons of confidentiality associated with the audit process, the names of clients have been removed and substituted with a coded reference).
As will be obvious from even a cursory perusal of the PIP, there is nothing in the document (except the need to prepare a report to Ms Johnson and Mr Brahman by the end of February 2015 on how he met the "deliverables" aspects of the PIP) which places any additional burdens, tasks or requirements upon Mr Yang. It simply reflects the tasks and processes he was expected to undertake as part and parcel of the performance of his normal duties. The document records five issues/areas where deficiencies had been identified in Mr Yang's previous performance and lists methods/approaches he should adopt to meet QAO's expectations set out in the last column. It was, in effect, a checklist for Mr Yang to follow as he went about his daily duties.
Relevantly, and importantly, the fourth column set out the "to be achieved by" dates Mr Yang was expected to meet if the planning for the respective audits was to be managed/conducted according to the pre-determined (and agreed) timelines.
The initial PIP is to be compared to the summary document (attached as Annexure 2), prepared by Mr George on 21 April 2015 for Mr Close's consideration, and at his request, which was canvassed at length during a meeting held on 22 April 2015 between Mr Yang, his support OT, Mr George and Ms Townsend. This document clearly records Mr Yang's failure to meet deadline dates, as well as other deficiencies in his performance.
While the contents of Annexure 2, most relevantly the "Overall summary" in the final column, would ordinarily have to be taken at face value - on the basis it was prepared by Mr George - I unreservedly accept its contents as being an honest record of Mr George's professional assessment of Mr Yang's performance during the PIP process which ran from 22 December until 9 April 2015. My conclusion is based on four factors:
· the contents of Mr George's Witness Statement, including the multiple attachments to it;
· his overall credibility as a witness;
· my impressions of the level of Mr Yang's knowledge (or rather, lack thereof) as demonstrated during his questioning of Mr George, Mr Flynn and Mr Close; and
· Mr Yang's demonstrated lack of attention to detail in his Application for Reinstatement, Witness Statements and various draft reports appended to the Witness Statements of Mr Close and Mr Flynn.
Relevantly, Annexure 2 not only records the formal meetings conducted during the PIP process, it also records that Mr George met Mr Yang on six other occasions in the February to early April period to discuss his progress on the audits on which he was involved. This is separate to phone conversations and ad hoc meetings to clarify matters or update on progress.
The final column, "Overall summary", discloses a litany of missed due dates and details of work which was either not completed by Mr Yang or not completed to an appropriate standard.
Mr Yang's performance during the July to mid-September period
Evidence about Mr Yang’s performance in the period between July and September 2015 was primarily provided by Mr Flynn, Mr Yang’s direct supervisor during that period. He said that Mr Yang was assigned as the team leader on the audits of clients G and D, and as a member of the audit team for clients S and Q, and that he met with Mr Yang weekly, over a six week period from late July, to obtain updates on the status of the work assigned to him.
As the team leader for audits G and D, Mr Yang’s role required him to:
· ensure the audits were delivered within budget and timeframes;
· liaise with clients and manage the client relationships to ensure client satisfaction;
· review the work of junior team members;
· draft correspondence and other documents, including the preparation and finalisation of the closing report, audit committee briefing papers, management letter and independent audit reports;
· undertake general managerial duties.
As but one example of Mr Yang’s failure to meet deadlines, and then still deliver substandard work, Mr Flynn said he received an email from Mr Yang late on the afternoon of Friday 14 August 2015 which informed him that the closing report for the G audit would be provided to him on Monday 17 August 2015 and the closing report for the D audit would be provided on Wednesday 19 August 2015. A little later that afternoon Mr Flynn sent an email to Mr Yang asking him to provide the closing report for client G early on the Monday morning so that it could be reviewed by Mr George and himself prior to the due date of 19 August. On or around 17 August he provided Mr Yang with a copy of the closing report that had been completed the previous week for client U to be used as a guide for the G and D closing reports.
Despite Mr Yang indicating that he would provide a copy of the closing report for the G audit by 17 August, Mr Flynn had still not received a copy by mid-morning on 18 August 2015. As such, he sent an email to Mr Yang asking could it be provided as soon as possible. After it was received at about 11:45am, Mr Flynn found a substantial number of inaccuracies and problems with the report on the basis it had not been tailored to client G’s circumstances and contained inaccurate and irrelevant information.[6] He spent approximately 4 hours reviewing and rewriting the report, compared to about one hour he would normally spend reviewing a similar closing report prepared by any other Audit Manager at Mr Yang’s level.
[6] See attachment AF-11 to Mr Flynn's Witness Statement.
As a result of Mr Yang’s lateness in providing the draft audit report it was not provided to the ARC until 11:30am on the day of the meeting, 19 August 2015, which was scheduled for 2:00pm. Mr Flynn said he provided verbal feedback to Mr Yang in relation to the draft report as they were on their way to the ARC meeting and confirmed this feedback, by email, on 21 August 2015. Included in this feedback were the following points:
· incorrect dates were noted in a number of places in the report (dates of the client strategy and the interim management letters);
· the statement of the client’s financial position made reference to shareholder loans where none existed. However such loans did exist for client U;
· the report included reference to specific management representations which had not occurred. However, such representations had been made to client U;
· the report made reference to the fact that there were no audit issues raised. This was incorrect in the case of client G, but correct in the case of client U;
· there were grammar and spelling errors throughout the report.
In terms of the audit report for client D, Mr Yang ultimately delivered his draft audit report to Mr Flynn on 25 August 2015 - in circumstances where he had earlier indicated that it would be delivered on 19 August 2015 - when the ARC was due to meet on 26 August 2015. To compound matters, Mr Yang sent a revised version of the final report at approximately 10:30am on the date of the ARC meeting. Due to the revisions required in the draft submitted by Mr Yang,[7] the final version of the closing report was not delivered to the ARC until approximately two hours prior to the start of their meeting. In Mr Flynn’s words:
“This gave them little or no opportunity to read the report and this did not reflect well on QAO as a professional organisation. Mr George and I attended the audit committee meeting and we were required to go through the report in detail so that members could understand the content and seek clarification on any matters as we progressed through the report. This would not have been necessary had the committee members had sufficient time to review the report prior to the meeting. During this meeting, we were also advised by a committee member that a meeting was held with Mr Yang the previous day that we were not aware of. This further demonstrated poor professional judgement on behalf of Mr Yang.”
[7] See attachment AF-16 to Mr Flynn's Witness Statement.
Mr Flynn also referred to a matter of major concern he identified during the course of the audit for client S. This involved Mr Yang contributing to the client’s development of a position paper in connection with its proposal to aggregate certain assets for depreciation purposes. Mr Flynn’s concern (a concern also shared by Mr George and Mr Close) was that as an auditor, Mr Yang had a clear obligation to remain independent from the client. It was not professional or appropriate for him to participate in the preparation or drafting of the client’s position paper, nor to contribute to its development.
Mr Flynn also gave evidence about his meeting with Mr Yang, Mr George and Ms Townsend on 15 September 2015, the purpose of which was to provide Mr Yang with feedback in relation to his performance during the period from July to September 2015 - particularly in relation to his work on the audits for clients G, D, Q and S. He said the meeting was structured, with Mr Yang’s performance on each audit assignment being dealt with separately. He said that Mr Yang acknowledged that a number of the concerns raised were valid and should have been identified during the relevant audit.
Finally, Mr Flynn also said that he was consulted in relation to the commencement of a show cause process concerning Mr Yang’s performance and agreed that it was warranted. In this respect, he was shown a draft copy of the 9 October 2015 show cause notice at the time it was being developed and asked to confirm that the comments related to Mr Yang’s performance between July 2015 and September 2015 were factually accurate.
The decision to terminate Mr Yang's employment
Notwithstanding the fact that he provided a detailed witness statement in which he recorded his intimate awareness of Mr Yang's alleged performance issues from a very early stage, Mr Close also set out detailed reasons for his ultimate decision to terminate Mr Yang on 12 February 2016, as follows:
"7. I made the decision to terminate Mr Yang’s employment taking into account all of the material that was before me, including his responses to the show cause processes. I have set out in full my reasons for deciding to terminate Mr Yang’s employment in the Penalty Letter. The reasons for my decision included, but were not limited to, the following:
(a)Despite receiving clear, constructive and ongoing feedback and support in relation to his performance, and ongoing supervision from a number of experienced and senior QAO employees, Mr Yang consistently failed to take on the feedback provided to him and to follow direction and instruction by more senior members of QAO. Mr Yang had been given a number of extensions of time to accommodate his needs throughout the performance improvement plan (PIP) process. Mr Yang continued to not meet the performance expectation or perform his duties as an Audit Manager to the required standard despite being given a period of over twelve months in which to demonstrate improvement. I was of the view that the QAO had made every attempt to manage Mr Yang’s performance and to assist him to improve his performance to the required standard with no success.
(b)I held significant concerns regarding Mr Yang’s practice of over-auditing, which had been identified in the PIP. Mr Yang was explicitly advised not to over-audit as it was against the position of the QAO and he was provided with training in relation to risk-based auditing. However, despite this, Mr Yang demonstrated that he was unable or unwilling to comply with the QAO’s direction to adopt a risk-based assessment approach and to stop the practice of over-auditing.
(c)I also held significant concerns regarding Mr Yang professional judgment as an auditor. The ability to recognise the risks to the QAO’s independence from its audit clients is a matter of professional judgment expected of every professional auditor, even from a junior level. Mr Yang did not appear to recognise the inappropriateness of his admitted conduct in assisting (Client S) to draft their position paper.
(d)I held significant concerns that QAO could not continue to allocate meaningful work to Mr Yang. Mr Nick George, Sector Director, QAO, and in his role as Engagement Leader under the Australian Auditing Standards, had indicated that he was unable to allocate Mr Yang to an engagement team in line with the Australian Auditing Standard ASA200 as he was not satisfied that Mr Yang had the appropriate competence and capabilities that are required of an auditor. Based on Mr George’s view, I could not be confident in Mr Yang’s competence to perform his role to the required standard and did not consider there were any alternative duties within the QAO that would be suitable for Mr Yang to be allocated.
(e)The workload allocated to Mr Yang, in his capacity as an Audit Manager, was less than other Audit Managers in the QAO. Despite repeated extensions of time given for the milestones for the completion of certain work during the PIP process, Mr Yang performed his duties inefficiently in that he consistently did not complete work by the original due date, failed to address slippages of work and spent more time to complete tasks than ought to have been necessary. Mr Yang often failed to communicate with the relevant team leader or his supervisor that he was not able to complete the work within the required timeframe.
(f)Under the A-G Act, the Auditor-General has responsibility for conducting audits of Queensland public sector entities. In particular, the Auditor-General is required to conduct financial audits of public sector entities each year to assess whether the financial statements are true and fair. The QAO is the set up to support the Auditor-General in this role. Staff of the QAO are subject to the direction of the Auditor-General, the Deputy Auditor-General or any person authorised by the Auditor-General in relation to the way audits are conducted, and the priority given to audit matter. As a result of the obligations of the Auditor-General and myself under the A-G Act, I needed to have trust and confidence in Mr Yang as an auditor and the quality of work he produced. Based on Mr Yang’s continued failure to perform his duties as an Audit Manager to the required standard, I had lost trust and confidence in Mr Yang as an employee, and was not satisfied that this trust and confidence could be repaired. I did not consider that Mr Yang held the technical skills, management skills or prioritisation skills required of an auditor (even at a lower classification level). I also held significant concerns about Mr Yang’s professional judgment.
8. In the Penalty Letter, I informed Mr Yang that I had received his response dated 19 January 2016, and noted the information Mr Yang provided in his response.
9. Having considered all of the material before me, including Mr Yang’s response to the Second Show Cause Letter, I decided to terminate Mr Yang’s employment with the QAO as I did not consider any of the alternative penalties proposed by Mr Yang would be a reasonable and just outcome.
I considered Mr Yang’s submissions in relation to assigning him within the QAO to a lower classification level, but I decided this was not appropriate for the same reasons as I decided to terminate his employment. Further, the concerns that had been identified in Mr Yang’s performance indicated to me that demoting Mr Yang into a position of a classification level only one or two levels lower would not have been appropriate. This is because it appeared that Mr Yang did not understand the fundamental auditing principles which all auditors are required to take into account when conducting an audit. I could not have transferred Mr Yang to another area of the QAO, such as IT, HR or Finance, given Mr Yang’s experience is limited to auditing and the QAO is a small organisation with only limited non-audit roles.
10. I was aware that I could take a range of disciplinary actions including not taking any disciplinary action against Mr Yang. However, having read and considered all the material I formed the view that termination of employment was the only appropriate penalty in relation to Mr Yang’s continued unsatisfactory performance."
Later, in his witness statement, when addressing the topic of why it would be inappropriate for the Commission to reinstate Mr Yang if his termination was found to be harsh, unjust or unreasonable, Mr Close said:
"63. I consider that it is essential to have trust and confidence in each and every auditor employed by the QAO, as authorised representatives of the Auditor-General, to ensure the Auditor-General performs his statutory obligation to form an opinion on the reliability of financial statements produced by public sector entities in Queensland.
64. Taking into account Mr Yang’s consistent failure to perform his duties to the required standard, despite the provision of feedback and support, I would have no confidence that if Mr Yang were reinstated that he would be able to perform his role as an Audit Manager competently, carefully and efficiently.
65. Mr Yang’s assertions throughout the PIP and show cause processes, particularly relating to foundation level auditing concepts and his understanding of audit quality, demonstrate to me that I would be unable ethically to reinstate Mr Yang at any level within the organisation to manage or contribute to an audit, based on the auditing professional standards, and I could not knowingly ask any QAO staff member to do the same.
66. If Mr Yang was to be reinstated, I do not believe that there is any meaningful work that could be allocated to him given Mr George’s view that Mr Yang is not competent to be assigned to an audit engagement team. Whilst training would be necessary if Mr Yang was to be reinstated to ensure he was up-to-date with current auditing standards, I do not consider this would resolve the concerns that were held with Mr Yang’s performance prior to his termination.
67. Despite the lengthy PIP process undertaken, Mr Yang has not been prepared to acknowledge that his performance needs improvement. It is also evident from Mr Yang’s witness statement in these proceedings, dated 24 November 2016, that he still has no self-awareness of the issues with his performance."
In the course of commenting on the term "auditor mindset", Mr Close indirectly reinforced some of the points he made above when he said:
"77. The phrase 'auditor mindset' relates to the inherent professional traits and requirements of audit professionals. Generally, it is used to refer to an auditor’s professional judgment and scepticism, objectivity and independence. Competent auditors will challenge and evaluate the information that is put to them as part of the audit, and not merely accept it as being accurate.
78. Based on the PIP documentation and feedback provided to Mr Yang, it did not appear that Mr Yang had the requisite professional judgment that is expected of an Auditor."
Was the termination of Mr Yang's employment harsh, unjust and unreasonable?
Section 1023 of the Industrial Relations Act 2016 provides that if a person started a proceeding under the Industrial Relations Act 1999 (the repealed Act), and the proceeding had not ended, the repealed Act continues to apply to the proceeding. Accordingly, in deciding this matter the Commission is required to have regard to s 77 of the repealed Act, which relevantly provides:
"77 Matters to be considered in deciding an application
In deciding whether a dismissal was harsh, unjust or unreasonable, the commission must consider–
(a) whether the employee was notified of the reason for dismissal; and
(b) whether the dismissal related to–
(i)the operational requirements of the employer’s undertaking, establishment or service; or
(ii)the employee’s conduct, capacity or performance; and
(c) if the dismissal relates to the employee’s conduct, capacity or performance–
(i)whether the employee had been warned about the conduct, capacity or performance; or
(ii)whether the employee was given an opportunity to respond to the allegation about the conduct, capacity or performance; and
(d) any other matters the commission considers relevant."
It is obvious from the material recorded above that:
· Mr Yang was notified of the reason for his dismissal; and
· the dismissal related to his capacity or performance; and
· Mr Yang had been warned about his capacity or performance; and
· he was provided an opportunity to respond to the allegations about his capacity and performance by way of his participation in a PIP process between 22 December and 9 April, as well as the opportunity to respond to QAO's concerns about his capacity and performance as reflected in the show cause notices of 30 July 2015, 9 October 2015 and 22 December 2015.
In terms of the provisions of s 77(d) of the repealed Act, I propose to set out a number of observations and comments below.
As I noted in paragraphs [5], [7], [8] and [13] above, Mr Yang demonstrated a concerning lack of awareness of what appeared to be fundamental terms, expressions and auditing procedures as they related to QAO during his questioning of Mr George, Mr Flynn and Mr Close. For example, and despite the fact he had been provided with assistance, guidance and training by Messrs Jiang, George and Flynn during the period May 2014 until September 2015, he appeared still not to have any real appreciation or understanding of the terms "over-auditing", "risk based auditing" and "zero based budgeting".
Further, his questioning of Mr Close about how any difference of opinion between himself and Mr George about risk factors in designing an audit should be resolved was, rightly in my view, strongly criticised by Mr Close who said:[8]
"…the particular statement or assertion that you made around a difference of opinion really did demonstrate to me that there was a lack of understanding of foundation audit concepts in relation to particularly ASA220 and also ASA200 conduct and engagement of audit."
[8] T3-22.
The fact that Mr Yang continued to challenge Mr Close immediately following the above comment, by questioning the alleged validity of a superior officer overriding an inferior officer's decision in the case of conflict, simply served to demonstrate Mr Yang's lack of knowledge of what are fundamental auditing principals. An Engagement Leader's view always prevails.
In addition, Mr Yang's questioning of Mr Close about the latter's concern at his involvement in assisting a client to prepare a position paper on the depreciation matter, referred to at paragraph [22], revealed that Mr Yang lacked an appreciation of the need for an auditor to be independent of the client so as to avoid the potential for conflict, whether it be perceived or real. It was Mr Yang's view, a point which he did not resile from, that he was "value adding" - a concept which Mr Close totally rejected.
Conclusion
Each of Mr George, Mr Flynn and (in particular) Mr Close gave evidence under cross-examination that Mr Yang did not have the requisite levels of skill, knowledge, professional judgement and professional scepticism necessary to be an auditor at his previous level (PO5), or even lower.
Indeed, Mr Close's evidence was to the effect that when he considered demotion of Mr Yang to a lower level, as opposed to his termination, he concluded that Mr Yang's depth of professional knowledge, judgment, scepticism and awareness of the need to remain independent meant that he could really only be placed at the graduate auditor level - which he felt was not a practical solution.
Further, both Mr George and Mr Close said that, given Mr Yang's identified deficiencies, they could not ethically assign him to an audit team at anything other than a base level role, given their respective obligations as Engagement Leaders under the Australian Auditing Standards.
Nothing in Mr Yang's evidence or submissions caused me to doubt such assessment. Not only were large parts of Mr Yang's evidence fanciful, e.g. his claim that he did not know that a PIP process had commenced and was required to deduce that fact, as well as his claim that he was yelled at in the meeting on 16 December 2014, he rarely disputed any of the factual evidence provided by QAO's witnesses.
Further, his questioning of the witnesses revealed, as stated several times above, a disturbing lack of knowledge and general awareness of what all the other witnesses agreed were the fundamental qualities expected of an Auditor.
Everything placed before me having been considered, most relevantly Mr Close's evidence as recorded at paragraphs [25] to [27] above - which I accept as an accurate assessment - I find there was nothing harsh, unjust or unreasonable in Mr Close's decision to terminate Mr Yang's employment on 12 February 2016 on the basis he had performed his duties carelessly, incompetently or inefficiently.
For the foregoing reasons, I dismiss Mr Yang's application in matter TD/2016/15. I make no order as to costs.
I determine and order accordingly.
Performance Improvement Plan – John Yang
| Name of employee | John Yang | ||||
| Job title | Audit Manager | ||||
| Division | Financial Audit Services | ||||
| Date of Initial Meeting | 22 December 2014 | ||||
| Review Dates | Weekly meetings with Sector Director to determine progress against plan. Formal Review Date: _____________________ | ||||
| Issues | Improvement area | Competencies | Deliverables | Expectations | |
| Client strategies for Client S and Client Q required a lot of rework Zero based budget initially drafted for Client D was overly inflated in some areas | Look at ways of undertaking his work more efficiently and to an appropriate level of quality | Use logic and problem solving when undertaking audit tasks to produce an effective audit plan Lead the scoping, risk identification and audit planning process for medium sized audits | Prepare the following deliverables to the required level of quality and prepare a report to present these deliverables to the Assistant Auditors-General (AAGs) by the end of February 2015: Prepare zero based budgets for the following audits: · Client G · Client A Prepare Client Strategy – Client G by 28/1/15 and present to Audit and Risk Committee (ARC) on 11/2/15 Prepare Client Strategy – Client D by 16/2/15 and present to the ARC on 23/2/15 Prepare and present the Client Strategy for Client A to the CEO and Finance Manager by 20/2/15 | Hold meetings with key stakeholders Communicate key areas of audit risks and focus to both internal and external stakeholders Effectively explain and support the proposed budget / audit fee to stakeholders Ability to draft a Client Strategy that requires minimal rework Effectively present and explain Client Strategies at the Audit and Risk Committees | |
| Has not achieved deliverables by the timeframes that were initially agreed to Significant number of uncompleted 2014-15 planning procedures for Client Q and Client S | Ability to set realistic budgets and meet milestones Ability to finalise work to an appropriate level of quality | Manage assigned tasks to ensure timely completion of work to required quality standards | Finalise planning to the required level of quality for the following 2014-15 audits: · Client S IPSAM file by 9/1/15 · Client D (#) and Client G by 6/2/15 · Client Q IPSAM File by 13/2/15 · Client A by 20/2/15 (#) Finalise planning on semi-completed procedures on the Client D audit and prepare a report to the AAGs on the impact of data analytics on the client strategy and audit procedures to be undertaken | Streamline audit procedures to reduce over auditing. Prepare a report to the AAGs which explain: 1. Why audit procedures have been removed / added 2. The estimated time and cost benefit 3. Impact on quality and risk Planning on all IPSAM files completed by the agreed deliverable dates Review of audit procedures completed by team members. Provision of prompts to staff where required Completion / Review of IPSAM procedures to an appropriate level of quality | |
| Where timeframes are met it is usually at the detriment of quality | Finalise work to an acceptable level of quality | Effectively apply technical auditing knowledge and skills | Meet with Client A in late January to provide advice on potential variation to Commonwealth agreement | Delivery of appropriate advice in relation to the audit of Commonwealth Certificates Design audit procedures to address the going concern risks relating to Client A | |
Please note - If the expected outcomes are not achieved/improvements attained more formal action will be initiated under Policy P5.
Signed:
……………………………………………………………. …………………………………………………………….
John Yang Nick George
Audit Manager Sector Director
……………………………………………………………. …………………………………………………………….
Karen Johnson P Brahman
Assistant Auditor-General Assistant Auditor-General
Performance Improvement Plan – John Yang – Summary Document
| Name of employee | John Yang |
| Job title | Audit Manager |
| Division | Financial Audit Services |
| Date of Meeting | 21 April 2015 [sic - should be 22 April 2015] |
| This document provides an overall summary of the three revised Performance Improvement Plans (PIPs) that were put in place during the period 22 December 2014 to 2 April 2015 [sic - should be 9 April 2015] | |
Process
- Original PIP put in place 22 December 2014
- Met John Yang on 20 Jan – return from leave
- Formal Meeting held with John Yang, (Support Person) Karen Johnson, Natalie Townsend and Nick George– revised PIP
- Formal Review Meeting held with John Yang, (OT), Natalie Townsend and Nick George
- Issued a revised PIP on 5 March 2015 – extended PIP to 20 March 2015
- Formal Review Meeting held with John Yang, Natalie Townsend and Nick George on23 March – PIP review
- Issued a further PIP on 24 March 2015 – extended PIP to 2 April 2015
- Final Formal Review Meeting held with John Yang, (OT), Natalie Townsend and Nick George on 9 April 2015
- In addition to above held further meetings to discuss progress (5,16 and 27 Feb; 18 and 30 March; 7 April)
- Also had various other phone conservations and ad hoc catch up meetings to clarify any matters or update on progress
| Issues | Improvement area | Competencies | Deliverables | Expectations | Overall summary |
| Client strategies for Client S and Client Q required a lot of rework. Zero based budget initially drafted for Client D was overly inflated in some areas. | Look at ways of undertaking his work more efficiently and to an appropriate level of quality. | Use logic and problem solving when undertaking audit tasks to produce an effective audit plan. Lead the scoping, risk identification and audit planning process for medium sized audits. | Prepare the following deliverables to the required level of quality and prepare a report to present these deliverables to the Assistant Auditors-General (AAGs) by the end of February 2015: Prepare zero based budgets for the following audits: · Client G. · Client A. Prepare Client Strategy (CS) – Client G by 28/1/15 and present to Audit and Risk Committee (ARC) on 11/2/15. | Hold meetings with key stakeholders. Communicate key areas of audit risks and focus to both internal and external stakeholders. Effectively explain and support the proposed budget / audit fee to stakeholders. Ability to draft a Client Strategy that requires minimal rework. Effectively present and explain Client Strategies at the Audit and Risk Committees. | Client Strategies Client G Rationale for time delay · Resourcing issues (staff illness) · Time taken to understand knowledge of client operations and apply to planning of audit was considered excessive · Inability to manage multiple audits/tasks Key Issues · Initial Draft strategy provided on 5/2/15 was not complete and required rework · 40 review prompts (hot review) – insufficient documentation supporting audit strategy. This included conclusions not supported by documentation, procedures not tailored, SIS not linked to control procedures. · Zero based budget did not demonstrate focus on areas of risk and full understanding of entity (eg testing of QTC loans) Impact Due to quality of planning – need to reassess some areas in preparation for interim audit visit (eg obtain an understanding of the transactions that make up expenditure related account balances) |
| Prepare Client Strategy – Client D by 16/2/15 and present to the ARC on 23/2/15. | Client D Original due date -16/2/15 Key Issues · 39 review prompts (cold review) - points included: documented results did not fully answer the intent of what the audit procedures were asking, limited documentation provided to support some conclusions. · Feedback at ARC meeting (23/2/15) was that some comments on CSO were not factually correct Impact Due to quality of planning – additional work required to address review prompts. A review of responses to initial review prompts questions whether the most efficient approach has been taken (eg payroll substantive procedures, full understanding of CSO transaction) | ||||
| Prepare and present the Client Strategy for Client A to the CEO and Finance Manager by 20/2/15. Finalise planning to the required level of quality for the following 2014‑15 audits: Client A by 20/2/15 | Client A Original due date – 20/2/15 Client strategy issued 23/3/15 – delay mainly due to client’s late feedback | ||||
| Has not achieved deliverables by the timeframes that were initially agreed to. Significant number of uncompleted 2014-15 planning procedures for Client Q and Client S. | Ability to set realistic budgets and meet milestones. Ability to finalise work to an appropriate level of quality. | Manage assigned tasks to ensure timely completion of work to required quality standards. | Finalise planning to the required level of quality for the following 2014‑15 audits: Client S IPSAM file by 9/1/15 Finalise the 2014-15 interim audit for Client S to the required level of quality by the 31 March 2015. Specifically: · All interim audit procedures / documents are to be either completed by John and ready for review; or reviewed by John. · All audit issues raised are to be completed and include management responses, where appropriate. All prior year issues are to be updated within IPSAM and · Completion and issuance of the interim report to management. | Streamline audit procedures to reduce over auditing. Prepare a report to the AAGs which explain: Why audit procedures have been removed / added. The estimated time and cost benefit. Impact on quality and risk. Planning on all IPSAM files completed by the agreed deliverable dates Review of audit procedures completed by team members. Provision of prompts to staff where required. Completion / Review of IPSAM procedures to an appropriate level of quality. | Client S IPSAM file Steps in file completed by due date – 9/1/15 Client S – interim audit/ letter Original due date: 20/3/15 Rationale for delay · Late release of template · Issues not completed to appropriate standard · Inability to manage multiple audits/tasks Key Issues · 2 audit issues included in draft letter were subsequently omitted because results not available (water metering) and insufficient evidence to support issue (EFT payment) · Did not clearly articulate status of issues at a meeting with Acting CFO Impacts · Letter and issues were substantially revised putting at risk in meeting deliverable by 30/4/15 · Client observation could imply that we do not understand their entity/business |
| Finalise planning to the required level of quality for the following 2014‑15 audits: · Client D (#) and Client G by 6/2/15. (#) Finalise planning on semi-completed procedures on the Client D audit and prepare a report to the AAGs on the impact of data analytics on the client strategy and audit procedures to be undertaken. · Commence review of Client D non-commercial assets and follow up of prior year issues. | Client D IPSAM file Rationale for delay · Staff illness · Inability to manage multiple audits/tasks Issues | ||||
| Finalise planning to the required level of quality for the following 2014‑15 audits: · Client D (#) and Client G by 6/2/15 | Client G IPSAM file · Staff illness · Inability to manage multiple audits/tasks Issues | ||||
| · Client Q IPSAM File by 13/2/15 | Client Q IPSAM file Original due date - 13/02/15 Revised dates: 20/2/15; 31/3/15 Not completed to date Rationale for delay · Staff illness · Inability to manage multiple audits/tasks · Misunderstanding of scope of review work required Issues · Review not completed to date | ||||
| Present action plan to reduce over auditing to AAG by 31 March. | Action plan – over auditing Overall comments Presentation to AAG – provided a basic understanding of overall audit process but not at the level of a manager in showing how efficiencies gained could be applied in reducing the number of audit visits and audit costs. | ||||
| Where timeframes are met it is usually at the detriment of quality. | Finalise work to an acceptable level of quality. | Effectively apply technical auditing knowledge and skills. | Meet with Client A in late January to provide advice on potential variation to Commonwealth agreement. All review comments are to be responded to and corrected within IPSAM where relevant as follows -. Client G - by 9 March | Delivery of appropriate advice in relation to the audit of Commonwealth Certificates. Design audit procedures to address the going concern risks relating to the Client A. Completion of planning procedures to a satisfactory level of quality. Satisfactorily apply previous feedback to other jobs. | Client A Action taken and work completed Review Comments Client G review comments 41 comments raised 24/2/15 Response due: 6/3/15 Overall comments |
| Client D – by 27 March | Client D review comments 39 comments raised 26/2/15 Response due: 6/3/15 17 of review comments appropriately addressed | ||||
| Client Q – by 31 March Where relevant, these review comments are to be updated to the respective IPSAM files and CS. | Client Q review comments– not commenced Not evident that the outcome from review comments (Client G & Client D) has been applied to Client S planning | ||||
| Routine tasks expected of an Audit Manager are sometimes not completed in a timely manner. Ad hoc requests are sometimes fulfilled but at the detriment of other responsibilities. | Proactively deal with routine tasks without prompting. Completion of ad hoc requests. | Effectively carry out the role and responsibilities of an Audit Manager. | Undertake routine tasks expected of an Audit Manager and respond to ad hoc queries in a timely manner. Examples include: · running cost assessment sheets and updating the engagement leader on costs and any possible overruns; · keeping track of WIP, requesting the raising of invoices, and updating the client as appropriate; · follow up status of audit committee meetings and preparation and review of agenda papers; · updating resourcing spreadsheets; · responding to area of audit focus queries. | Carry out routine tasks expected of an audit manager with prompting or coaching. Respond to draft queries in a timely manner and to an appropriate level of quality. | Issues noted Need to monitor budgets. Actual times were not being monitored with budgeted hours. Over budget for Client D & Client G – level of hours not in line with work done in file. Resourcing not always maintained up to date – not identifying resource gaps in advance Completed areas of audit focus in a timely manner Impacts Resources not used efficiently Client may not be satisfied with audit services Other comments Improvement noted in managing tasks after prompting but this came at the detriment of other responsibilities (missed milestones in finalising review comments, audit strategies) |
Overall comments
Over the course of the PIP, whilst I acknowledge that John Yang participated well in the plan and tried hard to improve, my overall comments are as follows:
Deliverables slipping and quality of work provided is not consistently up to the level expected of an Audit Manager.
Majority of strategies not delivered on time.
Number of review comments noted around the quality of audit.
Number of review comments not addressed to sufficient level of detail or remain outstanding.
Inability to manage multiple tasks and conflicting deadlines prove challenging.
Managing resourcing of self and relevant team members is also identified as a weakness and not to the required Audit Manager standard.
PIPs revised on 3 occasions to allow for reasonable adjustment of process undertaken.
Basic/fundamental skills such as self checking own work ready for engagement leader signature, not being proactive in terms of putting into action plans to address slippages in deliverables.
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