We undertake quality assurance (QA) reviews of financial models, used by government to make financial and business decisions including estimating costs and testing policy options.
Outputs from models underpin decisions made by departments and arm's-length bodies that often have very real impacts on people's lives.
GAD's independent QA review helps by:
- verifying model calculations are working correctly, and that models and outputs are robust
- validating that data, assumptions, and the modelling approach are fit for purpose
- reviewing model documentation to ensure the model is used and updated correctly
- assessing whether the model has been subjected to appropriate scrutiny and challenge
- assuring the limitations and uncertainty of model outputs are adequately communicated
We have proven methodology and tools for quality assuring models across the public sector to provide confidence in their use.
An example of where we have undertaken a QA modelling project was with Reclaim Fund Limited (RFL). It receives money from dormant bank and building society accounts and distributes a proportion of the funds to UK charities and social enterprises.
GAD verified that the model was built in line with the specification, and provided assurance that the data processing, methodology and assumptions were fit for the intended purpose. GAD also reviewed the communication of results to the Board and Audit and Risk Committee to ensure that risk and uncertainty were sufficiently communicated.
We built independent challenger models using R, which enabled us to validate the reasonableness of the overall outputs from the model, and to test individual components of the model.
