International Journal of Auditing – April 2009
Gene L. Dodaro, Acting Comptroller General, U.S. Government Accountability Office
"To ensure continued stability and protect the economic gains of both developed and developing countries, we need to consider deep and systemic reforms based on an inclusive multilateralism for a global financial system that can better meet the challenges of the 21st century."
Statement on the global financial crisis by the U.N Secretary-General, November 2008
The current financial crisis presents many challenges to countries around the world and to their supreme audit institutions (SAI). It demands that SAIs redouble their efforts to help provide accountability and lessons learned for their governments. Although SAIs differ in their legal authorities and mandates, they are generally well positioned to provide independent and objective analyses of these events and can contribute much to efforts to address them. In keeping with these concerns and considerations, the INTOSAI Governing Board established the Task Force on the Global Financial Crisis at its 58th meeting in Vienna in November 2008. The U.S. Government Accountability Office (GAO) is pleased to have been asked to chair this important effort.
The initial meetings of the INTOSAI Task Force on the Global Financial Crisis convened via teleconference on February 26, 2009, to discuss challenges that SAIs are facing in the current economic situation. To accommodate time zones differences, two teleconferences were organized, and representatives from 17 of the 23 task force member countries participated. The first teleconference was held with SAI representatives from Austria, Canada, Chile, Cyprus, Estonia, Hungary, Italy, Mexico, Morocco, Netherlands, Russia, Spain, Sweden, and the United Kingdom. The second teleconference was held with SAI representatives from China and Indonesia.
Discussion during both teleconferences focused on member feedback on the draft terms of reference previously circulated by GAO. Specifically, the terms of reference cover the task force’s proposed purpose, goals and objectives; meeting and reporting procedures; membership and organization; and expected products and outcomes. The proposed goals of the task force include developing recommendations for SAIs to help minimize the impact of future financial crises, developing resources for SAIs to use to monitor and audit financial regulatory systems, and building relationships with key international organizations. Members provided positive feedback on the draft terms of reference and made a number of suggestions to refine the goals, objectives, and scope. Some countries provided written comments to the draft prior to the meeting, and each country provided oral comments during the teleconferences. Most notably, members expressed interest in expanding the scope of the task force to cover fiscal crises and oversight of economic stimulus packages in addition to issues exclusively related to the financial crisis.
Members also discussed various options for dividing task force participants into sub-groups—for example, by language, type of auditing system, or financial versus economic issues. The task force will explore establishing its own Web site to provide specific information on the terms of reference, the work plan, and other task force products and plans to report at the 2010 INCOSAI in South Africa. In addition, this Journal will help task force members stay informed and connected.
In summary, major decisions made during these teleconferences include the following:
In the United States, GAO has been given a significant role in the oversight of government responses to the financial crisis. Currently, GAO is required to report every 60 days on its findings related to the oversight of the $700 billion in Troubled Asset Relief Program funds the U.S. government has allocated to provide asset relief to financial institutions. As of mid-March 2009, GAO had testified at eight U.S. congressional hearings on the status of efforts to address transparency and accountability in this process and has issued numerous reports on topics such as modernizing the regulatory system. Additionally, GAO has been tasked with conducting bimonthly reviews of the use of government stimulus funds in 16 states and selected localities. In accordance with the American Recovery and Reinvestment Act (ARRA), GAO will collaborate with state and local auditors and inspectors general from various federal agencies to examine how these funds are being used at the state and local levels and the extent to which they are achieving the purposes of ARRA. We recognize that these reporting requirements may not be the norm for SAIs in other countries and look forward to future discussions on the varying roles held by SAIs in this time of opportunity for the auditing community.
These are challenging times for all of us. As we begin to identify and leverage the collective efforts of SAIs, the task force will be reaching out to you for your insights, experience and expertise on the demands and effects of the crisis.
For additional information, contact GAO at email@example.com.