International Journal of Auditing – July 2003

INTOSAI: 50 Years of Cooperation between SAIs

This year, INTOSAI celebrates its 50th anniversary. It has grown from a small group of 34 supreme audit institutions (SAIs) that met in Cuba in 1953 to become the voice of the worldwide SAI community. Its nearly 190 members represent a wide spectrum of audit institutions working in many different ways to provide their parliaments and citizens with an effective audit of public finances. INTOSAI, as an apolitical international institution working for the mutual exchange of ideas on best practice, is without parallel anywhere else in the public sector.

So how and why has this happened? The simple answer is that INTOSAI has grown organically because its members and, in particular, the heads of SAIs place great value on the opportunity to meet their international colleagues to discuss matters of mutual concern. It is appropriate, therefore, that the XVIII INCOSAI in Budapest in 2004 will examine the possibilities for enhancing bilateral and multilateral cooperation. It is a particular honour that the United Kingdom National Audit Office has been asked to prepare the principal paper on this important subject.

Recent years have seen a substantial growth in bilateral and multilateral cooperation among SAIs. Increasingly, SAIs recognise the need to learn from each other if they are to keep pace with the rapid changes in public sector management, accounting and auditing standards, and expectations of the role of public auditors. Many formal and informal structures have been developed by SAIs to identify and promote good practice and to tackle issues that cross national boundaries. More recently, there has also been a growing recognition of the benefits of helping developing and transitional SAIs to modernise.

In upholding its motto that mutual experience benefits all, INTOSAI has been at the heart of these developments and has sought to encourage and support cooperation among members. Through its congresses, standing committees, working groups, task forces, meetings, and seminars, it has worked to facilitate the effective transfer of knowledge among SAIs. Over the last 15 years, through its support for the INTOSAI Development Initiative (IDI), INTOSAI has launched a major professional development initiative to build training capacity across SAIs.

Why and How Do We Cooperate?

There are perhaps three distinct drivers for multilateral and bilateral cooperation
among SAIs. These are the need to

  • promote accountability and good governance,
  • promote good practice, and
  • support institutional capacity building.

Cooperation to Promote Accountability

One consequence of globalisation is the significant increase in the joint working between nations through international treaties and cooperation projects to achieve common ends for the benefit of the citizens of their countries. International treaties may involve significant shifts of responsibility from national governments to international institutions—for example, the move towards a closer European Union by many countries in Europe and the creation of Mercosur in Latin America. International multilateral or bilateral projects, such as the building of dams or the development of new defence equipment, often result in the establishment of new cooperative management structures that require a similarly joined-up audit. International treaties also generate additional national responsibilities and duties (for example, treaties relating to environmental issues), which SAIs may be called upon to examine. Multilateral and bilateral cooperation is a natural consequence of the need to hold national governments to account for policies that can only in practice be implemented internationally.

Where international treaties involve a significant transfer of national sovereignty to an unstructured institution such as the European Union, there are usually well-defined structures for the involvement of SAIs. There are also well established guidelines for the audit of the entities of the United Nations system by the community of SAIs. The XVII INCOSAI in Seoul in 2001 established a working group to examine the audit arrangements for other international institutions with less well-defined auditing arrangements.

Many SAIs also work together on audits related to common areas of interest that cross national boundaries—for example, infrastructure projects, customs, immigration, and development or environmental issues. This cooperation takes many different forms, and it is increasingly recognised that good accountability arrangements and the involvement of SAIs builds trust in international cooperation.

Cooperation to Promote Good Practice

SAIs also cooperate to learn about how others deal with similar problems and issues. Ideas on good governance, accountability, and management of public resources move rapidly among nations and across continents. These changes call for SAIs to respond quickly to new audit approaches and techniques. Where some SAIs have found ways of auditing a new initiative, such as privatisations of public enterprises, then that experience can be made available to other countries tackling the same issues. This does not mean that one country must always copy a model or an approach developed elsewhere, but countries should be aware of such models, critically examine them and adapt them, if relevant, to their own circumstances.

Across the SAI community, there are regular programmes of formal high-level bilateral visits as well as less formal professional exchanges. There is also a significant volume of staff exchanges. Staff exchanges provide an opportunity for both the recipient and the provider to learn from first-hand practical experience of each other’s approaches and methods. There are telephone and e-mail exchanges between staff working on similar audits. Reports and other publications are regularly shared via Web sites and mail. In many ways, these exchanges are the bedrock of multilateral and bilateral cooperation. Good communication is the foundation for mutual trust, respect, and understanding of the cultural, political, and administrative differences between SAIs and is an essential pre-condition for effective cooperation.

SAIs use many different formal ways to identify and promote good practice. First and foremost are the committee, working group, and task force structures established within the framework of INTOSAI both internationally and regionally. The committees and working groups provide a range of good practice guidance as well as an opportunity for SAIs with similar objectives and needs to meet regularly to share practical experiences in a particular area of work.

Cooperation to Support Institutional Capacity Building

Cooperation is also driven by the desire to help build capacity across the SAI community. SAIs have a responsibility to find constructive and culturally appropriate ways of cooperating to help build capacity and establish, or reestablish, effective SAIs in those countries that wish to develop their systems of public accountability. Major donor institutions increasingly recognize the contribution sound public audit can make to good governance and accountability and the importance of modernising audit institutions.

This is a challenge that individual SAIs are unlikely to be able to meet alone. However, by pooling knowledge and expertise, SAIs can improve the services they provide to their communities and governments Across the SAI community, there is a vast appetite to modernise. Audit institutions want to upgrade their audit practices to provide their parliaments, governments, and citizens with better, more useful information.

INTOSAI has a clear strategy related to the worldwide development of training capacity through IDI. However, a further challenge is to ensure that the skills and knowledge acquired during training are being applied

Capacity building projects are longer term arrangements aimed at helping an SAI develop and modernise. Such projects are likely to engage with most aspects of running a modern audit institution, including strategic planning, resource management, procurement, human resource development, public relations, and training and support in conducting modern financial and performance audits. These major projects tend to be funded by grants from the European Commission and national development agencies or by loans provided by the World Bank and other development banks. Currently, there are not good practice guidelines on how to take such work forward.

As an organization, INTOSAI must be flexible and develop to meet the evolving needs of its members. It is, I think, essential that we retain the key characteristics of inclusiveness, cooperation, and openness that allow the organisation to respond to the real world in which its members live. We must be careful not to presume that “one size” really does fit all: to assume that what works well in one country or in one type of audit institution will do so in another is presumptuous. In reality, it is the very diversity of the ways in which SAIs tackle similar problems that provides the inspiration for changes within our own institutions. For the past 50 years, mutual experience really has benefited all the members of INTOSAI. We must work hard to ensure that the next 50 years are equally successful. I am sure that we will.