Twelfth PASAI Congress Sets New Directions for Auditing in the Pacific

The Pacific Association of Supreme Audit Institutions (PASAI)—formerly SPASAI—held its 12th congress, in Koror, Palau, July 20-24, 2009.

Participants at the12th PASAI Congress in Palau in July 2009

Participants at the12th PASAI Congress in Palau in July 2009.

As noted in the October 2008 issue of this Journal, PASAI changed its name last year to reflect the expansion of its membership. This year, in addition to conducting the usual Congress business, the members adopted a new charter and moved forward with their long-term plans to achieve their goal of “transparent, accountable, effective, and efficient use of public sector resources in the Pacific” by helping Pacific SAIs to improve the quality of public sector auditing in the Pacific to “uniformly high standards.” To that end, they approved and began implementing capacity development strategies that will significantly transform both PASAI itself and, over time, its members. They also participated in special sessions on introducing international auditing standards, using electronic auditing tools, and conducting peer reviews.

PASAI’s members include the SAIs of some of the smallest and most remote nations on earth. Many face the challenge of achieving good governance with limited resources. Some are vulnerable to the threats of rising sea levels, environmental degradation, and international corruption. This provided the context for the 12th Congress, held in the vibrant and beautiful Republic of Palau and hosted by its Acting Public Auditor, Satrunino Tewid. Other delegates included the heads of SAIs and audit offices, or their representatives, from American Samoa, Australia (National Audit Office), the Cook Islands, the Federated States of Micronesia (FSM) (the national office and the states of Kosrae, Pohnpei, and Yap), Fiji, Guam, Kiribati, the Marshall Islands, Nauru, New Zealand, Papua New Guinea, the Solomon Islands, Tonga, Tuvalu, and Vanuatu. FSM-State of Kosrae attended for the first time and was admitted as a new member during the first business meeting. Stakeholders and others who attended to support PASAI programs included the Asian Development Bank (ADB), the INTOSAI Development Initiative (IDI), the Pacific Financial Technical Assistance Center (PFTAC), the Pacific Islands Forum Secretariat, and the World Bank. Also participating in the discussions and presentations were the consultants and seconded staff working on PASAI’s strategic initiatives and programs.

Throughout the week-long discussions, delegates and stakeholders collaborated on PASAI’s future plans and programs. For several years, members of the Pacific Regional Audit Initiative (PRAI) project team have been working with PASAI members to develop a long-range regional strategy. During the week, the delegates approved two major cooperative auditing program initiatives under the PRAI: the Sub-regional Audit Support (SAS) project and the region’s first cooperative performance audit. The delegates also adopted their new charter and appointed PASAI’s first governing board. To further strengthen their organizational capacity while developing staff professional skills, delegates adopted a 3-year capacity-building program and agreed to serve on various working group or task force activities.

Transforming PASAI’s Governance Structure

The PRAI will transform PASAI from a loosely structured organization, which has been serviced administratively by the New Zealand SAI for many years, into a fully functional entity in its own right. This will require a new and more sophisticated governance structure, a full-time chief executive, and the ability to both engage and fund staff and consultants through a stand-alone secretariat.

The new PASAI charter establishes this framework. It also updates PASAI’s mandate and foundational principles, drawing on the PRAI objectives and recent INTOSAI developments, such as the Mexico Declaration on SAI Independence. Drafted by Robert Buchanan, PASAI’s legal consultant and a former Assistant Auditor-General of New Zealand, the document incorporates the key elements of INTOSAI’s statutes and other regional working groups’ constitutions but is expressed in a unique, plain language style that befits the “Pacific Way”.1

Under the charter, PASAI’s new mandate is to

  • strengthen understanding, cooperation, and coordination between its members;
  • advocate the interests of good governance—including transparency, accountability, and the need for strong and independent SAIs—to governments and others in the Pacific region;
  • build and sustain public auditing capacity across the Pacific by sharing knowledge with, and providing support to, its members;
  • assist its members in performing their auditing functions, including through cooperative audits and similar activities;
  • serve as a regional working group of INTOSAI in the interests of all SAIs in the Pacific and beyond; and
  • encourage cooperation with other regional working groups and SAIs.

The charter also embodies the four principles of the PRAI, adopted by the 11th congress, which underpin the functioning of PASAI and their interactions with each other:

  • The autonomy and independence of each member are to be respected and preserved.
  • Taking a regional approach to a common issue does not supplant a member’s individual needs.
  • PASAI’s resources are to be made available to all its members, irrespective of their geographical location or constitutional status.
  • The appropriate involvement of private sector auditors in public sector auditing, under the auspices of SAI heads, is to be supported and promoted.

Under the charter’s new governance structure, the role of the congress is to endorse PASAI’s strategic direction (as developed by the governing board) and provide guidance to the board on meeting PASAI’s objectives. Day-to-day governance will be the responsibility of the governing board, which is appointed by the congress using a democratic process. Each of the PASAI membership groupings (Melanesia, Micronesia, Polynesia, and Australia/New Zealand) nominates one SAI from among its numbers to serve on the board along with the chairperson (who is the most recent congress host), the immediate past chairperson, the host of the next congress, the secretary-general, and the executive director. The representatives are appointed for 2-year terms, which are staggered to enable a steady turnover of membership and knowledge. There is a power to co-opt the heads of other SAIs for specific purposes.

The governing board is expected to meet twice each year and may hold additional meetings by video or telephone conference as required.

The inaugural representative members of the governing board, appointed at Palau, are the SAI heads of Papua New Guinea (representing Melanesia), FSM (representing Micronesia), Tonga (representing Polynesia), and New Zealand (representing the Australia/New Zealand grouping and also holding the post of Secretary-General). They join the current chair (Palau), the immediate past chair (Cook Islands), and the host of the 2010 congress (Kiribati).

One of the key functions of the governing board is to appoint PASAI’s executive director. This position will have a vital role in implementing the PRAI, being responsible for co-coordinating all PRAI project activity, and developing relationships with governments across the region and with existing and potential donors. The governing board appointed Eroni Vatuloka, a former Auditor-General of Fiji, to this position. He is currently engaged by the ADB as the PRAI Program Coordinator and will formally take up his new role in early 2010.

Another key function of the governing board is taking steps, as needed, to enable PASAI to operate with full legal capacity in the region through either diplomatic recognition by the host government of PASAI’s secretariat or some means of incorporation. On the board’s recommendation, the congress decided to locate the secretariat in Auckland, New Zealand, on an interim basis (at least until 2011); the board will consider options for achieving legal capacity at its next meeting in November 2009.

The Congress also accepted the board’s recommendation to continue the designation of New Zealand’s SAI to hold the post of secretary-general. In the absence of the recently retired SAI head, Kevin Brady, that role was performed at the Palau Congress by Bruce Robertson, Assistant Auditor-General.

Transforming Public Sector Auditing through Cooperative Audit Opportunities

Experience in other INTOSAI regions has shown that cooperative audits increase capacity as team members learn from each other, develop better understanding of relevant auditing standards and practices, and practice skills while completing actual audit engagements. Additionally, it is generally recognized that on-the-job training, under the direction of qualified leadership, is the most effective form of professional development. Drawing on this experience, PASAI has launched two regional audits designed to develop expertise while meeting the needs of the SAIs’ clients.

Since 2007, the SAS program has been an integral part of the PRAI. SAS’s goal is to ensure that the SAIs in Kiribati, Nauru, and Tuvalu prepare timely financial audits that achieve a significant impact. Isaako Kine, Tuvalu’s Auditor General, chairs the project, working with Alexander George, the SAS Program Coordinator, and Beulah Danuakamakama, the team’s Audit Expert. This major capacity-building project will assist smaller island nations with clearing outstanding audits while developing auditing tools, providing on-the-job-training for the SAI staff, and in the longer term, contributing to the SAIs’ own auditing capacity. Two members from Kiribati and one each from Nauru and Tuvalu will soon begin working with the Program Coordinator and the Audit Expert on selected entities in Tuvalu. After assessing the first audit, the teams will move on to work in Kiribati and Nauru.

A cooperative performance audit was initially discussed at the 2008 congress; based on decisions taken at this congress, the team members will be identifying staff and beginning their work. The coordinators for this team are Jonathan Keate, from the Office of the Auditor General of New Zealand and a member of INTOSAI’s Working Group on Environmental Auditing; Claire Kelly, a consultant to the ADB; and IDI’s Pritom Phookun. The team will include representatives from the SAIs of the Cook Islands, Fiji, FSM, Guam, Palau, Papua New Guinea, and Tonga. Samoa and the Marshall Islands may also be joining the team. While in Palau, the team agreed on the audit objective—the effectiveness of solid waste management—and established a timeline for its work. The audit team members are having their planning meeting in October and then will begin their fieldwork. They expect to issue individual national reports and a joint report by June 2010.

Transforming SAIs and Their Staffs

Adapting INTOSAI’s capacity-building model and recognizing that development takes place at both the organizational and staff levels, PASAI adopted a 3-year capacity-building plan (2010-2012) addressing three major areas:

  • guidelines/manuals supporting standards, practices and methodologies;
  • education, training, and certification; and
  • quality assurance and peer review.

The plan was developed by Lin Weeks, the PRAI development team’s human resource management (HRM) expert and former Director of International Liaison at the U.S. Government Accountability Office. The plan’s objective is to provide SAIs with relevant, practical, authoritative, guidelines for implementing internationally recognized professional standards, practices, and methodologies. During the congress, delegates indicated the areas in which they were interested in working. At its next meeting, the governing board will establish working groups to develop manuals or guidelines dealing with HRM, financial auditing, performance auditing, quality assurance, and reporting guidelines.

The congress also adopted a generic set of job descriptions and competencies that will be available to SAIs in developing their HRM practices. A number of working groups, to be named by the governing board, will use this material to design and deliver a long-term career training and certification program in conjunction with universities and professional bodies. This will ensure that there is a coordinated, systematic approach to training and professional development across the region. At the same time, other working groups will begin outreach to local universities and professional certification bodies to ensure that university curricula meet the SAIs’ needs as well as the requirements of professional certification bodies.

As the final step in promoting best practices and continuous improvement, PASAI will implement a peer review program by 2012. This will provide audited entities, stakeholders, and citizens with assurance that an SAI is meeting the highest professional standards and contributing to enhancing transparency, accountability, and good governance.

In presenting the 3-year plan, Lin Weeks emphasized that many other INTOSAI regional working groups have already created manuals, developed courses, and begun peer review activities. In the spirit of INTOSAI’s motto, Mutual Experience Benefits All, she encouraged PASAI to reach out to the other groups for advice, guidance, and samples when implementing its own program. Noting the PRAI’s emphasis on transformative activities, and citing remarks made earlier by David Walker, the former Comptroller General of the United States, she reminded delegates that “transformation is about creating the future rather than perfecting the past”—but it isn’t easy and it does take time.

Technical Presentations

Aside from the PASAI business sessions and discussions, the congress also included three technical sessions.

Representatives of the Pacific Island Training Initiative of the Washington, D.C.-based Graduate School presented two of the sessions. Jeanne Yamamura presented an overview of international auditing standards—what they are, how they are developed and issued, and how they can be introduced and applied in the public sector. Steve Morgan spoke about peer reviews, giving particular emphasis to their benefits and how they are actually implemented

Lee Siu Wei, Business Development Manager, CCH TeamMate, delivered the third technical presentation. She demonstrated the benefits of automating the audit process with CCH TeamMate by taking the delegates through a series of examples.

Final Congress Decisions

As the Congress drew to a close, other important decisions were made:

  • The delegates endorsed a special note of appreciation to be sent to Kevin Brady, the recently retired Controller and Auditor-General of New Zealand, for his many years of service as PASAI’s Secretary-General.
  • The next PASAI congress will be held in Kiribati in 2010, and Tonga will host the 2011 Congress.
  • Paul Allsworth, Cook Islands, will continue to represent PASAI on the INTOSAI Governing Board.
  • Papua New Guinea will host the next meeting of PASAI’s governing board in November 2009.

For further information about PASAI, please contact PASAI’s Program Coordinator/Executive Director, Eroni Vatuloka:

Fax: +679 331 8074
Email: evatuloka1@connect.com.fj; Eroni.vatuloka@yahoo.com

1. http://www.pacificplan.org/tiki-page.php?pageName=The+Pacific+Plan