International Journal of Government Auditing – Autumn 2015
H.E. Dr. Harib Al Amimi, President of the state audit institution (SAI) of the United Arab Emirates, chaired the UAE delegation participating in the Arab Organization of Supreme Audit Institutions (ARABOSAI) Executive Council 51st meeting held in Tunisia March 23 – 25, 2015.
The meeting agenda included many important topics, such as
During the meeting the final accounts of 2013 and 2014, as well as the estimated budget of 2015, were approved, as was a budget to cover the expenses of the 51st meeting of the executive council.
SAIs also presented reports about their participation in committees and workgroups stemming from INTOSAI. SAIs which would benefit from the financial grant to participate in the scientific and training meetings to be held in 2015 were named, and the report of the 2014 ARABOSAI strategic planning team of 2014 was presented.
For more information about the Arab Organization of Supreme Audit Institutions, visit www.arabosai.org/En/
In the second week of September, 88 delegates from 40 organizations gathered in Stockholm, Sweden, to attend the second annual meeting of the Capacity Building Committee (CBC).
The CBC Leadership and Secretariat invited CBC members, including those from all INTOSAI regions and all INTOSAI main committees, and stakeholders from the World Bank, OECD IFAC, IDI, GIZ and Sida, to an intense meeting covering CBC work streams, theme discussions and steering committee issues.
The program started off with the Committee’s four work streams meeting with their respective members. Members worked on issues within the frameworks of IntoSAINT (chaired by the Netherlands), Cooperative Audits (chaired by Peru), Peer Review (chaired by Slovakia) and Certification of Auditors (chaired by South Africa).
New for this year’s meeting was the gathering of the Regional Forum on Capacity Development (RFCD), a forum which invites the INTOSAI regions to support each other and to share knowledge and experiences in various capacity development areas. The Regional Forum works to ensure continuity of the CBC’s attention to strategic regional issues. The forum worked on key regional capacity development issues identified during last year’s CBC meeting in Lima. Brief updates from the regions were also shared, on issues such as distance learning (OLACEFS / ARABOSAI /ASOSAI), SAI PMF implementation (AFROSA-E / IDI), independence (AFROSAI (CREFIAF) /CAROSAI) and the good practices database (EUROSAI).
Early in the CBC annual meeting agenda was a speech given by invited speaker Mr. Faquih, President of the General Auditing Bureau of Saudi Arabia and Chair of the INTOSAI Finance and Administration Committee and Chair of the INTOSAI-Donor Steering Committee. Dr. Faquih provided a lucid update on the strategic planning process, and in an excellent way informed CBC meeting participants that the Task Force on Strategic Planning now has a clear vision and timeframe to produce a new strategic plan.
Mr. Faquih further indicated that the FAC will propose modifications to the INTOSAI’s statutes to recognize the true role of the INTOSAI regions. He said that the new strategic plan must recognize and leverage the INTOSAI regional organizations as the mainspring uniting individual SAIs to wider INTOSAI efforts. Regional organizations alsohelp SAIs improve their value and benefits to stakeholders and to citizens.
The two main themes of the CBC Annual Meeting were aligned with the themes for the upcoming INCOSAI in Abu Dhabi, United Arab Emirates, planned for 2016.
This theme was dedicated to plenary and group discussions on what professionalism should entail at a regional level. Mr. Khalid Hamid of SAI UAE presented the results of a recent survey on current deliverables of INTOSAI’s regions, and proposed that there is room to strengthen both the interfaces between the regions and SAIs, and the regions and INTOSAI. There also is a need to clarify the value- adding role of regions in the INTOSAI statutes.
This theme was opened by interesting speeches given by Sierra Leone’s Auditor General Ms. Lara Taylor Pearce and Ms. Jennifer Thomson of the World Bank. Both speakers gave their perspectives on the post-2015 Development Agenda.
With a high level of participation and intense discussions by a broad range of participants, this year’s annual meeting succeeded in building momentum towards the CBC’s 2016 meeting, the last in this strategic planning period of INTOSAI before INCOSAI 2016.
The next CBC Annual Meeting will take place in Cape Town, South Africa, in 2016.
The Peer Review Guide with Peer Review Checklist was adopted at the XX INCOSAI in 2010 in South Africa as ISSAI 5600. The revised guide builds on the original ISSAI 5600, in particular on the initial framework of principles and examples of good practices.
The structure and content has, however, undergone significant change in order to reflect the feedback and suggestions received from INTOSAI members since its adoption. New guidance on key aspects of the peer review process has also been included.
The Peer Review Checklist (included as an appendix in the original ISSAI 5600) has been further developed and renamed “Peer Review Areas and Questions,” or PRAQ. It provides an updated list of possible areas to be considered for peer review, and questions that might be asked.
The guidance provided by the PRAQ is non-exhaustive and non-prescriptive. PRAQ is based primarily on the principles and guidelines defined in the ISSAI framework.
The result of the ISSAI 5600 review process between 2013 and 2015, after several working versions, is more readable and reader–friendly, and is a clearly structured standard reflecting the latest knowledge collected from the INTOSAI community.
At its annual meeting in Stockholm, Sweden, in September 2015, the Chair of the Sub-Committee on Peer Review, the SAI of Slovakia, presented the revised ISSAI 5600 to the CBC members.
The CBC Steering Committee has approved the revised ISSAI 5600 for exposure.
The revised ISSAI 5600 is available at the www.issai.org and INTOSAI members are invited to provide comments before February 15, 2016, in line with the INTOSAI due process for professional standards.
The Sub-Committee Chair wishes to acknowledge the contributions to the revised standard draft made by the SAIs of Hungary, Poland, Austria, Germany and Sweden and, especially, by the European Court of Auditors.
About 50 people, representing 26 countries and several organizations, gathered in Vanuatu in October to discuss how SAIs throughout the Pacific region can ensure and secure the independence of audit institutions across the Pacific.
Mr. John Path, Auditor General of Vanuatu, welcomed the delegates to the 18th Congress of the Pacific Association of the Supreme Audit Institutions (PASAI), 25 years after the Congress was last in Vanuatu in 1998.
In his opening address, Mr. Path stated, “Independence is the raison d’etre of SAIs (Supreme Audit Institutions),” emphasizing the theme of the Congress of securing independence of SAIs to improve the effectiveness of audit findings.
Mr. Path also assumed the Chairmanship of the PASAI Governing Board, taking over the position from Fuimaono Camillo Afele, Controller and Auditor General of Samoa.
Mr. Path then introduced the Prime Minister, the Honorable Meltek Sato Kilman Livtunvanu, to open the Congress. Mr. Livtunvanu said that national audit offices are one of the key pillars of a healthy democracy, and Vanuatu is no exception. “It is imperative that the Audit Office is free to carry out its work in total independence and unencumbered by outside influence.”
At a time when the Constitution of Vanuatu was being tested, Mr. Livtunvanu said it is important that a zero tolerance policy towards fraud and corruption is adopted.
He also emphasized that, in Vanuatu, the Audit Office is not the only organization that actively works to identify fraud and corruption within the country. The Ombudsman, internal audit units, law courts and the police, and several other regulatory bodies all function independently to ensure their mandates are carried out without any undue influence from outside entities or persons.
PASAI’s Secretary General, Ms. Lyn Provost, supported the Prime Minister’s statements by stating, “A zero tolerance approach to fraud and corruption is of interest and concern to both developed and developing nations and, as an organization, PASAI takes a united stand against it.”
PASAI has five strategic priorities:
The first strategic priority — independence — was the focus of the Congress.
Independence for audit institutions is important to provide information to allow parliaments to do their job of scrutinizing public accounts, help improve public expenditure, allow citizens to have confidence in how public funds are being spent, and be able to show the importance and value of the work of audit offices.
Donors and development partners noted that PASAI is a good example of what regionalism can achieve. PASAI’s cooperative audits are world-renowned and PASAI’s flagship Accountability and Transparency (A&T) project will reinforce that SAIs can promote accountability and transparency in the use of public funds in the Pacific, by leading by example; but they cannot do it alone. The main messages of the A&T report will be that SAIs must work with legislatures to improve accountability and transparency and that SAIs must work in collaboration with other key organizations to be effective.
In addition, to effect in-country and legislative change, preparation needs to meet opportunity. Until opportunity presents itself, it is important to maintain the things that are within the SAIs control: leading by example and remaining relevant to citizens. Robert Cohen, Acting Auditor General of the Solomon Islands, stated that it is important to be mindful of the things that are within the SAIs control: “We will continue to lead by example because we can control that; we will continue to remain relevant to citizens because we can control that.”
SAI member presentations have always been an important part of the Congress, and members shared their individual successes as well as the challenges facing them in their quest for independence, accountability and transparency as they relate to the eight principles of the 2007 Mexico Declaration on the Independence of Supreme Audit Institutions and the recent United Nations declarations supporting independence.
SAI Heads affirmed that every country is now clear on their position in relation to independence standards, and all demonstrated a high degree of knowledge of these principles as they apply in their own jurisdictions.
Broadly, across all members, SAIs have the ability to undertake financial, compliance and performance audits that can be tabled in the legislature and made public; reasonable appointment and dismissal processes are in place for SAI Heads; SAIs generally have appropriate relationships with their legislatures; follow-up mechanisms of audit findings are starting to be put in place in some countries; SAIs mostly have good access to information; and SAIs have the autonomy to establish their own work plans and can, if necessary, contract out audits.
All the country papers indicated that regional collaboration is vital, and an allied front is necessary to show legislatures across the Pacific the importance of what SAIs do.
Independence is not only of concern to developing countries. Dr Marco Bini, Executive Director, Governance, Legal and Strategy, Victoria Auditor- General’s Office, presented a paper titled, “Applying INTOSAI Independence Principles: An Australian experience.” PASAI’s more developed members noted that their legislation and positions of independence are “strong, but imperfect,” as highlighted by Ian Goodwin, Group Executive Director of the Australian National Audit Office.
A key issue emerging from the country presentations was a lack of financial and human resource independence. Many SAIs in the Pacific region were originally established as government agencies to audit and report on government accounts. Their budgets were set as part of the executive government, and their staff were members of the civil service and subject to civil service controls and terms of employment.
Public sector auditing in the modern era bears little resemblance to that approach. SAIs now follow a professional, risk-based approach to their audits, using international standards. At the same time, citizens and their elected representatives increasingly demand that their SAI goes beyond judgments of compliance and reasonableness of public resources, to also evaluate government performance and the value for money obtained through government transactions. The mechanisms for the funding and staffing of SAIs are now out of step with these requirements.
There is a need to change the approaches used for the funding and staff arrangements of Pacific SAIs, both developed and developing, to bring them more into line with the international standards and, in particular, to reduce the element of executive control over, and the ability to direct, the SAIs’ access to reasonable and necessary resources to perform their role.
It was also clear that Auditor Generals are more than just reporters of financial management practices; they are also advocates for SAIs as institutions and advocates for good financial management. Behavior — not just a reliance on legislation — demonstrates independence. However, there is a need for SAI bodies and development partners to reaffirm the need to comply with international auditing standards through advocacy, including advocacy for the need for real independence by way of resourcing and protection of the Auditor General and staff from political interference. PASAI’s advocacy program, headed by the PASAI Advocate, Mr. Eroni Vatuloka, will be a key program to help strengthen the position of SAIs within the Pacific.
The Samoa SAI demonstrates the kind of progress SAIs in the Pacific are pursuing. The Audit Act of 2013 establishes the independence of the SAI. Samoa’s legislative reform has removed its staff from the control of the Public Service Commission and made the appointment and termination of the Controller and Auditor General subject to the input of Parliament. This is also the situation in Tonga, and the New Zealand SAI’s independence is respected globally.
PASAI’s development partners acknowledged the significant achievements towards independence that have been achieved to date. The representatives of the Australian Department of Foreign Affairs and Trade welcomed the progress that has been made in implementing PASAI’s Long-Term Strategic Plan, and the significant increase in the numbers and quality of independent audits now being undertaken.
The Congress also had a number of presentations from countries that are not officially members of PASAI, but with whom PASAI has vital links.
Mr. Bao Shuowang, Director General of the National Audit Office of the People’s Republic of China (CNAO), presented on behalf of the Chairman of INTOSAI.
Mr. Shuowang said that CNAO is keen to strengthen its ties with PASAI and will continue to deliver training to help build capacity of member SAIs. Mr Shuowang also stressed that it is important for CNAO and PASAI to work together in their approaches to INTOSAI to strengthen the regional and global influence of Pacific nations on the international stage.
Ms. Archana Shirsat, Deputy Director General & Head of Capacity Development, IDI, noted how valuable IDI’s partnership with PASAI has been, particularly the success of the cooperative audits. IDI’s relationship with PASAI will continue to grow through the IDI’s new portfolio of capacity building that will be implemented from 2015–2018, creating more global and regional synergies.
The Asian Development Bank (ADB) stated that the work of PASAI is one of the few successful regional initiatives that showcases to donors how much their investment has achieved.
The ADB said that these accomplishments must be sustained and that the ADB is willing to enhance its partnership and continue to find ways of working with PASAI and its members to that end.
PASAI members finished the Congress with a workshop on the UN’s Sustainable Development Goals as they relate to auditing institutions; in particular, the importance of public auditing as a part of Sustainable Development Goal 16—peace, justice and strong institutions.
The Congress also welcomed the Micronesian State of Chuuk and the Australian Capital Territory as new members of PASAI.
The Congress thanked their development partners— including the Australian Department of Foreign Affairs and Trade, the New Zealand Ministry of Foreign Affairs and Trade, IDI and the ADB under the Japan Fund for Poverty Reduction-supported technical assistance—for their support.
Resources to learn more about issues emerging from the 18th PASAI Congress: