Inside INTOSAI

International Journal of Government Auditing – January 2009

Governing Board Meeting Held in Vienna

INTOSAI’s 58th Governing Board meeting was held in Vienna, Austria, November 13–14, 2008. During the meeting, board members reflected on how SAIs are well positioned to respond to changing world conditions—the most pressing issues of the day were addressed by reports from committees, task forces, and working groups; the establishment of new task forces; and the identification of themes for the upcoming INCOSAI. Under the able leadership of board chairman Arturo González de Aragón, board members advanced the goals of INTOSAI and reported on the results of its various groups.

The board members—18 heads of SAIs from all INTOSAI regions—were joined by observers representing committees, working groups, and task forces for 2 days of active discussion and deliberation on a range of important issues. In addition to reports from the goal chairs, the board received and approved the annual reports of the General Secretariat, the INTOSAI Development Initiative, and this Journal.

Osama Jafar Faquih, the chair of the Finance and Administration Committee, updated the board on its activities over the past year, providing special reports on the donor funding and strategic planning task forces. Gene Dodaro, the chair of the donor funding task force, reported that the task force was pursuing agreements with donors on a funding program to help support SAIs.

Mr. Dodaro, who also chairs the strategic planning task force, and Kirsten Astrup, INTOSAI Director of Strategic Planning, reported that the board had accepted the task force’s recommendation to update the current strategic plan instead of undertaking a wholesale revision of the plan. Specifically, INTOSAI’s mission, vision, and goals as stated in the current plan will remain the same in the updated plan, although some of the activities and programs supporting each of the four goals will likely change.

Dr. Josef Moser, INTOSAI Secretary General, reported on the General Secretariat’s work since the 57th Governing Board meeting held in Mexico in 2007. In early 2008, the secretariat surveyed the membership on recommended themes for the upcoming congress. The themes agreed upon for the congress (see below) resulted from that survey.

Two new working groups established at the last board meeting updated the board on their activities. The Working Group on the Value and Benefits of SAIs, led by South Africa, reported on its terms of reference and commitment to finalize its work before the XX INCOSAI in South Africa. Its first formal meeting is being held in South Africa in March 2009. The Working Group on Key National Indicators, led by the Russian Federation, reported that it had already met and had approved its terms of reference, rules of procedure, and action and working plans. Its next meeting will be held in Beijing in April 2009.

The goal chairmen reported on the activities of their committee; in many cases specific reports from committee task forces and working groups supplemented the chairmen’s reports. See www.intosai.org for additional information on the work of these task forces and working grups.

The General Secretariat is finalizing the full proceedings of the board meeting and will make them available shortly. In the meantime, some of the board’s major decisions are summarized below.

  • The board established the main themes for INCOSAI XX, which will be held in South Africa in 2010. Terenece Nombembe, Auditor General of South Africa, led the discussion resulting in agreement on the following themes: the value and benefits of SAIs (chaired by the SAI of South Africa) and environmental auditing and sustainable development (chaired by the SAI of China).
  • In response to critical issues facing world economies, the board established a task force on the global financial crisis. The SAI of the United States will chair this task force, which will address such issues as the causes of the crisis, the role of SAIs, and lessons learned.
  • The board approved INTOSAI’s external and internal communication goals and accepted the recommendation that INTOSAI’s theme for 2009 be “the importance of SAI independence as presented by the Lima and Mexico Declarations.”

For additional information, contact the INTOSAI General Secretariat:

E-mail: intosai@rechnungshof.gv.at
Web site: www.intosai.org

Don Drach Retires from U.S. GAO

Don DrachDon Drach has retired from the U.S. Government Accountability Office (GAO) after a distinguished 31-year career with the U.S. government. Starting in 1983, Don worked in many different capacities with GAO’s international liaison office. He helped to organize the 1992 INCOSAI held in Washington, D.C., and was a founding member of the IDI board of directors. Since 1986, he had been the editor of this Journal. Most recently, he coordinated GAO’s role on the INTOSAI strategic planning task force and served as GAO’s Director of International Relations. His many colleagues across the INTOSAI community recognize the effective professional and personal relationships he forged to achieve the organization’s goals.

Muriel Forster has succeeded Don as the editor of this Journal and can be reached at spel@gao.gov. Don can be reached at ddrach49@comcast.net.

Subcommittee on Financial Audit Guidelines

Subcommittee Meetings

In October 2008, the Board of Audit and Inspection of Korea hosted a meeting of the Subcommittee on Financial Audit Guidelines (FAS). At the meeting, participants approved nine practice notes for exposure and discussed due processes for the Professional Standards Committee and FAS and the FAS’ future organization. In April 2009, the European Court of Auditors will host the FAS meeting in Luxemburg and in October 2009, the SAI of Mexico will host the FAS meeting in Mexico City.

Expert Meetings

The FAS is successfully drafting groups of practice notes using special expert teams (SET). For each SET meeting, four to five experts meet for a working week to concentrate on a group of practice notes.

SET 5 met in Washington, D.C., in November 2008 to draft practice notes to International Standards on Auditing (ISA) 700, 705, 710, and 720. Experts from the SAIs of Canada, Sweden, and the United States participated.

In January 2009, SET 6 is meeting in Stockholm to draft practice notes to ISAs 501, 510, 520, 530, and 540. Experts from the SAIs of Brazil, Canada, China, and the United States are participating in the drafting process.

Evaluation of the FAS

During the fall of 2008, an external evaluator appointed by the World Bank carried out a comprehensive evaluation of the FAS’ work. Such evaluations are a condition for continued financial support from the bank. A copy of the report will be available on the FAS Web site in early 2009.

Schedule for Exposure of Practice Notes

The following dates for practice notes exposure periods have been slightly modified since they were listed in the October 2008 issue of this Journal. All SAIs are encouraged to comment on the exposure drafts, especially Courts of Account.

SET 4: Exposure Period: February 2009–April 2009
  • ISA 600–The Audit of Group Financial Statements (Including the Work of Other Auditors)
  • ISA 610–The Auditor’s Consideration of the Internal Audit Function
SET 5: Exposure Period: February 2009–April 2009
  • ISA 700–The Independent Auditor’s Report on General Purpose Financial Statements
  • ISA 705–Modifications to the Opinion in the Independent Auditor’s Report
  • ISA 706–Emphasis of Matter Paragraphs and Other Matter(s) Paragraphs in the Independent Auditor’s Report
  • ISA 710–Comparative Information–Corresponding Figures and Comparative Financial Statements
  • ISA 720–Other Information in Documents Containing Audited Financial Statements
SET 6: Exposure Period: May 2009–August 2009
  • ISA 530–Audit Sampling
  • ISA 501–Audit Evidence Regarding Specific Financial Statement Account Balances and Disclosures
  • ISA 510–Initial Audit Engagements–Opening Balances
  • ISA 520–Analytical Procedures
  • ISA 540–Auditing Accounting Estimates, including Fair Value Accounting Estimates, and Related Disclosures

For additional information, contact the FAS Secretariat:

E-mail: projectsecretariat@riksrevisionen.se
Web site: http://psc.rigsrevisionen.dk/fas

Subcommittee on Accounting and Reporting

Canada was appointed the chair of this subcommittee of the Professional Standards Committee in November 2007. The subcommittee’s mandate is to (1) observe and participate in the public sector accounting standard-setting activities of the International Federation of Accountants’ International Public Sector Accounting Standards Board (IFAC–IPSASB); (2) prepare periodic reports for the INTOSAI membership on current and planned IFAC–IPSASB activitities; and (3) facilitate the exchange of information and knowledge-sharing among supreme audit institutions.

Canada drafted a work plan for 2008–2010 and circulated it to members for comment. The plan was approved at the Professional Standards Committee meeting in Beijing in October 2008. Some key areas in the plan address member needs for public sector accounting and reporting information and the importance of an independent standard-setter. The work plan also proposed surveying members in the winter of 2008–2009 regarding accounting standards.

For information regarding the work of this subcommittee, contact Stuart Barr, Assistant Auditor General, at the Office of the Auditor General of Canada.

E-mail: stuart.barr@oag-bvg.gc.ca
Web site: www.oag-bvg.gc.ca

Capacity Building Committee

The INTOSAI Capacity Building Committee (CBC) has issued two publications of interest to INTOSAI members.

Building Capacity in Supreme Audit Institutions: A Guide has been published in English, French, Arabic, and Spanish. Electronic copies are available online on the CBC Web site at http://cbc.courdescomptes.ma. Hard copies can be obtained by contacting the United Kingdom National Audit Office (sonia.stoddart@nao.gsi.gov.uk).

The guide describes a process that SAIs can use to assess their current state of development and to identify strategic steps they need to take to build their capacity. The guide identifies key areas to consider during any major modernization or change program and focuses on

  • developing the skills of staff,
  • strengthening an SAI’s corporate and support services, and
  • increasing the impact of an SAI’s work by building effective external partnerships.

The CBC is eager to see the guide used and encourages INTOSAI members to use it to facilitate discussions at institutional and regional levels. Committee members are available to help facilitate these discussions upon request.

In addition, the Swedish National Audit Office has developed the CBC Directory. This directory of capacity-building projects is available online at www.cbcdirectory.org and is a useful source of information on capacity-building activities that SAIs have been involved in. SAIs interested in learning more about the capacity-building experiences of other SAIs are encouraged to contact the SAI concerned directly.

For additional information, contact the CBC:

E-mail: ccomptes@courdescomptes.ma
Web site: www.courdescomptes.ma

Subcommittee on Accounting and Reporting

Canada was appointed the chair of this subcommittee of the Professional Standards Committee in November 2007. The subcommittee’s mandate is to (1) observe and participate in the public sector accounting standard-setting activities of the International Federation of Accountants’ International Public Sector Accounting Standards Board (IFAC–IPSASB); (2) prepare periodic reports for the INTOSAI membership on current and planned IFAC–IPSASB activitities; and (3) facilitate the exchange of information and knowledge-sharing among supreme audit institutions.

Canada drafted a work plan for 2008–2010 and circulated it to members for comment. The plan was approved at the Professional Standards Committee meeting in Beijing in October 2008. Some key areas in the plan address member needs for public sector accounting and reporting information and the importance of an independent standard-setter. The work plan also proposed surveying members in the winter of 2008–2009 regarding accounting standards.

For information regarding the work of this subcommittee, contact Stuart Barr, Assistant Auditor General, at the Office of the Auditor General of Canada.

E-mail: stuart.barr@oag-bvg.gc.ca
Web site: www.oag-bvg.gc.ca

Capacity Building Committee

The INTOSAI Capacity Building Committee (CBC) has issued two publications of interest to INTOSAI members.

Building Capacity in Supreme Audit Institutions: A Guide has been published in English, French, Arabic, and Spanish. Electronic copies are available online on the CBC Web site at http://cbc.courdescomptes.ma. Hard copies can be obtained by contacting the United Kingdom National Audit Office (sonia.stoddart@nao.gsi.gov.uk).

The guide describes a process that SAIs can use to assess their current state of development and to identify strategic steps they need to take to build their capacity. The guide identifies key areas to consider during any major modernization or change program and focuses on

  • developing the skills of staff,
  • strengthening an SAI’s corporate and support services, and
  • increasing the impact of an SAI’s work by building effective external partnerships.

The CBC is eager to see the guide used and encourages INTOSAI members to use it to facilitate discussions at institutional and regional levels. Committee members are available to help facilitate these discussions upon request.

In addition, the Swedish National Audit Office has developed the CBC Directory. This directory of capacity-building projects is available online at www.cbcdirectory.org and is a useful source of information on capacity-building activities that SAIs have been involved in. SAIs interested in learning more about the capacity-building experiences of other SAIs are encouraged to contact the SAI concerned directly.

For additional information, contact the CBC:

Email: ccomptes@courdescomptes.ma
Web site: www.courdescomptes.ma

INTOSAI Online Collaboration Tool

The INTOSAI Collaboration Tool (ICT), launched by the SAI of India in May 2007, is a workbench for the INTOSAI community and is available for member SAIs to use for internal communication. The tool—which aims to integrate unstructured contents, documents, e-mails, calendars, and real time tools—provides INTOSAI with real time collaboration, communication, and content management.

To access the tool, go to www.intosaictool.org or click on the link on the home page of the INTOSAI Web site. On the sign-in page, users must input a username and password. To create or change their usernames and passwords, INTOSAI members can contact tarun@pathinfotech.com or intosaictool@gmail.com.

Collaboration Tool Tutorial

To assist users of the INTOSAI Collaboration Tool, a comprehensive tutorial (in INTOSAI’s five official languages) is available on the tool’s log-in page. The tutorial features 13 presentations, also available as PDFs, on the following topics: how to log in, exploring the home page, e-mail, calendar and tasks, workspaces, discussions, content services, web conferencing, mailing lists, user profile, real time messenger, infrastructure requirements, and annexure-template for user creations.

For additional information, contact the SAI of India:

E-mail: cag@cag.gov.in, pdir@cag.gov.in
Web site: www.cag.gov.in

Working Group on Key National Indicators

INTOSAI’s Working Group on Key National Indicators (WG KNI) was established by the XIX INTOSAI congress in Mexico and is chaired by the Accounts Chamber of the Russian Federation. The working group’s first meeting was held in May 2008 in Moscow. Members attending represented the SAIs of Hungry, Denmark, Italy, Kazakhstan, China, Latvia, Lithuania, Mexico, Pakistan, Poland, Russia, Slovakia, the United States, Ukraine, Finland, and Switzerland. Observers from the SAIs of Armenia, Belarus, Canada, and Moldavia also attended, as did representatives of two international organizations, the Organisation for Economic Co-operation and Development (OECD) and the World Bank. Terms of reference, rules of procedure, and an action plan for 2008 were discussed and approved at the meeting.

The mission of the WG KNI is to “support coordinated policies of national SAIs and INTOSAI towards development and application of KNIs in economic, ecological and social domains at national and supranational levels.” The working group has the following strategic goals:

  • support the SAI role in assessing the efficiency and effectiveness of government activities on the basis of KNIs and
  • support INTOSAI’s international role in promoting the development and use of KNIs and supranational indicators.

The WG KNI is undertaking a number of projects, including the following:

  • a report on KNI good practice in the environment of knowledge-based economies and societies (coordinated by the SAI of Hungry);
  • a review of international experiences in the development and use of KNIs (coordinated by the SAI of Latvia);
  • assistance in implementing and monitoring KNI systems and developing performance audit in the countries of the Commonwealth of Independent States (coordinated by the SAI of the Russian Federation); and
  • preparation of a KNI glossary (coordinated by the SAI of the United States).

In addition, members of the WG KNI have discussed and suggested amendments to the memorandum of understanding (MOU) between INTOSAI and the OECD. The MOU focuses on developing cooperation between the WG KNI and the global project of the OECD in the sphere of measuring social progress.

At its meeting in November 2008, the INTOSAI Governing Board approved the report on WG KNI activities and the text of the MOU between INTOSAI and OECD.

The WG KNI’s second meeting will be held April 21–23, 2009, in Beijing.

For additional information, please contact the Department for External Relations of the Accounts Chamber of the Russian Federation:

E-mail: intrel@ach.gov.ru
Web site: http://intosai4kni.org

New EUROSAI Task Force Prepares for Its First Meeting

The EUROSAI Task Force on the Audit of Funds Allocated to Disasters and Catastrophes was established during the VII EUROSAI Congress in Krakow, Poland, in June 2008. The task force was established to carry on the work of the former Special Subgroup on the Audit of Natural, Man-caused Disasters Consequences and Radioactive Wastes Elimination, which had been part of the EUROSAI Working Group on Environmental Auditing (WGEA) since 2006.

The Accounting Chamber of Ukraine was elected as the chair of the task force, whose secretariat in located in Kiev. Fifteen European SAIs and two other entities have already expressed their wish to collaborate on the task force. The full members are the SAIs of Armenia, Azerbaijan, Belarus, Belgium, Bulgaria, Hungary, Iceland, Kazakhstan, Lithuania, Moldova, Poland, and the Russian Federation as well as the European Court of Auditors. The observers are the SAIs of Italy, Norway, and the Slovak Republic and the chair of the INTOSAI Working Group on Accountability for and Audit of Disaster-Related Aid.

The SAI of Ukraine drafted the task force’s terms of reference and work plan for 2009–2011. These documents set up the strategy, mandate, and activities the task force is to carry out and are to be approved during the first task force meeting, which is scheduled for March 17–18, 2009 in Kiev.

For further information, contact the Accounting Chamber of Ukraine:

E-mail: rp@ac-rada.gov.ua
Web site: www.ac-rada.gov.ua/achamber/control/en/index

Signing of the Joint Report of the Chernobyl Shelter Fund Audit

As noted briefly in the October 2008 Journal, the Joint Report of the International Coordinated Audit of the Chernobyl Shelter Fund (CSF) was officially presented and signed in June 2008 during the VII EUROSAI Congress in Krakow, Poland. The audit was carried out as part of the work of the former EUROSAI WGEA Special Subgroup on the Audit of Natural, Man-caused Disasters Consequences and Radioactive Wastes Elimination.

The SAIs of Ukraine, Germany, Switzerland, Poland, the Russian Federation, and the Slovak Republic and the European Court of Auditors participated in the audit; the SAIs of the United States and the Netherlands also contributed to the audit. The Accounting Chamber of Ukraine acted as the audit coordinator.

Participants in the signing of the joint report on the coordinated audit of the Chernobyl Shelter Fund at the VII EUROSAI Congress in Poland in June 2008.
Participants in the signing of the joint report on the coordinated audit of the Chernobyl Shelter Fund at the VII EUROSAI Congress in Poland in June 2008.

The auditors positively assessed (1) the collaboration between the international community and the European Bank for Reconstruction and Development in 1997 to establish the CSF and replenish it with relevant financial contributions and (2) the actions of Ukraine in relation to the decommissioning of the Chernobyl Nuclear Power Plant in 2000. However, the auditors concluded that the construction of new safe confinement building works and the transformation of the destroyed plant into an environmentally safe system had fallen more than 7 years behind schedule. In addition, the costs for the work considerably exceeded initial estimates and were likely to increase.

To keep the Chernobyl Shelter Object safe and ensure the completion of confinement building works, the auditors made recommendations to the government of Ukraine, the CSF contributor governments, and the CSF assembly of contributors. Recommendations included reviewing contractor responsibilities, ensuring the quality of contractor work, and controlling the schedule, costs, and risk mitigations.

For further information, contact the Accounting Chamber of Ukraine:

E-mail: rp@ac-rada.gov.ua
Web site: www.ac-rada.gov.ua/achamber/control/en/index