Inside INTOSAI

International Journal of Government Auditing – Jan 2010

59th Governing Board Meeting Held in Cape Town South Africa

When: November 16–18, 2009

Where: Cape Town, South Africa

Host: South African SAI

Participants:  SAIs from Australia, China, the Cook Islands, Denmark, Egypt, Estonia, the European Court of Auditors, France, Hungary, India, Ivory Coast, Libya, Mexico, Morocco, the Russian Federation, Saudi Arabia, South Africa, South Korea, St. Kitts and Nevis, Sweden, the United Kingdom, the United States of America, and Venezuela.

INTOSAI’s annual Governing Board meeting was held in Cape Town, South Africa, November 16–18, 2009. Terence Nombembe, Auditor General of South Africa, hosted the meeting in his capacity as organizer of the upcoming XX INCOSAI that will be held in Johannesburg in November 2010.

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 discussion and deliberation on a range of important issues. In addition, the board received reports from the goals chairs and approved the annual reports of the General Secretariat, the INTOSAI Development Initiative, and this Journal.

Finance and Administration Committee

Osama Jafar Faqeeh, the chair of the Finance and Administration Committee, updated the board on the committee’s activities over the past year; he also reported on the activities of the task forces on donor funding and the INTOSAI strategic plan. He noted that INTOSAI had just signed an historic agreement with the donor community that will help build capacity in SAIs (see page 31 for more information on this initiative) and that the strategic plan is undergoing its first major revision since the inaugural plan for 2005–2010. Kirsten Astrup, the Director of Strategic Planning, reported on the status of the 2011–2016 plan. To date, few comments had been received recommending significant revisions to the new draft plan. (See page 24 for additional information on the strategic plan.)

Professional Standards Committee

All goal chairs provided reports. Henrik Otbo, Auditor General of Denmark, reported on the Professional Standards Committee, focusing on the need to increase awareness of the International Standards of Supreme Audit Institutions (ISSAI) among SAIs and develop a structure or protocol to permanently maintain the ISSAIs. He emphasized that we are leaving the development phase for ISSAIs and reaching a phase that will require harmonizing and eliminating overlap and duplication in them. In addition, Mr. Otbo noted that INTOSAI’s focus on increased awareness about the ISSAIs must lead SAIs to work in accordance with the standards. A spirited discussion followed on the subject of how this evolution in the ISSAI process should be handled. As a result, the Professional Standards Committee will prepare a paper on due process concerning ISSAIs to serve as a basis for further discussion at INCOSAI XX in November.

Goal 2: Capacity Building

Ahmed El Midaoui, President of the Court of Accounts of Morocco, reported on goal 2, capacity building. Over the past year, the goal 2 subcommittee led by the United Kingdom’s National Audit Office (NAO) has presented its guide, Building Capacity in SAIs, which has been translated and is now available in all official INTOSAI languages on the Capacity Building Committee Web site at http://cbc.courdescomptes.ma; work is also under way on Russian and Chinese editions. In addition, the NAO has printed editions and sent them to all INTOSAI members in accordance with their expressed language preference. The committee also reached out to the SAI of India as the chair of the goal 3 Knowledge Sharing Committee to ensure broader promotion. The committee is working on the development of two additional guides: Introducing Professional Qualifications for Audit Staff, A Guide for Supreme Audit Institutions, and How to Increase the Use of Audit Reports.

Under goal 2, the SAI of Peru created a software instrument to develop a database of SAI experts and investigators. The SAI of Germany developed a draft guide, Joint, Coordinated, or Parallel Audit Programs, which is under review. The SAI of Pakistan drafted Guidelines for Internship Programs, which is under review, and continues to work on an outline of its internship program for integrated financial management information systems. The SAI of Germany is currently analyzing input for its draft Guideline on Peer Reviews. Due to some organizational changes in the United Nations (UN), our work within the UN/INTOSAI Platform has been delayed.

Jørgen Kosmo, Auditor General of Norway, provided the report for the INTOSAI Development Initiative (IDI). After developing a capacity-building needs assessments framework and toolkit, IDI conducted extensive needs assessments programs in AFROSAI-E (English-speaking AFROSAI), ARABOSAI, ASOSAI, CAROSAI, and OLACEFS. In 2008, IDI launched the Capacity Building Needs Assessment Program in OLACEFS and conducted two programs there. IDI undertook numerous other activities, which are described in the IDI Update on page 39. In addition, Mr. Kosmo highlighted the following IDI activities:

  • Over the past year, IDI has developed the following guidance material and handbooks:
    • Capacity Building Assessment Guide,
    • Learning for Impact—A Practice Guide for SAIs,
    • IDI/ASOSAI Handbook on Quality Assurance in Financial Auditing, and
    • Strategic Planning Handbook.
  • A set of internal performance indicators has been developed to measure success in achieving IDI’s mission.
  • IDI has played an active role in the donor funding memorandum of understanding.
  • IDI’s annual report will be distributed electronically and is available at www.idi.no

Goal 3: Knowledge Sharing

Vinod Rai, Comptroller and Auditor General of India, reported on goal 3, knowledge sharing. The Knowledge Sharing Committee has nine working groups and two task forces. Highlights from those reports include the following:

  • The Working Group on Public Debt defined a list of experts in public debt auditing (www.wgpd.org.mx).
  • The Working Group on IT Audit has six ongoing projects; Guidelines for Auditing Systems Development has been completed (www.intosaiitaudit.org).
  • The Working Group on Privatization, Economic Regulation, and Public-Private Partnerships developed executive summaries of its guidelines as part of efforts to build an online database of official INTOSAI documents (www.nao.gov.uk/intosai/wgap/home.htm).
  • The Working Group on Environmental Auditing enhanced its Web site (www.wgea.org) and held its largest meeting to date, with 180 participants from 66 countries.
  • The Working Group on Program Evaluation completed its report on program evaluation, which can be used as an introduction to evaluation for SAIs.
  • The leadership of the Working Group on the Fight Against International Money Laundering and Corruption was transferred to the Central Auditing Organization of Egypt, which developed a new Web site, www.wgfacml.cao.gov.eg. The working group also circulated a questionnaire seeking to identify country regulations, policies, strategies, and programs SAIs can use to detect and prevent corruption and money laundering.
  • The Working Group on Accountability for and Audit of Disaster-related Aid prepared a first draft of guidance for the preparation, implementation, and reporting of audits on disaster-related aid and has a check list for awareness of fraud and corruption (http://eca.europa.eu/intosai-aada).
  • The Working Group on Key National Indicators completed a draft guide to key terms and concepts, which is available at www.ach.gov.ru/en/intosiakni.
  • The Working Group on the Value and Benefits of SAIs prepared and distributed a principle paper on that subject for the XX INCOSAI; the paper is available at www.incosai2010.org.
  • The Task Force on the Global Financial Crisis held its first meeting in Washington in June and July 2009. Three subgroups were formed and the proceedings are available on the INTOSAI Web site.

Other Board Business

In addition, a number of actions and resolutions were presented, voted on, and accepted by the board. A full report of all resolutions is being prepared by the General Secretariat and should be available shortly. Some of the principal resolutions are described below:

  • The Governing Board endorsed a resolution to incorporate the Lima and Mexico Declarations in international law. This is expected to contribute to greater efficiency in government and assist in achieving the Millennium Development Goals.
  • The Organization of Supreme Audit Institutions of Portuguese Speaking Countries (CPLP) was accepted as an associate member of INTOSAI.
  • The Governing Board will propose to the XX INCOSAI that the SAI of China be the board’s candidate to host INCOSAI XXI in 2013.
  • The Communication Strategy Task Force presented the first draft of a Guideline for INTOSAI Communication and a survey on communications.
  • The Governing Board agreed that the Secretariat would organize a May 2010 conference in Vienna on strengthening external public auditing and independence.

For additional information on the meeting, contact the INTOSAI General Secretariat:

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

INTOSAI and the Donor Community Sign Historic Agreement and Plan the Way Forward

“Transparency and accountability are not governments’ gracious concessions; instead, they are the legal, ethical, and moral obligation that no one can overlook.”

—Arturo González de Aragón, former Chairman, INTOSAI Governing Board, and Auditor Superior of Mexico

Mr. González de Aragón signs the MOU on behalf of INTOSAI.
Mr. González de Aragón signs the MOU on behalf of INTOSAI.

 

Signing Ceremony for the Memorandum of Understanding between INTOSAI and the Donor Community


 

When: October 20, 2009
Where: Brussels, Belgium
Who: Signing the Memorandum of Understanding for INTOSAI: Arturo González de Aragón

Signing the Memorandum of Understanding from the donor community:
  • African Development Bank
  • Austrian Development Agency
  • Belgian Foreign Affairs, Foreign Trade, and Development Cooperation
  • Canada
  • United Kingdom Department for International Development
  • European Commission
  • International Monetary Fund
  • Ireland
  • Netherlands Ministry of Foreign Affairs
  • Norwegian Agency for Development Cooperation
  • Switzerland
  • Sweden
  • United States of America
  • World Bank
  • Inter-American Development Bank (signed on October 28 in Washington, D.C.)

On October 20, 2009, representatives from countries and donor institutions and the Chair of the INTOSAI Governing Board signed a memorandum of understanding (MOU) that paves the way for stronger capacity building of supreme audit institutions (SAI). Organized by the Belgian government and the European Commission, the signing ceremony was held in a large salon framed by glass walls and a glass ceiling that appropriately reflected the transparency the agreement is expected to foster.

In introductory remarks, Arturo González de Aragón, then Chair of the INTOSAI Governing Board, described the history of INTOSAI and how, from its inception, it had focused on promoting experience and knowledge exchange as well as strengthening SAIs worldwide. He declared in his remarks that “the signing of this Memorandum of Understanding is the conclusion of a continuous effort to strengthen supreme audit institutions’ capacities, which improve governments’ performance.”

The signing ceremony was the result of almost 2 years of effort on the part of the donor community and the INTOSAI donor funding task force led by Gene Dodaro, Acting Comptroller General of the U. S. Government Accountability Office (GAO). In September 2009, the Secretary General electronically distributed the MOU to the Governing Board members and received their approval of it. The board members reconfirmed their approval and support for the ongoing efforts of the donor funding task force at the Governing Board meeting in Cape Town, South Africa, in November 2009.

INTOSAI representatives at the signing of the MOU in Brussels: (front row, left to right) Gene Dodaro (United States of America), Arturo González de Aragón (Mexico), Osama Faqeeh (Saudi Arabia), Josef Moser (Austria), Ahmed El Midaoui (Morocco), Frank Vanstapel (Belgium); (back row, left to right) Jørgen Kosmo (Norway), Gregory G. Teu (Tanzania), John Muwanga (Uganda), Philippe Roland (Belgium).

INTOSAI representatives at the signing of the MOU in Brussels: (front row, left to right) Gene Dodaro (United States of America), Arturo González de Aragón (Mexico), Osama Faqeeh (Saudi Arabia), Josef Moser (Austria), Ahmed El Midaoui (Morocco), Frank Vanstapel (Belgium); (back row, left to right) Jørgen Kosmo (Norway), Gregory G. Teu (Tanzania), John Muwanga (Uganda), Philippe Roland (Belgium).

Memorandum of Understanding

The MOU brings together all the SAIs and the donor community in a common approach that provides (1) a strategic focus for donors and the SAI community in strengthening SAI capacity in developing countries and (2) a variety of mechanisms to facilitate donor funding and support in line with donor mandates, priorities, and requirements. The MOU outlines the principles that will govern this initiative and expresses the donors’ intent to strengthen audit capacity in partner developing countries so that there is sustained improvement in national (public sector) accountability, transparency, and governance.

The MOU also includes the following underlying principles:

  • The SAI community will endeavor to develop individual country-led strategic plans and development action plans that are comprehensive, realistic, and prioritized.

  • INTOSAI will endeavor to achieve the strategic goals set out in the INTOSAI strategic plan.

  • The donor community

    • declares its commitment to respecting SAI country leadership, independence, and autonomy in developing strategic and development action plans,

    • will endeavor to mobilize additional resources to support the strategic development action plans, and

    • declares its commitment to delivering financial and other support for audit capacity-building programs in a harmonized and coordinated manner.

The MOU calls for the establishment of a steering committee, comprising representatives from INTOSAI and the donor community, to provide strategic guidance and counseling to the parties. The steering committee will establish a Secretariat to provide administrative support to the steering committee.

In comments prepared for the signing ceremony, John Muwanga, Auditor General of Uganda, recognized the importance of the agreement, highlighting the increasing significance and recognition that SAIs are receiving from the donor community:

“Donors are increasingly appreciating the role that SAIs undertake in promoting public sector transparency and accountability within the wider sphere of good governance. . . . [T]he role of the SAI in providing the necessary fiduciary assurance is therefore more crucial now than it ever has been. Corruption and abuse of public resources impede effective resource mobilization and allocation. The SAI’s role in bringing about greater accountability and ensuring that funds are used for their intended purpose enables resources to be continually directed towards planned programs which are designed to tackle and enhance poverty reduction measures and bring about economic development.”

Technical Meeting of Donors and INTOSAI

On October 21, the day after the signing, representatives from the donor community and INTOSAI met to discuss the next steps in implementing the agreement.

Ahmed El Midaoui, President of the Court of Accounts of Morocco, generously offered to host the first meeting of the steering committee. This meeting will be held February 22–23 in Marrakech, Morocco. Jørgen Kosmo, the Auditor General of Norway, offered to prepare the initial documents needed to support the first meeting. Work is under way to develop two discussion papers for this meeting. One addresses the steering committee, its work program, and operational and funding modalities. The other outlines the roles and responsibilities of the Secretariat and discusses possible hosts for the Secretariat.

For additional information, contact Mary Mohiyuddin, the U.S. GAO’s Capacity Building Coordinator, at spel@gao.gov.

Subcommittee on Financial Audit Guidelines

Gert J¨nssonINTOSAI nominated Gert Jönsson, chair of the Subcommittee on Financial Audit Guidelines (FAS) and the Deputy Auditor General of the Swedish National Audit Office, to be a member of the International Auditing and Assurance Standards Board (IAASB). Mr. Jönsson was appointed to this post at the IAASB’s meeting in Madrid in September 2009 and took up his new duties at the end of 2009. He succeeds Steen Berndt Jensen, and his technical advisor on the board will be Jonas Hällström, the director of FAS. .

The IAASB is one of the International Federation of Accountants’ 10 independent standard-setting bodies. It has 18 members, 3 of whom represent the public sector. Since 2004, INTOSAI has nominated a representative to fill one of these three positions.

Over the past 20 years, Mr. Jönsson has held several management positions at the Swedish National Audit Office and has solid financial audit experience. For many years, he was responsible for the office’s international cooperation, which has resulted in a wide range of international contacts. Mr. Jönsson has chaired the FAS since 2005; during this time, he has played a key role in INTOSAI’s cooperation with the IAASB. (See the editorial and the article on p. 11 for additional information about INTOSAI’s cooperation with the IAASB.)

For additional information, contact the FAS Secretariat:
projectsecretariat@riksrevisionen.se.

Working Group on Environmental Auditing

The Working Group on Environment Auditing (WGEA) held its eighth steering committee meeting August 3–6, 2009, in Bali, Indonesia. The working group would like to thank Anwar Nasution, the former Chairman of the Audit Board of Indonesia, for his kind hospitality and the staff of the Indonesian SAI for their superb organisation of the event. In Bali, the steering committee reviewed the first drafts of working group guidelines that are to be finalized and delivered to the INTOSAI community at INCOSAI XX in November 2010. These seven new documents address climate change, sustainable energy, forests, fisheries, minerals and mining, environmental accounting, and international agreements. They represent a joint effort by 33 member countries; the working group would also like to express its gratitude for their hard work.

All the meeting materials, including the minutes and other relevant information on environmental auditing, are available on the WGEA Web site: www.environmental-auditing.org.

Upcoming Meetings of the WGEA

The WGEA’s ninth steering committee meeting will be held February 15–18, 2010, in Dar es Salaam, Tanzania. The purpose of the meeting is to discuss further (1) the guidance documents, other projects, and plans to communicate them and (2) the development of the 2011–2013 work plan. The steering committee aims to approve the final drafts of the guidance documents at this meeting.

The 13th meeting of the WGEA will be held in China June 7–11, 2010, to approve all developed documents and the new work plan for 2011–2013. The meeting will also give participants the opportunity to share their experiences and knowledge in various fields of environmental auditing through tutorials and workshops. Invitations to the meeting will be sent out to all INTOSAI members, and the working group is looking forward to active participation.

WGEA’s 2008–2010 Work Plan

The 2008–2010 work plan is the most extensive and ambitious one since the working group was established in 1992. It includes the following:

  • Develop new audit guidelines on
    • climate change (Norway),
    • sustainable energy (Czech Republic),
    • forestry (Indonesia),
    • minerals and mining (Tanzania), and
    • fisheries (South Africa).
  • Develop a study on environmental accounting: current status and option for SAIs (United States).
  • Develop, in cooperation with the United Nations Environment Programme (UNEP), a manual on auditing multilateral environmental agreements.
  • Conduct a global coordinated audit on climate change (Canada).
  • Encourage regional cooperative audits.
  • Develop a biodiversity auditing training course and web page (Brazil and Canada).
  • Conduct an annual collection of environmental audits and the sixth survey (Estonia).
  • Publish the Greenlines newsletter (United States).

The work plan has been implemented under the leadership of the new Chair, the SAI of Estonia. The Chair appreciates all the hard work of the project leaders and their subcommittee members, who have put forth every effort to meet established goals, follow project plans, and deliver agreed outcomes on time. The results of the work plan will be presented during the June 2010 WGEA meeting in China and at the November 2010 INCOSAI XX in South Africa, but a great deal of work has already been accomplished.

Hosts Needed for Upcoming WGEA Meetings

The WGEA is looking for SAIs who would be interested in hosting one of the following meetings that have been scheduled for 2011–2013.

  • Spring 2011: 10th steering committee meeting
  • January/February 2012: 14th working group meeting
  • Autumn 2012: 11th steering committee meeting
  • Spring 2013: 12th steering committee meeting

Please contact the Secretariat if you are interested in hosting one of these important events.

For additional information, contact the WGEA Secretariat:

E-mail: info@wgea.org
Web site: www.environmental-auditing.org

Working Group on Key National Indicators Meets in Beijing

The Working Group on Key National Indicators held its second meeting in Beijing, April 21–22, 2009, with 34 participants from 16 SAIs. The meeting was hosted by the China National Audit Office (CNAO), and Liu Jiayi, Auditor General of the CNAO, delivered an address at the opening ceremony. Other participants included Sergey Vadimovich Stepashin, Chairman of the working group and Chairman of the Russian SAI, and Valentyn Kostiantynovych Symonenko, Chairman of the Ukrainian SAI.

During his opening speech, Mr. Liu stressed the importance of key national indicators as a mechanism to assess the development of countries, improve the performance of government, and strengthen government accountability. Researching, establishing, and using key national indicators will undoubtedly play an increasingly important role during the current global financial crisis in promoting policies to help governments achieve their goals and helping SAIs fulfill their responsibilities. Mr. Liu stated that during audits in China, especially performance audits, the CNAO paid significant attention to collecting key indicator information on the economy, society, zoology, environment, culture, resources, and people’s livelihood. The CNAO used this information to carry out audits in areas such as the environment, education, public health, social security, and fixed asset investment.

During the meeting, participants discussed the current work of the group and the working plan for 2009–2010; they also discussed the concept mechanism for developing and using a key national indicators system. In addition, CNAO representatives submitted a paper on relevant assessment indicators and their utilization in audit on scientific developments in China.

For additional information contact the working group at intrel@ach.gov.ru.

New ASOSAI Secretary General

Hwangsik Kim In October 2009, the ASOSAI Assembly unanimously elected Hwangsik Kim, Chairman of the Board of Audit and Inspection of Korea, as new Secretary General of ASOSAI for a 3-year term beginning on the date of election.

Mr. Kim stated that he would like to focus on (1) fully supporting member SAIs in their initiatives to face the challenges of the 21st century and (2) enhancing cooperation and collaboration among member SAIs and with other INTOSAI regional organizations to promote knowledge-sharing.

For additional information, contact ASOSAI:

E-mail: koreasai@koreasai.go.kr
Web site: www.asosai.org

 

ASOSAI Seminar on Social Security Audit Held in Beijing

The ASOSAI Seminar on Social Security Audits was held in Beijing September 1–8, 2009, with 29 participants from 26 SAIs in attendance. Participants shared their national policies and regulations on disaster relief funds and government-subsidized housing programs and exchanged ideas and audit case studies related to these topics. Through this seminar, ASOSAI members gained an idea of how Asian countries have audited disaster relief funds and government-subsidized housing programs, and expanded their vision on how to carry out social security performance audits.

Participants in the ASOSAI Seminar on Social Security Audits held in Beijing in September 2009.

Participants in the ASOSAI Seminar on Social Security Audits held in Beijing in September 2009.

For additional information, contact ASOSAI:
E-mail: koreasai@koreasai.go.kr
Web site: www.asosai.org