Inside INTOSAI

International Journal of Government Auditing – July 2014

ASOSAI WGEA holds its 5th Seminar and 4th Working Group Meeting in Vietnam

The fifth seminar on Environmental Auditing, and the fourth working meeting of the Asian Organization of Supreme Audit Institutions (ASOSAI) Working Group on Environmental Auditing (WGEA), were both held in Hanoi, Vietnam, April 14–18. Attending the meetings were 53 delegates from 19 countries, and observers from INTOSAI WGEA, AFROSAI WGEA, the Canadian Comprehensive Auditing Foundation (CCAF-FCVI), and the German Corporation for International Cooperation (GIZ).

The Environmental Auditing Seminar served as a forum for sharing experiences and best practices regarding three themes: research and audit on the atmospheric environment, audit on sustainable energy, and audit on solid waste. Nineteen papers based on these themes were presented during the seminar.

The ASOSAI WGEA meeting was held to update participants on environmental auditing developments since its last meeting. Members of the group also discussed and adopted the 2014-2016 Working Plan of ASOSAI WGEA, and introduced two proposals of cooperative audit.

On behalf of Mr. Liu Jiayi, the Chairman of ASOSAI WGEA and the Auditor General of China, Dr. Dong Dasheng, the Deputy Auditor General of CNAO, delivered the opening remarks and reported on the work of ASOSAI WGEA over the past two years. Mr. Nguyen Huu Van, Auditor General of the State Audit Office of Vietnam and the representative of the Chair of INTOSAI WGEA, delivered the welcome speech.

The next seminar and working meeting will be hosted by SAI India in 2016.

Capacity Building Committee’s Subcommittee 3 reports rising number of peer reviews

In accordance with the “Action Plan 2013-2016 of the INTOSAI Capacity Building Committee’ss Sub-Committee to Promote Best Practices and Quality Assurance through Voluntary Peer Reviews (Sub-Committee),&4dquo; approved by the XXI INCOSAI in Beijing 2013, an e-mail based peer review survey among INTOSAI members was conducted by the Subcommittee Chair (SAI Slovakia) in February and March of 2014.

As of April 1, 2014, 66 peer review projects were recorded by the Subcommittee. The most reviewed SAI, with four peer reviews, was the Government Accountability Office of the United States. Three other SAIs—from Canada, Lithuania, and Poland—were peer reviewed three times. Fourteen SAIs were reviewed twice, and another 25 SAIs were peer reviewed once. These numbers mean that, so far, 43 SAIs (23 percent of 191 INTOSAI SAIs) have been peer-reviewed.

The SAI of Sweden was involved as a peer reviewer 18 times, followed by Norway and the Netherlands (both 17 times) and the UK (16 times). As peer reviewers, these four SAIs accounted for 41 percent of the engagements of the SAIs in the peer review. The Subcommittee Chair believes this imbalance should be addressed, and will present the survey results at the Capacity Building Committee meeting in Lima, Peru, at its September 2014 meeting. And, being inclined to lead by example, the Subcommittee Chair intends to contribute to the process by acting as a peer reviewer.

The peer reviews are becoming increasingly valuable as an assessment tool for INTOSAI members: there were 29 peer reviews recorded in a 10-year period (2000-2009). The next five-year period (2010-2014) saw the rise of the performed peer reviews to 37.

The e-mail survey revealed that, after its adoption in 2010 by the XX INCOSAI, ISSAI 5600: Peer Review Guideline was used extensively—especially in the peer review preparation stage, and primarily in the peer review planning process. ISSAI 5600 is due for revision, and subsequent adoption, at the XXII INCOSAI in 2016. The revision of this standard represents an opportunity to contribute expertise and knowledge to the ISSAI framework development, and, by extension, to the wider INTOSAI community.

The Subcommittee’ss task team, including representatives from the SAIs of Germany, Hungary, Poland, and Slovakia, met in May 2014 in Bratislava, Slovakia, to work on the ISSAI 5600 revision in accordance with the Subcommittee’s action plan.

For additional information, contact the SAI of the Slovak Republic at info@nku.gov.sk.

Photo:  Subcommittee Task Team (from left): P. Banas (SAI Poland), A. Hetényi- Lajó and Z. Giday (SAI Hungary), S. Hild (SAI Germany), I. Gál (SAI Slovakia), S. Ludes (SAI Germany), and I. Ciho and T. Tirpák (SAI Slovak Republic), standing against a wall, Delegates at the WG15 assembly plenary session in Tallinn, Estonia, held June 3–6.
Subcommittee Task Team (from left): P. Banas (SAI Poland), A. Hetényi- Lajó and Z. Giday (SAI Hungary), S. Hild (SAI Germany), I. Gál (SAI Slovakia), S. Ludes (SAI Germany), and I. Ciho and T. Tirpák (SAI Slovak Republic).

First meeting of the Working Group on Financial Modernization and Regulatory Reform

When: May 6 – 7, 2014
Where: Washington, D.C.
Host: United States Government Accountability Office
Participants: SAIs of Brazil, Chile, China, Finland, Indonesia, Italy, Mexico, the Netherlands, Poland, the Republic of Korea, Saudi Arabia, Sweden, United Kingdom, the United States.

Photo:  G FMRR participants gather in Washington, D.C., to exchange ideas on topics such as financial regulatory reforms.  Participants are standing in front of a large collage or mural in a room.
WG FMRR participants gather in Washington, D.C., to exchange ideas on topics such as financial regulatory reforms.

The U.S. Government Accountability Office (GAO) hosted the first meeting of the INTOSAI Working Group on Financial Modernization and Regulatory Reform (WG FMRR) in Washington, D.C. The work of the WG FMRR is organized into three subgroups that correspond to three objectives:

  • Subgroup 1, led by China, is focused on audit tools: it collects and summarizes information on SAIs’ authorities and capabilities to conduct financial regulatory audits; identifies other relevant guidance and tools for conducting such audits; and provides technical assistance to SAIs.
  • Subgroup 2, led by Canada, is focused on networking: it identifies the relevant international organizations involved in financial modernization and reform efforts, compiling a list of potential points of contact at each organization, and reaching out to discuss potential mechanisms for sharing information.
  • Subgroup 3, led by the United States, is focused on reform efforts: it identifies and collects information on the nature, scope, and implementation status of financial modernization and regulatory reforms undertaken at the national and international levels, and synthesizes such information to identify potential gaps that may warrant additional regulatory attention.

During the two-day meeting, delegates met in their respective subgroups to discuss work plans and determine next steps.

The audit tools subgroup agreed to

  • develop information on SAIs’ authorities, experience, methodology, and available guidance for oversight of the financial system;
  • present their methodologies for overseeing the financial system; and
  • identify tools and guidance to share among the SAIs.

The networking subgroup will

  • identify contacts and set up meetings with international bodies, namely the International Monetary Fund (IMF), Financial Stability Board (FSB), Basel Committee on Banking Supervision (Basel Committee) and International Organization of Securities Commissions (IOSCO);
  • review the status of the European Banking Union and determine the utility of establishing a relationship with the EU; and
  • obtain relevant information on SAIs’ work monitoring financial stability and reform.

The subgroup engaged in reform efforts will

  • research international institutions and international financial reforms with the aim to develop standardized methods to help SAIs evaluate financial stability and emerging risks.

Discussion sessions with GAO staff and outside speakers

In addition to the subgroup sessions, the two-day meeting included three discussion sessions on financial regulatory reform and oversight: 1) GAO staff members talked about recent work GAO has conducted on financial regulatory oversight issues, 2) outside experts from research organizations and the U.S. Securities and Exchange Commission discussed the progress and challenges of international financial reforms since the financial crisis, and 3) representatives of the International Monetary Fund (IMF) spoke about identifying risks to the financial system.

Internal Control Standards subcommittee meets in Lithuania

Photo:  Members of the ICS subcommittee gather in Lithuania to discuss ways to develop and promote good practices in the field of internal control.  Two long curved rows of people are standing outside on a paved surface.
Members of the ICS subcommittee gather in Lithuania to discuss ways to develop and promote good practices in the field of internal control.

The National Audit Office of Lithuania hosted the INTOSAI Subcommittee on Internal Control Standards (ICS) meeting in Vilnius, Lithuania, on May 27–28, 2014. In her opening speech, Lithuanian Auditor General Giedre Švediene said, “The task of the National Audit Office is to assess the effectiveness of internal control and to promote standards of good governance in the government sector. Therefore, the work of the subcommittee is of paramount importance to us. The study paper on reporting on internal control in the light of the results of the global survey of 2012, developed by the subcommittee in 2013, will be used in updating INTOSAI GOV 9110. I am pleased to mention that my office took an active part by developing the questionnaire for this survey in cooperation with the Supreme Audit Institution of Poland.”

Subcommittee Chair and President of the Supreme Audit Office of Poland Krzysztof Kwiatkowski reminded participants that the Subcommittee on Internal Control Standards was established in 1984 under the name of the Committee on Internal Control and initially chaired by the SAI of the United States, and is one of the oldest structures of INTOSAI. The INTOSAI ICS subcommittee was created to foster the development and promotion of good practices in the field of internal control, and to establish focused managerial accountability in the public sector. The subcommittee is responsible for working out the INTOSAI Guidance for Good Governance (INTOSAI GOV) on internal control standards.

President Kwiatkowski stressed the importance of cooperation and coordination of work among all subcommittees that, together with the ICS subcommittee, constitute the Professional Standards Committee of INTOSAI – PSC. To this end, representatives of other PSC subcommittees took part in the meeting in Vilnius and updated participants on their latest achievements and future plans. Representatives of several other institutions, such as IFAC, OECD, and the Ministries of Finance of Lithuania and Poland, were also invited to the meeting.

The ICS subcommittee activities are part of Goal 1 of the INTOSAI Professional Standards Committee. The subcommittee work plan for the period 2014–2016 builds on the five main tasks identified by the PSC Steering Committee in 2013:

  • Draft revised INTOSAI GOV 9110 on the basis of the results of the survey conducted in 2012
  • Draft revised guidelines on risk management (INTOSAI GOV 9130) on the basis of the results of the survey conducted in 2012
  • Review INTOSAI GOVs 9100, 9120, 9140 and 9150 and present proposal for possible revision
  • Actively promote the INTOSAI GOVs on internal control
  • Develop the subcommittee e-platform

Subcommittee members volunteered to implement individual tasks of the work plan: the review of INTOSAI GOVs 9100, 9120, 9140 and 9150, as well as the revision of INTOSAI GOV 9110 and 9130. The next step for the subcommittee will be to prepare a detailed time frame for the revision.

As of May 2014, the ICS subcommittee has 28 members: Poland (Chair), Austria, Bahamas, Bangladesh, Belgium, Bolivia, Brazil, Chile, Cook Islands, Costa Rica, Cuba, Egypt, El Salvador, France, Georgia, Hungary, Jamaica, Libya, Lithuania, Netherlands, Oman, Romania, Russian Federation, South Africa, Spain, Tanzania, Ukraine, United States of America, and one observer, the Institute of Internal Auditors.

For additional information, visit the ICS Subcommittee Web site at
http://www.psc-intosai.org/subcommittees/internal-control-standards/ or e-mail the ICS at ics@nik.gov.pl.

OLACEFS Board of Directors meets in Buenos Aires

27 representatives from nine regional SAIs attended the 59th Board of Directors meeting

On May 23 in Buenos Aires, Argentina, the SAI members of the OLACEFS Board of Directors met in Argentina’s Office of the Auditor General of the Nation (AGN).

The event was attended by the Chair (Brazilian SAI) and Executive Secretariat (Chilean SAI) of the organization, as well as the SAIs of Argentina, Paraguay, and Peru. Also present, in their capacity as representatives of OLACEFS Committees, Commissions and Working Groups, and the OLACEFS-GIZ Regional Program, were the SAIs of Colombia, the Dominican Republic, Mexico, and Uruguay.

Among the most relevant topics discussed were the OLACEFS-GIZ Regional Program, the monitoring of the organization’s management, adjustments to the annual operating plans (AOPs), and the budget for 2014.

Work was begun to formulate a strategic plan for the period 2017 – 2022, and proposals for the self-generation of resources by OLACEFS were presented. As part of the institutional strengthening of the organization, a document was presented that will govern OLACEFS’ communications policy.

Also, to modernize its image and visibility, guidelines were defined for a contest to design a new OLACEFS logo. The contest is open to officials of the OLACEFS’ SAI members. The closing date for entries is August 3, and the winner will receive 1,000 USD. Competition rules can be found on the OLACEFS website.

As part of OLACEFS’ expansion plans, board members approved the incorporation of the Court of Accounts of the Municipalities of the state of Bahia (TCM-BA) of the Federative Republic of Brazil. The final stage of TCM-BA’s admission process to OLACEFS as an affiliate member will take place at the next OLACEFS General Assembly this fall.

The recent meeting also addressed the Americas Award, and the creation of the Latin American and Caribbean Network for the Fight against Corruption (RLACC). The Board of Directors, through the Resolution of Buenos Aires, expects a memorandum of understanding to be signed with other networks to enable the possible launch of the RLACC at the 24th OLACEFS General Assembly in Cuzco, Peru, in November.

For more information please click on the following links:

DOCUMENTS FOR THE 59TH BOARD OF DIRECTORS MEETING 2014, BUENOS AIRES (http://www.olacefs.com/Olacefs/ShowProperty/BEA%20Repository/Olacefs/Eventos/2014/Archivos/ Consejo_BBAA.htm)

PHOTO GALLERY FOR 59TH BOARD OF DIRECTORS MEETING, 2014 (https://www.flickr.com/photos/olacefs/sets/72157644852776073/)

PASAI/IDI SAI Performance Measurement Framework training

Twenty-five members of the Pacific Association of Supreme Audit Institutions (PASAI) community took part in a one-week training program on the SAI Performance Measurement Framework, April 28 to May 2, in Fiji. The Performance Measurement Framework is an assessment tool to help SAIs communicate their value and benefits to citizens. The framework also helps with managing, measuring, and monitoring the performance of SAIs.

PASAI members gather in Fiji for a Performance Measurement Framework training program. Long rows of people, one row seated, the other standing behind the seated row.  They are outside, on grass, with tall plants close behind them as the background.
PASAI members gather in Fiji for a Performance Measurement Framework training program.

The framework also details the internal and external areas SAIs should strengthen to deliver on responsibilities prescribed by their mandates. While participants were overwhelmed by how comprehensive the scope of the framework is, they recognized its importance in measuring SAI performance. The framework also highlights the importance of effective management and support structures, responsive human resources and leadership, and active management of communication and stakeholder relationships.

At the end of the training, participants received certificates certifying them as assessors and trainers of the SAI Performance Management Framework. The participants will be added to the trainer database maintained by the INTOSAI Development Initiative (IDI).

The training is a cooperative program between PASAI and the IDI, with facilitators from the Brazilian Court of Accounts, the World Bank, and the Cook Islands Audit Office. The training comprised two parts: using the framework, and training trainers to teach others to use the framework.

It was a timely training for PASAI members as they prepare for the implementation of their new Strategic Plan 2014–2024. As the new strategic plan takes effect, training successfully demonstrated where members need to focus to improve and strengthen their SAIs.

Including supreme audit institutions in the UN Post-2015 Development Agenda

Supreme audit institutions (SAIs) play an essential role in the functioning of public administration. Their work creates transparency and accountability, and contributes to good governance. SAIs can only effectively fulfill their mandate, however, if their independence is fully guaranteed. A significant step toward strengthening SAI independence, and thus ensuring increased transparency and accountability worldwide, would be the inclusion of SAIs’ roles in the UN Post-2015 Development Agenda.

With the Post-2015 Development Agenda the UN will adopt a new global development framework to succeed the expiring Millennium Development Goals. This agenda will facilitate sustainable and inclusive development. In recent months, the INTOSAI General Secretariat has been advocating the recognition of SAI independence and SAI capacity building in the future international development agenda.

In October 2013, INTOSAI Secretary General Josef Moser met with UN Secretary-General Ban Ki-moon. They agreed on the importance of collaboration between their organizations in order to strengthen accountability in development cooperation. On the occasion of the XXI INCOSAI in Beijing in October 2013, the INTOSAI community reached common ground with the UN cooperation.

At a symposium held by the United Nations Economic and Social Council (ECOSOC) on “Accountable and effective development cooperation in a post-2015 era,” held in Berlin in March 2014, as well as at the 13th Session of the UN Committee of Experts on Public Administration (CEPA), held in New York in April 2014, the General Secretariat communicated INTOSAI’s position. The General Secretariat also submitted a contribution paper to the UN Intergovernmental Committee of Experts on Sustainable Development Financing, and participated in the UN online discussions “Measuring progress in MDG achievement and beyond” and “Participatory monitoring and accountability.”

As a result of these efforts, both current ECOSOC President Martin Sajdik and UN Under-Secretary-General for Economic and Social Affairs Wu Hongbo endorsed the inclusion of SAIs and their capacity building in the future UN development agenda. CEPA also decided to incorporate SAI independence and capacity building in its conclusions to ECOSOC, which will play a pivotal role in the design of the Post-2015 Development Agenda.

In July 2014, the INTOSAI General Secretariat will participate in the ECOSOC High-Level Political Forum in order to advocate SAIs’ contributions to sustainable development. Secretary General Josef Moser will once again underline the indispensability of the independence of SAIs, the need for sustainable SAI capacity building, and the necessity of improving the accounting system. Members of the INTOSAI community are encouraged to play a leveraging role by asking their national bodies to help endorse the General Secretariat’s efforts.

With the developments of the past months, the importance of SAI independence – as spelled out in INTOSAI’s Declarations of Lima and Mexico and reiterated in the UN Resolution A/66/209 – and the necessity of SAI capacity building were clearly recognized. The inclusion of SAIs’ roles in the UN Post-2015 Development Agenda is the necessary next step to increase the independence of SAIs, thus enabling functional public administrations and creating increased transparency and accountability worldwide.

For more information visit http://www.intosai.org or contact the INTOSAI General Secretariat at intosai@rechnungshof.gv.at.