International Journal of Government Auditing – Winter 2016
The INTOSAI Code of Ethics – ISSAI 30 was adopted by the XVI INTOSAI Congress in Montevideo in 1998. In Stockholm in June 2013, the Steering Committee of the INTOSAI Professional Standards Committee (PSC) established a team to carry out an initial assessment of whether the extant ISSAI 30 needed to be revised to ensure its relevance in the current public sector auditing environment. The ISSAI 30 Review Team was established and comprised the Supreme Audit Institutions (SAIs) of Indonesia, Poland (project leader), Portugal, the United Kingdom and the United States.
To determine whether the Code of Ethics needed a revision, input was sought from the whole INTOSAI community, through an online survey distributed in February 2014. According to the respondents, ISSAI 30 needed a revision that should focus on, among others, shifting from the perspective of an individual auditor to the SAI perspective, with due consideration to stakeholders; emphasising the importance of ethical culture; reviewing fundamental principles and core values; considering monitoring compliance with ethical requirements, and including ethics management and control; and improving clarity of the document. The survey also indicated the need for additional guidance and examples. Based on these results, a project proposal was then submitted and approved by the PSC Steering Committee in May 2014.
To deal with the actual revision of ISSAI 30, and to provide for a broader regional representation, the team was enlarged to include also representatives from the SAIs of Albania, Chile, Hungary, Kuwait, Mexico, Namibia, the Netherlands, New Zealand and South Africa, with a representation of the International Ethics Standards Board for Accountants (IESBA). The Team have developed, through meetings and correspondence, the revised version of ISSAI 30, always keeping in mind the conclusions of the survey. In autumn 2015, the document was sent to the PSC Steering for approval and for exposure on www.issai.org.
The main change in comparison with the present version of the INTOSAI Code of Ethics is the new wording of the fundamental values that underpin ethical behaviour. These values, along with a summarised explanation of each value, follow:
Another fundamental change is that ISSAI 30 is now intended to be applicable to SAIs and all their staff. This includes the Head of the SAI, any management positions and all individuals directly employed by, or contracted to conduct business on behalf of, a SAI. All these individuals should consider the stated values in their professional activity and, as adequate, in their private life.
A novelty introduced in the revised ISSAI 30 is a section dedicated to overall responsibilities of Supreme Audit Institutions in the area of ethics promotion and management. This has been done with a view to encouraging SAIs to provide their staff with conditions and incentives to cherish ethical values, rather than leaving them alone while facing ethical dilemmas.
The revised ISSAI 30 follows a new structure, including a Preamble, a section with an Overall approach to ethical behaviour, a section dedicated to Overall responsibilities of SAIs and five sections to explore each fundamental value individually.
The proposal clearly differentiates requirements and guidance. All requirements should be complied with, either by SAIs or their staff. This is intended to clarify the initiatives, controls and behaviours that are prerequisites to ensure trust and credibility.
Separately, application guidance is provided to assist both SAIs and staff in meeting the requirements, as had been requested by respondents to the survey. The requirements and application guidance can be clearly differentiated in the revised ISSAI 30 through the visual presentation and through the language used.
In October 2015, the Steering Committee of the Professional Standards Committee approved of the exposure draft of the revised ISSAI 30. The exposure draft has been placed on the ISSAI website www.issai.org and was open for commenting until February 1, 2016.
Once amended following comments, and after going through the Due Process for INTOSAI Professional Standards, the revised ISSAI 30 will be submitted for approval to the INTOSAI Congress in December 2016.
Any questions related to the project can be addressed at: ISSAI30.Review@nik.gov.pl.
On November 23, 2015, the President of the United Mexican States, Enrique Peña Nieto, welcomed delegates from across the Americas to Querétaro, Mexico for the XXVth Assembly of the Organization of Latin American and Caribbean Supreme Audit Institutions (OLACEFS). Hundreds of delegates from 23 countries attended the Assembly.
President Nieto was joined by, among others, the Governor of the State of Querétaro, Mr. Francisco Dominguez Servién; the Secretary of Public Affairs, Mr. Virgilio Andrade Martinez; and the President of the Oversight Commission of the Auditoria Superior da la Federación de México, Luis Maldonado Venegas. INTOSAI colleagues such as Ms. Monika Gonzalez-Garcia-Koss, the INTOSAI Director of Strategic Planning; Mr. Freddy Ndjemba, Chief of Operations for African Organization of Supreme Audit Institutions (AFROSAI); and Mr. Horacio Saboai Viera of the INTOSAI Development Initiative (IDI); were also in attendance to show support for OLACEFS and its partners in the region.
The Auditor General of Mexico, Mr. Juan Manuel Portal, and the President of the Brazilian Court of Accounts, Minister Aroldo Cedraz de Oliviera, inaugurated the 25th OLACEFS Assembly.
The next day the delegations began intense discussions on the first theme of the Assembly: Citizen Participation in the Work of Supreme Audit Institutions. The Assembly agreed that it is impossible to ignore the role society plays as a stakeholder in the accountability of public funds. In fact, society’s engagement is translated as support for the work of the Supreme Audit Institutions (SAIs).
The Assembly noted there were a number of questions related to citizen engagement. Delegates found there is a need to advance this discussion around two key questions: what exactly does citizen engagement mean, and what are its implications.
Other questions that arose during discussions included those related to ensuring the quality of the inputs from citizens in audit work; defining the legal, institutional, and organizational frameworks of SAIs; and developing a common language for participatory audits.
Assembly participants also noted a number of benefits arising from citizen engagement. Specifically, they noted that increasing citizen engagement in audit work can lead to more effective communication with society at large.
Such engagement can also contribute to the creation of a culture of accountability, better access to official information, and public acceptance of audit reports.
The Assembly also discussed a second theme: Strengthening Information Technology and Communications Security and the Use of Databases for Efficient Auditing. The Assembly noted that Information Technology (IT) resources are an essential element in making audit offices more efficient and increasing the impact of their work. The use of IT resources presents many advantages, such as the optimization of resources, cost reduction, and corroboration and integration of diverse data sets.
The Assembly also noted that IT and communications issues present a number of challenges for SAIs in the region. Participants expressed concerns about information security breaches, the rapid advancement of key technologies that could present a risk that some SAIs could be left behind, limitations to access of information from some sectors of society and government, and systems compatibility concerns among some public sector entities and SAIs.
In addition to the discussions surrounding the themes of the conference, a number of dignitaries from international organizations presented information on their respective projects, many of which are designed to support the development of SAIs around the region. Leaders from the Organization for Economic Cooperation and Development, UNDP, the UN’s Food and Agricultural Organizations Inspector General, and the GIZ made presentations.
At its meeting in 2014 in Vienna, the Governing Board gave the goal chairs of the Professional Standards Committee (PSC), Capacity Building Committee (CBC) and Knowledge Sharing Committee (KSC) joint responsibility for assembling a forum of technical experts to address standard-setting issues in INTOSAI. The need to get the ISSAI framework “sorted” had become increasingly apparent in pace with the growing number of ISSAIs being developed, and the forum’s initial task would therefore be to provide clearer distinctions between auditing standards, other standards (requirements), guidelines and best practice documents in regard to auditing, ethics, independence and capacity development.
The common forum has now been established and the 15 members are ready to start work under the leadership of Ms. Ganga Kapavarapu from SAI India, who has been appointed chair of the forum.
The members convened for the first time in December 2015 for a kick-off meeting, which included meetings with the International Federation of Accountants (IFAC) and the Institute of Internal Auditors (IIA), a visit to the United Nations - where the Sustainable Development Goals (SDGs) were on the agenda -and a session with the World Bank.
For a list of members of the common forum, please visit www.psc-intosai.org.
Ensuring that the composition of the common forum reflected the membership of INTOSAI in terms of regional representation, SAI models, audit types and audit/capacity-developing expertise was of vital importance to both the Governing Board and the goal chairs, and this requirement guided the selection process from start to finish.
In March 2015, the members of INTOSAI received a letter from the three goal chairs encouraging them to nominate candidates for the common forum.
Two months later, 30 SAIs – representing six of INTOSAI’s seven regions - had come forward and expressed their massive interest in participating in strengthening INTOSAI’s standard setting by nominating 82 candidates for the forum. During the months of May, June and July, the three goal chairs scrutinized the applications and subsequently the field was narrowed down to a short list of 20 nominees, which was further reduced to 16 (including a chair) after personal interviews had been conducted with the candidates over the phone.
The forum will report on progress made at the PSC, CBC and KSC steering committee meetings in 2016 and prepare a final project report for the Governing Board meeting in 2016 with its recommendations to enhance the ISSAI framework. On this occasion, the members of the Governing Board will also decide whether the common forum should become a permanent body in INTOSAI after 2016.
In that event, the forum may be required to assume further responsibilities for the approval of the content of INTOSAI’s standards, which will require a revision of the current version of the Due Process for INTOSAI’s Professional Standards. During the first or second quarter of 2016, the INTOSAI community will be consulted on a revised version of the Due Process that addresses this potential development.
Scheduled for May 26 – 27 , 2016, in Copenhagen.
The 13th EUROSAI WGEA Annual Meeting was held in Malta, between 6 and 8 October 2015. The main environmental topic for the meeting was auditing issues related to industrial waste and chemicals. The crosscutting audit topic was Reaching the Stakeholders of Supreme Audit Institutions. A training seminar in relation to Auditing Environmental Impacts of Agricultural preceded the Annual Meeting on 5 October 2015.
Seventy-one delegates from 30 state audit institutions, including representations from the WGEAs of the International Organization of Supreme Audit Institutions (INTOSAI) as well as the Organization of Latin American and Caribbean Supreme Audit Institutions (OLACEFS) participated in the Annual Meeting.
The training seminar focused on adverse environmental impacts of agriculture as well as measures for managing such impact and supporting EU agricultural schemes. The seminar also encompassed presentations and discussion on SAIs’ experiences relating to the conduct of environmental audits concerning the agriculture sector. Ms. Sylwia Gawronska (European Environmental Agency), Mr. Jérémie Crespin (European Commission, Directorate-General for Environment) and Ms. Christina Borchmann (European Commission, Directorate-General for Agriculture and Rural Development) delivered keynote speeches.
Mr. Anthony C. Mifsud, Auditor General of Malta, as the host and Dr. Alar Karis, the Auditor General of Estonia, as the Chair of EUROSAI WGEA, formally welcomed the delegates to the 13th EUROSAI WGEA Annual Meeting. The main theme addressed the topic: Auditing Issues related to Industrial Waste and Chemicals. Keynote speeches were delivered by Dr. Cathy Maguire (European Environmental Agency), Mr. Kevin Gatt (University of Malta) and Ms. Marie Dollhofer (BiPRO GmbH).
The theme relating to industrial waste and chemicals was further explored through SAI presentations, as well as plenary and group discussions. Discussion in relation to this topic mainly focused on treating industrial waste, hazardous waste management, medical waste treatment, regulating the management and disposal of solid waste as well as air pollution and climate change policy.
The second theme of the Annual Meeting, Reaching the Stakeholders was introduced through keynote speech by Dr Åge Johnsen, (Oslo and Akershus University College of Applied Sciences). A number of SAIs presented the methods and approaches adopted to ascertain that findings as well as conclusions arising through audit work reach stakeholders.
A businesses meeting concluded the Event where EUROSAI WGEA Secretariat presented a progress report and the work-plan for the forthcoming period. INTOSAI WGEA also presented a progress report and introduced its forthcoming initiatives. Additionally, OLACEF WGEA discussed the findings and conclusions of the Coordinated Audits of Water Resources.
The business meeting also entailed progress reports on the status of cooperative audits, namely Audit of Funds Allocated to Disasters and Catastrophes as well as the audit on the Protection of the Bug River drainage basin waters against pollution. This session also incorporated a plenary discussion on ongoing EUROSAI WGEA activities, including the potential for further cooperative audits, as well as continuous cooperation between SAIs.
More information on the event is available on EUROSAI WGEA’s portal at http://www.eurosaiwgea.org/meetings/Pages/13th-Annual-meeting.aspx