International Journal of Government Auditing – January 2012
In March 2011, the third EUROSAI-ARABOSAI Conference was held in Abu Dhabi, the capital of the United Arab Emirates, with participants from over 40 countries within the two regions. Held soon after the XX INCOSAI in Johannesburg, the conference provided an opportunity to reflect on the Johannesburg Accords as well as the conference themes of accountability, transparency, and fighting corruption.
The sessions on transparency and accountability built on the discussions at the XX INCOSAI and provided more information on the documents included in the International Standards of Supreme Audit Institutions (ISSAI) framework along with practical country experiences of the issues. The final session on fighting corruption was aimed at increasing awareness and looking at the scope of auditing or investigating corruption within different jurisdictions.
The conference produced the Abu Dhabi Declaration, which attempts to provide a platform for bringing the regions closer together by identifying mutually beneficial methods of collaborating to implement the ISSAI framework and enhance the fight against corruption. The declaration includes an appendix that lists many documents produced within INTOSAI and its regions. It provides significant guidance on how to operate as an SAI, ranging from strengthening quality assurance functions to elements of an enterprise architecture.
Preconference discussions with various SAIs disclosed that while identifying the quantity of available documentation and establishing a framework for SAI operations are both valuable undertakings, organizing the information for practical implementation can be confusing. For example, it is difficult to implement elements of the value and benefits paper from the XX INCOSAI when considering building capacity or ISSAIs 20 and 21 (Principles of Accountability and Transparency and Principles of Transparency—Good Practices). To this end, the appendix focuses on organizing (rather than creating more of) the current information into an architecture.
The preconference discussions also identified the lack of attention paid to fraud and corruption within the ISSAI framework. Its heavy focus on auditing (especially attestation audits) and limited guidance on inspection and investigation (which are part of many SAI mandates) lead to a lack of focus on these areas.
The host SAI of the United Arab Emirates presided over session one, which focused on two essential functions if SAIs are to “walk the talk”: providing information on their own performance (as explained through key aspects of ISSAIs 20 and 21) in the public domain and opening SAI doors for scrutiny, as discussed under the peer review mechanism. Prior to the meeting, SAIs filled out a survey that provided an overview of the key transparency elements.
Figure 1: Key Transparency Elements for SAIs
As shown in figure 1, SAIs are moving toward having transparency indicators. However, actually putting these mechanisms in place to ensure the effectiveness of SAI outputs is still an area for development.
The SAI of France presented a paper outlining the key principles in ISSAIs 20 and 21, which are a simple assessment of the aspects needed by SAIs to put their mandates in place and help add value and benefit to the lives of citizens. This complements the value and benefits issues outlined in theme 1 of the XX INCOSAI. The French SAI focused on the principles relating to communicating the results of SAI work, as highlighted in figure 1. The SAI of Iraq also presented a comprehensive paper on its experience in regard to some of the principles set out in ISSAIs 20 and 21.
Peer review is a tried and tested tool that can help SAIs increase transparency and enhance their effectiveness. The German SAI, which was heavily involved in drafting the peer review guidelines, presented a paper on the theory and practice of peer reviews from the perspectives of both the peer reviewer and the subject of a peer review.
Knowledge transfer and learning can occur for the entity on either side of the peer review. Furthermore, many agreements regarding the scope of the reviews center on SAI effectiveness. For example, the Norwegian SAI was recognized for the effectiveness of its performance audit process, demonstrating how a peer review can add credibility to an SAI’s work.
The SAI of Switzerland presented another peer review experience. For a small SAI, a peer review can be an effective opportunity to draw upon the resources of larger SAIs in a focused manner. The scope of the Swiss peer review addressed far-reaching and important issues such as the following:
The deliberations involved in agreeing upon the peer review engaged broader stakeholders, including parliamentarians.
In addition to demonstrating the value of the SAI, peer reviews can highlight areas for development and improvement and provide objective advice and guidance. The conference had presentations concerning capacity building and a summary of the IDI stocktaking report in which SAIs identified areas for development and training. A peer review process can help SAIs provide third-party confirmation of the gaps in their capacity to meet the needs of stakeholders.
Finally, peer reviews can address concerns about the return on resources invested in SAIs. On a broader level, this issue was discussed during the second session on accountability.
The SAI of Lebanon chaired the second session, which focused on providing information on SAI reporting practices and ensuring that audit findings and recommendations are taken seriously. The Russian Chamber presented an overview of how its operations affect the broader public financial management agenda within Russia. This includes assessing the budget at various stages (not simply after the fact). The chamber’s presentation explained its accountability process after the audit report is issued and considered in various chambers as well as the speed of response to audit findings, in particular its ability to deal with issues of vital importance. A combination of planned activities and responses to issues emerging within the public interest help maintain the chamber’s relevance and professionalism. This, in turn, ensures public interest in audit results and swift action on recommendations.
The SAI of Jordan provided an overview of the different types of accountability under a court-based system, which are broader than those of audit offices. Particular emphasis is placed on individual accountability and assessing the duties and responsibilities of public officials.
The President of EUROSAI, the SAI of Poland, presented a paper on measuring SAI performance, continuing the discussion on this topic that began at the XX INCOSAI. The presentation discussed the need for such measures and indicators and how they should be introduced and reported to stakeholders. A key issue was integrating any framework into the fabric of the SAI and abiding by the principle of preparing “SMART” indicators (that is, indicators that are specific, measurable, achievable, realistic, and timely).
The SAI of Belgium provided an example of an SAI’s value to its stakeholder by discussing its work on the social security system. The SAI of Malta described its accountability report to Parliament, providing an example of the type of information that SAIs can gather and report on their performance and activities.
The Spanish SAI presented an important paper that summarized many of the issues raised in this session. This paper reflected on accountability in terms of
The final session provided an opportunity for the SAIs, under the stewardship of the SAI of Portugal, to discuss the difficult topic of SAI involvement and mandate in leading the fight against corruption. SAIs need to be leaders in encouraging the prevention of fraud and corruption rather than enforcement agencies. SAI mandates in this area are not necessarily clearly defined and, therefore, practices across SAIs can differ significantly, as demonstrated in figure 2.
Figure 2: SAI Involvement in Fighting Corruption
Several presentations were made on innovative techniques and uses of technology to provide some measures to prevent and detect fraud and corruption. Presentations by the SAIs of the United Arab Emirates, Hungary, and the Netherlands highlighted tips and tricks for assessing fraud and corruption.
The EUROSAI-ARABOSAI Conference underscored a number of key issues. INTOSAI and its regional working groups are moving toward closer collaboration and harmonization, as reflected in the ISSAI framework. However, current practices and experiences demonstrate the need for further knowledge sharing to enable consistency and high quality wherever possible. Limitations in capacity and different mandates notwithstanding, SAIs should utilize joint working programs, undertake peer review, and develop innovative methods to ensure that they can effectively integrate all aspects of the ISSAI framework and cover additional elements of fraud and corruption.
For additional information, contact the SAI of the United Arab Emirates: