International Journal of Government Auditing – July 2012
Environmental Auditing: Current and Future Challenges
Prior to the 14th WGEA Assembly in Buenos Aires, Argentina, in November 2011, a 1-day training seminar called “Environmental Auditing for Beginners” took place in close cooperation with the SAIs of Finland and the United States and several other members of the WGEA Steering Committee.
As the last session of the training day, a panel comprising representatives from the committee’s member SAIs discussed challenges to and the future of environmental audits. The panelists were Dr. Vivi Niemenmaa (Finland), Ms. Nameeta Prasad (India), Mr. Helge Strand Østtveiten (Norway), Ms. Jill Goldsmith (United Kingdom), and Mr. Steven Elstein (United States).
Panelists at the WGEA training session discussed current and future challenges in environmental auditing.
Major Environmental Audit Challenges
The panelists were unanimous in their belief that environmental auditing is more similar to other types of audits than not, but they were still able to identify a number of difficulties that are specific to environmental auditing:
- Environmental data can often be lacking, diffuse, or incomplete at the local, regional, and international levels.
- Environmental problems and policy issues are relatively new.
- Sustainability— a core dimension—is fundamentally difficult to address.
- Environmental problems and abatement evolve over the long term.
- Materially linking environmental issues to state finances is a challenge.
- Cost-benefit analysis of the long-term benefits of environmental engagements is crucial but difficult.
- Environmental issues are multinational and interdisciplinary.
- Fieldwork requires specific competencies and knowledge.
- Finding audit criteria on the national level is difficult, but it is also difficult to persuade governments to adopt international criteria.
- Auditing generally has a retrospective focus, but environmental issues require vitality in assessing the potential future impact of policies/programs.
Future Environmental Auditing Challenges
In mapping future challenges, the panelists were, in many respects, of one mind. They pointed out the trend toward the increased globalization of environmental problems, the ever more apparent impact of climate change, and the need to address complex issues such as sustainable development and climate change.
The panelists also observed the following future challenges:
- addressing more complex and global environmental issues as the effects of climate change become ever more apparent;
- expanding the pool of environmental auditors and providing proper training for them;
- planning audits and choosing topics and focuses amid the vast array of options;
- raising awareness about environmental auditing practice among the public and politicians;
- adapting to fluctuations in environmental policy decisions;
- measuring how environmental matters are being dealt with; and
- maintaining integrity and professionalism against the background of the often high-level politicization of environmental concerns.
Tips for First Environmental Audits
The panelists shared the following tips for SAIs carrying out their first environmental audits.
Spend enough time on planning the audit and get as much information as possible about the topic. Choose a clear problem that is also recognized by others as such. Do not choose a complicated first topic like climate change. Even if the audit of waste is not easy, it is easier than climate change. Start with familiar things or things that are important for your country—for example, fisheries for Norway. Do not think that you have to be the “world champion” in your first environmental audit. Scoping is important, so avoid a large scope and instead start with a focused scope.
Once you have chosen the topic, find out what other SAIs have done and consult the WGEA website for resources. Also, study the WGEA guidance material, if there is one on your chosen subject.
Questions and Criteria
Have a solid design for the audit: risk-based research questions, solid and clear criteria, and good methodology. Choose the right target where you can identify good questions. Most importantly, design good, clear, and researchable questions and objectives, even if it takes more time. Poor audit questions are the single greatest cause of audit failure . Lay the groundwork so that good questions can be defined properly, even if it takes extra time. Get management and all other important parties to agree on the questions. Develop good audit criteria against which to measure the government’s performance. The success of the audit depends on the criteria.
Field Work and Recommendations
After designing the audit, assign clear tasks and responsibilities to each member of the team; this will greatly facilitate the whole process.
Establish what recommendations you are going to make and identify those who should act on the recommendations.