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International Journal of Government Auditing-April 2003:

Governmental Auditing in the South Pacific Region:




I am privileged to have the opportunity to share with you some issues 
and challenges confronting small and isolated audit offices in the 
South Pacific. For the purpose of this article, I will focus my 
comments on the perspective of a small island state. The Cook Islands 
comprises 15 small islands scattered over an area of some 2 million 
square kilometers of ocean, with a total land area of 240 sq. km. It is 
flanked to the west by Tonga and Samoa and to the east by Tahiti and 
French Polynesia. The Cook Islands is divided into a northern group 
with seven islands and a southern group with eight islands. It has the 
second largest exclusive economic zone in the world but is one of the 
least populated countries in the South Pacific, with a population of 
under 20,000.


Until 1987, the Cook Islands Treasury Department maintained an internal 
audit function that focused primarily on the integrity of the Treasury 
Department's centralized imprest system, the supply and sale of liquor, 
stamps, and cash counts. During this period, the internal audit 
function, which had four local staff, uncovered major fraud involving 
the supply and sale of liquor and cash losses in government-run post 
offices. This fraud resulted from poor internal controls and a lack of 
review and monitoring. In 1987, the Office of Audit and Inquiries, the 
Audit Office's predecessor, was established under the Public Money and 
Stores Act. During this period, the Cook Islands government delegated 
responsibility for the external audit function to the New Zealand 
Office of the Auditor General.

Prior to 1995, the Cook Islands economy experienced an economic 
collapse due to a bloated public service leading to over expenditures. 
The government was forced to downsize and restructure the public 
service, which resulted in a reform process. The under performance of 
various government-owned assets contributed to the economic collapse 
and, consequently, privatization saw the sale of various assets, 
including the government's failing flagship hotel. The reform process 
introduced the Public Expenditure Review Committee and Audit Act 
(PERCA) in July 1996 to help ensure financial management oversight and 
improve accountability and transparency. As a result of this 
legislation, the Office of the Audit and Inquiries was replaced by the 
Audit Office, which has functioned under the PERCAAct from the time of 
its origin. The external audit function carried out by the New Zealand 
Office of the Auditor General and private sector chartered accounting 
firms was transferred to the Cook Islands Government Audit Office, 
which took on full responsibility for external audit in 1996, when, for 
the first time, the Director of Audit position was localized. The 
Director of Audit rendered his first auditor's opinion on the Crown 
Financial Statements for the year ended June 30, 1998. Since then, the 
Audit Office has been fully responsible for providing auditor's 
opinions on the financial statements of the Crown and all of its 
Ministries and Crown Agencies.


After the public sector reform program began in 1995-96, the Ministry 
of Finance & Economic Management (MFEM) Act was enacted, which required 
strict financial management controls and replaced line item budgeting 
with output budgeting. The PERCAAct of 1996 was also designed to ensure 
adequate oversight and monitoring of compliance with the MFEM Act.

The Cook Islands Audit Office exists as a constitutional safeguard to 
maintain the financial integrity of the country's parliamentary system 
of government and to assist government in the effective, efficient, and 
economic use of resources. The Audit Office assists Parliament in 
strengthening the effectiveness, efficiency, and accountability of the 
instruments of government.

The Audit Office is independent of the executive branch of government. 
Its statutory mandate is enshrined in the Constitution of the Cook 
Islands, under Article 71, and in the Office of Public Expenditure 
Review Committee and Audit Act 1995/96, Part 3. The Director of Audit 
performs the functions assigned to him by law, with the assistance of 
staff and persons he appoints according to the terms of Section 21 and 
24 of the Office of Public Expenditure Review Committee and Audit Act 

Staffing and Training:

The Audit Office has experienced marked growth since its inception 7 
years ago. The size of the audit staff has nearly tripled and local 
staff have attained formal tertiary qualifications and received ongoing 
training through the South Pacific Association of Supreme Audit 
Institutions (SPASAI). SPASAI training programs have received adequate 
funding as a result of the efforts of the INTOSAI Development 
Initiative (IDI) and financial assistance from Asian Development Bank 
(ADB). Both institutions are committed to promoting good governance in 
the region.

Continuous professional development and staff training have continued 
to be a high priority for the Office, which has assisted in funding 
staff to take accounting and law courses through the extension services 
of the University of the South Pacific. In February 2001, the Audit 
Office hosted the 7th SPASAI Congress in Rarotonga. The Congress 
included a performance auditing workshop for auditor generals in the 

Financial Accounting and Reporting Practices and Audit Methodology:

Since the reform program was initiated, the standards for reporting 
accounting information from Ministries and other reporting units to the 
Ministry of Finance and Economic Management have improved considerably. 
The transformation from the cash basis of accounting to the accrual 
basis under generally accepted accounting practices has been completed. 
In the 1998/99 financial period, out of the 30 entities, five qualified 
audit opinions and one disclaimer of opinion were issued. In the 1999/
2000 financial period, three qualified audit opinion and one disclaimer 
of opinion were issued. However, delays in the timely preparation of 
financial statements and, the Audit Office's subsequent audit continue 
to be an area of concern. In December 2002, MFEM issued a comprehensive 
set of governmentwide accounting and financial reporting policies and 

At present, the majority of Audit Office staff resources are directed 
toward the conduct of financial statement audits to ensure that the 
public financial statements of the Crown and its separate reporting 
units are fairly presented. However, the Office undertakes special 
reviews targeted at specific problems ranging from internal control 
structure issues to allegations of criminal wrongdoing in the public 
service. The Audit Office functions as a safeguard to maintain the 
financial integrity of the country's parliamentary system of 

Future Challenges:

The recruitment and retention of qualified accountants and auditors is 
the most significant challenge the Audit Office faces today. Many of 
the Cook Islands' most talented and ambitious young people have left 
the country to pursue educational and career opportunities in larger 
South Pacific countries, such as Australia and New Zealand.

The Office also faces expanding workload management problems caused by 
understaffing. Quite simply, additional staff are needed to deal with 
the increased number of required financial audits and the Office's need 
to begin service performance audits in order to fulfill its legislative 
mandate. The lure of more attractive rates of pay in the private sector 
enhances recruitment problems.

To obtain the increased funding necessary to hire additional staff, the 
Audit Office will have to convince the government that the incremental 
costs associated with each new staff member hired would be more than 
offset by cost savings derived through additional audits conducted, 
especially service performance audits.

Presently, the Ministries and other reporting entities do not 
adequately report on the nonfinancial elements most commonly included 
in general purpose financial reports, i.e., the inputs, outputs, and 
outcomes directly related to service performance. The Audit Office will 
be encouraging reports on service performance that disclose the degree 
to which the reporting entity has met its service objectives of 
supplying goods and/or services. Once these reporting mechanisms are in 
place, the Audit Office will need to have additional staff to conduct 
related audits.

By undertaking service performance auditing, the Audit Office plans to 
become increasingly involved in ensuring the effective, efficient, and 
economic use of government resources. The performance audits will allow 
us the opportunity to evaluate the government's return on investment in 
terms of outputs and outcomes derived from the investment of public 

The Audit Office recognizes the need to solicit expert assistance from 
overseas to ensure that Audit Office staff receive appropriate training 
and are informed, on a regular and continuing basis, of changes and 
emerging issues related to international accounting standards and 
generally accepted accounting practices. While several Chartered 
Accounting firms practice in the Cook Islands, there may be issues 
concerning whether they themselves have had the time or opportunity to 
become fully knowledgeable with respect to current accounting changes 
and emerging issues.

Environmental auditing, information technology auditing, fraud and 
forensic auditing, and public debt auditing are also areas of concern 
and high priority for future staff resource allocations.

The Cook Islands Audit Office is currently challenged in meeting its 
statutory obligations under the PERCAAct with its existing level of 
resources. Declining revenues are available to the government due to 
external factors. The resulting decreasing budget appropriation, in 
turn, compromises the Audit Office's mandate.

These challenges lay out an ambitious agenda for the Cook Islands Audit 
Office. Other SAIs face similar challenges in carrying out their 
mandates. This makes it all the more imperative that as we celebrate 
INTOSAI's 50th anniversary this year, we continue to share our 
experiences and collaborate with one another to address our common 
challenges and promote accountability and transparency in government 
around the globe.

[End of section]


Brazil Court of Audit Suggests Improvements in Literacy Program:

The Brazilian Court of Audit (TCU) recently carried out an audit of the 
Youth and Adult Education - Solidarity in Literacy Program, whose goal 
is to reduce illiteracy levels and promote educational opportunities 
for youths and adults from 14 to 24 years of age.

The audit found that the program did not take into consideration the 
Ministry of Education's national policy for youths and adults, there 
was no guarantee of continuity in the students' educational process, 
and that certain factors--such as visual impairments of some students 
and problems with textbooks--hindered the program's success. verified 
the need to connect the Literacy Program with public policies for youth 
and adult education to ensure continuity in the educational process for 
those who finish the literacy module.

The Court recommended that (1) the National Fund for Development of 
Education implement actions in the Solidarity in Literacy Program to 
identify and treat visual and hearing impairments, (2) the duration of 
the literacy module be increased, and (3) new textbooks and pedagogical 
material be written to complement the existing series.

Court of Audit and Internal Revenue Secretariat Join Efforts:

The President of the TCU, Justice Valmir Campelo, met with the 
Secretary of Internal Revenue, Jorge Rachid, to discuss important 
issues related to federal inspections.

During the meeting, they discussed ways to increase integration between 
the two institutions and joint actions that would enable more timely 
collection of relevant information to expedite judgment of TCU audits 
and increase their effectiveness.

Court of Audit Monitors Zero Hunger Program:

Brazil's Minister of Food Security and Fight Against Hunger has 
requested that the President of the TCU monitor and control actions 
related to government programs to combat hunger, which President Luiz 
Inácio Lula da Silva has identified as a priority because of their 
social impact and the large amount of resources to be invested in them. 
In response to this request, Justice Campelo, President of the TCU, 
stated that his audit office will pay special attention to government 
actions linked to the fight against hunger as one of its many legal and 
constitutional responsibilities to monitor and control programs and 
activities carried out by branches of the Federal Government.

Court of Audit President Receives Japanese Board of Audit Delegation:

Justice Valmir Campelo, president of the Brazilian Court of Audit, 
received the visit of a delegation from the Japanese Board of Audit 
that was in Brazil to audit the Japanese embassy and consulates and 
verify the proper use of resources the Japanese government donated for 
technical cooperation projects with the Brazilian federal government, 
states, and municipalities.

During the meeting, the Japanese delegation and the TCU were able to 
share experiences relating to a common challenge in both countries--the 
process of inspecting public companies undergoing privatization.

Court of Audit Recommendation to the Command of the Navy:

In response to a request to verify irregularities during the Navy 
Health Division's bidding to acquire medical equipment, the TCU has 
determined that the Command of the Navy/ Ministry of Defense must not 
permit Brazilian firms to be excluded from international bidding 
performed with resources proceeding from external credit transactions 
originating in (1) an official agency of foreign cooperation, (2) a 
multilateral financial institution in which Brazil takes part, or (3) a 
foreign financial institution. Such a prohibition is not in accordance 
with the Law of Bidding and Contracts.

For additional information, contact: Tribunal de Contas de União, 
Sector de Administracão Federal Sul-Lote 01, CEP-70042-900 Brasilia, 
D.F., Brazil; fax: ++55 (61) 316-7522; email:; Web 

European Union:

Implementation of Food Security Policy in Developing Countries:

At the World Food Summit in Rome in 1996, heads of state and government 
and the European Commission committed themselves to reducing the number 
of undernourished people from 800 million to 400 million by 2015 and to 
move away from food aid towards more long-term development in order to 
improve the food security situation. Around the same time, a Council 
Regulation was adopted aimed at enhancing food security and reducing 
the recipient countries' dependence on food aid.

The European Court of Audit reviewed the implementation of this food 
security policy for the period 1997-2001. The Court found that in a 
number of recipient countries, food security strategies were not 
integrated in coherent national development strategies and that food 
security programs were executed as development programs separate from 
mainstream programs. The Court also found that reliable baseline 
information on the situation of food security was not available and 
that the statistics produced by national services were mostly 
inadequate. Also, the identification of projects was unstructured in 
many countries, with no formal selection procedures based on clear 
priorities and criteria. The local population was rarely involved in 
proposing and selecting projects, and few structures existed to support 
local communities in managing projects. Most central governments had 
delegated the management of food security programs to para-statal 
bodies, which hindered the integration of development actions in 
sustainable structures.

The Court's recommendations included the following:

* The concept of food security should be integrated in the Commission's 
overall development policy, and single overall strategies and programs 
should be developed for and by the recipient countries.

* The Commission should consider supporting developing countries in the 
production of reliable information on socioeconomic household 
situations and the development of indicators on food security with 
other donors.

* The Commission should continue to focus its efforts on capacity 
building and institutional support to beneficiary countries' central 
and local services.

For further information, please contact the External Relations 
Department of the European Court of Auditors, tel.: +352-021-36 31 03 
(GSM), +352-4398-45410, fax: +352-4398-46430, e-mail:; or Web site:

Hong Kong:

Audit Report Issued:

On October 30, 2002, the Director of Audit submitted his Report No. 39, 
which includes the results of value-for-money audits completed from 
March through September 2002, to the President of the Legislative 
Council. The report contains 11 subjects, including (1) protection of 
revenue from dutiable commodities, (2) a special finance scheme for 
small and medium enterprises, (3) management of municipal solid waste, 
(4) planning and provision of primary school places, and (5) 
administration of primary schools. The report has identified some 
US$270 million of savings and benefits for the Government of the Hong 
Kong Special Administrative Region.

The findings in the report have prompted the government to take 
improvement measures. For example, the audit on the planning and 
provision of primary school places revealed that by 2010 there would be 
an excess of primary school places and a serious mismatch between 
demand and supply. In response, the government agreed to monitor the 
provision of primary school places by reviewing the school building 
program and improving the use of existing places.

For more information about the report, please visit the Audit 
Commission's Internet home page at, or 
contact: Director of Audit, Audit Commission, 26/F, Immigration Tower, 
7 Gloucester Road, Wanchai, Hong Kong, China; fax: (852) 2824 2087; 


State Audit Office's Activities and 2002 Summary Report:

According to the Constitution of Hungary, the State Audit Office (SAO) 
is the Parliament's financial-economic auditing organization. Its 
audits cover the entire state budget, the property of the state, 
financial management of certain organizations outside the state budget, 
and the operation and financial management of institutions that are 
accountable to the Parliament (including the Hungarian National Bank). 
SAO audits also determine the legitimacy of political parties' 
financial management. Beyond forming an opinion on the use and 
management of the public finances and of public property, the SAO 
evaluates the economy, effectiveness, and efficiency of the allocated 
resources through an increasing number of performance audits.

The SAO performs its activities based on an annual audit plan. 
Parliamentary commissions discuss most of the 40 to 50 reports the SAO 
prepares annually. During plenary sessions, the commissions discuss the 
audit reports on the annual budget, which include proposals on the 
budget and its execution, and on the operation of the state property 
agency and the national news agency. The SAO's summary report, which 
gives a comprehensive evaluation of trends in state budget operations 
and an account of the actions taken on recommendations and on the 
organization's operations, is also discussed at these plenary sessions.

In the summary report for the year 2002, the SAO found that the central 
and local government levels, operations and financial management are 
basically in order. Nevertheless, for the sake of the balanced 
operation of the large service systems (public health, social sphere, 
and pensions), which are significant to the proper functioning of the 
society and the economy, the SAO advised the government to accelerate 
the activities that provide the foundation for reform.

The summary report SAO places special emphasis on its progress--in 
accordance with the parliamentary resolutions--in performing audits 
using a financial audit methodology aimed at ensuring the reliability 
of the state budget execution and more comprehensive accountability and 
transparency, while contributing to the modernization of a state budget 
adapted to EU requirements.

The annual summary report also provides insight on how the SAO supports 
the initiatives emerging in organized form that are designed to reveal 
the causes, background, and relationship of corruption and high-risk 
areas and to reduce the sources of losses that pose a risk to the 

The year 2000 summary report also gives an overview of internal quality 
assurance and methodology development activities and international 
relations and evaluates contributions to improvements to the Hungarian 
financial audit system in adapting to the European Union's (EU) 

The report also highlights the SAO's participation in professional 
life. By playing a leading role in cooperating with universities and 
colleges to prepare the next generation of economic professions, the 
SAO helps to prepare Hungary for the challenges of the new millennium.

For additional information, contact: Allami Szamvevoszek State Audit 
Office Staatsrechnungshof, H 1364 Budapest 4, Hungary; fax: ++36 (1) 
484-9201, 338-4710; e-mail:


2001 Audit Report Issued:

During 2002, Malta's National Audit Office carried out financial and 
compliance audits on matters relating to the financial year ending 
December 31, 2001. The audit opinion, findings, and concerns are 
included in its 2001 audit report.

For the ministerial and departmental sections, the office adopted an 
improved reporting structure in an attempt to make the report more user 
friendly. Each section now includes background, which gives a brief 
description of the area under review, classifies the issues as key, 
control, or compliance. The report also includes the recommendations 
made to each entity to improve its internal control system and the 
comments of management on the actions they plan to take.

The financial report section contains the National Audit Office's 
comments on the consolidated fund statement, loans, investments, public 
debt, advances and letters of comfort, and bank guarantees. Although 
the Public Account held at the Central Bank of Malta has not been 
reconciled since June 1992, the Bank Reconciliation system went "live" 
on the October 14, 2002, with the opening balance of the public account 
as shown by the Central Bank of Malta.

Significant improvements could be achieved in arrears of revenue (which 
approached US$900 million as of December 31, 2001) an area in which 
inefficient procedures for the collection of debt and weak enforcement 
procedures were identified. A number of departments did not submit 
their returns, and data submitted by the Social Security Department was 
found to be unreliable.

The office is also concerned about widespread noncompliance with 
financial rules and regulations. Examples of specific areas of concern 
included the following:

* double payments as a result of weak internal controls;

* revenues not being receipted and funds not being deposited, and 
delays in remitting funds to the Public Account;

* noncompliance with inventory regulations, including the absence of 
up-to-date inventory record; and:

* underutilization of computerized facilities.

For further information, contact: National Audit Office, Floriana CMR 
02, Malta; fax: ++356 21 22 07 08; email:; Web 


New Law on State Audit:

On January 3, 2003, the State Great Hural (the Parliament) of Mongolia 
approved the Law on State Audit, which was based upon the Lima 
Declaration and the Generic Model Laws UNDP/PACT developed for SAIs. 
The enactment of this law brought about major changes in Mongolian 
government auditing system.

The former State Audit and Inspection Committee (SAIC) has been 
replaced by the newly established National Audit Office (MNAO), which 
will be the supreme audit institution of Mongolia. In addition, 
provincial Audit and Inspection Committees will be replaced by 
provincial Audit Offices headed by provincial Auditors General. While 
the former SAIC used the board model, the current MNAO will be 
structured on the auditor general model (also known as the Westminster 
or hierarchical model).

According to the new law, the MNAO's mandate is to conduct performance 
and financial statement audits for public agencies and government 
programs. Auditor General Appointed On January 10, 2003, the Mongolian 
Parliament nominated Mr. Javzmaa Lkhamsuren as Auditor General of 
Mongolia for a 6 year term of office.

Mr. Javzmaa Lkhamsuren:

[See PDF for image]

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Before this appointment, Mr. Javzmaa had served as the Chairman of the 
State Audit and Inspection Committee of Mongolia since 1995. Throughout 
his career in public service, Mr. Javzmaa has had long and varied 
experience in provincial and local government activities. He holds a 
masters degree in management.

For additional information, contact: Mongolian National Audit Office, 
Government Building No. 4, Baga Toiruu-6, Ulaanbaatar-45, Mongolia; 
fax: ++976-1-323266.

St. Kitts and Nevis:

2001 Annual Report Issued:

In his 2001 annual report to Parliament, St. Kitts' Director of Audit 
stated that although expenditure control showed signs of improvement, 
the results indicated that a great deal still needs to be done. He 
pointed out that despite Parliament's approval of the budget, its 
implementation ought to be guided by realities of the day:

"The various Ministries pursue their objectives as laid out in the 
detailed Programs of the Estimates as approved by Parliament. One point 
of view that I have heard expressed quite recently is that as the 
Budget is done on a Program basis, provided that expenditure is 
incurred on that basis, there should be no concern for savings, as all 
allocations should be spent in full and at the discretion of the 

Unfortunately, the word 'efficiency' and its meaning seldom features in 
the line of reasoning. Furthermore, managers with such concepts make 
expenditure control even more onerous for the Ministry of Finance.":

The result on the recurrent account was a deficit of $55.2 million. 
Because of the high level of capital revenue realized, the outturn on 
the capital account was an impressive surplus of $44.96 million. The 
net result of the 2001 financial operations was a modest deficient of 
$10.22 million.

The report also drew attention to the increasing cost of debt servicing 
(30.22 percent of recurrent revenue in 2001.) Nevertheless, St. Kitts 
is still current and timely with its payments. All amortization 
schedules were current and the government was not in any significant 
arrears with any of its loan obligations as of year-end.

For further information, contact: National Audit Office, Basseterre, 
St. Kitts and Nevis; fax: ++1(869) 466-8510; e-mail:

United States:

No Appeal in Suit over Access to White House Energy Records:

Comptroller General David M. Walker, head of the U.S. General 
Accounting Office (GAO) has decided not to appeal Judge John D. Bates' 
decision that the Comptroller General lacked standing to file a lawsuit 
seeking access to the records of the National Energy Policy Development 
Group (NEPDG).

"After thorough review and analysis of the district court's decision in 
Walker v. Cheney, as well as extensive outreach with congressional 
leadership and others concerning various policy matters and the 
potential ramifications of the court's decision, GAO has decided not to 
appeal the decision," GAO said in a February 7 statement provided to 
the press and posted on GAO's Web site (http://

The suit arose from GAO's efforts to obtain information about who the 
NEPDG--which is chaired by the Vice President--and its staff met with 
in formulating the president's national policy. GAO attempted to obtain 
this information in response to requests from two House ranking 
minority members and four Senate committee and subcommittee chairs. In 
February 2002, after months of negotiation and compromise on GAO's part 
failed to resolve the issue, GAO filed suit in the U.S. District Court 
for the District of Columbia. Oral arguments in the case were heard 
September 27, 2002; Judge Bates issued his decision December 9, 2002. 
Judge Bates' decision focused only on the Comptroller General's 
"standing" to file suit; citing the historical nature of the issue at 
hand--whether the courts should intervene in a dispute between the 
legislative and executive branches--the judge ruled that the issue 
involved and the nature of congressional interest were not sufficient 
to have the court decide the dispute.

"Despite GAO's conviction that the district court's decision was 
incorrect, further pursuit of the NEPDG information would require 
investment of significant time and resources over several years. At the 
same time, several private litigants are attempting to obtain much of 
the same information GAO has been seeking, and this information will be 
made available to GAO if they are successful in their cases.":

"Importantly," the statement continues, "because the district court's 
decision did not address the merits, it has no effect on GAO's 
statutory audit rights or the obligation of agencies to provide GAO 
with information. In addition, the court's decision is confined to the 
unique circumstances posed by this particular case and does not 
preclude GAO from filing suit on a different matter involving different 
facts and circumstances in the future.":

Walker said his outreach efforts to the U.S. Congress found a 
broadbased bipartisan consensus that GAO should have received the 
limited and nondeliberative NEPDG information it sought without having 
to resort to litigation. "While we have decided not to pursue this 
matter further in the courts, we hope that the administration will do 
the right thing and fulfill its obligations when it comes to 
disclosures to GAO, the Congress, and the public, not only in 
connection with this matter but all matters in the future. We hope that 
GAO is never again put in the position of having to resort to the 
courts to obtain information that Congress needs to perform its 
constitutional duties, but we will be prepared to do so in the future 
if necessary.":

The Comptroller General noted that the decision not to appeal, like his 
original decision to file suit last year, was a difficult one subject 
to controversy. "In both cases, I did what I thought was the right 
thing to do based on all the facts and circumstances." He also noted 
that there was significant bipartisan support for his decision not to 

Further information is available on the GAO Web site:

ANAO Better Practice Guides:

by Gordon Carey, Senior Director, Research and Development Branch:

The Australian National Audit Office (ANAO) produces better practice 
guides (BPGs) as part of its integrated audit approach, which includes 
providing information support services to audit clients.

BPGs aim to improve public administration by ensuring that better 
practices employed in some organizations are recognized and promulgated 
to the whole of the Australian Public Service. This can involve 
examining practices in the public and private sectors in Australia or 
overseas. From its knowledge and understanding of the public sector, 
the ANAO endeavors to identify, assess, and articulate good practice as 
well as areas where improvements are warranted.

Depending on the subject matter and nature of information collected 
during an audit, BPGs may be produced in conjunction with an audit. 
Alternatively, a BPG might be prepared as a result of a perceived need 
to provide guidance material in a particular area of public 

For a complete list of all BPGs published by the ANAO, from 1996 to 
date, go to the ANAO web site: These BPGs can 
be listed by date, title, or theme. A summary identifies the purpose of 
the BPG, and the guide can also be downloaded from the web site. Some 
earlier BPGs that may be of interest include the following:

* Life Cycle Costing;

* Some Better Practice Principles for Developing Policy Advice;

* Rehabilitation: Managing Return to Work;

* Internet Delivery Decisions;

* Planning for the Workforce of the Future;

In the coming months, the ANAO will update its 1999 BPG entitled 
Corporate Governance in Commonwealth Authorities and Companies.

Recently published BPGs of likely interest to other supreme audit 
institutions are outlined below.

Building Capability, A framework for managing learning and development 
in the APS (April 2003):

Efficient and effective achievement of government outcomes by 
Australian Public Service (APS) agencies depends on the capabilities of 
their people. Capability building, which is central to organizational 
performance, requires a systematic management approach to learning and 
development as an integral part of workforce planning.

Learning and development is a key management function for all APS 
agencies that requires the same rigor and attention as any other 
management task. Well managed, learning and development can deliver the 
right people with the right skills at the right time to enable agencies 
to deliver government objectives and outcomes into the future.

The ANAO performance audit report Management of Learning and 
Development in the APS(No. 64 2002-2002) and benchmarking study 
Managing People for Business Outcomes(No. 61 2001-2002) identified 
opportunities for improvement in the planning, integration, delivery, 
and evaluation of learning and development.

This guide, produced in collaboration between the ANAO and the 
Australian Public Service Commission, draws on the experiences of the 
ANAO audit of learning and development, as well as international and 
private sector trends. It is tailored specifically to the public sector 
through examples of APS agency better practice experience. The 
intention is to inform and influence key agency stakeholders as well as 
to encourage ongoing improvement by those with direct responsibility 
for learning and development.

This guide articulates the principles and characteristics of a 
framework for building capability. It provides advice on how to promote 
learning and development planning; identifies processes to position 
agencies to achieve good business outcomes; stresses the need for 
alignment and integration with other workforce activities (such as 
workforce planning and performance management) and shows the way 
forward to support a learning culture. It articulates governance 
considerations and appropriate reporting arrangements to fulfill 
Parliament's accountability expectations. The framework for managing 
learning and development in the APS presented in this guide is based on 
the following principles:

* align learning with business,

* integrate learning with human resources and other business processes,

* create a learning culture,

* provide appropriate learning options,

* manage learning effectively,

* support application of skills in the workplace, and:

* evaluate learning and development.

Internal Budgeting (February 2003):

This guide deals with the internal budget processes in organizations 
and the extent to which those processes contribute effectively to the 
organization's control environment and ability to meet its stated 
objectives. It has particularly close links with the Building Better 
Financial Management Support and Building a Better Financial Management 
Framework guides released in 1999. Publications dealing with aspects of 
control structures in organizations include the following:

* Contract Management, February 2001;

* Business Continuity Management - Keeping the wheels in motion, 
January 2000;

* Building Better Financial Management Support - Functions, systems and 
activities for producing financial information, November 1999;

* Building a Better Financial Management Framework - Defining, 
presenting and using financial information, November 1999;

* Security and Control for SAP R/3, October 1998;

* Controlling Performance and Outcomes - Control Structures in the 
Commonwealth Public Sector, December 1997;

The ANAO has produced this guide following the conduct of a recent 
Financial Control and Administration Audit of internal budgeting 
processes. The audit identified a need for further guidance on the 
development of robust and businesslike internal budgeting practices to 
help managers operate more effectively in the accrual-based outcomes 
and outputs framework.[NOTE 1]

Well developed and implemented budgeting processes are critical to 
providing a sound basis for controlling activity levels and for 
effectively monitoring and managing financial performance. Effective 
budgeting processes, in turn, can be a key driver in the successful 
delivery of an organization's outputs (services). This guide is 
designed to assist managers responsible for making decisions on the 
allocation, use and administration of resources. In particular, it 
outlines a series of better practice elements that, if adopted, will 
encourage more efficient and effective management of resources and 
improve the capacity of internal budgeting to support the achievement 
of organizational goals and objectives.

The framework has three broad components:

* integrating internal budgeting processes with strategic planning, 
including the setting of priorities, and supporting them with a robust 
control and financial management structure;

* putting efficient and effective internal budget development processes 
in place, including the use of appropriate technology to provide 
decision-support tools; and:

* regularly analyzing performance against budgets, using consistent and 
timely flows of information and implementing auditable accountability 

This guide should serve as a useful tool for managers responsible for 
internal budget development. This should, in turn, result in wider and 
more informed use of better internal budgeting practices contributing 
to better results.

[End of section]

Performance Information in Portfolio Budget Statements (Budget 
Estimates) (May 2002):

Performance information is a critical tool for public sector management 
and accountability. Since the ANAO [NOTE 2] issued the Better Practice 
Guide Performance Information Principles in November 1996, the public 
sector has adopted a framework for outcomes and output. This has 
required changes to agencies' performance management regimes, 
particularly the development and reporting of performance information 
in Portfolio Budget Statements (PBS) and related Annual Reports.

A Parliamentary Committee, the Senate Finance and Public Administration 
Legislation Committee, has undertaken three reviews of performance 
information in PBS, which raised a number of concerns. In addition, the 
ANAO has undertaken an audit on the issue, the findings of which were 
provided in Audit Report Number 18, 2001-02, Performance Information in 
Portfolio Budget Statements. This audit examined performance 
information in the PBS in 10 Commonwealth agencies. This guide aims to 
address many of the issues highlighted by the Parliamentary Committee 
and the audit.

The examples and better practices included in this guide are drawn from 
the audit and a subsequent related workshop. They are aimed at helping 
practitioners develop and improve organizational performance 
information. The guide focuses on performance information in the PBS. 
However, the principles highlighted apply to all performance 
information, as PBS (accountability-related) performance information 
and general management performance information should be part of a 
fully integrated framework. The guide is intended to be used in 
conjunction with information provided by the Department of Finance and 
Administration on its website ( in relation 
to the requirements for performance information in the PBS.

Reforms in the Australian Public Service (APS) over many years have 
emphasized the importance of a performance culture supported by clear 
lines of accountability. The performance of the APS, particularly its 
effectiveness, is now subject to increased levels of scrutiny. 
Performance information, assessment, and reporting are critical tools 
for monitoring and improving performance.

In the 1999-2000 budget, the APS moved from reporting performance on a 
program basis to an outcomes and outputs framework. Under the new 
arrangements, the focus is on improved accountability for performance. 
The foundation for agency accountability and transparency is 
performance information presented initially in agency Portfolio Budget 
Statements (PBS) with results being reported later in annual reports. 
This guide addresses performance information under the following broad 

* performance information concepts-outcomes, output groups and outputs;

* performance information, including indicators, targets, cost, and 
data quality; and:

* performance assessment and reporting-monitoring, annual reports, and 
presentation of performance information.

Administration of Grants (May 2002):

This Better Practice Guide has been prepared to provide practical 
assistance to those who may be involved with the planning, project 
selection, management, and review of grant programs within the 
Commonwealth. It also provides a useful basis for any future audits of 
grant programs. This edition of the Guide builds on previous editions 
issued in 1994 and 1997. The ANAO decided to update the Guide in the 
light of audits of grant programs since that time and to incorporate a 
number of fundamental changes that have occurred in the public sector 
environment. These changes particularly affect the accountability 
framework, performance management, and risk management of grant 
programs and funding agreements.

Among these changes are:

* the introduction of the Financial Management and Accountability Act 
1997 and associated legislation, which substantially changed the 
Commonwealth's accountability framework;

* the Public Service Act 1999 incorporating the Australian Public 
Service (APS) Values and Code of Conduct;

* the move toward more networked service delivery, which has resulted 
in a more collaborative approach in the delivery of grant programs;

* the introduction of a new tax system, including the introduction of a 
Goods and Services Tax; and:

* greater use of "one stop" shops for service delivery and on-line 
applications to improve responsiveness.

In 2000-2001, direct Commonwealth expenditure on grants to the private 
sector, including overseas grants, was estimated to be $3.2 billion. 
Public sector managers have a strong interest in ensuring that grant 
programs are appropriately designed and well administered to achieve 
the objectives of government. This guide is most relevant for those 
funding arrangements that are:

* discretionary, such that a minister or grant-giving organization has 
discretion in determining whether or not a particular applicant 
receives funding and the conditions that are imposed (as opposed to 
nondiscretionary, where the program or legislation creates an 

* selected from competing proposals on merit, based on an assessment 
against prespecified criteria;

* directed at achieving goals and objectives consistent with government 
policy; and:

* designed for individuals and community groups that are, generally, in 
the not-for-profit sector (but profit-seeking organizations are not 
excluded). Nevertheless, this guide contains administrative principles 
applicable to a wide spectrum of circumstances where the Commonwealth 
funds the activities of others, including payments to state, territory, 
or local governments. This guide addresses grant administration under 
the following headings:

* planning for an effective grant program, including establishing the 
need for the program, appropriate strategies and controls, performance 
measures, and a planning checklist;

* selection of projects, including handling and appraising 
applications, and a selection checklist;

* management of funding agreements, including form of funding 
agreements, setting up monitoring arrangements, acquittal of grants, 
and a management checklist; and:

* evaluation of the grant program, including managing the review/
evaluation, carrying out a review or evaluation, and an evaluation 
checklist. If you would like additional information, please contact the 
Publications Officer at or via fax on +61 2 6203 
7777 or telephone on +61 2 6203 7505.

[End of section]

Accountability and Audit by Mrs. Jocelyn Thompson, Auditor General of 
Trinidad and Tobago:

Editor's note: The following article has been adapted from a paper 
presented by the Auditor General of Trinidad and Tobago at a Regional 
Public Expenditure Management Conference held in Port of Spain, 
Trinidad, in February 2003.

Accountability has been defined as an obligation to answer for a 
responsibility that has been conferred. It is often linked with the 
obligation of leaders, governments, and corporate managers to answer 
for their actions to those who selected, elected or appointed them.

In 1993, Trinidad and Tobago's then Minister of Finance addressed this 
issue at an Integrity Symposium:

"Public confidence in Government's integrity and accountability in 
public affairs is of paramount importance in a democracy. Legitimate 
government in the eyes of the public is Government that displays 
expertise, entrepreneurship and stewardship. . . If there is 
accountability in public affairs, the public's expectation that 
Government will operate with due regard for economy, efficiency and 
effectiveness can be realized. While integrity in public affairs is 
distinct from accountability, it can be said that if Government 
operates in an environment which demands accountability, there will be 
little room for integrity standards to slip.":

This article will outline the cycle of accountability in Trinidad and 
Tobago, the contribution of the internal and external audit functions 
to this process, and the role of the Public Accounts Committee.

The Accountability Cycle in Trinidad and Tobago:

In Trinidad and Tobago, the accountability cycle begins with the laying 
of the Annual Estimates of Revenue and Expenditure in Parliament. The 
Estimates detail the expected revenues and expenditures for all 
governmental activities.

Following this, the Minister of Finance presents the "Budget Speech" 
outlining the government's general financial plans for the following 
fiscal year--recurrent expenditures, development programs, etc. This is 
followed by the Budget Debate and the passing of the Appropriation Act, 
the Provisional Collection of Taxes Order, and the Finance Act. The 
Minister of Finance releases funds to Accounting Officers after the 
Auditor General grants credits on the Exchequer Account. These funds 
are to be spent, as voted by Parliament, for the "service" of Trinidad 
and Tobago. Accounting Officers must be guided by the Exchequer and 
Audit Act, the Financial Regulations, and periodic directives issued by 
the Treasury (Minister of Finance).

The Exchequer and Audit Act requires a number of accounts and 
statements to be submitted within 4 months after the end of each 
financial year (currently, January 31st). The Treasury must submit 
Treasury Statements, each Accounting Officer must submit an 
Appropriation Account, each Receiver of Revenue must submit a Statement 
of Receipts and Disbursements, and each Administering Officer must 
submit Statements of the Funds administered. The Auditor General is 
then required to examine these accounts and statements and report to 
Parliament on its examination within 7 months of the end of the 
financial year (currently, on or before April 30).

After being laid in Parliament, the Report of the Auditor General and 
the attached Financial Statements are referred to the Public Accounts 
Committee for scrutiny and the examination of the stewardship of the 
Treasury, Accounting Officers, Receivers of Revenue, and Administering 
Officers. The Public Accounts Committee reports to Parliament on its 
examinations and recommendations. The resulting Treasury Minutes direct 
Accounting Officers of corrective action to be taken.

The Internal Audit Function:

A system of internal control which includes an internal audit function 
plays a significant monitoring role in the accountability process. The 
Institute of Internal Auditors defines internal auditing as:

"an independent appraisal function established within an organization 
to examine and evaluate its activities as a service to the 
organization. The objective of internal auditing is to assist members 
of the organization in the effective discharge of their 

Top management is responsible for ensuring that as far as possible, the 
internal audit function, while carried out by the organization's 
employees, is free from restrictions that could limit its scope. It is 
mandatory, therefore, that the internal auditor be responsible only to 
senior management to preserve the independence of the internal auditor 
from influences by the personnel subject to internal audit.

Furthermore, internal auditing must not be confined to financial 
transactions. In the final analysis, it assists the organization 
through its fact-finding, judgmental evaluation followed by 
recommendations, and follow-up action. The internal auditor can also 
assist line management by ensuring that adequate financial and 
management controls have been implemented and are operating effectively 
or by identifying weaknesses in the system and recommended remedial 
actions, where necessary.

In Trinidad and Tobago, the Financial Regulations of the Exchequer and 
Audit Act provide for the internal audit function within each 
accounting unit of the public service. In its annual examination of the 
Public Accounts, the Auditor General of Trinidad and Tobago has found 
that the internal audit function in the public service has been 
misunderstood, misused, abused or simply ignored over the years. 
Serious weaknesses have been reported since the 1980s. To date, 
however, the internal audit function has not shown improvement as a 
significant management tool to any appreciable extent. Currently, the 
Ministry of Finance is undertaking reform of the Financial Management 
System of the Public Service in Trinidad and Tobago. It is hoped that 
this effort will help establish the internal audit function in its 
correct place and provide adequate resources, including suitably 
trained and qualified staff.

External Audit:

The external auditor helps an entity achieve its objectives by bringing 
an independent and objective view. The external auditor contributes 
directly through its audits--whether compliance, financial statement, 
value-for-money, comprehensive or performance audits--and indirectly 
by providing useful information to management, the board of directors, 
and shareholders/stakeholders.

In Trinidad and Tobago, the appointed auditor of the public accounts is 
the Auditor General, whose office was created in accordance with 
section ll6(l) of the Constitution. The Auditor General is required to 
examine and report in accordance with the Constitution and the 
Exchequer and Audit Act. In addition, the enabling acts of certain 
statutory bodies may make provision for audits by the Auditor General. 
Further, the Exchequer and Audit Act provides for the Auditor General 
to audit statutory bodies if Parliament so directs.

It is a fundamental requirement that the Auditor General should be, and 
be seen to be, independent. The Constitution of Trinidad and Tobago 
states, "In the exercise of his functions under this Constitution the 
Auditor General shall not be subject to the direction or control of any 
other person or authority." Without such independence, the authority of 
the Auditor General's opinion and its value to those who seek to rely 
upon it would be eroded.

The Public Accounts Committee:

Historically, the Public Accounts Committee of the Parliament has been 
one of the main links in the chain of public accountability (the others 
being Parliament itself, the Treasury, and the Office of Auditor 
General). In Trinidad and Tobago, the need for a Public Accounts 
Committee was recognized by the Secretary of State for the Colonies in 
1957 when commenting on financial devolution in the West Indies. He 
stated that "such a Committee has a vital part to play in safeguarding 
the interests of the legislature in the proper expenditure of public 
funds." In 1960, the Speaker of the Legislative Council of Trinidad and 
Tobago appointed the first Public Accounts Committee. The present 
Constitution of Trinidad and Tobago makes provision for a Public 
Accounts Committee and a Public Accounts (Enterprises) Committee. 
Accounting officers and other responsible parties must explain their 
stewardship and actions on issues raised in the Auditor General's 
reports before these Committees.

In accordance with the Constitution of the Republic of Trinidad and 
Tobago, the Auditor General reports to the Speaker of the House of 
Representatives, the President of the Senate, and the Minister of 
Finance. The Speaker is required to lay the Report in the House of 
Representatives and the President of the Senate is required to lay the 
Report in the Senate, thus making the documents public.


In conclusion, let me emphasize that accountability is key to good 
governance. If leaders in public life operate in an environment which 
demands accountability, there will be little room for integrity 
standards to slip. Checks and balances provided by legislation, 
systems, procedures, and methodologies will ensure accountability and 
allow governments to operate with due regard to economy, efficiency, 
and effectiveness. What is vital and at times lacking is the standard 
of conduct in public life that will allow individuals at all levels to 
operate within established parameters of accountability.

An obligation to answer for a responsibility conferred means in common 
parlance that "Accountability is Answerability.":

[End of section]

Audit Profile: Office of the Comptroller and Auditor-General of 

by Mohammad Shamsuzzaman, Deputy Director, Performance Audit 
Directorate, and Niaz Rahman, Assistant Comptroller and Auditor 

Bangladesh-a rapidly developing nation of 123 millino people-has made 
significant progress since gaining its independence in 1971. The 
country has a 1000-year-old history, culture, and literature. Its 
economy depends largely on agriculture and the export of ready-made 
garments, raw jute, jute manufactures, hides and skins, leather 
products, tea, newsprint, and seafood.


The Office of the Comptroller and Auditor-General (CAG), the supreme 
audit institution (SAI) of Bangladesh, was created in 1973 in 
accordance with the Republic's constitution. The CAG has been 
responsible for both the auditing and accounting of public receipts and 
expenditures. However, the office has been relieved from the accounts-
keeping function based on an amendment to the act that was made in 

The basic structure of the SAI was inherited from the British system 
following the Exchequer and Audit Department Act, 1866, of the United 
Kingdom. The office of the Auditor-General was created under the 
Government of India Act, 1935.


The government is divided into three branches: the executive (the 
President is the head of state and the Prime Minister is the head of 
government), the legislature (the Parliament or Jatiya Sangshad) and 
the judiciary (the Supreme Court and the subordinate courts). The 
Office of the CAG is administratively under the executive branch but is 
functionally independent.

Legal Authority:

The constitution of Bangladesh empowers the CAG to audit and report on 
the Public Accounts of the Republic to the legislature through the 
President. The Comptroller and Auditor-General (Additional Functions) 
Act of 1974 gave the CAG additional responsibilities, including keeping 
the government accounts, preparing appropriation and finance accounts, 
auditing the accounts of statutory public and local authorities, and 
preparing commercial accounts and general financial statements. In 
1975, an amendment to the act gave the CAG further responsibility to 
audit public enterprises that have at least a 50 percent share or 
interest to the government.


The constitution allows the CAG to function with complete independence, 
stating that the "Comptroller and Auditor-General, in the exercise of 
his functions, shall not be subject to the direction or control of any 
other person or authority." SAI auditors have full, unrestricted access 
to all records and documents of any government department or 
government-owned entities. The President of the republic appoints the 
CAG to serve until the age of 60. Only the President, based on the 
recommendation of a Supreme Judiciary Council, can remove the CAG.

Organization of the SAI:

The SAI of Bangladesh is functionally organized into 10 audit 
directorates, each headed by a Director General. The audit directorate 
is responsible for conducting audits of different agencies and 
departments of the government. All serious financial irregularities 
relating to different governmental agencies that the audits identify 
are reported on both a yearly and an issue basis and submitted to the 
Office of the CAG for approval. The Deputy Comptroller and Auditor-
General (Accounts and Reports) is responsible for coordinating with the 
Directors General to (1) ensure timely generation of audit reports and 
(2) obtain the CAG's approval of those reports.

Currently, the audit staff totals 3,600. Auditors are recruited from 
various disciplines so that the staff will have complementary and 
multidisciplinary skills. All professional staff are recruited by an 
independent National Commission. Qualified staff of the SAI have 
academic and professional backgrounds in such fields as accounting, 
finance, economics, business administration, public administration, 
agriculture, engineering, and medicine.

Mission of the SAI:

The mission of SAI is to conduct independent audit and evaluation of 
public sector operations to provide reliable and objective information 
and assurance to the Parliament. The SAI is committed to promoting 
accountability and transparency in government to achieve good 
governance, an issue of great concern to the government as well as the 
taxpayers. SAI products attempt to offer insight into the government's 

Reporting and Follow-up:

The SAI of Bangladesh publishes a number of reports each year that 
reflect the results of its annual audit operations. The reports focus 
on compliance and financial audits of a very large number of 
government, local government, and public enterprises. However, a modest 
beginning has been made to adopt value-for-money audits in areas of 
public interest with the submission of four audit reports.

The CAG submits ministrywide annual audit reports to the President of 
the Republic who, in accordance with constitutional requirements, 
causes them to be laid before the Parliament. Annual audit reports up 
to the year 2000-2001, including 75 issue-based special audit reports, 
have already been submitted to the Parliament. The CAG also submits 
reports on the budget performance of the national accounts and the 
annual finance accounts regarding the total financial activities of the 
government. The Public Accounts Committee, a select body of Parliament, 
discusses these reports and then provides necessary directives and 
recommendations to the executive branch. Other audit findings not 
included in the audit reports are discussed bilaterally with respective 
executive agencies in order to settle them.

Professional Development:

The Office of the CAG is responsive to the vital need for human 
resource development in order to maintain high professional standards. 
Because the SAI is committed to both the professional development of 
its staff and continual improvement in audit quality, it is actively 
pursuing ongoing audit reforms. These reforms were implemented through 
capacity-building projects under the technical assistance of the United 
Nations Development Program and the Department for International 
Development, United Kingdom. Under these capacity-building programs, 
various institutional developments--including computerization, 
updating audit code, preparing audit standards and manuals, and 
developing audit methodology and intensive foreign training--were 

International Liaison:

The office has maintained liaison with various international audit 
organizations, such as INTOSAI, the Asian Organization of Supreme Audit 
Institutions (ASOSAI), and various SAIs of other countries. Such 
involvement has helped the office improve its performance and results. 
Bangladesh became a member of INTOSAI in May 1973. The Office of the 
CAG was elected to the Board of Governors at the Triennial Assembly of 
ASOSAI held in October 2000. In recognition to its commitment and 
contribution, the Office of the CAG has been included in the following 
standing committees of INTOSAI:

* Internal Control Standards Committee,

* Working Group on Environmental Auditing, and:

* Working Group on Audit of Privatization.

Future Challenges and Prospects:

At the beginning of the 21st century, the office is preparing to meet 
the challenges of the new millennium. The office discharges oversight 
as a watchdog, providing assurance to the Parliament and the government 
of the economy, efficiency, and effectiveness of government business. 
The office tries to be professional, objective, fair, honest, and ready 
to face the following challenges:

* Completing separation of auditing and accounting functions to enhance 
the credibility and quality of the audits.

* Developing performance audits--beginning with those on issues of 
public interest--to enhance the financial accountability process in the 

* Ensuring high-quality financial and compliance audit, with the 
quality of the audit meeting changing needs and demands, and 
introducing modern audit standards and audit methodology to ensure 
timely, up-to-date, high-quality products.

* Reforming audit and undertaking improvement of Audit Standards, 
Codes, and Manuals.

* Accelerating the pace of computerization and computer networking, 
including initiatives to develop a Management Information System for 
monitoring the audit information.

* Undertaking an elaborate training initiative to teach staff the 
latest auditing concepts and techniques.

For additional information, please contact the Office of the 
Comptroller and Auditor-General, Audit Bhaban, 189, Shaheed Syed Nazrul 
Islam Sarani, Kakrail, Dhaka-1000, Bangladesh; fax: ++880-2-8312690; e-
mail:; Web site:; telephone: 

[End of section]

Reports In Print:

The Department of the Auditor General of Pakistan has published its 
latest edition of the journal PERFORMIT, which is devoted to the 
advancement of financial and performance audit in the public sector. 
The current edition covers such topics as auditing educational 
institutions, internal control, and public sector nonfinancial 
performance reporting. For a copy of PERFORMIT, contact the Director 
General, Performance Audit Wing, Department of the Auditor General of 
Pakistan, PT&T Audit Building, Mauj-e-Darya Road, Lahore-54550, 
Pakistan; tel: ++001-92-42-9212044; fax: ++001-92-42-9212043 or 92-42-

The Performance Audit Department of the Swedish National Audit Office 
(Riksrevisionsverket, RRV) has published its Performance Audits Report 
2000. The work of the performance audit department is aimed at 
investigating and promoting efficiency and effectiveness in government 
activities. The RRV decides independently which agencies and 
organizations are to be examined in the course of its performance 
audits and what issues will be investigated, as well as the methods to 
be used and recommendations to be proposed. The current report reviews 
the following ministries--Justice, Foreign Affairs, Defense, Health and 
Social Affairs, Finance, Education and Science, Agriculture, 
Environment, and the Ministry of Industry, Employment and 
Communications. The RRV is the supreme audit institution of Sweden and 
carries out its audits independently. It audits the management and 
finances of central government agencies and the outcomes of political 
decisions in accordance with generally accepted auditing standards. As 
a result of its audits, the RRV provides reliable information on 
accounting and financial management in the central government 
administration. For more about the RRV or to obtain copies of its 
publications, contact the RRV Publication Service, P.O. Box 45070, S-
104 30 Stockholm, Sweden; fax: ++001-46-8-690-41-01.

According to GAAP Convergence 2002, a study recently released by the 
world's six largest accountancy firms, an overwhelming majority of the 
countries surveyed --over 90 percent of 59 countries--intend to 
converge with International Financial Reporting Standards (IFRS). This 
is the third in a series of studies conducted by the large accounting 
firms aimed at encouraging global convergence of accounting standards. 
Investors are increasingly making capital allocation decisions based on 
global opportunities. Globalization of capital markets has helped fuel 
the demand for a common worldwide accounting framework. The use of 
different national accounting standards makes it more difficult and 
costly for an investor to compare opportunities and make informed 
financial decisions. This recent survey answers the following 
questions: (1) Do countries have a plan to adopt IFRS or converge their 
national accounting standards with IFRS? (2) What is the nature of the 
convergence plan? (3) What difficulties have been faced to date and 
what are the obstacles to further convergence? The survey and results 
can be obtain through the website of the International Forum on 
Accountancy and Development at

December 2002, the U.S. General Accounting Office in Washington, D.C., 
convened a Governance and Accountability Forum to discuss the 
challenges facing regulators, the accounting profession, boards of 
directors, and managers of public companies in improving public 
confidence in corporate governance and accountability systems. Recent 
major accountability breakdowns, exacerbated in the last 2 years by the 
unprecedented breakdowns and bankruptcy of Enron and WorldCom, have 
contributed to the decline in investor confidence in U.S. capital 
markets. The Governance and Accountability Forum focused on four 
interrelated areas: corporate governance, the financial reporting 
model, the accounting profession, and regulation and enforcement. These 
have surfaced as critical areas to be strengthened and will involve the 
public, private, and not for-profit sectors. The report GAO Forum on 
Governance and Accountability: Challenges to Restore Public Confidence 
in U.S. Corporate Governance and Accountability Systems (GAO-03-419SP) 
is available on the U.S. General Accounting Office website at: You can also order copies of GAO reports and testimony by 
e-mail (, fax (202-512-4739), or Internet (http://

[End of section]


Auditing Standards Committee:

The INTOSAI Auditing Standards Committee (ASC) Working Group on 
Financial Audit Guidelines held a meeting in Washington, D.C., on April 
3-4, 2003. All SAIs in the working group--Austria, Canada, Cameroon, 
Namibia, Norway, the U.K., the U.S., and Sweden (Chair)--attended the 
meeting and contributed to interesting and fruitful discussions. 
Observers from the SAI of Japan, the International Federation of 
Accountants (IFAC), and the World Bank also attended the meeting.

The discussions focused on practical ways to develop the ASC's 
cooperative working relationship with IFAC. Under this arrangement, the 
ASC will provide the public sector perspective on the revision and 
development of IFAC's International Standards on Auditing (ISAs). In 
addition, through the working group, the ASC will write practice notes 
with advice and instructions for public sector auditors on how to apply 
each ISA in a public sector context.

IFAC's International Assurance and Audit Standards Board (IAASB) and 
the ASC will draft a memorandum of understanding to be approved by the 
respective bodies by October 2003.

The ASC Working Group has already started to comment on draft ISAs and 
will continue to do so. In addition, audit experts from the INTOSAI 
community are expected to participate in the work of IAASB Task Forces 
working on the revision of ISAs starting later this year.

In May 2003, the ASC Working Group will invite all INTOSAI members to 
nominate experts to the Reference Panel. The experts who are selected 
will work with the IAASB Task Forces and on other related tasks. In 
order to ensure a truly global perspective, the Working Group hopes to 
receive the contributions of SAIs from around the world and from 
different auditing systems.

Auditing Standards Committee Members in Washington:

[See PDF for image]

[End of figure]

Updating Guidelines on Internal Control Standards:

To carry out recommendations made at the 17th INCOSAI in Seoul, the 
Internal Control Standards Committee is currently updating the 
guidelines on internal control standards. On January 22 and 23, 2003, a 
task force met at the headquarters of the Belgian Court of Audit in 
Brussels to begin coordinating the project. Delegates from the SAIs of 
Belgium (chair), Hungary, Lithuania, the Netherlands, Romania, the 
United Kingdom, and the United States attended the meeting. The 
delegates reached an agreement about a framework document incorporating 
the COSO model and the current guidelines. The SAI of Bolivia, which 
could not participate in the meeting, submitted its comments in 

During the next phase of the update, the framework document will be 
supplemented with three topics. The United Kingdom's National Audit 
Office will develop the proposal for risk management. The U.S. General 
Accounting Office will develop the proposal for the use of information 
technology. The Dutch "Algemene Rekenkamer" will develop the proposal 
for ethical values. Once these proposals are developed, they will be 
integrated into the framework document integration into the framework 
document. The task force hopes to complete the process by the autumn of 
2003. By early 2004, the full Internal Control Standards Committee is 
expected to endorse the updated guidelines.

For additional information, please contact the Belgian Chair of the 
Internal Control standards Committee at

Web Page Launched for 18th INCOSAI:

The Hungarian State Audit Office, host of the 18th INCOSAI in October 
2004, has launched a Web site with useful information about the 
Congress as well as the 51st Governing Board Meeting and 50th 
Anniversary of INTOSAI that will be celebrated in Budapest in October 
2003. This Web page can be found at It contains 
information about the program, technical materials, registration, 
social events, venue, and hotels as well as information about Hungary, 
Budapest, and the State Audit Office.

The contents of the web site will be updated regularly to include 
additional information in Hungarian and the four official languages of 

For additional information, contact: Congress Secretariat, XVIII 
INCOSAI 2004 Budapest, Pf. 54, H-1364 Budapest 4; tel: +36 1 484 9183, 
+36 1 484 9184; fax: +36 1 484 9294, +36 1 484 9295;. e-mail:

IDI Update:

IDI Update keeps you informed of developments in the work and programs 
of the INTOSAI Development Initiative. To find out more about IDI and 
to keep up to date between editions of the Journal, look at the IDI 

ARABOSAI Enhances Its Pool of Training Specialists:

ARABOSAI has had a pool of regional trainers since the first round of 
the Long Term Regional Training Program (LTRTP) was completed in 1999. 
This pool is now being supplemented by a second delivery of the LTRTP.A 
combined workshop incorporating course design and development and 
instructional techniques is taking place in Rabat, Morocco, between 
February and April 2003. As an indication of the self-sufficiency that 
the LTRTP encourages, the instructors of the workshop in Rabat were all 
participants in the first round of the regional LTRTP.

SPASAI Performance Audit Workshop:

A 5-week Performance Audit Workshop took place in November-December 
2002 in Samoa for auditors from the region. It was specifically aimed 
at capacity building, with the goal being that participants would 
return to their organizations and act as internal supervisors, mentors, 
and trainers as performance auditing is introduced or enhanced in 
SPASAI audit offices.

Second Regional Audit Workshop in EUROSAI:

Following on from the first Regional Audit Workshop in Estonia last 
year, IDI Training Specialists again delivered the Financial Audit and 
Fraud Awareness modules developed during the first phase of the LTRTP 
in EUROSAI. Thirty auditors from European Union candidate countries 
attended the workshop in Nicosia, Cyprus, in February 2003.

From left to right, instructors for EUROSAI session included: Tõnis 
Saar (Estonia), Zoltan Giday (Hungary), Goranka Kiralj (Slovenia), 
Chrysostomos Nicolaou (Cyprus), Louiza Avraamides (Cyprus), Ina 
Balcevica (Latvia) and Zbyslaw Dobrowolski (Poland):

[See PDF for image]

[End of figure]

Strategic Planning in Anglophone Africa:

IDI will participate in the AFROSAI-E Strategic Planning Workshop in 
South Africa in March 2003. This subregion has a mature and well-
functioning training environment based on cooperative partnerships with 
the SAIs of The Netherlands and Sweden. IDI will continue to work with 
the regional Secretariat in South Africa and is helping to fund a 
Regional Symposium in June 2003.

Performance Audit and Public Debt Training in OLACEFS:

In February 2003, Panama hosted a 2-week performance audit course for 
26 auditors from 8 OLACEFS SAIs in the Central American region as part 
of the partnership program between OLACEFS, the U.S. General Accounting 
Office, IDI, and the Inter-American Development Bank. Designed and 
delivered by OLACEFS Training Specialists, it followed a similar course 
for auditors from South America last year.

At the end of April 2003, a 5-week public debt train-the-trainers 
course will take place in Mexico City, Mexico. This will be the first 
fruit of a long-running cooperative liaison with the INTOSAI Public 
Debt Committee. Specific SAIs have been invited to send participants to 
the workshop, which will be used as the springboard to launch national 
training programs in this important subject. Further progress on public 
debt training will be noted in future editions of IDI Update.

CAROSAI Long Term Regional Training Program:

Twenty-two auditors from 13 CAROSAI member countries will take part in 
the Instructional Techniques Workshop (ITW) in St. Lucia in May 2003. 
This follows on from their participation in the Course Design and 
Development Workshop (CDDW) at the end of last year. This IDI 
initiative will result in the establishment of the first pool of IDI 
Training Specialists in the region. The main output from the LTRTP will 
be an 8-day Financial Audit Workshop, which will be delivered in the 
region later in the year by selected Training Specialists.

Contacting IDI:

If you would like to discuss any of the issues raised in this edition 
of IDI Update, please contact us by telephone at ++47 22 24 13 49 or by 
email at:

[See PDF for image]

[End of figure]

Editor's Note: This calendar is published in support of INTOSAI's 
communications strategy and as a way of helping INTOSAI members plan 
and coordinate schedules. Included in this regular Journal feature will 
be INTOSAI-wide events and region-wide events such as congresses, 
general assemblies, and Board meetings. Because of limited space, the 
many training courses and other professional meetings offered by the 
regions cannot be included.

For additional information, contact the Secretary General of each 
regional working group.


[1] Audit Report No. 52, 2001-2002 Internal Budgeting, Australian 
National Audit Office, May 2002.

[2] Jointly issued with the then Department of Finance.