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External Accountability Supreme Audit Institutions . Budget Execution Course January 10-11, 2004 Anne Mondoloni, OPCFM-AFTFM. Overview. What is an SAI ? The Lima Declaration theory and practices Regional perspectives What is INTOSAI ?

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external accountability supreme audit institutions

External Accountability Supreme Audit Institutions

Budget Execution Course

January 10-11, 2004

Anne Mondoloni, OPCFM-AFTFM

overview
Overview
  • What is an SAI ?
  • The Lima Declaration theory and practices
  • Regional perspectives
  • What is INTOSAI ?
  • World Bank Strategy to support and strengthen SAIs
what is a supreme audit institution
What is a Supreme Audit Institution ?

The national audit body, independent of the executive, that issues reports on the use of public funds for the Legislature and Public

financial accountability scheme
Financial accountability scheme

Citizens-Public

Legislature

Financial accountability

Reports to

SAI

MOF

Audits accounts and management

three different institutional models
Three Different institutional models
  • Westminster model
    • UK – most commonwealth countries including in Sub Saharan anglophone Africa
    • SAI work intrinsically linked to the system of parliamentary accountability
  • Judicial / Napoleonic model
    • Latin countries in Europe / Turkey / Francophone countries in Africa and Asia / Several Latin American countries
    • SAI integral part of the judicial system. Often goes with the personal and financial responsibility of government officials
  • Board model
    • Asian countries including Indonesia / Philippines
    • Institution positioning similar to that of Westminster model but internal organization is collegial with of Board of auditors
different types of audit
Different types of audit
  • Compliance audits

Reviewing compliance with financial laws and regulation

  • Financial audits

Providing an annual opinion on the fairness of the information presented in State financial statements or government agencies statements

  • Performance audits (value for money)

May vary significantly in scope

regional perspective
Regional Perspective
  • ECASAI in EU candidate countries have made important progress (e.g. Poland) / others have difficulties reaching an adequate institutional positioning
  • AFR-MNAIn francophone countries : scattered auditing resource / and limited access to the general public / In anglophone South Africa as example of best practice
  • LACSAI could potentially benefit from well developed PFM system in Ministries of Finance but very low impact due to limited access to the general public
  • SAR – EAPLonger tradition of external oversight but weaknesses in terms of audit content, staffing and therefore impact / India as example best practice and initiating changes
identification of stages possible steps to take
Identification of stages Possible steps to take

CASE I “ Start”

No external audit institution in place or very recently created

CASE II “Low PFM Capacity environment”

When quality of State Accounting system is very low

CASE III “Intermediate”

Heterogenous staffing - Inadequate scope or institutional position Confidentiality of reports

CASE IV “Advanced”

Sufficient and skilled staff / but limited range activities

Free Disclosure of reports to the public but no follow-up

what is intosai
What is INTOSAI ?
  • INTOSAI

International Organization of Supreme Audit Institutions

For experience sharing and cooperation

  • Regional organizations

AFROSAI / ARABOSAI

OLACEFS / CAROSAI /

EUROSAI / ASOSAI / SPASAI

  • Congress every 3 years

last Congress in Budapest – October 2004

outcomes of 2004 xviii intosai congress
Outcomes of 2004 XVIII INTOSAI Congress
  • INTOSAI has adopted a Strategic Plan, that include a mission statement, a “vision” and a set of goals among which :
    • Accountability and Professional Standards as Goal 1
    • Institutional capacity building as Goal 2
  • Creation of a Working Group or Committee on SAI capacity building
  • Full alignment with Bank’s SAI approach
strategy paper objective
Strategy paper : Objective

Provide an overarching framework on how to make the most out of the commonality of interests between SAIs and donor agencies– which is based on ensuring that public / development funds are used in an effective manner to reduce poverty and are properly accounted for.

strategy paper key ideas 1 2
Strategy Paper : key ideas (1/2)
  • Dealing with SAIs as potential partners in bringing about results, rather than as remote oversight institutions
  • Advocacy / Policy dialogue
    • need to work on acceptance by the executive branch / government of a relevant– independent external scrutiny of its management of public funds
  • Leveraging the Bank’s portfolio
    • “acceptability” issue to be used as opportunity to engage dialogue / training program for enhancement of audit capacity
strategy paper key ideas 2 2
Strategy Paper : key ideas (2/2)
  • Draw on external expertise through partnerships with INTOSAI and its members
    • Build on on-going initiatives within the SAI community that deal with SAI capacity building – Large amount of on-going bilateral cooperation among SAIs
  • Support SAI capacity to audit budget execution
    • On area of particular interest SAI – as the sole public auditor for annual state budgets – is the main source of information for citizens, the legislature, the government and ultimately for development partners.
    • In line with new OP 8.60 need for specific support in carrying out Financial Audit of State Accounts (Budget execution)
lessons learned
Lessons learned
  • The need for a comprehensive approach of Public financial management
  • Freedom of disclosure of reports as a necessary condition for having impact
  • Role of the Ministry of Finance and importance of the accounting system
for your consideration
For your consideration
  • Financial accountability and … Rule of Law ?
  • Financial Accountability and… Corrupt environment ?
  • Financial accountability and .. Authoritarian regimes ?