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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

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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

  • 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



Financial accountability

Reports to



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 ?

International Organization of Supreme Audit Institutions

For experience sharing and cooperation

  • Regional organizations




  • 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 ?