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Environmental Audit

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By Jonathan Keate, Senior Solicitor Sector Manager, Office of the Auditor-General in New Zealand

This blog post provides public auditors with a brief history of environmental audit in PASAI and encourages future environmental audit work. The blog post also highlights helpful guidance and training activities from the INTOSAI Working Group on Environmental Auditing (WGEA) and the ACAG PASAI Regional WGEA (RWGEA).

Background

PASAI members have had a strong interest in environmental audit for many years, reflecting the importance of the environment and good environmental management to people in our region. Significant milestones include:

  • The establishment of a RWGEA for the region 20 years ago, with the SAI of New Zealand as chair and co-ordinator (PASAI congress, Sydney 2000).

  • Agreement to focus on environmental topics for the first series of co-operative performance audits (CPA) under PASAI’s CPA programme [1].

  • 10 RWGEA meetings between 2001 and 2018, from the first meeting in Melbourne in 2001 to the 10th meeting in Brisbane in 2018 (The 11th RWGEA meeting was to be held in May 2020 in Sydney, but was postponed due to COVID).

  • From 2009, seventy-six staff from 16 PASAI audit offices have taken part in CPAs on the topics of solid waste management, access to safe drinking water, sustainable tuna fisheries management and climate change adaptation and disaster risk recovery. This was a significant investment in building capacity in environmental audit for the region.

A survey of PASAI members for the 2018 RWGEA meeting showed a substantial appetite for further environmental audit work in PASAI (100% of survey respondents). PASAI members asked for an environmental auditing training programme for the region to build capacity in this area. PASAI’s strong participation over the last couple of years in online environmental auditing training courses, including the courses known as MOOCs, is further evidence of the interest in environmental auditing in the region.

Opportunities continue even if face-to-face meetings are not possible

The RWGEA will consider next steps for 2021, either by reconvening the postponed 2020 meeting if travel within the region is possible, or moving to online events. The RWGEA will likely continue with the planned strong focus on environmental audit training, by looking at some of the sustainable development goals (SDGs) from an environmental perspective (using plastic waste and climate action to illustrate). Plastic waste and climate action (specifically climate finance) are part of the INTOSAI WGEA 2020-2022 work programme. Climate finance is funding from developed countries to developing countries to help them adapt to climate change impacts.

Plastic waste and climate finance are highly relevant for the PASAI region, and could be suitable topics for future co-operative audits in the region.

The SAI of Finland, the WGEA chair, is organising the next WGEA assembly meeting for 19-21 January 2021 as a virtual event. The meeting will focus on the concept of ‘circular economy’. In the context of waste management, this involves eliminating waste from the system, for example, by eliminating packaging and ensuring products are re-used or recycled, so that they keep ‘circulating’ in the economy rather than becoming waste. The first day of the Assembly will be dedicated to familiarising participants with the circular economy concept and exploring how auditors could make use of the concept in their work.

It should be possible for interested SAIs to attend the first day of the Assembly, even if they are not WGEA members. The second and third days of the Assembly will be more focused on the WGEA work programme topics, to discuss progress with the work programme and with the chance to share their relevant audit experiences as well as suggest ideas and input to the further work of the projects.

The WGEA also has a new award for Inspiration in Environmental Auditing. The topic for the first award, to be awarded at the January 2021 Assembly meeting, is for “Best visualisation in an environmental audit”. The topic comes from a research paper Visibility of Environmental Auditing, which the WGEA published in 2019. By choosing visualisation as a first topic for the award, the WGEA Group wishes to make the SAI community aware of the importance of using material such as infographics and other visual representations of information to summarize audit findings. The SAI of New Zealand was involved in the Visibility of Environmental Auditing project, and will be on the judging panel for the new award.

How can we do more environmental audits in PASAI?

Findings from the 2018 RWGEA environmental audit stocktake and survey included:

  • A small number of PASAI members have separate environmental audit teams or do environmental audits as part of their performance audit mandate, but several do not.

  • The PASAI members that have done environmental audits have largely done so only through PASAI’s CPA programme.

  • PASAI members saw scope to undertake follow up audits in the CPA topic areas, as a way of re-starting environmental audit activity.

  • Several ACAG and PASAI members were planning to do environmental audits during the next few years. Potential topics included climate change adaptation, waste disposal, renewable energy, fisheries, and environmental impact assessment.

  • There was interest in the region in doing CPAs on environmental topics in the future, including on the environmentally focused SDGs.

  • Barriers or challenges to undertaking environmental audits included report writing, availability of subject-matter experts, constrained resources, lack of current mandate, basic awareness and understanding of environmental issues, technical capacity in the office, and high staff turnover.

Despite the challenges, Pacific Island offices were keen to take up the challenge of environmental audit.

SAIs with experience in environmental auditing continue to face similar issues and challenges, including:

  • choosing good topics;

  • getting to grips with complex subjects;

  • obtaining reliable environmental data, and data analysis;

  • making the best use of experts;

  • focusing on root causes, results, and outcomes, as well as compliance and processes.

Pacific region SAIs can examine environmental issues to determine the degree of government compliance with environmental commitments, including the implementation of national legislation, policy, and action plans. As with any audit, auditors are able to make recommendations that lead to improvements in the design, implementation, and outcomes of government policy and programmes, which contribute to better environmental outcomes. Ideally, audits would also focus on progress in improving environmental outcomes, as well as compliance and implementation of policies and plans.

Key considerations for planning and undertaking performance audits on environmental topics

The following tips include key considerations for planning and undertaking performance audits on environmental topics:

  • For those SAIs that took part in the CPA programme, consider undertaking a follow up audit on one of the CPA topics – solid waste, drinking water, sustainable fisheries, or climate change adaptation - to assess progress, and as an easy way of re-starting environmental audit activity.

  • Choose a topic where there is guidance and training material available. Note that there is considerable guidance available from the WGEA on different environmental topics. See the WGEA’s visual representation of the 50 guidance and training products – https://wgea.org/publication/studies-guidelines/

  • Use the WGEA website and guidance and other resources such as the WGEA newsletter Greenlines to look at how other SAIs have audited the environmental topic of interest.

  • See if there is interest from fellow SAIs in cooperating on an environmental topic and sharing experiences and methodologies – this is a good way to share knowledge and expertise, and enhance the impact of environmental audit findings.

  • Use twinning arrangements in place to seek help from twinning partners that might have more environmental audit experience. They might also be able to help with methodology and finding subject matter experts.

  • Environmental topics are often of high public interest. SAIs should be able to make use of this interest to help get impact and engagement, and to increase visibility and relevance on environmental issues.

  • Many environmental audits rely heavily on data and science, and audit credibility can be enhanced through use of data analytics, data dashboards, and subject-matter experts. Several offices have data analysts to support audit teams.

  • Data analytics has great potential but needs to be approached in a strategic way. It is important to establish the relevant data early on and assess any issues with its integrity and quality, with expert assistance if required, rather than ask for more data than is needed and waste time.

  • Focus on environmental outcomes and results - impact is greater when audits focus on the achievement of environmental outcomes or on the root causes for a lack of achievement, as well as whether policies and plans have been properly implemented (often they haven’t).

PASAI and the RWGEA would be pleased to help PASAI members who wish to begin or resume environmental audits, including by linking members to the WGEA resources and providing training in 2021 in the WGEA focus areas for 2020-22 – plastic waste, and climate action (focusing on climate finance).

For further information about the WGEA see https://www.environmental-auditing.org/

If you have any questions or comments about the RWGEA please contact the RWGEA coordinator: jonathan.keate@oag.parliament.nz

We welcome your feedback and look forward to hearing about other priority topic areas of interest to you. Please email: secretariat@pasai.org

[1] The CPA programme began as part of the Pacific Regional Audit Initiative, a capacity building programme for the region, with support from PASAI, the Asian Development Bank, the INTOSAI Development Initiative, the Australian and New Zealand governments, and the RWGEA.

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The Pacific Association of Supreme Audit Institutions (PASAI) is the official association of supreme audit institutions (SAIs) in the Pacific region, and a regional organisation of INTOSAI and promotes transparent, accountable, effective and efficient use of public sector resources in the Pacific. It contributes to that goal by helping its member SAIs improve the quality of public sector auditing in the Pacific to recognised high standards. Due to the global coronavirus pandemic (COVID19), this has restricted PASAI’s delivery of our programs to our Pacific members and in lieu of this PASAI will be providing a series of blogs on various topics that may help auditors think about some implications to service delivery as a result of COVID19.

For more information about PASAI refer www.pasai.org