Honouring citizens’ trust in SAIs with FSG audits

By Tiofilusi Tiueti, Director – Technical Support, PASAI

The audit of Financial Statements of Government (FSGs) [1] is a public mandate bestowed by citizens upon supreme audit institutions (SAIs) through audit and/or Public Financial Management (PFM) legislation.

The mandate designates citizens’ trust in SAIs to provide assurance on government accountability reports and how it has used public resources.

SAIs must honour citizens’ trust.

FSGs audited in a timely manner to recognised high standards by SAIs are fundamental to holding governments and public entities accountable through oversight by the legislature.

Timeliness

About 80 per cent of Pacific SAIs completed the FSG audit within their respective statutory timelines. Four SAIs still have an FSG audit backlog. We are providing SAI-level support ensuring these audits are carried out promptly and within ISSAIs [2]. Some factors contributing to these backlogs include the delay of preparing financial statements by the Ministry/Department of Finance, the delay in responding to the audit queries, and the delay in finalising audit adjustments and signing the accounts.

We have arranged consultants to work closely with the FSG audit teams in improving audit methodology, advise on audit practice and documentation, review audit work papers, conduct team-building and enhance communications with its Ministry of Finance etc.

With continuing support, all FSG audits should be up to date by 2024.

Citizens expect that SAIs will complete FSG audits in a timely manner.

Quality

Achieving quality audits of FSGs is central among our strategic priorities. There has always been a commitment to ensuring member SAIs improve the quality of public sector auditing in the Pacific to comply with international auditing standards. SAI Performance Measurement Framework (PMF) results show that 44 per cent of SAIs assessed had low scores in audit quality for financial audit indicating more work is needed in this area. Some of the measures a SAI needs to consider to achieve high-quality audits and compliance with international audit standards include but are not limited to:

1. Audit manual

   PASAI has published a manual for financial audit. Some SAIs have their own customised manuals. Using manuals are important to achieve uniformly high quality audits in line with international audit standards.

2. Established quality control and quality assurance systems with internal reviews

   Having quality control and quality assurance systems with regular internal reviews confirm the consistent application of international audit standards to each audit project.

3. Periodical external reviews of audit practice

   PASAI and the IDI [3] are conducting a SAI-level support programme to enable a SAI to conduct an FSG audit based on ISSAIs for financial audit. The SAIs will go through a workshops with the project team to refine their audit methodologies. It includes a quality assurance component to not only review the audit but to train SAI staff to do quality assurance reviews. External reviews will add value by confirming the consistent application of the international auditing standards to the work of a SAI.

4. Continuous training of auditors

   Public auditors must have continuous training to ensure up-to-date knowledge and skills in auditing.

Achieving quality audits will also require a confident SAI decision and the boldness to take consistent steps through a systematic process and procedures. PASAI is keen to support and work with SAIs to achieve this.

Citizens expect that SAIs will conduct high-quality FSG audits.

Achieving FSG audit impact

Timely, high-quality FSG audits provide transparency and accountability of government spending of taxpayers’ money.

Some of the issues affecting the impact of FSG audits include the delay in preparing these reports, the delay in their submission to parliament, a delay or reluctance to publish them and the public and/or parliamentarians not understanding the reports.

FSG reports and audits are relevant when they are timely, high-quality and communicated effectively.

For these audit reports to have an impact, they must inspire action where needed and trust where deserved. A well crafted report should be only one component of an audit ‘project’, which may also include a media release, social media content, preparation for press appearances and even recent innovations like interactive website dashboards.

SAIs need good communication plans to truly create FSG audit impact. SAIs should also celebrate successes to show how they make a difference to the lives of citizens.

This will help improve public trust in government and public institutions. Citizens’ trust in SAIs to conduct FSG audits is certainly a necessary precursor.

Achieving that, SAIs honour citizens’ trust.

What’s next?

Future topics in our series include:

• eLearning

• The impact of SAI PMF reports

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

Footnotes

[1] FSG audits are also known as Whole of Government (WoG), Public Accounts (PA) or Single Account (SA) audits.

[2] International Standards of Supreme Audit Institutions

[3] The INTOSAI Development Initiative

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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, promoting 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. Our blog includes topics that may help auditors think about some implications to service delivery because of the global coronavirus pandemic (COVID-19).

Human resources a vital pillar of professional SAIs

By Sinaroseta Palamo-Iosefo, Director – Practice Development, PASAI

SAI’s capacity to deliver value and benefits

SAIs must have a capable and motivated workforce to deliver value and benefits to the lives of citizens through effective and impactful audits. Having competent people to deliver the SAI’s mandate is a critical element of being a professional SAI.[1]

The four fundamentals of professionalism

Without the autonomy to decide on all human resource (HR) matters, it is difficult for SAIs to attract and retain competent people. SAIs should be able to take a lead role in ensuring they have the right number of people at the right time with the appropriate competencies to execute their mandates.

Although some SAIs may not have full autonomy, they should still plan for and manage other aspects that affect their workforce to the extent possible under legislative boundaries.

The human resource management (HRM) cycle includes HR strategy, planning, attraction and recruitment, performance management, learning and development, reward and recognition, and retention and succession. SAIs can devote attention to such critical issues at the various stages of the HRM cycle while pursuing their full independence in handling all HR matters.

PASAI experience and achievements so far

The results of SAI Performance Measurement Framework assessments between 2016 and 2020 indicated that 90 per cent of the SAIs in the region do not have an HR strategy.

These results informed our decision to develop a comprehensive HRM course for inclusion in our capacity-building programme.

The Swedish National Audit Office (SNAO) and AFROSAI-E lent their knowledge to the creation and delivery of the course. Through this partnership we provided technical support to six SAIs (Fiji, FSM National, Kiribati, Papua New Guinea, FSM States Pohnpei and Yap) to develop their HR strategies and operational plans.

Of the six participating SAIs, Fiji, Kiribati and Yap have developed and approved their strategies and operational plans. Furthermore, Kiribati established its own dedicated human resource unit staffed by the two auditors who developed its HR strategy and operational plan.

We have since signed a memorandum of understanding with SNAO as there is still a strong need to enhance HR capabilities in this region.

Through our partnership with SNAO, we:

• help improve participants’ knowledge on human resource concepts and processes,

• build capabilities of SAI staff to ensure sustainability of lessons learnt and applicability at SAI level, and

• promote the importance of SAIs taking ownership of decisions and actions required to ensure they have competent people.

What SAIs can do

While SAIs are on a continuous journey to have organisational independence, it is critical they recognise their own role in establishing robust systems and processes to manage HR processes to the extent possible. SAIs should think of having competent people as a fundamental priority because it contributes so strongly to the financial welfare of the country.

When SAIs have a greater understanding of their mandates and the required competencies to execute these mandates, they are better able to plan and manage their human resources effectively.

The INTOSAI Capacity Building Committee’s Guide provides useful information on a typical HRM cycle, which can help SAIs determine appropriate actions that suit their circumstances.

Planning for future HRM support is underway, so we encourage Pacific SAIs to take advantage of these opportunities when they become available.

What’s next?

Future topics in our blog include:

• Financial statement of government audits

• eLearning.

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

References

[1] Developing Pathways for the Professional Development of Auditors in a Supreme Audit Institution (SAI)

https://www.intosaicbc.org/wp-content/uploads/2019/09/4.-Guide_Pathways-for-Professional-Development-of-Auditors-in-SAIs.pdf  

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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, promoting 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. Our blog includes topics that may help auditors think about some implications to service delivery because of the global coronavirus pandemic (COVID-19).

Responding to an emergency: SAI New Zealand’s pandemic response

By Sarah Markley, Deputy Secretary-General; and Nicole Ayo von Thun, Senior Advisor, International Engagement, Office of the Auditor-General in New Zealand

The purpose of a supreme audit institution (SAI) is to improve trust in our public organisations and public financial management systems. At a time when there is a significant and rapid increase in Government expenditure to address the impacts of the pandemic, the work SAIs do has never been more important. As auditors we play a vital role in maintaining the integrity of the public sector in our jurisdictions by supporting transparency and accountability.

The team at SAI New Zealand has directed a lot of its efforts over the last financial year to work focused on the health, welfare, social, and economic responses of the COVID-19 pandemic. It has continued to do this work through multiple lockdowns, regional and national. This has been possible due to strong emergency response structures in place at SAI New Zealand.

With COVID-19 continuing to impact the work we do and how we do it, sharing our experiences and challenges with one another is critical.

SAI New Zealand’s COVID-19 pandemic response

Since the first lockdown from 20 March 2020, SAI New Zealand has implemented a Coordinated Incident Management System (CIMS) structure. Using this structure, they introduced a COVID Response Team to manage and respond to the COVID-19 pandemic.

CIMS was first developed in 1998 to provide emergency management agencies with a framework to coordinate and cooperate effectively in a response. Today many New Zealand organisations use the CIMS framework to manage emergency responses of any scale. The CIMS framework outlines the different functions of the response structure, the levels of response and the relationships between them, and how a response can be structured at each level. The CIMS model has three distinct layers: the Governance function, the Controller function, and the Operational function.

SAI New Zealand’s COVID Response Team is made up of the following functions which operate in a networked hierarchy (see diagram below):

• Governance (Combined Leadership Team): Provides governance decisions which the Controller and the Operational team implement.

• Controller (and Controller’s Assistant): Controls and coordinates the response.

• Safety and Risk: Advises on measures to minimise risks.

• Communications: Develops and delivers messages to staff from Governance. These usually come from the Auditor-General, in particular when it’s about alert level changes and office closures. Occasionally, when a message is about implementing a process, these are sent directly from elsewhere within the Response Team.

• Intelligence: Collects and analyses information and produces intelligence.

• Logistics: Provides equipment, supplies, and services to support response activities.

• Welfare: Ensures planned, coordinated and effective delivery of welfare services to staff.

• Planning and Recovery: Plans for response activities and resource needs. Also starts the recovery management process during the initial response phase and ensures the recovery process is integrated with the response.

SAI New Zealand’s COVID-19 Response Team structure

Lessons learnt from using CIMS at SAI New Zealand

The lessons they learnt include:

• Provide clear and regular communication to all staff. During each lockdown regular emails, often from the Auditor-General, were sent to staff outlining the situation, expectations of staff, and support that is available. Having clear communication ensured there was one source of truth outlining how the organisation was responding to COVID-19 outbreaks. SAI New Zealand has eight offices around the country. Having this consistent and coordinated communication approach was very important for all staff to understand the office expectations and requirements. Where there were exceptions for certain offices due to outbreaks in their region, having clear communication ensured that staff felt fairly treated.

• Have an effective logistics function. Quite often lockdowns have been announced quickly and staff need to shift to working from home overnight. Staff often need to access equipment and furniture that is still in the office. In some cases, the logistics function has helped people to set up prior to the lockdown so they can easily work remotely. In other cases, the logistics team has got equipment to staff as quickly as possible. Taking the safety of those providing logistics support into account and balancing support for ongoing productivity can be a challenge. This is where the team benefit from seeking a clear policy approach from the Governance function.

• Ensure a good Welfare function is in place to support staff across the organisation. This includes sending out information on mental health and wellbeing, conducting surveys to assess wellbeing issues, and directing line managers to regularly check in with their staff.

• Maintain clear roles within the Response Team. This separation enables the Governance function to provide clear direction and policy decisions as it sits above the Operational function, which the Operational team then implements and reports back on.

• Establish a pattern of meetings and sharing of information. For example, in New Zealand there are regular televised updates on the outbreak from the Prime Minister and Director General of Health. The Controller and the Operational team would watch these updates, meet to discuss next steps, share them with the Combined Leadership Team as the Governance function, receive a decision or clear direction, and then send a message out to the wider organisation. Using this pattern and getting messages out quickly provides certainty for staff.

• Ensure clarity of objectives for the Response Team, which focus on the emergency and are separate from any normal business activities or other emergencies. The SAI needs to be clear on the extent of the team’s role and whether the Response Team is only there to deal with COVID-19 outbreaks or all emergency responses (such as earthquakes) and future organisational planning.

• Ensure there is enough support for the core Response Team. Because COVID-19 is ongoing and working in the Response Team comes on top of each staff member’s normal workload, the SAI needs to be clear in what circumstances and timeframes the Response Team will function. Having back up team members for each function enabling the team to rotate is really important, as it means that members on the core Response Team can have a break.

• Formally train staff in the Response Team. CIMS was a new emergency response tool for SAI New Zealand that not all staff on the Response Team were trained on. The team was quickly able to pick up the structure and ideas behind CIMS and implement them effectively; however, formal training would have led to more clarity of roles. If an organisation is planning to use this model to respond to emergencies, it is beneficial to train and inform staff of functions prior to implementing it.

By using the CIMS framework SAI New Zealand has effectively navigated each lockdown. Establishing a clear and consistent emergency response structure has enabled its important work to continue.

What’s next?

Future topics in our series include:

• Human resource management

• Financial statement of government auditing

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

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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, promoting 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. Our blog includes topics that may help auditors think about some implications to service delivery because of the global coronavirus pandemic (COVID-19).

The future of environmental auditing in the Pacific

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

In November 2021, the United Kingdom will host COP26, a major United Nations (UN) climate change conference for countries to report on their progress and climate actions they have taken since the 2015 Paris Climate meeting [1]. With 30,000 participants expected, and intense scrutiny from media and interest groups likely, the conference will be a chance for countries and regions most vulnerable to climate change, including the Pacific, to draw attention to their challenges and the actions required.

This blog post outlines PASAI training and resources to support SAIs to conduct performance audits on environmental issues, areas of interest and possible future audit topics in the Pacific region.

PASAI training and environmental audit resources

PASAI ran two online workshops in late July 2021 to support SAIs considering environmental audits in their work programmes. This training prominently featured climate change and explained the UN Sustainable Development Goals (SDGs).

The workshops enhanced participants’ awareness of sustainable development and the potential social and economic effects of government environmental programs on the wider community.

SAIs should play the primary role in assessing government actions that aim to respond to environmental pressures or improve environmental outcomes over time. Many SAIs have already conducted environmental audits with support from INTOSAI’s Working Group on Environmental Auditing (WGEA).

The training confirmed most environmental audits are performance audits, where SAIs use their performance audit mandates to evaluate the effectiveness, efficiency or economy (the ‘three Es’) of environmental topics.

The discussion about environmental audits and the ‘three Es’ resonated with participants, as well as the fact that environmental issues should not be viewed in isolation. This is because environmental topics often require a long-term view to be taken and have social and financial/economic considerations (the sustainable development concept).

Videos used in the workshops are now available online [2]. They include links to an interactive map which shows how various countries are progressing against the SDGs and to all the WGEA resources and training available for SAIs doing environmental audits. SAI staff who missed the workshops are still welcome to contact us with any questions about these resources.

Opportunities and challenges

Participants showed enthusiasm to conduct more environmental audits. Ideas and comments included:

• The ‘blue economy’ is an emerging area. This is the interaction of environmental, social, and financial aspects of the marine environment, including for deep sea oil and gas exploration and fisheries.

• Environmental topics are often of high public interest. SAIs should be able to take advantage of this interest to create impact and engagement with their audits, and to increase the visibility of environmental issues they report on.

• Accessing climate finance can be challenging for Pacific countries even though needs are pressing and urgent.

• Access to data and subject matter experts can be difficult, especially if the experts have already worked for the auditee.

Future audit topics for the Pacific

SAI Kosrae is planning a follow up audit of a previous environmental audit undertaken as part of the PASAI cooperative performance audit (CPA) programme [3]. Other SAIs that participated in the CPA programme could do a follow up audit on one of the CPA topics. This would be a good way to re-start environmental audit activity and get some newer staff involved.

Workshop participants mentioned the freshwater pools of a Guam sea cave, a popular destination to both locals and tourists alike, have been filled with mud due to a lack of erosion control measures from a nearby development project. In addition, oil leakages from World War II shipwrecks in Micronesia are possible and would likely damage the marine environment if no preventative measures are taken.

These are examples of potential performance audit topics, depending on SAI capacity, resourcing and other audit priorities.

The WGEA is currently working on the topics of sustainable transport, plastic waste, and climate finance. Each of these topics link closely to an SDG. Plastic waste and climate finance are good environmental audit topics for the Pacific region, as both are linked to the marine environment.

The Great Pacific Garbage Patch is a well-known issue but it’s just one plastic waste problem contributing to environmental degradation.

Image source: https://marinedebris.noaa.gov/sites/default/files/GPmap_2012_NOAAMDP.jpg

PASAI and the RWGEA can support PASAI members with environmental audits. This support may include focused training on auditing plastic waste, climate finance or any common area of interest in the region.

What’s next?

Future topics in our series include:

• SAI crisis management team methodology

• Human resource management

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

Footnotes

[1] COP26 is the 26th meeting of the United Nations Climate Change Conference of the Parties to the 1994 convention.

[2] Basics of environmental auditing and Crash course on the SDGs.

[3] 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, promoting 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. Our blog includes topics that may help auditors think about some implications to service delivery because of the global coronavirus pandemic (COVID-19).

Leadership

By Annie Subactagin-Matto, Director – Monitoring, Evaluation and Reporting, PASAI

Why leadership matters

Leadership strength and competency is strongly related with an organisation’s ability to deliver and sustain exceptional performance over time [1] and to respond quickly and effectively to internal and external opportunities and challenges.

Leadership competencies to achieve excellence

A global survey identifies five key competency areas that effective leaders tend to exhibit:

1. High ethical standards and providing a safe environment by demonstrating a commitment to fairness, clearly communicating their expectations to which they hold themselves and others to account, and behaving in a way that is consistent with organisational values.

2. Empowering individuals to self-organise by providing clear direction and delegating work and decision making across the organisation. This approach builds trust, improves employee engagement, commitment and job satisfaction – in turn leading to higher levels of productivity.

3. Promoting connection and belonging among employees through encouraging open and regular communication. From a neuroscience perspective, creating psychological safety and connection in the workplace allows employees to access their full potential by activating the higher functioning prefrontal cortex, which is associated with the essential cognitive abilities required in a workplace – attention and focus, coordination, planning, decision making and managing emotions.

4. Openness to new ideas and organisational learning by demonstrating safety for trial-and-error, flexibility to change opinions and being open to innovative ideas. Leaders who demonstrate a ‘flexible’ versus ‘fixed’ mindset encourage continuous improvement and a greater diversity of ideas and approaches resulting in innovative, streamlined business processes and more impactful and well-considered outputs.

5. Commitment to the professional and intellectual growth of employees by encouraging and advocating for their ongoing training. Managing through fear and consequence reduces higher brain functions whereas leaders who support employee growth are rewarded with higher quality work, engagement and staff retention. [2]

Leading in the pandemic: creating clarity, building resilience and charting a clear direction

The COVID-19 pandemic poses unprecedented challenges to leaders of public and private sector organisations. The pandemic has required a swift leadership response to allow changes in how and where employees work, significant shifts in operating models and service delivery and rapid digital transformation while maintaining business performance, employee morale, engagement and wellbeing.

Effective communication is critical for leaders in a situation of crisis, in particular the need to listen actively to their people and those providing expert advice. Leaders need to communicate swiftly, regularly and with candour with their peers, teams and within the wider organisation. During a crisis information is likely to be unavailable or inconsistent. When people are often unsure about what they know, behavioral science points to an increased human desire for transparency, guidance, and making sense out of what has happened [3]. This approach enables leaders to create hope and stability, revitalise and strengthen the resilience of their people and support them to form some meaning out of uncertainty.

Characterised by regular, fact-based communication and increased engagement with vulnerable communities, New Zealand’s swift, decisive and empathetic response to the pandemic has been commended globally. At a recent event hosted by the Te Kawa Mataaho Public Service Commission, Dr Ashley Bloomfield (Director-General of Health New Zealand) noted, “If people understand the ‘why’, they will do extraordinary things”.

The theme of the 23rd PASAI Congress, held from 22–24 June 2021, was ‘Impact through leadership’. Keynote speaker, Dr Siouxsie Wiles (Associate Professor, Auckland University and New Zealander of the Year 2020), advised the best way to communicate ideas to stakeholders is to provide information in short, understandable parts making complex information and key facts engaging and ideally shareable. She used this approach to collaborate with cartoonist Toby Morris to communicate the science of COVID-19. Their work together includes the popular ‘flatten the curve’ visualisation, which has been translated into many languages and adapted by governments to help people understand lockdowns.

PASAI leadership and communications programmes

Heads of SAIs and established second tier SAI leaders are attending PASAI’s leadership programme which covers the following broad topic areas:

• Leading and establishing organisational culture

• People management

• Organisational leadership

• Managing and developing stakeholder relationships

• Dealing with challenges and maintaining a long-term view. 

The programme aims to enhance and strengthen the effectiveness of SAI Heads as leaders and significant influencers in the public financial management system of their country, and to create a critical mass of leaders to influence good governance, transparency and accountability in the Pacific region.

Beginning in August 2021, this programme runs for up to 18 months and includes online workshops and group coaching sessions to establish a cohort of Pacific SAI Heads to share leadership experiences and mutual support around the unique challenges they face as leaders.

PASAI’s communications programme aims to enhance a range of communication capabilities among public auditors. During the 2021–22 financial year, PASAI plans to arrange technical assistance for and/or deliver workshops on developing and implementing a communications strategy, engaging with the media and other key stakeholders, report writing, interpersonal communication skills and website design and analytics.

What’s next?

Future topics in our series include:

• Sustainable Development Goals

• SAI NZ’s emergency response approach

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

References

[1] McKinsey & Company (2021). McKinsey Quarterly Five Fifty: Leadership at scale. https://www.mckinsey.com/featured-insights/leadership/five-fifty-leadership-at-scale

[2] Harvard Business Review (2016). The most important leadership competencies, according to leaders around the world. https://hbr.org/2016/03/the-most-important-leadership-competencies-according-to-leaders-around-the-world

[3] McKinsey & Company (2020). A leader’s guide: Communicating with teams, stakeholders and communities during COVID-19. https://www.mckinsey.com/business-functions/organization/our-insights/a-leaders-guide-communicating-with-teams-stakeholders-and-communities-during-covid-19

[4] Rouleau et al. (2021). Covid-19 and Our Understanding of Risk, Emergencies and Crises. Journal of Management Studies. 58:1. https://onlinelibrary.wiley.com/doi/10.1111/joms.12649

[5] Christianson, M. and Barton, M. (2021). Sensemaking in the Time of COVID-19. Journal of Management Studies, 58:2. https://onlinelibrary.wiley.com/doi/10.1111/joms.12658

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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, promoting 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. Our blog includes topics that may help auditors think about some implications to service delivery as a result of the global coronavirus pandemic (COVID-19).

Improving audit impact with multimedia

By Luke Eaton, Communications Advisor/Editor, PASAI

Supreme audit institutions (SAIs) are champions of public accountability, transparency and good governance. However, the word ‘audit’ usually makes people think of numbers, balance sheets, tables and maybe a few pie charts. Unfortunately, most people don’t get as excited by these things as we do!

However, we can use multimedia to increase stakeholder engagement with our work and improve audit impact. Photos and videos that create an emotional response (affection, disgust, surprise, appreciation) are best.

The power of a picture

It took complicated calculations from multiple branches of mathematics[1] and many thousands of scientists, engineers and others to fly astronauts to the moon and back. A photo Neil Armstrong took of Buzz Aldrin standing on the lunar surface soon became one of the few iconic images depicting this triumphant event.

The vast, empty darkness behind Aldrin and the tiny lunar module in the reflection of his helmet shouts “We landed on the moon!” better than an explanation of the maths ever could. NASA understood the launch, landing and return was only half the job. Showing the world photos and footage of this feat of human ingenuity was just as important.

Photo by History in HD on Unsplash

Why pictures matter

Have you ever sat through a long speech (or sermon) and just moments after it ended you struggled to remember what it was about? On the other hand, have you left a presentation and thought the most memorable parts were the powerful images the speaker tied to her key messages?

If she made a point using an impressive image, you’re more likely to remember that than the slide full of words.

SAIs can use images to add value to audit reports, presentations, stakeholder engagement publications, annual reports, media releases and social media posts. Increasing visibility and engagement with our work enables us to demonstrate the value and benefits of SAIs and how we make a difference to the lives of citizens (INTOSAI-P 12).

The work of public auditors usually deserves a wider audience than what it gets. Sometimes that is out of our control. But if you create a compelling case for action with the use of multimedia when publishing audit findings they will be more likely to make a greater impact. The effect will hopefully be apparent in the last phase of the audit process: following up on the report’s recommendations.

Social media and ‘The Snowball Effect’

Most SAIs in the Pacific have one or more social media accounts. Social media may be the only way citizens ever learn about a SAI’s work. It can also be a very useful tool for SAIs to engage with their other stakeholders, including the media and interested organisations.

In 2016 Facebook reported its users “spend, on average, 1.7 seconds with a piece of content on mobile” when scrolling through their news feeds[2]. The probability the typical social media user will stop to read just the first sentence of your post or tweet increases with the instant appeal of the image you’ve paired it with.

If it’s a video, it should be understandable without sound, capture attention immediately and not be long.

People who live far from the equator intuitively know the meaning of The Snowball Effect. If, like many residents of the Pacific, you have never seen snow, a little snowball sent on the right path gathers more snow on its surface as it rolls down a hill. It gets faster as it grows and is less likely to be stopped on its journey, growing bigger and bigger. However, many little snowballs only roll a short distance before they stop, get buried or disappear!

This is a good way to think about social media.

The more people who stop to read your social media post, the greater the chance some of them will ‘react’ to it (with a Like or Thumbs Up etc) and/or ‘engage’ with it (click its link or share it). This will in turn put the post in more people’s news feeds and the cycle continues. The more appealing the image the greater the effect. And if your social media posts consistently engage people your future posts will start to appear in people’s ‘notifications’, a place even more valuable than a news feed!

Unless you’re a celebrity (hint: you’re not!), few people will bother to even read your social media post or tweet if it doesn’t come with an image. So at the very least make sure you include an image (almost anything) with your posts, because something is better than nothing.

How to source images

The good news is the phone you probably carry with you everywhere can take high-quality photos and videos. However, to do that your phone needs someone who knows and applies a few basic shooting principles.

In addition to taking your own images, it’s possible to get great royalty-free images from certain websites.

This is part of the workshop we are providing this month for SAIs interested in improving their use of multimedia. Participants will learn how to make (and choose) images that can communicate a SAI’s work most effectively.

Shooting for the stars

There is an accidental brilliance about Armstrong’s photo. The horizon reflected in Aldrin’s helmet matches up perfectly with the one behind him, emphasising the sense of desolation. It’s like he knew how to take an evocative photo that would perfectly capture the event’s significance.

What you probably don’t know is the image you see is significantly different from the one Armstrong took.

There is space junk in the foreground of the original and the top of the photo awkwardly cuts off just above Aldrin’s life support system. Someone back on earth added the missing blackness of space and removed the crosshatches that formed a grid over the image[3]. Various editors have since cropped the photo to create balance and to suit their media, whether for a magazine cover, a wall poster or even an internet blog post!

If the photographer (Armstrong) had spent a little more time to frame his shot he’d have saved us some trouble later on. However, this just shows a little editing can allow a good photo to convey a message in whatever format you choose.

References

[1] Exploring the Math in 'Hidden Figures'

https://www.insidescience.org/news/exploring-math-hidden-figures

[2] Capturing Attention in Feed: The Science Behind Effective Video Creative

https://www.facebook.com/business/news/insights/capturing-attention-feed-video-creative

[3] A Brief History of AS11-40-5903

https://www.hq.nasa.gov/alsj/a11/a11-5903history.html

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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 programmes to our Pacific members and in lieu of this PASAI will be providing a series of blog posts 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 to www.pasai.org.

Achieving Audit Independence in the Pacific (Part 2)

By Esther Lameko-Poutoa, Chief Executive, PASAI

Audit independence is vital to establish the credibility, public confidence and trust in the work of public audit offices. This blog post is the second in a series of two exploring the concept of audit independence and its role in promoting transparency, accountability and good governance in a country. In our previous post, we explored the definition and measurement of audit independence.

This post explores the SAI Performance Measurement Framework (SAI PMF) results for audit independence in the Pacific region. We discuss strategies to strengthen and achieve SAI independence. Finally, we outline the PASAI Secretariat’s initiatives to support SAIs in the region to achieve audit independence.

The PASAI Secretariat’s work on audit independence is funded by the ‘Strengthening of Public Finance Management and Governance in the Pacific Project’ (PFM). This project aims to strengthen oversight over public financial management in the Pacific region through improving the budgetary scrutiny, public financial oversight and accountability capacities of parliaments, supreme audit institutions and civil society within the region, aligning with international public financial oversight and accountability standards, and fostering citizen engagement and oversight. PFM is funded by the European Union (EU) and implemented by the United Nations Development Programme (UNDP) in partnership with PASAI.

INTOSAI SAI Performance Measurement Framework 2016–2019

The assessment of SAIs in the last three years using the SAI PMF tool shows a clear picture of the current state of audit independence in the Pacific region. The assessment is based on the following levels:

Level	Minimum Requirement for Scores
0	The feature is not established or barely functions.
1	The founding level: The feature exists but is very basic.
2	The development level: The feature exists and the SAI has begun developing and implementing relevant strategies and policies.
3	The established level: The feature is functioning broadly as expected under the ISSAIs (levels 1-3).
4	The managed level: The feature is functioning following the principles in the ISSAIs (levels 1-3) and the SAI implements the activities in a way that enables it to evaluate and continually improve its performance.

We have yet to assess two SAIs, one SAI had a score of 0, four SAIs had a score of 1, 11 SAIs had a score of 2 and two SAIs had a score of 3. None achieved the ideal score of 4 indicating true independence.

Graph 1: Independence of the SAI - Overall Assessment

PASAI has developed an Independence Resource Kit to help SAIs with their strategies in achieving independence. PASAI also provides technical assistance and resources to support SAIs in their initiatives to achieve independence.

The PASAI Secretariat is available to work in collaboration with SAIs and parliamentarians of the Pacific countries to implement changes to improve these assessments so that more results meet the level 4 standard.

What does it take to achieve SAI independence?

• Strong leadership: Change can be implemented with strong leadership and commitment. It takes courage to institute change and to advocate to parliamentarians that this change is a positive alternative for any nation planning for economic growth and sustainable development. Hence there is a need for SAIs to inform parliamentarians, the public sector and the country as a whole about what they do and the importance of their role.

• An informed Parliament: Some SAIs have submitted proposed amendments of provisions allowing for independence but they do not get passed in Parliament. SAIs are encouraged to design a programme to inform parliamentarians. There should be staff allocated to answer queries of parliamentarians at any time especially during parliament committee meetings. When parliamentarians understand the need for a SAI to be independent and are informed regularly of the SAI work and reports, it paves the way of getting parliamentary consent for independence.

• Regular publication of audit reports, ideally annually. These reports should be made available to Parliament and the public so that the performance of public entities can be properly scrutinised. Reports can be published on the website of the SAI and/or the public entity and through Parliament. Their release can also be publicised through social media platforms. There should be greater visibility of the role of the SAI to the country as a whole. The results of investigations, special audit work, financial audits, performance audits and any work done by the office should be reported and published on their website. In some countries timelines for audit reports are set through legislation, which is also a recommendation from the Public Expenditure and Financial Accountability framework discussed in the first part of this blog. Outside of the legislative process, Parliament or the executive government should not have any influence to hasten or delay reports or alter when these reports are to be published.

• Design and implementation of a practical Communications Strategy to strengthen the communications function and capability of a SAI, enabling it to communicate clearly and regularly to the public what the SAI does and also how people can understand the reports. Social media platforms can be used to inform the public about the work of the SAI and any reports it issues. SAIs need to be prepared to manage public and media probing into these reports.

• Informed public servants: There should be a targeted communications programme to inform public servants and every entity in the public sector about the role of the SAI and the value that it adds by promoting accountability, transparency and good governance in the public sector in particular and the wider community in general.

Is it an impossible mission?

Far from it. Some SAIs are already on the way to achieve complete audit independence. This process requires long-term commitment and includes taking one step towards progress at a time. Without a step forward, there is no progress.

PASAI continues to work with SAIs in the region to advocate for audit independence with parliaments and key stakeholders. The Secretariat supports SAIs to achieve audit independence by providing:

• an up-to-date Independence Resource Kit to be used as a guide for audit offices

• legal consultants who can work with the SAIs in reviewing the legislation and consulting with parliamentarians and the public and

• assistance to SAIs to develop Communication Strategies to effectively plan how and when to communicate about their role and reports to Parliament, the public and other key stakeholders.

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

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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

Achieving Audit Independence in the Pacific (Part 1)

By Esther Lameko-Poutoa, Chief Executive, PASAI

This blog is the first in a series of two blogs to provide public auditors with an introduction to the concept of audit independence. It also contains information about how to measure audit independence – including the four dimensions of ‘Audit Independence’ within the INTOSAI Supreme Audit Institution ‘Performance Measurement Framework (SAI PMF)’ and the Public Expenditure and Financial Accountability (PEFA) tool used to examine the external audit function of a public financial management system of a country.

PASAI Secretariat’s work on audit independence is funded by the ‘Strengthening of Public Finance Management and Governance in the Pacific Project’ (PFM). This project aims to strengthen oversight over public financial management in the Pacific region, through improving the budgetary scrutiny, public financial oversight and accountability capacities of parliaments, supreme audit institutions and civil society within the region, aligning with international public financial oversight and accountability standards, and fostering citizen engagement and oversight. PFM is funded by the European Union (EU) and implemented by the United Nations Development Programme (UNDP) in partnership with PASAI.

Introduction

Audit independence is crucial to ensure the SAIs (also known as Offices of the Auditor-General or Public Auditors) and their work is trusted. As countries and economies move towards improved and increasingly sophisticated systems of Public Financial Management (PFM), driven by the latest technologies, the crucial role of the Auditor-General in providing independent audits, and peer reviews to substantiate audit quality, must receive equal focus.

Without proper audit independence, questions remain about whether the Auditor-General accomplished their tasks objectively and effectively? Does their office and its work add value? Does the public have trust in their work? Audit independence is fundamentally important to government efforts to promote accountability and transparency in the management of public resources. Therefore it is vital that governments of the Pacific move towards amending and passing legislation to make the SAIs and offices of Auditors-General and Public Auditors truly independent.

Defining Independence

Independence is defined as “free from outside control; not subject to another's authority and is not depending on another for livelihood or subsistence”. An auditor must maintain independence from the audit client to uphold the objectivity and integrity of the audit process. Auditor independence is the cornerstone of the auditing profession and it is the foundation of the public's trust in the accounting and auditing profession.

At the country level, the independence of the Auditor-General is fundamentally important in its role as an agent auditing the government. It is the basis of the public’s trust in its work to ensure accountability and transparency. The work of the Auditor-General should give Parliament and the public ‘independent assurance’ that public entities are operating and giving an account of their operations and performances.

United Nation Resolution A/66/209 of 2011 states "Promoting and fostering the efficiency, accountability, effectiveness and transparency of public administration by strengthening supreme audit institutions". This resolution highlights the importance of SAI independence. This resolution states explicitly that SAIs "can accomplish their tasks objectively and effectively only if they are independent of the audited entity and are protected against outside influence".

How is Audit Independence measured?

This section outlines the two tools to measure audit independence.

1. The SAI Performance Measurement Framework (PMF) tool has been developed by INTOSAI to define and assess SAI independence against the following criteria or dimension in the SAI PMF (Performance Measurement Framework) tool[1]:

Dimension 1: Appropriate & Effective Constitution Framework: The establishment of the SAI and its independence should be laid down in the country’s Constitution, including provisions guaranteeing the SAI a high degree of initiative and autonomy. The appointment of the SAI Head position, the term of office and independence of decision making should be guaranteed in the Constitution along with adequate legal protection against interference with SAI independence.

Dimension 2: Financial Independence/Autonomy: SAIs should have available, necessary and reasonable resources, and should be allowed to manage their own budgets without interference or control from the Executive. Financial independence should encompass the whole budget process, meaning that the Executive should not unduly interfere with the SAI’s budget proposal, and after the budget has been adopted by the Legislature, it should not control the funding allocated, for example by hindering the disbursement of resources. This indicates that the Auditor General should have the authority to submit its budget directly to Parliament without any interference from the government of the day.

Dimension 3: Organisational Independence: In order for the SAI Head and officials to fulfil their mandate effectively should enjoy autonomy in the organization and management of their offices. This means they should be able to manage their organizations and organize and plan their activities without interference from executive bodies. Importantly this must include the full authority to manage all aspects their own human resources.

Dimension 4: Independence of the Head of SAI & its Officials: The conditions for appointment of the Head of the SAI should be specified in legislation. The term “Head of SAI” refers to those who are responsible for the SAI’s decision-making and are answerable for these decisions to third parties. Their independence can only be ensured if they are given appointments with sufficiently long and fixed terms and if appointments and cessation of functions happens through a process that ensures their independence. This allows them to carry out their mandate without fear of retaliation. Any re-appointment where this is applicable and in accordance with the law, should take place in the same independent and transparent manner.

Independence of the Head of SAI and its officials means their appointment should not be subject to the government in power. Regardless of any sophisticated provisions in the legislation to state that the work of the SAI is independent, if the SAI Head and officials are appointed like all the other public servants (that is through Cabinet or any public entity under the control of the Prime Minister and Cabinet) the SAI is not fully independent.

2. The Public Expenditure and Financial Accountability (PEFA) program provides a framework based on Standards and good practices, for assessing and reporting on the strengths and weaknesses of PFM. Pillar 7 of the PEFA tool examines the external audit function of a public financial management system of a country. It examines and assesses the areas of audit coverage & standards, submission of audit reports to Parliament, external audit follow-up and SAI independence. With a SAI independence indicator, they allocate an overall score based on the following dimensions:

Minimum Requirement to Score ‘A’ - The SAI operates independently from the Executive with respect to procedures for appointment and removal of the Head of the SAI, the planning of audit engagements, arrangements for publicizing reports, and the approval and execution of the SAI’s budget. This independence is assured by law. The SAI has unrestricted and timely access to records, documentation and information.

Minimum Requirement to Score ‘A’ - The SAI operates independently from the Executive with respect to procedures for appointment and removal of the Head of the SAI, the planning of audit engagements, and the approval and execution of the SAI’s budget. The SAI has unrestricted and timely access to records, documentation and information for most audited entities.

Minimum Requirement to Score ‘A’ - The SAI operates independently from the Executive with respect to the procedures for appointment and removal of the Head of the SAI as well as the execution of the SAI’s budget. The SAI has unrestricted and timely access to the majority of the requested records, documentation and information.

Minimum Requirement to Score ‘D’ - Performance is less than required for a C score.

Overall, audit independence under the PEFA tool focuses on the independence of the appointment and removal of the SAI head and officials, having the independence to plan and complete audits, have independent access to financial resources to deliver its mandate as well as having unrestricted access to information. The ability to publishing audit reports without fear or influence from the Executive government is also considered crucial.

What’s next?

Our next blog looks at SAI PMF results for audit independence in the Pacific region and shows a clear picture of the current state of audit independence in the Pacific. Strategies to strengthen and achieve SAI independence are discussed. The PASAI Secretariat’s initiatives to support SAIs in the region to achieve audit independence are also outlined.

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

[1] SAI PMF tool is an INTOSAI framework developed to support SAIs to evaluate their performance. The framework is based on the objectives set out in the International Auditing Standard - ISSAI 12 which sets out how SAIs strengthen the accountability, transparency and integrity of government and public sector entities, showing relevance to citizens, Parliament and stakeholders.

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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