Understanding the government financial audit opinion

By Doris Flores Brooks, Director (North Pacific), PASAI

PASAI has 10 SAIs who follow the United States (US) Congressional model of governance. These SAIs are in the Federated States of Micronesia (the National Government and the four members states of Chuuk, Kosrae, Pohnpei and Yap), the Marshall Islands, Palau and the US Territories of American Samoa, the Northern Mariana Islands and Guam.

The standards these SAIs follow require the annual audit of the financial statements for the whole of government to be signed by a US licensed Certified Public Accountant (CPA). Very few of these SAIs have a licensed CPA on staff so for the past several decades they have contracted out the annual government financial audits to independent CPA firms.

The financial audit report of the Government of Guam for the fiscal year ended 30 September 2021 [1] is 201 pages long. It begins with an Independent Auditors’ Report prepared by Deloitte and Touche LLP addressed to the Governor of Guam. We’ll use this as an example of terminology common among financial auditors that likely requires ‘translation’ when presented in other formats for laypeople [2].

Report on the Financial Statements

The report opens by listing the financial statements audited, namely, those of:

• the governmental activities,

• the aggregate discretely presented component units,

• each major fund,

• the aggregate remaining fund information, and

• the related notes to the financial statements.

It should be clear from the beginning which statements of information the audit opinion is expressed on.

Governmental activities include education, general government, public safety, public welfare, economic development, transportation, interest on debt and other activities governments customarily perform.

In this part of the audit opinion, it highlights the main activities of government which were covered in the audit.

Component units are state owned enterprises that have been established by law and separated from the general treasury. These component units have their own financial records that document revenues and expenses.

This information is particular to a government being audited. In this case, the Government of Guam has more than 20 component units. They include the hospital, the community college, the university and the authorities for the airport, the waterworks and the port.

Major funds in Guam include those for Federal Grants Assistance, American Rescue Plan Act Assistance, COVID-19 and Coronavirus Aid, Relief, and Economic Security Act Unemployment Assistance.

This part of the audit opinion highlights the main funds and revenue sources of the government.

Management’s Responsibility to the Financial Statements

“Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, this includes the design, implementation, and maintenance of internal control to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.”

This part of the audit opinion highlights the responsibility of government in the preparation of financial statements. Management, in this case, the Department of Administration, prepared the financial statements following the Generally Accepted Accounting Principles (GAAP). It is the responsibility of government to have proper financial management systems and adequate systems of internal controls in the preparation of these financial statements.

Auditor’s Responsibility

“Our responsibility is to express opinions on the financial statements based on our audit.”

This part is the responsibility of the independent external auditor, to express an audit opinion based on sufficient and appropriate evidence collected and documented from the audit. The audit must be conducted in line with international audit standards, in the case of Guam, the Generally Accepted Government Audit Standards, known as GAGAS or the Yellow Book.

Opinions

“In our opinion, based on our audit and the reports of other auditors, the financial statements … present fairly, in all material respects, the respective financial position of the government…”

This is the actual audit opinion expressed on the financial statements. In this case, the auditor issued an unqualified audit opinion and that the government’s financial statements are fairly stated. In other cases, audit opinions can be modified if there are significant issues with the financial statements.

Emphasis of Matters

An emphasis of matter paragraph is to highlight a matter to the readers of the financial statements which does not affect the audit opinion expressed. Emphasis is made if auditors want to highlight certain topics even though they have been appropriately presented in the financial information.

In this case, the auditor emphasised a change in an accounting principle and that the government thought COVID-19 may have a negative effect on its finances.

Other Matters

This is where auditors raise matters relevant to understanding the financial information.

Required Supplementary Information

The Government Accounting Standards Board (GASB) requires certain information to be presented so there is context to the basic financial statements. The auditor pointed out that management didn’t present certain information (the Schedule of Revenues, Expenditures and Changes in Deficit – Budget and Actual – General Fund and notes).

Other Information

Management provided extra information on pages 143 to 197 for additional analysis to support the financial information presented.

Other Reporting Required by Government Auditing Standards

In this paragraph the auditor states it has issued a report on the government’s internal control over financial reporting and its own tests of its compliance with certain laws, regulations, contracts and grant agreements.

The Challenge

It’s one thing to understand financial audit opinions and another thing to explain them to a SAI’s stakeholders. SAI Guam has done a commendable job in creating a short 2021 Financial Highlights document [3] that incorporates some effective visuals and summarises important points from the Independent Auditors’ Report and the government’s financial statements as a whole.

References

[1] https://www.opaguam.org/sites/default/files/2_-_govguam_fs21_final_jul_18_2022_0.pdf

[2] Much of this information was obtained from Jeanne Yamamura CPA, at the 2022 APIPA virtual conference.

[3] https://www.opaguam.org/sites/default/files/1_-_ggw_fy_2021_hl_final.pdf

Reflections on seven years at PASAI

By Tiofilusi Tiueti, Director – Technical Support, PASAI

When you walk into an organisation on your first day and are greeted happily you know your tenure will be a pleasant one. About seven years ago, I was warmly welcomed at the PASAI Secretariat office in Auckland and immediately felt at home with my co-staff and as a member of the PASAI community.

This is not your usual blog post on a technical audit topic to garner interest from members and the public audit community. Rather, it is a sharing of fond memories to express how much I have enjoyed the opportunities and challenges of working in PASAI, the partnerships we have forged among our member SAIs, and, most of all, the camaraderie of our dedicated, hard-working team in the PASAI Secretariat. All this could be perceived as trite, but the feelings are absolutely genuine – as I am now finding.

After prudent consideration, I concluded that although it would still be delightful to work in PASAI, the value I take from the worlds of public finance and global development would also make a humble contribution to Tonga and the region. So, I have resigned.

Memories of the work I have engaged in and the opportunities afforded to me over the last seven years at PASAI will remain with me forever. 

Since I became a PASAI staff member, I have enjoyed working for an organisation that is continuously empowering SAI staff and endeavouring to make a difference in the lives of people in the Pacific.

I remember Eli Lopati and Matereta Raiman, the former heads of SAI Tuvalu and SAI Kiribati, who were persistent in reforming their respective audit legislation to strengthen their SAIs’ independence. It is encouraging to see other SAIs also pursuing their SAI independence ‘journey’. Having a will at the top, a clear independence strategy and an effective advocacy program with key stakeholders is vital to bolstering SAI independence.

I remember parliamentarians in Fiji, FSM Pohnpei, Kiribati, Samoa, Solomon Islands and Tonga appreciating the integral external oversight roles of SAIs and Public Accounts Committees (PACs). They are vital in the effective follow-up of the implementation of audit recommendations by the Executive and in holding the government accountable in its use of public resources. This is why we persistently promote SAIs as a critical component of a robust public finance management (PFM) system and advocate they have effective communication with parliament. 

I remember the thrill of seeing SAI Nauru addressing its 15-year backlog of Financial Statements of Government (FSG) audits and continuing with the determination to get the subsequent years’ FSG audits up to date. Seeing the staff support from SAIs Fiji, Samoa, and Tonga of SAI Nauru on the Financial Audit Secondment Technical Support (FASTS) initiative bear success was most pleasing. This is a good approach to help reducing audit backlogs and ensure the timeliness and quality of FSG audits.

I remember working with SAI staff on various INTOSAI Development Initiative (IDI) cooperative audits and other programmes. The SAI-level support to eight SAIs on their FSG audits to be ISSAI compliant presents a useful model for audit quality and building the capacity of SAIs.

I remember working with a fine bunch of PASAI audit professionals over the years in conducting the SAI Performance Measurement Framework assessments of member SAIs. The results of these assessments have provided PASAI with a wealth of evidence-based information on the status of SAI operations and performance but more importantly, have identified areas where SAIs need support to become more professional and independent. 

I remember sharing knowledge, revealing experiences and absorbing discussions with SAI staff in various training, workshops and SAI-level support programmes.

I remember working with Sarah Markley (aka the Deputy Secretary-General) to secure funding to implement the second half (last five years) of the PASAI Strategic Plan 2014–2024. The wise guidance of the Secretary-General and the great support of the Governing Board was vital to obtaining agreement with our development partners on building SAIs’ capacity through our programmes.

I remember the ongoing delivery of PASAI programmes with SAIs adapting to the changing global context despite the unfavourable impact of COVID-19. We still supported SAIs to respond to emerging issues and remain relevant. It also revealed that in times of adversity we have the resilience to adapt and achieve our purpose.

I remember the wise ideas and creative approaches shared and discussed by heads of SAIs, staff and colleagues, in numerous congresses, governing board meetings, and other regional and international forums. These vital interventions contributed to improving SAI systems and enhancing audit processes to ensure audit quality towards making an impact on the lives of people.

I remember uniting with development partners and engaging with regional partners who have been a great support to PASAI in funding and technical assistance. They have worked with us at the Secretariat and the member SAIs to create an environment for more inclusive dialogues on regional and global issues. Engaging constructively in regional public audit and PFM strengthening processes is of continuing significance.

I remember the countless cups of coffee in the Secretariat office to plan, set up, strategise, discuss, agree and celebrate with fellow staff and good friends.

And so, so much more.

I want to acknowledge and thank our member SAIs and officials for what we have achieved together. I have been very inspired by the incredible work of our SAIs across the Pacific – a work that I will continue to follow as I move on to my new role. I am very proud of the work that PASAI does and glad I could be part of it.

As I conclude my term, I have never felt more strongly about the need for the PASAI Secretariat. It remains the only regional organisation for government (public) auditors that provide us with the space to determine our own strategic direction, free from external influence.

Much has been achieved, but there is still much to do.

All Pacific countries and their people must feel valued and derive value from SAIs. At the same time, and particularly at these uncertain times, I sincerely hope that all 27 members continue to recall why PASAI is a necessary institution.

It has been a great privilege to serve the region as part of the Secretariat. Over the past seven years, I have had the pleasure to work with a Secretariat team of passionate, dedicated and highly competent colleagues who manage important PASAI projects and learn from their diverse experiences. I am very proud of the staff who ensure we deliver on our priorities. I know you are well placed to meet the challenges ahead under the leadership of the Chief Executive, Esther Lameko-Poutoa. I cannot wait to see what PASAI will achieve in the years to come!

I am awed by the prospect of starting my new role but I have worked at the Tonga Ministry of Finance for eight years before I joined PASAI. The new role will be rich, exciting and immensely challenging – working with local, regional and global partners in exceptional public finance landscapes, and helping to build capacity, economic resilience and global development.

When I walk out of the Secretariat’s office at the end of today and hand in my key card and other resources belonging to the Secretariat, part of me will be deeply sad. I started as a colleague of a PASAI community, I will leave as a member of the PASAI family. I still feel the warmth and welcome since my first day at the office. I’ve had a pleasant time indeed.

But … I am hoping to continue connecting in my new role. And to keep on advocating for SAI independence, strong PFM systems and accountable governments in the region.

So, farewell until we cross paths again, hopefully in the field where our best work is done.

Mālō ‘aupito mo e ‘ofa atu!

The importance of strategic planning and alliances in creating audit impact

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

A mandate that provides supreme audit institutions (SAIs) the discretion to select areas of audit focus is a tremendous responsibility. It deserves proper strategic planning, external consultation and due consideration to the intended benefits to citizens the audits will achieve through their impacts.

Coherent audit planning

A well-structured strategic plan ensures the SAI will produce work that contributes to improving performance in the public sector and solving societal problems. A SAI should have an established planning system and process to ensure it covers issues of broad public and political interest.

Where SAIs have flexibility to choose the objective and scope of their performance or compliance audits, they should consider emerging issues like inclusiveness in the audit planning process. They should also consider the resources required to perform these audits.

The COVID-19 pandemic has, in many cases, increased the disparities of opportunity, wealth and power among people. These inequalities reveal themselves when looking at demographics such as gender, ethnicity, age, class, disability, sexual orientation, religion, nationality, indigeneity, migratory status, socio-economic status, and geographical remoteness.

SAIs should consider the range of issues and risks heightened by the pandemic when selecting audit focus areas to remain relevant, increase their impact and make valuable contributions to their citizens.

SAI value creation

While SAIs have control over the quality and timeliness of their audits, there are other factors that affect the SAI’s contribution to greater impact on citizen’s lives, especially the most vulnerable and marginalised sectors. The diagram below depicts the value chain of what the SAI can achieve through audits.

Source: Adapted from IDI’s Performance Audit ISSAI Implementation Handbook, August 2021

It’s more than completing quality audits and submitting timely reports (SAI outputs), which are within the control of the SAI. The impact of the SAI’s work can only materialise when auditees action recommendations. However, if the overall accountability framework is insufficient, some auditees may lack the incentive to action any recommendations.

For citizens to reap the benefits of improvements in public service delivery, it usually requires legislative scrutiny of audit reports and interest from CSOs and the media, among other key stakeholders.

Auditees usually care about the risk of reputational loss. Knowing the implementation of audit recommendations will be followed up can motivate action.

Strategic alliance

Each SAI is part of an ecosystem with its own unique social, economic, and political context. Multiple stakeholders such as legislative bodies, auditees, civil society organisations, professional bodies, academia, and media all play a role in achieving audit impact. SAIs need to take an active role in engaging with these stakeholders throughout the audit process to ensure government policies, programmes and institutions are inclusive and responsive to the needs of citizens, especially the marginalised sectors.

Throughout the audit process—from planning, conducting, reporting and follow-up—SAIs need to maintain an active dialogue with relevant stakeholders to understand significant societal issues, the main risks, and how the SAI can add the most value through the intended audit.

PASAI support

PASAI continues to build SAI capabilities to develop their own strategic and operational plans, human resource strategies and communication strategies.

An upcoming course on Strategic Audit Planning will cover in depth how SAIs should select potential audit topics by intentionally reviewing government priorities, policies and programmes. It will also give participants a deeper understanding of emerging societal issues. SAIs should have a rationale for any audit, especially performance or compliance audit.

Collectively these initiatives aim to strengthen the SAIs to deliver meaningful and impactful audits.

Impacts guide the audit process

In summary, SAIs should focus on the outcomes and the long-term effects of audits. The overall objective of the SAI is to deliver value and benefits and make a difference in the lives of citizens. SAIs should actively consider impact throughout the audit process when:

• planning – create a coalition with stakeholders when selecting audit topics to ensure audits focus on relevant and significant issues affecting government and citizens,

• conducting – perform audits in accordance with relevant standards or ISSAIs to ensure audit quality,

• reporting – communicate the value of audit results through timely reporting to all stakeholders, and

• following up – check with the Legislature and auditees to ensure recommendations have been fully implemented for citizens to benefit from improvements.

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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).

Applying best practice to our evolving learning delivery

By Danial Sadeqi, eLearning Specialist, PASAI

When the COVID-19 pandemic brought international travel to a halt, we could no longer deliver in-person training to member SAIs. We responded by transitioning our programme delivery online to continue building Pacific SAIs’ capability. In doing so, we worked through several challenges, both in terms of infrastructure and online training delivery.

We recruited an eLearning Specialist to provide expertise in converting existing materials into an online format using instructional design principles and best practice. Our eLearning Specialist also worked with subject matter experts to design and develop online training and capability development solutions.

Throughout the development of our online courses, whether re-purposing existing materials or designing new content, we followed best practice in instructional design and workplace training to ensure high quality materials.

Our approach

We have maintained the learning and development standards which apply when designing in-person training. [1] That is, establishing learning roles, learning theories and methods used, and the models provided for applying learning (such as tasks and assignments). In addition, we draw on empirical evidence and best practice in the field of online learning to ensure our courses meet eLearning standards as well. [1, 2, 3, 4, 5, 6, 7, 8]

Evidence abounds in the importance of reflection [5, 9, 10, 11], and applying knowledge [4, 5, 10, 11] to facilitate learning. The “Kolb Cycle” [12] provides a four-stage learning cycle which not only captures different stages of learning (including reflection and applying knowledge) but also recognises four different learning styles. Therefore, we incorporate this model into our course design.

The “Kolb Cycle”. Source: https://www.nicole-brown.co.uk/reflective-model-according-to-kolb/

Our training objectives take inspiration from “Bloom’s Taxonomy” (revised in 2001 with verbs for the category names) [13]. We design training so participants will not only be able to remember course content, but also truly understand and apply it, and so on up the pyramid. Ideally they will be able to create new work that integrates their learnings.

Source: https://citt.ufl.edu/resources/the-learning-process/designing-the-learning-experience/blooms-taxonomy/#:~:text=Overview,according%20to%20complexity%20and%20richness

To ensure quality we endeavoured to create courses which:

• have a professional design and layout [1, 2]

• address learners’ current needs [14, 15]

• provide an engaging learning experience [16]

• induce frequent learner interaction [2, 17, 18]

• increase flexibility [19] and

• are segmented to allow gradual accumulation of knowledge. [20]

While the principles above informed all steps of our learning design, our aim was to set realistic goals considering our resources, timelines, budget, and other commitments. Moreover, curriculum development is a continuous process which takes a significant amount of time before even getting close to the desired outcome. [2, 15] Therefore, we aimed to get our online courses up and running as fast as we could to avoid any disruptions to our training. Then we would be in a place to move towards gradual improvement of our courses.

Once we established a project plan for converting upcoming courses into an online format, we procured a Learning Platform to host these courses, manage all eLearning content, and track and administer learners’ progress. Choosing a webinar tool was the least challenging part of the process since Zoom had already established itself as the dominant platform of choice.

The Chair of our Governing Board officially launched our Learning Platform in November 2020. The first online training which followed included a webinar and a course component on the Learning Platform. In the webinar, the facilitator delivered a Powerpoint presentation with a Q&A section. The course on the Learning Platform included a forum discussion, workshop slides, supplementary materials and a survey.

Our course design

We then set out to change the design of our online courses to maximise learning. Given that a detailed account of all the work which went into our course design and the research that informed it is well beyond the scope of this blog, I will go over three main design components.

We started off by adding a ‘Pre-course’ section which aimed to improve learning by activating existing knowledge and preparing the learners for the workshop ahead. Activating learners’ existing knowledge benefits them by acting as a building foundation for the training that follows [21]. We did this by adding:

• a survey which elicits learners’ current knowledge of the subject matter and their expectations from the course and

• a task which requires learners to upload recent work on the topic and answer guiding questions that elicit their familiarity with the topic.

The analysis of the above helps facilitators’ make the content more relevant to the learners and improve learning outcomes. [2, 14, 15, 16]

We added a practical, hands-on element based on the learners’ working context to give them an opportunity to apply their learnings and crystalise their knowledge [11, 12] in an authentic context. [22, 23] For instance, in our ‘Report Writing’ course, we ask learners to:

1. select an extract from a recently written audit-focused report and assess it against a set of given questions all of which are based on the main principles taught during the course

2. edit the extract with tracked changes based on what they learnt in the course and

3. submit their edited extract with comments on why they changed things.

This task given after the last webinar provided the learners with an opportunity to activate what they had learnt during the course in an authentic context. The facilitators provided detailed feedback on all submissions.

Our commitment to innovation and continuous improvement

We offer a post-training evaluation, and respond to our learners’ feedback by continuously improving our training offerings and Learning Platform.

User queries and trouble-shooting proved to be the most challenging aspect of online delivery. Given that this was the first time many participants and facilitators were doing an online course, we supported our learners with queries regarding registering for, logging in and navigating the Learning Platform.

We have streamlined the registration process and made significant improvements to the Learning Platform to enhance user experience. To achieve this, we re-designed our user interface, simplified the platform navigation and made the registration process easier for participants.

These changes resulted in a decrease in queries and an increase in user satisfaction ratings, in particular for ease of use and navigation. According to Allen, [2] “more responsive customer service, increased throughput, reduced accidents and errors,” and “better-engineered designs” help the success of eLearning.

Next steps

We are working to mainstream gender and inclusion into our programme of work. This is reflected in our improvements to our Learning Platform to ensure it meets accessibility standards and provides an inclusive learning experience for all our learners.

References

[1] de Freitas, S. (2014). Education in computer generated environments. Routledge.

[2] Allen, M. (2016). Michael Allen’s guide to e-Learning (second edition): Building interactive, fun and effective learning programs for any company. Wiley.

[3] Jia, J. (2012). Educational stages and interactive learning from kindergarten to workplace training. Information Science Reference.

[4] Ifenthaler, D. (Ed.). (2018a). Digital workplace learning: Bridging formal and informal learning with digital technologies. Springer.

[5] Clark, R. C. & Mayer, R. E. (Eds.) (2016). E-Learning and the science of instruction: Proven guidelines for consumers and designers of multimedia learning (4th ed). John Wiley & Sons, Incorporated.

[6] Hung, D., & Khine, M. S. (Eds.). (2006). Engaged learning with emerging technologies. Springer.

[7] Mayer, R. E. (2011). Instruction based on visualizations. In R. E. Mayer & P. A. Alexander (Eds.), Handbook of research on learning and instruction (pp. 427–445). New York, NY: Routledge.

[8] Mayer, R. E. (2014). Research-based principles for designing multimedia instruction. In V. A. Benassi, C. E. Overson, & C. M. Hakala (Eds.), Applying science of learning in education: Infusing psychological science into the curriculum. Retrieved from the Society for the Teaching of Psychology web site: http://teachpsych.org/ebooks/asle2014/index.php

[9] Weedon, E. M., & Cowan, J. (2002). Commenting electronically on students’ reflective learning journals. In Rust, C. (ED.), Improving student learning, theory and practice using learning technology (pp. 99-110). Oxford, UK: Oxford Centre for Staff & Learning Development.

[10] Moon, J. A. (2004). A handbook of reflective and experiential learning. London: Routledge Falmer.

[11] Cowan, J. A. (2006). On becoming an innovative university teacher (2nd ed.). Buckingham, UK: Open University Press.

[12] Kolb, D. A. (1984). Experiential learning. Englewood Cliffs, NJ: Prentice-Hall.

[13] Anderson, L.W. (Ed.), Krathwohl, D.R. (Ed.), Airasian, P.W., Cruikshank, K.A., Mayer, R.E., Pintrich, P.R., Raths, J., & Wittrock, M.C. (2001). A taxonomy for learning, teaching, and assessing: A revision of Bloom’s Taxonomy of Educational Objectives (Complete edition). New York: Longman.

[14] Wallace, D. (2019). Know thy learners. Talent Development, 73(3), 46-50.

[15] FAO. 2021. E-learning methodologies and good practices: A guide for designing and delivering e-learning solutions from the FAO elearning Academy, second edition. Rome. https://doi.org/10.4060/i2516e

[16] Hung, D., Tan, S. C., & Koh, T. S. (2006). Engaged learning: Making learning an authentic experience. In D. Hung & M.S. Khine (Eds.), Engaged learning with emerging technologies (pp. 29-48).

[17] Harteveld, C. (2011). Triadic game design: Balancing reality, meaning and play. Springer.

[18] Harteveld, C. (2012) Making sense of virtual risks: A quasi-experimental investigation into game-based training. Doctoral Thesis. Delft University.

[19] Hashey, A. I., & Stahl, S. (2014). Making online learning accessible for students with disabilities. Teaching.

[20] Dziuban, C. Howlon, C., Moskal, P., Johnson, C., Parker, L., & Campbell, M. (2018). Adaptive learning: A stabilizing influence across disciplines and universities. Online Learning, 22(3), 7-39.

[21] Merrill, M. D. (2002). First principles of instruction. Education Technology Research and Development, 50 (3), 43-59. https://doi.org/10.1007/BF02505024

[22] Jonassen, D. H., & Strobel, J. (2006). Modeling for meaningful learning. In D. Hung & M.S. Khine (Eds.), Engaged learning with emerging technologies (pp. 1-27). Springer.

[23] Jonassen, D. H., Howland, J., Moore, J., & Marra, R. M. (2003). Learning to solve problems with technology: A constructivist perspective, 2nd. Prentice-Hall.

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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 mutual benefits of engaging civil society organisations

By Luke Eaton, Communications Advisor/Editor, PASAI

Civil society organisations (CSOs) are among a SAI’s most important stakeholders. But there are things SAIs need to do to nurture these relationships to ensure both parties derive value and benefits from this engagement.

Who are we talking about?

A CSO can be anything from a small, informal group of single-issue activists to a large, influential and well-funded organisation with a diverse agenda. They include faith-based organisations, non-government organisations (NGOs), labour unions and community/professional associations [1].

Here in the Pacific, we have CSOs passionate about dealing with climate change, eradicating gender-based violence, good governance, poverty alleviation and ocean custodianship, to name just a few. If an audit relates to a Sustainable Development Goal (SDG), there is a good chance there is at least one CSO who would be interested in it.

Many CSOs are members of national umbrella networks. PIANGO’s list of ‘national liaison units’ is a good place to start looking if you haven’t identified one in your jurisdiction yet.

Why are CSOs important in the Pacific?

Many who work or volunteer for CSOs are driven by their values and not the lure of lucrative financial incentives. They are usually, by default, advocates of anti-corruption. Pacific CSOs have increasingly been formally involved in national anti-corruption committees, such as in the Cook Islands, Kiribati, Papua New Guinea, Solomon Islands and Vanuatu [2].

They are natural allies when it comes to promoting SAI independence because they often want to use audit reports as reliable sources of data to strengthen their own advocacy work.

The Pacific Islands Forum Secretariat seeks meaningful and active engagement with CSOs, as detailed in its engagement strategy. Regionally, our lawmakers recognise the influence of CSOs as special interest groups.

CSOs can spearhead the cultural change needed to amend or create beneficial legislation which is so often dependent on consensus-driven decision making in the Pacific. The Pacific Community (SPC) credits the lobbying of CSOs with the passage of disability legislation and the increase in marriageable age (aligned to the Conventions on the Rights of the Child) in Micronesia [3].

How to help them help you

1. Invite CSOs to suggest audit topics or raise issues of concern. Depending on their mandate some SAIs can conduct formal inquiries or investigate fraud allegations as well as perform audits. Conduct an annual CSO survey and/or make submissions through an online form available year-round.

2. Consult relevant CSOs on the scope and planning of individual audits. As subject matter experts, CSOs may be able to guide you to the legislation, policies and best practices to form the auditee’s performance criteria.

3. Collect evidence from CSOs during the audit’s examination phase. Many CSOs in the Pacific are based in or have connections with rural areas and can provide you with insights not readily apparent to an auditor based in a capital city. They will likely be willing to share their assessments of government programmes.

4. Produce citizen-friendly audit report summaries and/or deliver presentations to CSOs on audit findings. CSOs may be able to use reports to legitimise their own work and attract support for it.

5. Make reports and associated material (summaries, videos, infographics) publicly available so that CSOs can easily amplify the findings. CSOs might maintain public interest in a topic long after you have distributed your one media release about the report. They can share findings within their own networks, effectively multiplying the likely impact of them.

6. Inform relevant CSOs of your involvement in legislative hearings (such as by the PAC) to help monitor implementation. CSOs can pressure governments and their agencies to make desired improvements. They will likely take an interest in any follow-up audit.

It may well be CSOs who are the ones relentlessly advocating for positive changes based on your audit recommendations and preventing your reports from merely collecting dust on a shelf.

Cultivating relationships

In some Pacific nations, SAIs may still be in a ‘discovery’ stage of their relationship with CSOs. This represents a great opportunity to educate them (with pamphlets, videos and/or presentations) about the SAI’s role in public finance management.

Tongan CSO forum on public finance management in May 2022. Source: Civil Society Forum of Tonga Facebook page.

While encouraging CSO involvement in the audit cycle, it’s important to manage expectations. CSOs are not necessarily politically neutral so SAIs need to be mindful about their motivations and the perception of bias. Make it obvious to them that the SAI retains control on the decisions about audit topics and budget allocation as well as the timing of report submission for tabling.

SAIs in the Pacific are by no means immune to the occasional threat to independence. However, after several years of effective engagement with CSOs you are likely to have many enthusiastic and civic-minded defenders of your office.

Want to know more?

INTOSAI’s Engagement with Civil Society – A Framework for SAIs and CAAF’s Collaborating for Change series are great resources.

We will also conduct a virtual workshop on Effective Stakeholder Engagement on 19, 20 and 22 July 2022, with a focus on how to effectively communicate audit objectives, findings and recommendations to all stakeholders and CSOs in particular.

During the workshop, we will launch the PASAI Stakeholder Engagement Toolkit. It includes a citizen-friendly audit report summary template and a presentation template explaining the role of a SAI and audit findings and recommendations to stakeholders. SAIs are encouraged to submit nominations by 8 July to Annie.SubactaginMatto@pasai.org.

References

[1] Development Asia: Participation Tools for the Pacific – Part 1: Engaging Pacific Civil Society Organizations

[2] UNDP: Pacific Civil Society Engagement to Address Corruption and Promote Public Accountability and Transparency

[3] Pacific Community: Pacific-style Advocacy

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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 role of the Pacific Association of Supreme Audit Institutions (PASAI)

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

Many readers will be very familiar with the work we do. However, have you ever taken a step back to think how we fit into the international public auditing community and the important role we play within our own Pacific region?

International SAI bodies

The International Organization of Supreme Audit Institutions (INTOSAI) operates as an umbrella organisation for SAIs. For more than 50 years it has provided an institutionalised framework for SAIs to promote development and the transfer of knowledge, improve government auditing, and enhance professional capacities, standing and influence of member SAIs in their respective countries.

INTOSAI encourages the exchange of experiences among its members. The resulting findings and insights promote continuous development and improvement in government auditing globally.

Seven organisations promote INTOSAI's goals regionally, providing members with opportunities for professional and technical co-operation. PASAI is one of these organisations recognised by INTOSAI and is the official association of SAIs in the Pacific region.

We promote transparent, accountable, effective and efficient use of public sector resources in the Pacific. We contribute to that goal by helping our member SAIs improve the quality of public sector auditing to recognised high standards.

The role of PASAI

Our northernmost SAI is in the Northern Mariana Islands and our southernmost is in New Zealand, with 27 members in all. Our SAIs operate in jurisdictions with a diversity of operating models, political systems and levels of development. However, what all members have in common is their willingness to work together to achieve the ultimate goal of improving accountability and governance in the Pacific region.

The PASAI Secretariat sits in Auckland, New Zealand and includes regionally based staff. With help from a pool of external consultants from all over the world, we work towards achieving our Strategic Priorities (SPs). These five SPs were jointly formed and signed up to by our members in 2014. The SPs, formalised in the PASAI Strategic Plan 2014–24, are:

1. Strengthen SAI independence

2. Advocacy to strengthen governance, transparency, accountability, and integrity

3. High quality audits completed by Pacific SAIs on a timely basis

4. SAI capacity and capability enhanced

5. PASAI Secretariat capable of supporting Pacific SAIs

These SPs guide our work empowering members to deliver their mandates and as a result, improve the transparency, accountability and integrity of the management of public sector resources in Pacific Island countries.

Why is it important to have a regional body to support SAIs?

There are many existing and emerging challenges in the Pacific. These include climate change, the COVID-19 pandemic, achieving the United Nations Sustainable Development Goals, financial crises, changes in government, geographic isolation and limited resources to respond to these.

We support SAIs to operate effectively within the wider public financial management system by developing and implementing a coordinated regional programme. This includes implementing a jointly formed strategy, coordinating a centralised repository of information and facilitating the sharing of knowledge and experience with peer-to-peer cooperation and SAI twinning programmes.

By collaborating with other regional and international organisations, we draw on a larger pool of knowledge, experience and resources to build organisational and technical capabilities. We advocate for SAI independence and contribute to various regional and international fora on matters of good governance.

We also work to build SAI capability and capacity through targeted and needs-based training programmes. These programmes support SAIs to perform timely audits that meet international standards and be a credible source of independent and objective insight for citizens, legislature and other stakeholders.

Workshop in Papua New Guinea (pre-COVID-19)

How do SAIs strengthen accountability, transparency, governance and integrity?

Citizens have a right to expect that public money is accounted for. A well-functioning SAI can make a difference to the lives of citizens by ensuring that public funds are spent effectively and efficiently. SAIs are the lead public sector organisation focusing on the accountability and transparency of public funds. They are uniquely placed to build and sustain stronger and more effective accountability and integrity mechanisms. [1]

SAIs strengthen public sector institutions. Through their audit work, they confirm whether internal controls are operating effectively, identify waste and recommend better operating models. This ensures public resources are spent effectively and make a real difference to the lives of citizens. When the SAI is supported to perform its role well, both from within the public financial management system and by regional organisations, its reporting will be timely and of a good quality. 

We appreciate the continued support of our core development partners, the New Zealand Ministry of Foreign Affairs and Trade (MFAT) and the Australian Department of Foreign Affairs and Trade (DFAT), to build the capacity and independence of SAIs in the region. The people of the Pacific should be confident their governments are spending public funds effectively and efficiently.

What’s next?

Future topics in our series include:

• Engaging civil society organisations

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

References

[1] OECD: Good Practices in Supporting Supreme Audit Institutions

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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 North Pacific US congressional model of governance

By Doris Flores Brooks, Director (North Pacific), PASAI

Historical background

Ten of our member SAIs follow the United States (US) congressional model of governance. They are from three US territories (American Samoa, Guam and the Northern Mariana Islands) and the freely associated countries of the Marshall Islands, Palau and the Federated States of Micronesia (plus the SAIs of each of its states: Chuuk, Kosrae, Pohnpei, and Yap). 

Guam and American Samoa became US possessions at the end of the Spanish–American War in 1898. The rest of the island governments were dominated by Germany and after World War I became part of the Japanese empire.  

At the end of World War II, the United Nations established the Trust Territory of the Pacific Islands (TTPI) administered by the US. The TTPI included the Carolinian islands of Chuuk, Kosrae, Pohnpei and Yap, the Marshall Islands, Palau and the Northern Mariana Islands. The US dollar became the common currency and English the official language throughout the TTPI.

Beginning in the 1970s and continuing into the 1980s, these islands petitioned the US to become independent countries in free association with the US. Three Compacts of Free Association with the US were established, the Federated States of Micronesia (FSM), the Marshall Islands and Palau. The Northern Mariana Islands instead voted to become a Commonwealth of the US rather than an independent country.

In their respective compacts, the FSM, Marshall Islands and Palau developed their own constitutions modelled after the US form of government to include legislative, executive and judicial branches. In the executive branch the head of state is the President and/or Governor. Within the legislative branch each has a bicameral legislature with one house equally represented by area and the other house elected by population. Within the judicial branch each has a Supreme Court where the judges are nominated by the Chief Executive and confirmed by the Legislature. 

Funding from the compacts provide significant revenues to these governments which is used to fund infrastructure and general operations. The compacts of the FSM and the Marshall Islands with the US expire in September 2023 and Palau’s in September 2024. As negotiations for new compacts are ongoing the outcome, particularly from a financing perspective, is unknown.  

Financial audits and Government Auditing Standards

The US provides federal funding to each of the freely associated governments in varying amounts over the life of the compacts.

The three US territories of American Samoa, Guam and the Northern Mariana Islands are eligible to receive grants from various federal agencies, similar to those available to the 50 US states. 

Entities who receive federal grants in excess of $750,000 must have a financial audit and a compliance audit (referred to as the ‘Single Audit’) in accordance with the Government Auditing Standards (GAS) issued by the Comptroller General of the US. The GAS are also known as the ‘yellow book’.

Source: United States Government Accountability Office

The Governmental Accounting Standards Board (GASB) issues accounting standards for US states and local governments. Additionally, federal grant recipients must comply with the Office of Management and Budget Compliance Supplement for the different federal grants received.

The various standards require a US licensed, certified public accountant (CPA) to sign the financial audit opinion which must be issued no later than nine months after fiscal year end. As most of these SAIs do not have a CPA on staff, they contract out their financial audits to independent accounting firms.

Whole of Government financial statements

With these federal grant requirements, these 10 SAIs generally issue their whole of government (or  financial statement of government – FSG) audits in a timely manner. For the latest fiscal year 2020, six SAIs have issued their financial audits. As the overseeing agency, the US Department of the Interior has granted extensions for the remaining four SAIs due to COVID-19 delays. 

The departments of finance of these 10 governments prepare their respective financial statements for the whole of government in accordance with the US generally accepted accounting principles (GAAP).

Audits conducted by SAIs

As the majority of financial audits are contracted out to independent accounting firms, most of the North[1] Pacific SAIs conduct performance audits, compliance audits, investigations, inspections and other reviews. The standards used in the issuance of these reports don’t necessarily comply with the GAS, the Quality Standards for Inspections and Evaluations issued by the Council of the Inspectors General of Integrity and Efficiency and/or constitutional authority.

PASAI training and development

Our member SAIs in the North Pacific avail themselves to a variety of capability development programmes and technical assistance we provide.

Almost all have now undergone SAI Performance Measurement Framework (PMF) assessments. By collaborating with us to complete these reports, we identify organisational weaknesses to improve upon and strengths to maintain and enhance. Post-assessment, several SAIs have updated or are in the process of receiving PASAI technical assistance to update their strategic plans, operational plans, stakeholder engagement strategies, human resource strategies, independence strategies and other policies. 

Our most recent annual report outlines the assistance we provided in the last financial year. This year, we enhanced our ability to cater to the unique needs of these SAIs with the appointment of a director based in Guam.

Overall, the trajectory of our member SAIs in the North Pacific is positive and we are committed to partnering with them on their journeys to become model public audit offices into the future.

What’s next?

Future topics in our series include:

• The role of PASAI

• Engaging civil society organisations

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

End notes

[1] Our Micronesian member SAIs from Nauru and Kiribati follow the parliamentary model.

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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).

Gender equality, diversity and social inclusion

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

Sustainable Development Goals 5 and 10 of the United Nations 2030 Agenda focus on achieving gender equality and reducing inequality through the social, economic and political inclusion of all. The UN explains, "gender equality is not only a fundamental human right, but a necessary foundation for a peaceful, prosperous and sustainable world”. [1]

Gender equality, diversity and inclusion are about giving equal access and opportunities and removing the barriers of discrimination towards women and other marginalised and vulnerable populations, such as disabled people, indigenous populations, refugees and migrants. Providing women, girls and other marginalised populations with equal access to education, healthcare, decent work and representation in political and economic decision-making processes will fuel sustainable economies and benefit societies and humanity at large.

Why is this relevant to SAIs?

Providing equal employment opportunities to women enables supreme audit institutions (SAIs) to access, grow and optimise latent and previously untapped talent available in the labour market. By recruiting and retaining a skilled, professional workforce of qualified women and men, SAIs will be most capable of achieving their core mandates.

The benefits of creating a diverse workforce include increased creativity, problem solving and innovation in response to complex and unprecedented situations. However, diversity in itself is not an endpoint. To unlock the benefits of diversity, SAIs need to create an inclusive work environment that promotes a sense of belonging, purpose and well-being among staff. Expect greater employee engagement, retention and productivity to result.

What can SAIs do to promote gender equality and inclusion?

SAIs play a critical role in promoting gender equality and social inclusion. By becoming gender responsive organisations, SAIs can model relevant strategies, policies and practices to promote equal opportunities for women and men in the public sector. By mainstreaming gender [2] in their strategies, operations and audit work, SAIs can increase awareness of the importance of gender equality and inclusion in the public sector, communities and the region.

How can SAIs become gender responsive organisations?

To mainstream the concepts of equal employment opportunities and inclusion in their strategies and business-as-usual operations, SAIs can:

1. define their gender equality and inclusion goals in their Strategic Plan

2. incorporate gender equality and inclusion in their core values

3. develop a gender equality strategy, policy and an action plan on how to achieve specific targets

4. ensure their HR Strategies, policies and processes reflect the above

5. report on progress towards achieving gender equality targets and use gender disaggregated data in their annual reports and

6. create an inclusive culture in which all staff feel valued, recognised and appreciated, fostering a true sense of belonging and purpose.

How can SAIs incorporate gender equality and inclusion in their Human Resource Management processes and policies?

To create HR policies and processes that promote gender equality and foster inclusion at all points of the employee lifecycle, SAIs can:

1. Incorporate gender, diversity and inclusion into their overarching HR Strategies and related policies, such as a Gender Policy and a Sexual Harassment Policy.

2. Attract and encourage women and marginalised people to apply by using gender sensitive and inclusive language in advertisements and job descriptions.

3. Aim to recruit a reasonably gender-balanced workforce while sourcing the right skills and capabilities required for a particular role.

4. Onboard staff with induction programmes that cater to the diverse needs and learning styles of women, men, disabled and other marginalised people.

5. Provide women and men with equal opportunities to access training and development to extend and achieve their full potential. Consider the strengths and skills of staff and create development plans that reflect them.

6. Ensure equal compensation and benefits for all staff. Compensation should always be fair, consistent, and reflective of the external market.

7. Conduct equal and fair performance assessments for both men and women, allowing all employees to provide input into their performance plans, objectives and targets. Consider female candidates in succession planning to provide suitably qualified women and men with equal opportunities to advance to leadership positions. In time this will create a more balanced gender composition of middle and senior management.

8. Retain staff by building a gender inclusive culture by offering flexible work hours, paid parental leave, study leave and allowances and onsite childcare rooms. Provide a psychologically safe opportunity to exiting employees in an exit interview to identify any issues with inclusion that may have contributed to their decision to leave. Use these insights to improve existing policies, process and the organisational culture.

Employee lifecycle [3]

Achieving impact through audit

Once a SAI has established gender equality as a strategic priority, it can include gender as part of its audit programme by conducting performance audits assessing gender issues in different sectors. SAIs may also adopt a gender lens in financial and compliance audits – such as auditing budget allocation towards initiatives promoting gender equality (for example, programmes aiming to boost women’s participation in business, education and community development).

The decision to undertake gender performance audits may present the need to manage existing audit priorities and SAI capability. This may be especially relevant for SAIs with few staff and limited capability. If SAIs don’t have sufficient capacity, technical capability and subject matter expertise, they may engage an expert to plan and conduct such audits. We explored some preliminary guidance, best practice and things to consider before conducting performance audits on gender issues in a previous blog post.

We acknowledge the support of our development partners, Marianna van Niekerk (AFROSAI-E) and Petra Schirnhofer (IDI) as we advance our gender, diversity and inclusion work.

What’s next?

Future topics in our series include:

• The North Pacific’s congressional model of governance

• The role of PASAI

• Engaging civil society organisations

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

References

[1] https://www.un.org/sustainabledevelopment/gender-equality/

[2] ‘Gender mainstreaming’ involves paying attention to the different needs and circumstances of men and women when designing, implementing and evaluating policies, programmes and projects.

[3] Steven AJ Cox

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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).

Designing audits for impact

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

The current role of SAIs

Supreme audit institutions (SAIs) are independent bodies that assess whether public resources are used economically, effectively and efficiently for their intended purposes, on behalf of the parliament/legislature. By performing timely, high-quality and impactful audits, these institutions contribute to good governance and continually drive improved outcomes for all.

The COVID-19 pandemic has certainly pushed everyone into unchartered waters. The resulting lockdowns and safety restrictions dramatically changed the normal SAI practise of being physically present at the audited entity’s premises.

At the same time, considerations like inclusiveness, gender equality and leaving no one behind are being integrated in global and national initiatives creating new norms, risks and priorities for all to manage. So how can SAIs continue to make an impact and contribute to a quality life for all in the face of these new challenges and considerations?

How SAIs can achieve impact

SAIs can continue to make an impact by auditing relevant and emerging issues such as those resulting from the pandemic. This involves identifying appropriate focus areas and carefully designing audits. To identify relevant issues, SAIs need to be aware of what’s going on in their jurisdiction and have a good understanding of the pertinent issues affecting government, organisations and citizens.

When designing the audit, SAIs may consider a different approach, such as conducting agile audits of high risk and high priority areas of government. A key feature of agile audits is a short time frame to complete and to report on the audit to facilitate immediate improvements.

Source: https://idi.no/elibrary/professional-sais/tai-audit/1216-tai-audit-guide-chapter-4-how-to-apply-an-agile-approach/file

With an agile approach to audit, having a manageable audit scope and focusing on audit impact throughout the audit process is crucial. Audits can be scoped in terms of focus areas (for example, a government socio-economic stimulus package) or in terms of a time period (such as examining the distribution of benefits under a socio-economic relief package during the last six months).

With the shifting challenges of the COVID-19 pandemic, SAIs should adapt the design of audits to ensure timely results, making effective recommendations available to auditees and other stakeholders.

Currently, two Pacific SAIs [1] are participating in the INTOSAI Development Initiative’s global transparency, accountability and inclusiveness (TAI) audit of emergency funding for COVID-19 [2]. To respond to the health and socio-economic crisis caused by the pandemic, the TAI audit focussed on evaluating established public frameworks to regulate emergency funding and manage actual spending to ensure transparency, accountability and inclusiveness.

Inclusiveness in public spending means the allocation and utilisation of emergency funding to reach the furthest behind, and prioritisation of those vulnerable and most affected by the pandemic, such as women, people with disabilities, the poor and workers in the informal sector. The TAI audit adopts an agile approach where audit teams scoped the work to ensure they perform a quality, timely and impactful audit.

Achieving impact through collaboration

SAIs are more likely to achieve audit impact when they actively engage with the relevant stakeholders throughout the audit process. This may include, for example, the auditee and interested civil society organisations during the planning phase, and parliamentary accounts committees (PACs) and the media during the reporting phase.

Positive impact is possible when all involved work collaboratively. That includes those conducting the audit, office holders taking corrective actions as recommended in the audit report and citizens monitoring results.

When SAIs actively lead this engagement they should be able to demonstrate their relevance in making a difference in the lives of citizens.

Endnotes

[1] Solomon Islands and Tuvalu

[2] Transparency, Accountability & Inclusiveness Audits
https://idi.no/work-streams/professional-sais/tai-audits

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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 impact of SAI PMF reports – Modernising SAI legislation in the Pacific

By Meresimani Vosawale-Katuba, Director (South Pacific), PASAI

SAI PMF and INTOSAI-P 10, the Lima Declaration

The SAI Performance Measurement Framework (PMF) assessments holistically evaluate SAIs on areas such as human resources, financial management, and audit methodologies and processes. Importantly, the framework also assesses a SAI’s operational and financial autonomy, and legislative independence.

In evaluating a SAI’s legislative independence, the SAI PMF takes cues from INTOSAI-P 10, The Lima Declaration, which states:

The establishment of Supreme Audit Institutions and the necessary degree of their independence shall be laid down in the Constitution; details may be set out in legislation. In particular, adequate legal protection by a supreme court against any interference with a Supreme Audit Institution’s independence and audit mandate shall be guaranteed.

This dimension of SAI PMF assessments seeks to reveal the extent to which laws protect or enshrine a SAI’s independence, freeing it and its officers from outside influence or control. After all, SAIs cannot effectively function without adequate independence.

Attempts to modernise legislation

After a SAI PMF assessment revealed scope to strengthen its legislative independence, SAI Tonga took action. Amendments to the supreme law of the Kingdom of Tonga—its Constitution—have formally recognised the independence of the position of Auditor General, providing protection from outside influence.

On this major independence milestone, Auditor General, Sefita Tangi, said, “It enriches the accomplishment of our tasks objectively and effectively knowing the Constitution fully protects us against outside influence” [1]. These amendments were gazetted in August 2021 [2].

Other SAIs in the region have proposed amendments to their legislation.

Commencing even before a SAI PMF assessment, SAI Fiji has done work to update and modernise its audit legislation, the Audit Act 1969. A legal consultant funded by PASAI carried out the review. Three key issues for improvement identified in the SAI PMF assessment matched those of the review. SAI Fiji continues to pursue recommended legal reforms through the relevant channels.

Additionally, SAI Solomon Islands has indicated it will push for legislative changes with the Solicitor General’s Office; however, they have indicated there will be some challenges.

SAI Samoa is also willing to propose legislative changes to improve its financial independence following its SAI PMF assessment. The SAI is hopeful to pursue this with assistance from PASAI and twinning partner, SAI New Zealand.

Common issues

We educate governments in the Pacific about the importance of modernising legislation for public sector auditing. Of particular importance is providing operational and financial independence for SAIs. This ensures they have the right for direct appeal to Parliament if resources are insufficient, and to protect the SAI head and staff from outside influence.

A key indicator for independence under the SAI PMF is the term of appointment and processes for removal of the SAI Head and staff. Provisions in the Constitution and relevant audit legislation should allow for SAI heads to have sufficiently long and fixed terms. This will enable them to carry out their mandates without fear of retaliation.

Some SAIs have been successful in modernising their legislation to achieve this such as SAIs Samoa and Tonga.

Supporting legislation should explicitly provide immunity to the SAI Head and staff in the normal discharge of their duties. Legislation should also ensure SAIs have sufficient rights of access to the information they seek to perform audits.

We advocate for and provide support to the SAIs taking steps to review their legislation to achieve independence.

Improving SAI PMF scores for greater impact

Improving a SAI’s PMF score is all about building a more capable public audit office. We will continue to focus on the areas of potential improvement that the assessments reveal to ensure governments in the Pacific are using public funds accountably and effectively. And one of the most important things to get right is a SAI’s independence.

References

[1] PASAI Newsletter December 2021 – page 1
https://static1.squarespace.com/static/57019a6db6aa607cbb909ab2/t/61b141bf9658283d39eb680a/1639008813553/PASAI+newsletter+Dec+2021+-+final.pdf  

[2] Tonga Government Gazette Extraordinary No. 228
https://ago.gov.to/cms/images/legislation/gazettes/2021/2021-0034/gazetteextraordinaryno.2282021.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).

eLearning: A response to COVID-19 and the future of workplace training

By Danial Sadeqi, eLearning Specialist, PASAI

With the COVID-19 pandemic causing lockdowns and travel restrictions across the globe, offices shifted gears to a remote working environment using online technology to enable work continuity. In this virtual workplace model, eLearning became the norm in delivering staff training and induction [1].

While the pandemic triggered an unprecedented spike in the use of eLearning in workplace training, its popularity dates back further. Towards the end of the 2000–2019 period, online learning had already become the preferred method of training in several industries [2, 3, 4, 5].

In this blog post, we will look at some of the benefits of eLearning which have led to its increasing popularity.

• Convenient for those who have limited time to devote to training
  Unlike traditional classroom sessions where the learners need to attend the session at a particular time and place, online courses featuring pre-loaded activities and pre-recorded components give learners the flexibility to access training 24/7. For many employees who have busy schedules, the anytime access of online courses is much more convenient. Learners in traditional settings have to fit their other work and life commitments around the training, or just miss out. Online learners can avoid the scheduling clashes or just choose the time of day that is best for them to concentrate on training.

• Caters to a geographically dispersed audience
  When participants remotely attend a webinar, it is possible for them to interact with other participants in similar ways to being at a seminar in person. Running such sessions enables a broader community to learn from each other and exchange experiences [1, 6] without the cost of and time needed for travel.

• Provides flexibility for the participants to learn at their own pace
  In a classroom setting, the facilitator/trainer determines how much information is presented in each session. Some may find the amount of information presented overwhelming while others might find it insufficient. The same is often true for the pace of delivery. eLearning, however, allows learners to take control of the learning process. They can decide how much time to spend on each lesson or each key point. This gives each learner the flexibility to progress their learning at their own pace.

• Complicated concepts can be broken down with engaging/interactive videos
  An engaging video can present complex concepts in ways that are far easier to understand than presenting them in a classroom [6]. In videos, ideas can be both visualised and made interactive for every single learner. This enables learners to understand the concepts better or pause/rewatch the video as many times as needed. Forum discussions can also be added to each video to allow learners to interact with each other and the facilitators to further discuss the concept or clarify questions.

• Learners’ activities can be tracked
  Checking each learner’s understanding and progress through the course can be an arduous, if not impossible, endeavour in a classroom environment. However, components of online courses can be set up to automatically measure learners’ understanding. This information can be an invaluable resource guiding both the facilitators and the learners throughout the learning process. The use of such eLearning technology and administrative tools enables employers to monitor their employees’ ongoing compliance status as well as ensure all staff members have accessed relevant information [3].

• Learning taking place over time is more effective
  When information is accessed gradually over time rather than in a single sitting, it is remembered better [7, 8]. Working professionals often space their training so that they do a section at a time to work around a busy schedule. A likely added benefit of longer exposure to learning materials is enhanced retention. eLearning platforms enable educators to incorporate interactive exercises, quizzes, games, and forum discussions to maintain engagement throughout the training.

• Good return on investment
  While developing online programmes can cost more than preparing materials for in-person training, the delivery costs are significantly lower [6]. eLearning either lowers or fully eliminates the costs of training rooms, materials, instructor(s)/participants’ travel and job time lost due to attending a classroom session. All the participants need to access and complete the training is an internet connection and a computer or a mobile device.

• Reduces environmental impact
  A UK study showed that eLearning can reduce energy by 87 per cent and lower CO2 emissions by 85 per cent compared to full-time face-to-face courses [9]. Online training eliminates the need for physical facilities to deliver training, commuting and printing.

The above benefits of eLearning were true even before the pandemic.  It is now apparent that eLearning is here to stay and will continue to evolve and deliver benefits over time [1, 6]. 

We are committed to developing a multi-modal approach towards training, based on pedagogical and eLearning best practice to maximise engagement and applied learning. With the gradual easing of border restrictions, we are exploring the possibility of delivering hybrid (face-to-face and online) training in the future.

What’s next?

Future topics in our series include:

• the impact of SAI PMF reports

• interpersonal communication.

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

References

[1] Future of learning in the wake of COVID-19
https://www2.deloitte.com/content/dam/Deloitte/in/Documents/human-capital/in-hc-future-of-learning-in-the-wake-of-COVID-19-noexp.pdf

[2] Why eLearning Is The Future Of Corporate Training
https://www.linkedin.com/pulse/why-elearning-future-corporate-training-melody-godsey/

[3] Using e-Learning to build workforce capability: A review of activities
https://www.educationcounts.govt.nz/publications/schooling2/workforce/58148

[4] White, M., & Shellenbarger. (2017). Harnessing the power of learning management systems. Journal for Nurses in Professional Development, 33(3), 138–141.

[5] Park, S. H., Kim, M., & Yu, D. (2011). The effects of learning authenticity on the learning achievements in the online corporate training programme. British Journal of Educational Technology. 42(2), E37–E41.

[6] FAO. 2021. E-learning methodologies and good practices: A guide for designing and delivering e-learning solutions from the FAO elearning Academy, second edition. Rome.
https://www.fao.org/publications/card/en/c/800d5a81-e770-5c6d-9638-adfee7dd2f0a/

[7] Sisiti, H. M., Glass, A. L., & Shors, T. J. (2007). Neurogenesis and the spacing effect: Learning over time enhances memory and the survival of new neurons. Learning and Memory, 14, 368–375.

[8] The Spacing Effect: How to Improve Learning and Maximize Retention
https://fs.blog/spacing-effect/

[9] Roy, R., Potter, S., & Yarrow, K. (2007). Designing low carbon higher education systems: Environmental impacts of campus and distance learning systems. International Journal of Sustainability in Higher Education. 9(2), 116–130.

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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).

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 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

Public Procurement as a Key Focus for SAIs

By Tiofilusi Tiueti, Chief Executive, PASAI; A’eau Agnes Taimane Tuiai-Aruwafu, Director – Technical Support, PASAI; and Sarah Markley, Deputy Secretary-General

In 2019 PASAI released a Regional Report on Public Procurement in the Pacific (Refer to PASAI's Regional report here). The report provides useful information about the procurement lifecycle and the opportunities for auditors involvement. As we now face the challenge of COVID-19 and see our Governments initiate new spending programmes the review of this publication is timely.

The report includes reflections from Auditors-Generals that participated in the programme, where these  SAIs conducted an audit on public procurement practices of selected government agencies.   The key issues highlighted in this report provide a good reminder for us of recurring and all too common challenges in the Pacific region. These challenges are likely to be heightened as COVID-19 puts additional pressure on procurement processes.

The recurring issue identified in the report are: 

·       Lack of procedures and guidance for some aspects of the procurement life-cycle

·       Non-compliance with policy, procedures, and/or legislation 

·       Lack of training in the procurement system and procedures

·       Poor procurement planning and poor record-keeping throughout the procurement life cycle

·       Poor administrative and internal controls surrounding procurement practices

During this time of stress and crisis, public procurement becomes more complex, as the government will require more rapid and efficient procurement during the Coronavirus.  SAIs play an important role to ensure procurement processes are open, compliant, and transparent.   However, there will be rapid changes and emergency procedures being carried out by the government during this time, and SAIs need to be prepared.

Practical ways for SAIs assess emerging issues and risks   

Every SAI, whether large or small, will need to make choices about where to focus their efforts. This means that completing careful and well-structured assessment of the imminent risks posed by this pandemic will position SAIs well to deliver high quality and relevant work. Some practical approaches for SAIs to ensure they are well informed of emerging issues and risks related to pandemic procurement are:

i.   Keep abreast of government directives and specific activities that may relate to changes in procurement processes or the procurement lifecycle. Consider the possible risks of the loss of public funding or misuse of public resources where the changes that are proposed might signal that risks have increased.  Good sources of this information are official government announcements through a press conference, official website, or social media platforms.

ii.   Initiate proactive, meaningful, and ongoing dialogue with key stakeholders, such as the Ministry of Finance or related agencies responsible for implementing procurement regulations/instructions. These discussions can help to remind those responsible for risks, and guidance materials available as well as providing support and alerting you to specific areas of concern.

iii.   Keep well-informed of relevant matters being debated in domestic and regional forums relating to public procurement changes or significant activities. What our citizens and frontline workers are concerned about could likely signal risks SAIs should be interested in too. Good sources of this information are local TV and newspapers, relevant local social media, and in our region radio talkback will likely be a good way to assess citizen concerns.  

iv.   Gathering information directly from the public. In particular those SAIs with “Fraud Hotlines” already in place, these might require extra resource if notifications increase significantly. Alternatively setting up resources to receive citizen feedback on concerns can be considered. The U.S. Government Accountability Office (GAO) has set up a hotline to help combat Fraud under COVID-19 assistance to urge the public to report allegations of fraud, waste, abuse, and mismanagement.US GAO Fraudnet_coronavirus .

Practical ways for SAIs to provide support  

SAI can focus on promoting mechanisms to address the importance of enhancing procurement processes. For example, New Zealand has issued brief guidance on Procurement during a national emergency (AuditNZ National-emergency-procurement). 

The following are some other useful resources which may help you and PASAI may be able to provide further assistance to your clients and/ or stakeholders:

§  https://oag.parliament.nz/2008/procurement-guide/docs/procurement-guide.pdf

§  https://www.oecd.org/gov/ethics/48994520.pdf

§  https://www.allenandclarke.co.nz/wp-content/uploads/2016/03/AC_Quick_Guide_Procurement.pdf

§  https://www.open-contracting.org/what-is-open-contracting/covid19/

As mentioned above our regional report highlighted issues identified during public procurement audits completed including audit recommendations cross-cutting themes.  SAIs should reflect on these issues identified and use this opportunity during the COVID19 to make the greatest impact through improving pandemic procurement.

By responding in a timely manner to risks of potential fraud, loss, and mismanagement of government funds and resources as a result of poor public procurement practices, especially during the COVID19 period, SAIs are demonstrating their ongoing relevance to not only citizens but also parliament and other key 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

SAIs demonstrating ongoing relevance

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

The global coronavirus pandemic (COVID-19) is requiring Pacific governments to quickly react to the circumstances they find themselves in. These reactions include establishing new protective health strategies, review of priorities,  activating emergency legislation including declaring a state of emergencies. The impact of these reactions is in many cases a regional or nationwide lockdown.  At the same time, governments need to maintain essential government services.

This situation is complex for all countries but in a  developing environment such as the Pacific, the challenge is even greater. With limited resources, sub-standard infrastructure and lack of capacity there is much for the government to consider including the inevitable adverse socio-economic impacts.

In a time of stress and crisis service delivery becomes more complex and there is a significantly increased risk of fraud. In the public sector at this time the risk of fraud or loss of funds and/or public resources falls particularly into areas such as procuring of needed health equipment, distribution of economic stimulus package, allocation of targeted donor grants,  and integrity or completeness of reporting related to policy implementation.

As of 2 April, of the 18 COVID-free countries, 10 are from the Pacific[1]. We are thankful that some countries in our region have been able to avoid this virus up until now and we hope that this continues to be the case. However, even for those without cases, we are aware that the prevention measures being taken still place those countries, along with those actively fighting the virus, at risk of fraud or financial and non-financial reporting stresses.

SAIs being responsive to changing environments

One of the key objectives of INTOSAI-P-12 “The Value and Benefits of Supreme Audit Institutions-making a difference to the lives of citizens” is for SAIs to demonstrate their ongoing relevance to citizens, parliament and other stakeholders. This objective is extremely relevant at this time of crisis. We encourage each SAI to apply the key underlying principle of this standard and during this pandemic to be responsive to the changing environment. It is important for the SAI to focus on the emerging risks and to consider how you can contribute by supporting your citizens, Parliament, and stakeholders using your unique position in the public financial management system.

SAIs to refocus and revise Annual Audit Plans

During a time such as this COVID-19 crisis, it is critical that SAIs are a credible voice. This may be an opportunity to achieve beneficial change and to improve public sector delivery. It is important for SAIs to focus on being well informed. Having a good understanding of the situation, and awareness of developments at global, regional, and national levels will assist the SAI to identify issues and risks and opportunities to contribute.

COVID-19 is not business as usual for our citizens, Parliament or stakeholders and neither can it be for us as SAIs – whether here in the Pacific or elsewhere around the world.  As SAIs we should respond to this unprecedented global challenge by revisiting our audit programs. There will be things we had planned to do that are no longer appropriate at this time and new issues and risks that we need to respond to. We suggest SAIs should identify areas of high potential risks particularly associated with essential public services, and also look at issues and risks in new initiatives, and programs and spending responding to COVID-19. Prioritise audits to be performed, develop an innovative audit approach, and consider ways to provide effective audit reports at this time.

Taking this approach will assist your SAI to demonstrate relevance and responsiveness to public interests and Parliament and stakeholder risks as they seek to combat COVID19.  

One area of particular risk and public interest in government procurement during this time of emergency.  With unprecedented levels of procurement occurring that were not expected or planned for using usual systems and processes this is an area of high risk.

We encourage you to consider how your SAI can adapt to be relevant during this current crisis. We plan to continue to share tips and hints to assist you as this crisis continues. Next week we will be sharing guidance from a report we published last year about procurement to assist your work in this area.

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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, that 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 refer www.pasai.org

[1] https://www.rnz.co.nz/news/world/413417/covid-19-the-countries-without-the-deadly-virus