THE Public Accounts Standing Committee (PAC) is considering the common audit issues arose during the audit conducted on Government Ministries, Departments and Agency (MDA) in the financial year 2015/2016.
PASAI Annual Report 2016 - 2017
The PASAI Annual Report for 2016 - 2017 is now viewable on the PASAI website.
Please follow this link to download and review:
PASAI ANNUAL REPORT 2016 - 2017
Call for improved financial oversight in Tonga Govt
A new auditor general's report in Tonga shows widespread mismanagement in the government's ministries and agencies.
Read More HERE
2015 Tonga finance minister 'Aisake Eke Photo: UN/YoutubeChannel
After 6 years, Marshall Islands govt files an audit on time
For the first time in six years, the Marshall Islands government has completed its annual financial audit on time, confirming improvements in the financial accountability system at the Ministry of Finance.
For the full article, CLICK HERE
By Giff Johnson, RNZ Pacific correspondent in Majuro.
OFFICE OF THE FSM PUBLIC AUDITOR - Annual Financial Audit on the Caroline Islands Air, Inc. for Fiscal Year 2016
The Office of the National Public Auditor (ONPA) announces the release of the financial audit on the Caroline Islands Air, Inc. (CIA) for the fiscal year ended September 30, 2016. This is a part of the Single Audits for the FSM Government, which is outsourced to Deloitte & Touche under the oversight of the ONPA. A digital copy of the audit is available for public review online at www.fsmopa.fm and printed copies are available at the ONPA in Palikir, Pohnpei.
Background
CIA, a component unit of the FSM National Government, was established by Public Law 10-72 in December 1997, for the purposes of (1) providing air transportation services throughout the FSM, (2) contract with domestic and foreign persons and corporations for the provisions of aircraft and services, (3) operate domestic air transportation, (4) train citizens in professions related to aeronautics, (5) act as a "freely associated state air carrier" within the meaning of the Federal Program and Services Agreement concluded pursuant to the Compact of Free Association, (6) engage in support activities, included but not limited to, freight terminal and delivery activities and passenger services, and (7) enter into joint ventures with other entities in order to effectuate its operations.
It is governed by a six-member Board of Directors. Each of the four state governors recommends a representative. All Board members are appointed by the President with the consent of the Congress. The CEO serves as an ex-officio on the Board.
Financial Results
Based on the audit, the total operating revenues for CIA totalled $674,069. This is an increase of approximately $241,315 compared to prior year. This increase is due primarily to the increases in charter services and passenger airfare.
The total operating revenues comprised of $354,368 (52.6%) from charter services, $250,179 (37.1%) from passenger airfares, $49,668 (7.4%) from baggage fees, $17,844 (2.6%) from freights, and $2,010 (0.3%) from other services such as service fees and drums.
CIA's total operating costs for FY16 totalled $527,139. Of this amount, $331,288 (63%) came from maintenance and operations, $133,565 (25%) from salaries and housing, $27,537 (5%) from insurance, $14,911 (3%) from taxes, and $19,838 (4%) from other costs such as rent and depreciation.
Gross profit for CIA after deducting the operating costs from operating revenues amounted to $146,930, compared to $102,307 in prior year.
The following table summarizes the financial condition and operations for CIA for FY2016, FY2015 and FY2014:
Audit Findings and Opinion
Findings: There were no unresolved audit findings from the prior year audits for CIA.
Opinion: CIA, Inc. received an UNMODIFIED opinion on its 2016 audit. An unmodified opinion means that the entity's financial statements were fairly presented, in all material respects, in accordance with accounting principles generally accepted in the US.
Deficiencies in internal control over financial reporting were identified during the course of the audit, which included the following:
1. Written employment contracts were not utilized for several employees.
2. There were numerous audit adjustments which impacted a significant number of accounts. Many of the adjustments related to the lack of year-end closing entries.
3. Board meetings have not been held since October 2015 because the members' terms have expired. Board members are still involved with CIA's operation since the new members have not been appointed.
Management:
Alex Tretnoff, CEO/Pilot/Chief Mechanic and Mary Tretnoff, CFO
The 2016 financial audit for CIA was conducted by Deloitte & Touche under a contract awarded by the Office of the National Public Auditor. The deadline for this audit is June 30, 2017. The full copy of the audit report can be accessed on our office website at http://www.fsmopa.fm/.
News from the INTOSAI Capacity Building Committee
The INTOSAI Capacity Building Committee newsletter is now available.
Please CLICK HERE to access.
The INTOSAI Journal Special INCOSAI Edition
EXCERPT FROM: INTOSAIJournal@updates.gao.gov
The special INCOSAI edition of the International Journal of Government Auditing is now available online at www.intosaijournal.org.
You can also download the Journal here!
This issue is dedicated to INCOSAI XXII in Abu Dhabi, United Arab Emirates, and we ask you to follow us on INTOSAI’s journey to success!
Inside you will find features on the INTOSAI Strategic Plan 2017-2022, as well as Achieving Global Sustainability and Professionalization.
Additional highlights include articles on how working together can help cultivate success, such as the multi-lateral exchange of knowledge and ideas that led to the endorsement and approval of the Working Group on Big Data.
Throughout this edition of the Journal, you will find tons of photos along with inspirational quotes and video interviews on what success for INTOSAI looks like to some of our delegates.
In addition to the Journal’s website, you can find audit community news and images through our Facebook postings www.facebook.com/intosaijournal, Twitter feed www.twitter.com/@INTOSAIJournal and Instagram photos www.instagram.com/intosaijournal.
Haiying Jiang, Director-General of International Cooperation of the National Audit Office of China: Learn and Progress with Friends
Haiying Jiang, Director-General of International Cooperation of the National Audit Office of China
China’s first Auditor-General, Mr Yu Mingtao, is turning 100 years old in 2017. He was appointed Auditor-General in 1983 when the National Audit Office of China was established. In a recently published book, he recalled the early days when he, as the new Auditor General heading a new SAI, found the biggest challenge being that “there was no professional capacity to rely on, no working experience to borrow from and no ready laws or regulations to follow, not even theoretical books about auditing was to be found.” Starting from scratch, the National Audit Office of China on the one hand, actively explored ways of audit based on Chinese reality; and on the other hand, intensified international exchanges with foreign SAIs to introduce useful experiences to China. Mr Yu said: -“Experiences of various countries are valuable for us to learn”.
As a matter of fact, even before the SAI was established, China started to learn from SAIs in other countries. In September 1981, Mr Servando Fernandez-Victorio y Camps, then President of Tribunal de Cuentas del Reino of Spain, visited China. As the first head of a SAI visiting China, he talked to a Chinese audience on government auditing, a session the audience described as enlightening. The National Audit Office of China was formally established in September 1983 and joined INTOSAI in the same year, then ASOSAI in the following year. After joining these international organizations, exchanges with foreign SAIs were widely conducted on the platform of international auditing organizations and on a bilateral level. Through these exchanges, Chinese auditors broadened their views, learned and benefited greatly from good practices of other SAIs. Many SAIs provided support and assistance in capacity building to SAI China in this period, such as the SAIs of Spain, Canada, Germany, Australia, Sweden, France, UK, the Netherlands, India, Pakistan, Malaysia and Indonesia, to name just some of them. Chinese auditors were sent to study audit practices in foreign SAIs and audit experts from these SAIs were invited to China to train Chinese auditors.
The former Auditor-General of Australia Mr Ian McPhee, once visited China in the 1980s, as a trainer for an audit training programme. When he visited China again in 2011 as Auditor-General of Australia, he brought with him photos of the training programme participants, taken in China. Some of the participants, still working with CNAO, could confirm what an important learning experience this programme had been for them and how they had used the techniques they learned, in their audit projects and therewith achieved better results. With this valuable support and help, the National Audit Office of China made fast progress in government auditing. And the learning helped greatly, not only the National Audit Office of China, but also Chinese local audit institutions. Mr Liu Jiayi, Auditor-General of China, believes that audit theory and practice in China is open and inclusive, and has achieved development by drawing on the experiences and practices of auditing of other countries.
In the National Audit Office of China, we never forgot the assistance we received from other SAIs. At seminars on audit practices, in seminar papers, in books about auditing, authors and auditors, and even past Auditor-General like Mr Yu, mention from time to time, how much we benefited by learning from other SAIs. Successful technical assistance projects with SAIs of Spain and Germany were told by older generation of auditors to the younger generation auditors at their induction training programme in the Office. The National Audit Office of China knows well the value of helping each other and the importance of being open and sharing ideas with others in developing audit practices.
As an ancient Chinese poem says: “We get what we need from others, we should also give what we have to others in need”.
We are very happy to share our good practices with other SAIs. Now the National Audit Office of China maintains friendly exchanges with many SAIs worldwide. CNAO has helped train auditors at the request of some SAIs, including seminars, workshops and training programmes. Initiated by the Auditor-General, the National Audit Office of China also cooperated with the Nanjing Audit University to operate a Master Programme for international auditors to study in China under a Chinese Government scholarship. There has been increasing attention on Chinese audit practices such as IT auditing, accountability auditing, real time auditing, public works auditing and environmental auditing et al. Delivering presentations at seminars or attending discussions with auditors from other SAIs, Chinese auditors have learned a lot from other auditors. As the Head of International Relations, I am often told by my colleagues how they have enjoyed attending and lecturing international training programmes, because interactions with the participants is also a good learning experience for the trainers. The truth is that learning is never one way, the more you share with others, the more you learn.
Over 2000 years ago, a Chinese scholar once said: -“Learning alone without any friends, one is cut off from the world and knows little”.
George Bernard Shaw said something similar “If you have an apple and I have an apple and we exchange these apples, then you and I will still each have one apple. But if you exchange ideas, then each of us will have two ideas”. This is exactly how we should learn, learn by sharing with friends and peers, learn by exchanging ideas. The audit community knows this better than many others, for what INTOSAI promotes exactly, is - “Mutual Experience benefits all”.
Achieving Impact and Reinforcing Accountability – Sierra Leone's Perspective
Achievements At A Glance
- Successful capacity development in a post-conflict environment
- Improved transparency through unprecedented publication of audit reports, and PAC hearing broadcasts
- Improved accountability for use of public funds through 21% increase in audit coverage
- Real-time audit of Ebola funds strengthened accountability and financial management
- National Integrity Award for stance against corruption
- Demonstrating SAI improvements, through repeat performance assessments
The Challenge
The Audit Service Sierra Leone (ASSL) became an operational independent organization in 2004. In a country context marked by a post-conflict legacy, high youth unemployment, poverty, corruption, weak governance structures and fragile legal environment following the end of the civil war in 2002, Sierra Leone is considered to be among the 10 poorest countries in the world according to the 2015 United Nations Human Development Index.
ASSL faced internal challenges early on. The lack of a strategic plan and audit manuals; low audit coverage; limited human and financial resources, as well as little to no information technology facilities and infrastructure were just some of the obstacles they encountered.
Externally, audited public institutions were without basic systems and documentation, which hampered ASSL´s ability to perform audits.
Parliament was not reviewing audit reports. In fact, audit reports were not published nor were audit recommendations considered. The SAI’s role within the Public Financial Management (PFM) system was weak, particularly given the lack of tools designed to provide oversight regarding the effective utilization of public monies.
The Response
Once fully operational, ASSL immediately embarked on comprehensive capacity development programs led by the United Kingdom Department of International Development (DFID). The goal: strengthen ASSL’s institutional and professional capacity and fulfill its mandate within demanding national limitations.
As of 2016, ASSL’s picture has drastically improved in part as a result of the following activities which are aligned with the INTOSAI-Donor Cooperation principles:
- Strong SAI Leadership. This has distinguished the organization with country stakeholders, as well as development partners, leading to high levels of SAI ownership when planning capacity development.
- Long term and scaled-up support. DFID has backed ASSL through organizational, institutional and professional capacity development technical assistance. DFID’s leading role has evolved over the years into a facilitative one, where it now supports ASSL-led initiatives in developing guidance and capacity in financial, compliance and performance audits. ASSL has also benefited from support provided by other development partners, including the African Development Bank; the European Commission; and the World Bank, all of which have harmonized efforts in accordance to ASSL’s strategic plans and core programs.
- SAI participation at the international arena. ASSL has been capitalizing on INTOSAI global public goods and regional capacity development programs by AFROSAI-E region and IDI.
- ASSL underwent two assessments under the SAI Performance Measurement Framework (PMF), one in 2012 and one more recently in 2016, producing evidence-based measurements over a period of time that continue to identify areas for improvement.
- ASSL will also receive support from the SAI Capacity Development Fund (CDF) financed by SECO (Switzerland) and administrated by the World Bank, towards strengthening professional capacity.
- Public Financial Management (PFM) Reforms. PFM reforms have promoted timely and regularly published reports by the Auditor General. The “2014- 2017 PFM Strategy of Sierra Leone” incorporates ASSL observations.
The Results
Comparing ASSL´s performance in 2002 to 2016 shows tremendous improvements attributed to various capacity development activities.
- ASSL has implemented sound strategies and policies addressing core audit processes and organizational structures including strategic planning, professional training and stakeholder management, leading to the delivery of significant results despite limited human and financial resources.
- Repeated PEFA assessments indicate the scope, nature and follow-up of external audit has consistently improved since 2007, including a 21% expansion in audit coverage; enhanced quality of financial and compliance audit work; and the establishment of performance audit as an audit area.
- Strengthened ASSL-Public Accounts Committee (PAC) relationships have led to improved parliamentary scrutiny of audit reports; public access to ASSL´s reports; and publicly broadcast PAC hearings.
- Budget support development partners extensively use ASSL’s outputs to monitor fiduciary risk and incorporate into dialogue with Sierra Leone’s government.
- ASSL’s impact includes the office’s prompt audit on the 2015 Management of Ebola Resources. The report on mismanagement and corruption in the use of Ebola aid funds allowed for strong debates among stakeholders and resulted in increased pressure for accountability.
- In 2015, the Auditor General was awarded with the National Integrity Award by the Anti-Corruption Commission for her distinguished service in the protection of the national resources and strong stance against corruption.
ASSL must remain steadfast in its efforts to combat obstacles and achieve a positive impact on accountability, good governance, and transparency. ASSL continues to develop. According to the 2014 PEFA assessment, ASSL needs to remain focused on increasing audit scope, further cultivating specialized audit areas and ensuring that its reports are being acted upon. PAC follow-up on recommendations is still a challenge.
We have embraced the sustained support given by our development partners and harmonization development programs with our strategic plans. We hope the intense development assistance to ASSL can continue until we reach a level of matureness where we can make an impact based on our own sustainable capabilities.–Mrs. Lara Taylor-Pearce, Sierra Leone Auditor General
The story in other languages:
The Intosai-donor Cooperation
The INTOSAI-Donor Cooperation is a strategic partnership between donors and the Supreme Audit Institution (SAI) community.
Purpose: to improve SAI performance in developing countries through scaled-up and more effective support.
Guiding Principles: development of country-led strategic plans; donors respecting SAI country leadership; and improved coordination of support.
Members: To date, 23 donor organizations and INTOSAI
(who comprise the INTOSAI-Donor Steering Committee) have signed the Memorandum of Understanding.
For more information, visit us online at www.idi.no/en/intosai-donor-cooperation.
SAI Bhutan Responding to Emerging Challenges
Achievements At A Glance
- Enhanced SAI credibility and audit quality through applying international standards
- Audit report on public debt management debated in Parliament:
• Public debt policy and debt-thresholds established
• New Finance Department to ensure public debt levels remain sustainable - Leading by example in accountability, through publishing assessment of its own performance
- New strategic plan to further enhance public confidence in the SAI
The Challenge
For roughly 45 years, Bhutan has been on the United Nation’s list of least developed countries that face severe long-term structural impediments to growth. The country was established as a democratic constitutional monarchy in 2008. While the country has experienced some advancement, challenges remain namely from risks associated with:
- High external public debt
- Projected large hydropower-related revenues
The Royal Audit Authority of Bhutan (RAA) was established as an autonomous public audit body in 1985. With a broad mandate and strong legal framework for enforcing audit recommendations, the RAA is also backed by the nation’s constitution that stresses the entity’s importance in conducting performance audits.
Yet, despite these significant advantages, recent performance assessments show that the RAA still experiences difficulty in conducting audits that meet quality standards expected from the international audit community and making a difference to the lives of citizens.
The Response
The RAA has initiated several development programs in an effort to address the challenges. Upon adopting the International Standards of Supreme Audit Institutions (ISSAI) framework in 2010 when it was approved at INCOSAI, the RAA has received support through several mechanisms developed by the INTOSAI-Donor Cooperation:
- Global Stocktaking. The 2010 Global Stocktaking of needs and support provided to the SAI Community resulted in the World Bank’s funding of the 3i Program, where RAA completed Phase 1 in December 2014. The program, implemented by the INTOSAI Development Initiative (IDI) aims to support SAIs in ISSAI implementation. As part of the 3i Program, the RAA carried out ISSAI Compliance Assessments (iCATs) to identify gaps, as well as raise awareness of ISSAI requirements.
- Global Call for Proposals. Following the Global Call for Proposals in 2011, the Austrian Development Agency (ADA) backed the RAA’s project proposal designed to enhance professionalism in the delivery of audit services. As part of this project, to be operational from 2012-2017, several audit manuals and policies have been developed, among them a policy document on auditing from a gender perspective.
- SAI PMF Assessment. The Office of the Auditor General of Norway and the INTOSAI-Donor Secretariat conducted a peer review in 2014 using the pilot SAI Performance Measurement Framework (PMF). Afterwards the final report was published.
- SAI Capacity Development Fund (SAI CDF). The RAA has support from the SAI CDF, financed by SECO (Switzerland) and administered by the World Bank to further enhance ISSAI implementation, focusing on improving audit quality in all audit streams.
The Results
In 2013, the RAA, with support from ADA, conducted three pilot audits following the new ISSAI framework. According to the SAI PMF assessment, the pilot audits scored significantly higher than other reviewed audits, providing evidence of the program’s success and RAA’s performance improvement. The SAI PMF assessment also provided input toward the RAA’s new strategic plan for 2015 - 2020, which was finalized and published in 2016
The impacts associated with professionalizing audits has extended beyond the SAI, particularly in the realm of public debt, which is a key national challenge. The RAA participated in the IDI public debt auditing program funded by the Norwegian Ministry of Foreign Affairs. The RAA’s audit report on public debt management, completed in 2014, was debated extensively in the Parliament of Bhutan and received positive feedback by the Ministry of Finance (MOF).
External support has been instrumental in enhancing the institutional capacity of our audit office.–Dasho Tshering Kezang, Auditor General of Bhutan
Based on the audit recommendations, the MOF developed a Public Debt Policy that was put into effect August 18, 2016, and provides both a single overall threshold, as well as sector-specific thresholds for external debt. This new policy specifies total external debt should not exceed 25% of total goods and services exports.
Shortly after the policy’s implementation, the MOF established a new department of Macroeconomic Affairs, whose mission is to "maintain a sustainable level of public debt".
Bhutan’s Auditor General has emphasized the importance of internal ownership to development projects. As a result, the activities are primarily carried out by internal staff, ensuring RAA project ownership and product usefulness. External support has also been aligned behind RAAs strategic plan.
All of these factors have contributed to the positive results in Bhutan.
Implementation of ISSAIs is a long term endeavor, and the RAA recognizes more work is needed to ensure audits are performed coherently across the organization and to make the changes sustainable. The RAA has, therefore, included ISSAI-implementation as one of the goals in its Strategic Plan for 2015-20.
The story in other languages:
- ARABIC : CLICK HERE
- FRENCH: Le Bhoutan : Répondre aux nouveaux défis
- SPANISH: La EFS Bután Responde a los Desafíos Emergentes
The Intosai-donor Cooperation
The INTOSAI-Donor Cooperation is a strategic partnership between donors and the Supreme Audit Institution (SAI) community.
Purpose: to improve SAI performance in developing countries through scaled-up and more effective support.
Guiding Principles: development of country-led strategic plans; donors respecting SAI country leadership; and improved coordination of support.
Members: To date, 23 donor organizations and INTOSAI
(who comprise the INTOSAI-Donor Steering Committee) have signed the Memorandum of Understanding.
For more information, visit us online at www.idi.no/en/intosai-donor-cooperation.
Exciting New Web Interface for IDI
The IDI has a new and exciting web interface for all its stakeholders beginning 2017. It is available at the same address as the previous website: www.idi.no
Back at number one and it’s personal
“Putting people first in maintaining integrity” was a theme in Lyn Provost’s last speech as Auditor-General at the fifth Transparency International Leaders Integrity Forum last week.
This point was echoed by the Brian Picot Chair in Ethical Leadership at Victoria University, Professor Karin Lasthuizen.
New Zealand has worked hard to have a public sector with high integrity, which has been reflected in our ranking on Transparency International’s Corruption Perceptions Index for a long time. We are usually ranked either first or first equal in the world, but we slipped to second and fourth in 2014 and 2015.
It’s certainly good to be back at number one (at least, first-equal with Denmark) on the 2016 index. But we are not complacent.
In 2012, our Office’s work on fraud helped lead to an increase in awareness and action. Now all of us in the public sector have an opportunity to raise awareness and understanding of bribery and corruption.
Lyn told the Integrity Forum that the second word in “Corruption Perceptions Index” matters as much as the first. She has seen an increase in accusations of corruption during her term as Auditor-General, even though the Office’s inquiries have not upheld those accusations.
The increasing perception of corruption should be of concern to us all, Lyn said.
“Without transparency, allegations of corruption will flourish. Without transparency, people wonder what their politicians and officials are trying to hide. We can hardly blame them.”
As public sector auditors, we meet thousands of public servants committed to improving the lives of New Zealanders. They’re doing a great job, but our reputation is a fragile thing. There is plenty that can go wrong. Public entities can get too focused on avoiding risk, ticking boxes, following processes, and managing throughputs. Of course we need systems, but what comes first in maintaining integrity is concern about people.
Karin’s presentation on research in ethical leadership reinforced Lyn’s emphasis on concern for people. She told the forum that ethical leadership and explicit communication about ethics is particularly important for combatting unethical behaviour. Communication about ethical values and norms, and open discussion about ethical dilemmas, helps reduce perceptions of favouritism inside an organisation, and discrimination outside of it.
The Kiwis Count Survey run by the State Services Commission shows that New Zealanders' trust in public services by experience is consistently much higher than their perception of trust. By both measures, trust has increased markedly since 2007. It shows that their trust is closely linked to their personal contact with the public sector.
In her last address as Auditor-General to the public sector, those at the Forum might have expected a discussion of accounting and financial management challenges and of the systems that could be improved. But Lyn showed the forum the trait that has made her distinctive as an Auditor-General – her willingness to talk about the issues that matter for people.
She challenged the public sector to focus on, and find ways to improve, five issues that trouble us all and blight so many of our lives: and that undermine our integrity:
Suicide – the third leading cause of premature death in New Zealand. Every suicide is a tragedy. Our Office has tried to contribute to this complex problem by looking at how information is collected and used to prevent future suicides.
Mental health – in our Office, as in communities throughout New Zealand, no one’s life is untouched by the pain of suicide and mental health related issues. In the next few months, the new Auditor-General, Martin Matthews, will present a report on acute care of mental health patients.
Māori education – too many Māori children leave school without the education they deserve. The achievement gap between Māori and non-Māori is closing too slowly. As an Office, we are proud of our reports on Māori education, and we hope the sector will have the courage to do what is needed to help Māori students achieve their full potential.
Jobs for youth – we are an organisation that recruits graduates who are beginning careers to become our future public sector leaders and finance managers. Too often we hear the phrase “we want experienced people”! How does a young person get experience with that attitude?
Family violence and its impact on children – in her eight years in Police, Lyn says she saw the impact of family violence again and again. Family violence is not acceptable.
Staying at number one on the Corruption Perceptions Index means making it personal – having the uncomfortable conversations to find ways to tackle the issues that matter for people.
FULL ARTICLE AT: https://oag.parliament.nz/blog/2017/back-at-number-one
““Without transparency, allegations of corruption will flourish. Without transparency, people wonder what their politicians and officials are trying to hide. We can hardly blame them.””
Spotlight on Success: Regional Collaboration to Close the Accountability Gap-the PASAI Approach
THE CHALLENGE
Several smaller island nations in the Pacific have limited auditing capabilities. For example, back in 2009, theTuvalu Office of the Auditor-General (TOAG) and the Kiribati National Audit Office (KNAO) were not completing audits in a timely manner. They had backlogs of audits and struggled to keep up with changes to international financial reporting and auditing standards.
One of their main challenges was in the area of human resources, a typical problem faced by small island nationsin the Pacific. The untimely audit of the government’s accounts entailed reduced accountability for the use of public funds in Tuvalu and in Kiribati, as the Parliaments and the citizens did not receive assurance that funds were spent as intended.
THE RESPONSE
The Pacific Association of Supreme Audit Institutions (PASAI) designed a Sub-regional Audit Support Programme (SAS) to support some of the smaller and most vulnerable SAIs that were facing similar challenges with staff capabilities, audit methodologies and systems. The programme was linked to PASAI’s strategic plan and its work program, the Pacific Regional Audit Initiative (PRAI).
The SAS programme was operational from 2009 to 2016. It supported TOAG and KNAO capacity building by helping them complete financial audits, train SAI personnel and improve information sharing. This effort was made possible by a team of secondees from each participating country and supported by consultants to assist in the audit of public accounts using updated auditing standards.
The Asian Development Bank financed the SAS programme, through the Japan Fund for Poverty Reduction. The Australian Department of Foreign Affairs and Trade and the New Zealand Ministry of Foreign Affairs and Trade have been the primary funders of the PASAI Secretariat, whichhas helped implement the programme.
THE RESULTS
- The KNAO is now up-to-date with the whole of government audits
- The TOAG has audited all financial statements submitted, including the whole of government financial statement for 2015
- The competency, confidence and experience of the staff involved in the SAS programme have significantly increased.
- The timely completion of the whole of government audits has positively contributed to the availability of up to date and reliable financial information for the respective governments in preparing budgets and in formulating relevant policies, which will benefit citizens
The results in PASAI have been made possible with the support of donors who have aligned behind PRAI and PASAI´s strategic plan, leading to well-coordinated support to the SAIs in the region.
PASAI’s regional approach to capacity development has enabled scarce resources to be utilized in an effective way, as synergies have been realized and peer SAIs have worked together to improve performance at the country level. The approach has included staff training and development, sharing resources regionally and aligning policies to strengthen national capacities. This isa good illustration of the key principles for SAI capacity development in the INTOSAI-Donor Memorandum of Understanding.
On the basis of the same regional approach, the INTOSAI- Donor and PASAI secretariats have designed a programme for measuring performance that is in line with PASAI’s regional priorities. Financed by the Australian Department of Foreign Affairs and Trade, this newly developed initiative facilitates SAI Performance Measurement Framework (SAI PMF) assessments for numerous smaller SAIs throughout the Pacific region. Using a combination of self- assessment and peer reviews, the goal is to effectively address the challenges associated with staff and skill limitations.
The TOAG takes part in the SAI PMF programme. The TOAG assessment was conducted in 2016 using a combination of internal assessment and peer review by the Samoa Audit Office with support from PASAI. Following the completion of the draft assessment, the peer review team presented preliminary findings to TOAG management and staff, who acknowledged and accepted the constructive feedback for improvement.
FOR FULL ARTICLE CLICK HERE
SAS committee May 2013
SAS Committee May 2014 - signing new MOU
Martin Matthews - Controller and Auditor-General
On 1 February 2017, Martin Matthews began his seven-year term as New Zealand’s Controller and Auditor-General.
Martin has worked in the public service for more than 36 years.
He joined the (then) Audit Office in 1979 and spent the first 18 years of his career in the office. He was an Assistant Auditor-General from 1990 to 1998, holding various portfolios during this period.
Martin then spent 10 years as Chief Executive of the Ministry of Culture and Heritage. He later served as Secretary for Transport and Chief Executive of the Ministry of Transport, from 2008 to June 2016.
Martin was the select committee’s advisor on the Public Finance Act 1989 and led much of the policy design work for the Public Audit Act 2001.
As Controller and Auditor-General, Martin's principal functions and duties are set out in the Public Audit Act 2001. In summary, they are to:
- ensure that the office carries out its obligation to conduct audits of public sector bodies, and report to Parliament on the results of the audits; and
- ensure the efficient, effective, and economical management of the Office of the Auditor-General.
Martin is a Fellow of Chartered Accountants Australia and New Zealand, New Zealand Institute of Management, New Zealand Institute of Chartered Logistics and Transport, and Companion of the New Zealand Institute of Professional Engineers.
STORY COURTESY OF: http://oag.govt.nz/our-people/martin-matthews
PASAI Independence Resource Kit
Excerpt from the CBC website at : http://www.intosaicbc.org/pasai-independence-resource-kit/
PASAI has prepared this independence resource kit under as one of its strategic priority to strengthen SAI independence, and for the benefit of its members. The resource kit is now available on PASAI’s website, for use by SAI’s in the Pacific but also more widely. PASAI will update the kit to reflect development in SAI independence both in the Pacific and globally. Please read more on the PASAI page in the main menu on CBCs website or go to PASAIs website to find out more: http://www.pasai.org/introduction
Retaining Staff - We train them and then they leave!
Excerpt from the CBC website at : http://www.intosaicbc.org/retaining-staff/
As we implement the ISSAIs, especially the financial audit ISSAIs, we need professional staff but how do we train and re-train them? In one way or other this was a constant refrain in the formal and informal discussions at the recent Congress in Abu Dhabi. Once we have trained people, and especially once they have professional accounting qualifications, how do we pay enough to keep staff. This is not an easy one to solve and is something Auditors-General and Senior Managers wrestle with across the SAI community. But there are some solutions which I have seen work.
At base, it is important to understand the market in which a SAI operates. What is the going rate in the private sector or in other parts of the public sector for qualified accountants or auditors? It is useful to engage a consultancy body with experience of carrying out such comparator exercises? In one country where we did this the comparators were some of the private sector firms but also the Revenue Authority. Knowing the going rate is a useful starting point. A SAI may not need to match the private sector completely because working in the public sector brings many other benefits which are not available to the private sector – usually better pensions, access to wider training opportunities, longer holidays and shorter days, better job protection, a wider variety of work, and the public sector ethos of contributing to wider social benefits. However, having hard data of this kind makes it easier to make a defensible case for salary uplifts (if warranted) with Parliaments and Ministries of Finance.
In situations where a SAI needs to follow public sector wide salary bands, then it can be difficult to make a special case for improvements to the salaries of SAI staff. Again data on turnover or problems with recruiting qualified staff should be collected to help substantiate claims. But equally a SAI can forge links with other key public sector bodies needing to employ qualified financial experts for example the Ministry of Finance, Revenue Authority and Internal Audit Services and make a joint proposal to the Public Service Board or equivalent putting the case for a more market responsive salary scale for financial staff. Such cases can be made stronger if the SAI shows how recruiting qualified financial staff can generate efficiencies and not just lead to an increased staffing bill.
Where the SAI is a training organisation, then it risks losing a proportion of these staff once they gain their professional qualification. The UK NAO provides for this risk by training more than it wishes to eventually retain – recognising that even during training such staff are productive and play a major role in carrying out the routine aspects of the annual audits. At the same time, it is important that these trainees are well supported and motivated during training so that they can see a satisfying career in the NAO when they become qualified. Early in their career we seek to expose these newly qualified staff to a wide range of interesting assignments, to continue to invest in their professional development and to make sure they feel valued members of the organisation. In Rwanda a number of years ago, a colleague asked one of the shining middle-manager stars what it would take from the SAI to keep people like him in the office, as she had identified him as just the type of person the office would need in order to keep progressing. His reply was that a recognition such as that would go a long way. If he only knew that top management saw him as an important part of the office’s development and that they were willing to invest in him that would make a difference. He said nothing about the salary.
It is also sometimes practical to make sure that the accountancy or audit qualification offered by the SAI is one which is oriented to the public sector (so making private sector poaching less likely). In other situations, a SAI may choose to offer staff accounting or auditing certificates or diplomas which are at sub-professional level with only a few being taken through the full courses needed to become full members of the professional associations.
But staff will leave – and it is important that their leaving is managed well. They can be important ambassadors for the SAI when they move elsewhere, they can make useful contributions to improving public financial management elsewhere and in some cases they may want to come back with new skills and experiences into more senior roles in the SAI. It can be a win-win!
David Goldsworthy
Former Head of Technical Cooperation and International Relations , National Audit Office - United Kingdom
INTOSAI Leading by Example in Performance Measurement
In a historic day for public external auditing, the International Congress of Supreme Audit Institutions today unanimously adopted the SAI Performance Measurement Framework (PMF) as an official INTOSAI document. The SAI PMF is a holistic and evidence-based tool supporting the professionalization of SAIs. It enables SAIs to live up to public expectations of being credible institutions, and to measure and report on their performance.
The need for a framework to support SAIs to better measure their performance was identified at the 2010 INTOSAI Congress in South Africa. The INTOSAI Working Group on the Value and Benefits of SAIs was given the role, and a task team of volunteer SAIs and Donors established. SAI PMF development, consultation and piloting was coordinated by the INTOSAI-Donor Secretariat in the INTOSAI Development Initiative (IDI). INTOSAI published a Pilot Version of the SAI PMF in 2013, which was piloted in more than 20 volunteer SAIs from Brazil to Nepal (being the first to publish its assessment), and from Burkina Faso to the Slovak Republic during 2013-15. Experience from the pilot assessments, and global consultation, led to extensive lessons learnt and ultimately development and approval of the SAI PMF.
INTOSAI also gave its support to the SAI PMF Implementation Strategy for 2017-19, including the INTOSAI Capacity Building Committee taking on the role of INTOSAI strategic governance lead and a new SAI PMF unit within IDI taking the role of the operational lead for SAI PMF support. This will ensure SAI PMF is firmly anchored within INTOSAI, and provide support to SAI PMF as a tool that all heads of SAIs are encouraged to utilise, on a voluntary basis.
Meanwhile, SAIs around the world continue to utilise SAI PMF to support needs assessments, strategic planning and performance management. In 2016, Sierra Leone became the first country to conduct a repeat assessment, through peer review, providing objective evidence of performance improvement since its first assessment in 2012. In November, New Zealand completed its self-assessment, tabling a summary of the report in Parliament and publishing the assessment in full. Auditor General Lyn Provost noted that "the results were largely as expected, which is pleasing. However, the assessment has also identified a few areas which require more focus within our SAI, which should lead to further improvements in our performance".
Throughout 2016, SAIs across the Pacific have worked together, with support from IDI, to undertake peer-assessments through a coordinated, regional approach.
The development and piloting of SAI PMF represented a successful partnership effort between INTOSAI and the donor community. The INTOSAI-Donor Cooperation, involving INTOSAI and 23 international development partners, provided significant funding and strategic advice, built on experience from similar tools such as the Public expenditure and Financial Accountability (PEFA) framework. Individual assessments in different countries have been resourced by combinations of SAI's own resources, in-kind support from peer SAIs, and donor funding, especially from the Inter-American Development Bank in Latin America and the Caribbean. The Donor Community will remain involved in SAI PMF implementation, through voluntary membership of a SAI PMF Independent Advisory Committee, as well as by supporting implementation efforts at the regional and country level.
Contact Details
SAI PMF Secretariat in IDI: saipmf@idi.no
Lara Taylor-Pearce Auditor-General of the Republic of Sierra Leone on transparency and accountability in public financial management
The Auditor General of Sierra Leone is an IDI Board member who was interviewed by Jamie Hitchen, a policy researcher at Africa Research Institute. The result is a thought provoking article on transparency and accountability in Public Financial Management. One of the best articles on the work of SAIs that I have read in many years, and worth 5 minutes of everyone’s time.
Available via the IDI website at http://www.idi.no/Artikkel.aspx?AId=1475&back=1&MId1=44 and directly at the Africa Research Institute: http://www.africaresearchinstitute.org/newsite/publications/lara-taylor-pearce-transparency-accountability-public-financial-management/
Auditor General of the Republic of Sierra Leone, Lara Taylor-Pearce
Cape Town After-meeting Documentation Now Available
The presentations and CBC Steering Committee Resolutions from the Annual Meeting in Cape Town are now on the INTOSAI Capacity Building Committee website HERE
FIPP - Call for Candidates
Please find below a letter from the Chairs of the Knowledge Sharing Committee, the Capacity Building Committee and the Professional Standards Committee inviting your SAI to nominate candidates for the Forum for INTOSAI Professional Pronouncements (FIPP). The deadline for nominations is 1 November, 2016 and they should kindly be submitted to ir@cag.gov.in.
