AUDIT AND CIVIL SOCIETY th Global Forum on Reinventing Government Towards Participatory and Transparent Governance May 2005, Seoul, Republic of Korea Ho Bum Pyun Commissioner, BAI

UNDESA BOARD OF AUDIT & INSPECTION Table of Contents Introduction Functions of National Audit and Key Issues Interrelationship between Audit and Civil Society Case study of Korea Conclusion

UNDESA BOARD OF AUDIT & INSPECTION INTRODUCTION Supplier Oriented Customer Oriented Government Citizen Public Goods Taxes & Levies

UNDESA BOARD OF AUDIT & INSPECTION Audit Function Based on “Agency Theory” National audit function is broader - Private sector : specific, small interested parties - Public sector : Comprehensive, many interested parties (auditing + controlling)

UNDESA BOARD OF AUDIT & INSPECTION Changing role of traditional audit function Need more control aspects in securing accountability, transparency Many SAIs use control concepts Comptroller General (US) Comptroller and Auditor General (UK, INDIA)

UNDESA BOARD OF AUDIT & INSPECTION Case of BAI (Korean SAI) ■ Two functions : audit and inspection - Inspection means oversighting, controlling, evaluating administrative activies Board of Audit ( ) Commission of Inspection ( ) Board of Audit & Inspection ( )

UNDESA BOARD OF AUDIT & INSPECTION Main Issue in Auditing Maintaining Independence SAI Auditees Interested Group Media Politics biased opinion

UNDESA BOARD OF AUDIT & INSPECTION Core principles of Independence (17 th UN/INTOSAI Seminar) Existence of an appropriate constitutional/legal framework and retaining broad mandate Independence of SAI heads and members Unrestricted access to information Freedom to disclose audit reports Existence of effective follow-up mechanism Financial and other resource autonomy

UNDESA BOARD OF AUDIT & INSPECTION Independence in BAI Constitutional Agency - Articles 97 to 100 of the Constitution - Function, Status, Organization - Term of office of chairman and Commissioners Agency under the President but retain independence in performing its duty - Autonomy in finance and resources ※ Current issue : whether to move to the Legislature? A Council system for Decision-Making

UNDESA BOARD OF AUDIT & INSPECTION Other Issues in Auditing Professionalism Scope of audit on policy Pre-audit or post audit? Discretion in disclosure of audit results

UNDESA BOARD OF AUDIT & INSPECTION Interrelation Between Audit and Civil Society Roles of Civil Society Monitoring of government activities - exchange information between two sides (cooperative) Direct & Indirect involvement in audit activities - request audit on specific areas - participating in audit activities (through expert advice) Roles of SAI enlarge audit areas (ie. environmental auditing) solve civic complaints and petitions

UNDESA BOARD OF AUDIT & INSPECTION Case Study in Korea (BAI) – ① Policy Advisory Commission - non-standing advisory group - members from various areas (journalists, lawyers, professors, civil group activists) - give advice on policy of BAI Expert Groups on Specified Area - Finance, Engineering, Urban planning, Health, National securities, Local autonomy

UNDESA BOARD OF AUDIT & INSPECTION Case Study in Korea (BAI) – ② Audit Advance Notice System - receives in advance complaints or information from citizens Citizen Audit Request System - minimum number of request : 300 Citizens - reviewed by “Citizen Audit Request Screening Committee ” 7 members (3 BAI officials, 4 outside experts) chairman is from outside

UNDESA BOARD OF AUDIT & INSPECTION Case Study in Korea (BAI) – ③ Division for civil claims and petitions - about 8,700 cases were filed in filed by letter, fax, telephone, hotline (open 24 hours) Citizen Auditor System - adopted by several local governments - citizen become auditor in dealing with civil claims

UNDESA BOARD OF AUDIT & INSPECTION Case Study in Korea (BAI) – ④ Full Disclosure of Audit Results - from abstract to full disclosure - except for national security or crucially harmful to public safety issues Auditor for Auditors - in the process of enacting reorganization of internal auditing system - the head of internal audit is from outside expert

UNDESA BOARD OF AUDIT & INSPECTION Conclusion Interaction, partnership between civil society and audit is important This interrelation should be carried out within maintaining independence of auditors