MEASURING PERFORMANCE OF SUPREME AUDIT INSTITUTION M. Mozammal Hoque Sr. Financial Management Specialist (OPCFM)

National Integrity System Pillars of National Integrity System Sustainable Development National Integrity System Political Will Parliament Admin. Reforms The Judiciary Civil Society The Media Watch Dog Agencies* The Private Sector Economic Reforms *Anticorruption agencies, Supreme Audit Institution, and Ombudsman's Office

Public Financial Accountability People Reports Accountability Relationship PAC PEC PUC SCM C&AG Audit GOB Parliament Donors Media Public Financial Accountability

Building Trust: Capturing the Promises of Accountability Mechanisms Parliament Performance reports Audits Redress Mechanisms Media Long-term Goals Improved Services Confidence Trust Intermediate Objective Transparency Disclosure Redress

Budget Implementation Strengthening Financial Management Budget Implementation Budget Preparation Budget Evaluation Budget Oversight Macroeconomic Framework Development & Recurrent Budget Sector Strategies MTEF Annual Reports Value-for-money Audits Report on Budget Implementation Revenue Administration Pensions & Payroll Procurement Internal Control C&AG’s Office Parliamentary Committees

Financial Accountability Cycle: 3 Questions What information can Oversight Agencies obtain about the Government’s activities; how relevant, accurate, timely and comprehensive is the information? How well are the Oversight Agencies able to analyze the information, and develop action-oriented conclusions? What kind of response are Oversight Agencies able to generate from the executive?

Role of SAI Determining the SAIs role upfront may dictate how we conduct their assessment Role may be one or more of the following: A line function: ex-ante control To enforce legal compliance To carry out ex-post financial audits To enhance bureaucratic performance

Questions for Discussion Can the SAIs possibly escape the larger political environment? Does the Bank have a bias towards Ministries of Finance which works against the pursuit of SAI independence?

KEY ISSUES IN SAI PERFORMANCE -1 Independence Appointment and tenure of the head(s) of the audit institution Arrangements for funding of the audit institution; not beholden to the Executive Adequacy of funding Autonomy from other government controls (e.g. perhaps civil service rules) Freedom to select topics for review

KEY ISSUES IN SAI PERFORMANCE - 2 Scope and authority Extent of coverage of the whole public sector (off- budget and secret accounts, government business enterprises, sub-national government) Right of access to all necessary information Powers to report publicly Is there an executive role ( e.g. power of surcharge against wrong doers) Is there a judicial (prosecutorial) role ?

KEY ISSUES IN SAI PERFORMANCE - 3 Quality of auditing processes Extent of follow-up on audit recommendations Impact: Budget savings, reduction in corruption, policy changes, organizational changes, legislative changes, etc. (role of PACs) Demand for financial accountability and extent of public interest Who does this work? Extent of professionalism Integrity of SAIs staff

KEY ISSUES IN SAI PERFORMANCE - 4 Procedures for audit reports Timeliness and availability of external audit reports Clarity of the audit opinion and relevance/significance of the issues discussed Capacity of the legislature to follow up audit reports and the extent to which follow up occurs Capacity of the media in follow up and the extent to which such follow up occurs Quality and relevance of management letters provided to auditees Adequacies of processes for pursuing legal actions which may arise from the audit

KEY ISSUES IN SAI PERFORMANCE - 5 Performance and accountability of the SAI To whom is an SAI accountable ? Independent audit and review of the audit institution Adherence to international auditing standards (which ones ?) Extent of self assessment of performance – existence of some measures of audit costs and impact, apart from merely formal institutional arrangements How “pro-active” or “hands on” should an SAI be in recommending changes to improve financial reporting, legal compliance or performance (value-for- money) If the SAI makes detailed recommendations for changes, will this compromise its “independence”, as it then must review its own recommendations (?)

KEY ISSUES IN SAI PERFORMANCE - 6 Appropriate relationship with other audit/review organizations and anti corruption bodies Clarity and appropriateness of relationship to internal audit institutions Clarity and appropriateness of relationship with anti-corruption bodies and related prosecutorial bodies Relationship with procurement reviews and procurement audits, procurement complaints authorities etc.

Integrated Financial Management and Control Approach Public Accounts Committee Public Undertakings Committee Parliament: Oversight Functions Committee on Estimates or Finance Ministerial Standing Committee Submit annual performance report to Parliament Identify change agents from Minister/Secretaries Introduce Strategic Planning in Ministries Form Budget and Audit Committees Give a Corporate look to Ministries/Department Focus on outputs as well as inputs/measurement concept Address human infrastructure of Ministries Move from red taped file to a technology based system Link with broader administrative reforms Ministries Chief Executive Officer Principal Accounts Officer Chief Accounts Officer Go for Pilots and Roll out