Working Group on Public Debt Annual Report to KSC Mr. Juan M. Portal, CPA Auditor General of Mexico WGPD Chairman 8th Meeting of the Steering Committee of the INTOSAI Committee on Knowledge Sharing and Knowledge Services (KSC) September 7-9, 2016 Mexico City, Mexico 09.2016 | WGPD

Nanjing 30 participants 14 member SAIs IDI World Bank 2016 WGPD meeting Nanjing 30 participants 14 member SAIs Chinese Academy of Social Sciences IDI World Bank

Chinese Academy of Social Sciences 2016 meeting participants Argentina Austria Azerbaijan Brazil Bulgaria Chile China Egypt Fiji Finland Gabon India Indonesia Jordan Korea Lithuania Mexico (Chair) Moldova Portugal Romania Russian Federation Ukraine USA Yemen Zambia IDI (key partner) Chinese Academy of Social Sciences World Bank SAI attending the 2016 meeting Invitees at the 2016 meeting

2016 WGPD meeting Administrative status Progress made on WG activities Agreements on next steps of WG projects

WGPD membership Azerbaijan July 16, 2015 August 6, 2015 Contact July 16, 2015 Formal Request August 6, 2015 Admission August 22 – September 8 (WGPD Consultation) September 2015

WGPD membership Cape Verde Contact through World Bank Georgia Contact through INTOSAI General Secretariat June 6, 2016  Request to be admitted as WGPD member July-August 2016  Analysis by WG members Cape Verde Contact through World Bank June 20, 2016  Informal communication with WGPD From mid-July on  mutual exchange

ISSAIs Revision Five Key Criteria for the revision of WGPD ISSAIs 1. Usefulness 2. Updating required 3. Potential harmonization with other Working Group’s products 4. Alignment to other standards in the ISSAI Framework 5. Harmonization of the general ISSAI terminology

“Guidance on Definition and Disclosure of Public Debt” ISSAIs Revision Updated and withdrew WGPD ISSAIs ISSAI 5410 “Guidance for Planning and Conducting an Audit of Internal Controls of Public Debt” ISSAI 5421 “Guidance on Definition and Disclosure of Public Debt” ISSAI 5422 “An Exercise of Reference Terms to Carry out Performance Audit of Public Debt” ISSAI 5430 “Fiscal Exposures: Implications for Debt Management and the Role of SAIs” ISSAI 5440 “Guidance for Conducting a Public Debt Audit - The Use of Substantive Tests in Financial Audits” ISSAI 5420 “Public Debt: Management and Fiscal Vulnerability: Potential Roles for SAIs” Revised ISSAIs Withdrew ISSAI

ISSAIs Revision Updated and withdrew WGPD ISSAIs Guidance provided by PSC Secretariat Due Process  ISSAIs’ updating Changes not of substance  Minor editorial changes No need to expose them for comments by INTOSAI Community Translation into INTOSAI languages + updating of preambles, and forewords for XXII INCOSAI

ISSAIs Revision Updated and withdrew WGPD ISSAIs ISSAI 5440 “Guidance for Conducting a Public Debt Audit - The Use of Substantive Tests in Financial Audits” Revision concluded Minor editorial changes No need to expose for comments by INTOSAI Community Translation into INTOSAI languages + updating of preambles, and forewords for XXII INCOSAI

Revision to start in 2016 fall ISSAIs Revision WGPD ISSAI to be revised ISSAI 5411 “Debt Indicators” Revision to start in 2016 fall

Investigation Themes WGPD Strategic Plan’s Objective “to prepare and publish guidelines and other material to be used by SAIs in order to encourage sound management, proper reporting, and auditing of public debt”

1st Exposure for comments by the INTOSAI community Investigation Themes Guidance of Auditing on Public Debt Information System Draft ISSAI 5450 Due Process 1st Exposure for comments by the INTOSAI community 22 SAIs (July – September 2013)

Nature of comments received during the first round of comments Investigation Themes Guidance of Auditing on Public Debt Information System Re-exposure for comments by the INTOSAI community – 4 SAIs (January – March 2015) Lessons learned post-implementation of this guideline as reference for a coordinated parallel audit Nature of comments received during the first round of comments

Translation into INTOSAI languages Investigation Themes Guidance of Auditing on Public Debt Information System Exposure comments appropriately reflected in revised version of draft ISSAI 5450 Approved by the WGPD to be forwarded to the KSC Steering Committee for endorsement Submission to the INTOSAI Governing Board and the INCOSAI for final approval WGPD: Translation into INTOSAI languages

Investigation Themes Public Debt Management Office Guidance to establish an effective public debt management office Expectation: Working Group’s first INTOSAI GOV To be exposed for comments by the INTOSAI Community

Investigation Themes New projects to be undertaken by WGPD Call for candidates Sub-groups responsible for drafting these materials Areas of opportunity to develop new guidance material for public debt auditors Stages of debt authorization & contracting 2016 WGPD Meeting

Concept Framework of Coordinated Parallel Audit of PDM Information Systems General Information Work Plan: 2013-2014 Objective: To assess the appropriate implementation of management and control process in relation to the efficiency of Public Debt Management National Information Systems 9 participant SAIs Brazil, Bulgaria, Fiji, Georgia, Moldova, Romania, Ukraine, Yemen, and Zambia 4 observer SAIs China, Egypt, Mexico, and the Russian Federation

Concept Framework of Coordinated Parallel Audit of PDM Information Systems Findings Government bodies established reliable and sustainable Public Debt Management Information Systems along with respective infrastructure (at the state-of-the-art technological level). The reviewed information systems ensured capturing, processing and reporting debt data and transactions in accordance with the national requirements and users expectations of working capacity of the system facilitating the management of public debt.

Concept Framework of Coordinated Parallel Audit of PDM Information Systems Findings: Deficiencies related to overall debt management IT systems (areas of opportunity) Information system strategy Alignment to the auditees’ strategy goals and core business processes Integration of the debt management into an IFMIS or its interconnection with the DMFAS Division of roles and responsibilities among the debt management personnel at technical level Staff’s regular training

Concept Framework of Coordinated Parallel Audit of PDM Information Systems Reference: Guidance for Conducting a Public Debt Audit (developed by the IDI in collaboration with the WGPD) Guidance of Auditing on Public Debt Information System (draft ISSAI 5450)

WGPD’s Strategic Plan (First Goal): Capacity building and enhancing SAIs’ expertise WGPD’s Strategic Plan (First Goal): WGPD IDI

Influencing effective sovereign lending and borrowing practices 2nd Trans-regional capacity building program 2012 - 2015 Influencing effective sovereign lending and borrowing practices Objective: Strengthening professional and institutional capacity of SAIs in conducting in-depth and effective audit of lending and borrowing frameworks Trans-regional Programme on Strengthening Public Oversight and Audit of Sovereign Lending and Borrowing Frameworks (ALBF)

Identification of the lessons learned 2nd Trans-regional capacity building program 2016 - 2017 IDI WGPD UNCTAD Foreseen actions: Compendium of findings and a summary and analysis of the findings from the programme Updating of the guidance prepared by the IDI and the Working Group on public debt management and a Quality Assurance mechanism Identification of the lessons learned WGPD will provide assistance in terms of resource persons to complete these tasks

Public Debt Auditors (PDA) Platform Community of practice for public debt auditors KSC-IDI portal http://intosaicommunity.org/ WGPD-IDI  Joint collaboration to define the Work Plan for the platform’s design and development Aimed at promoting the capacity development of SAIs about public debt auditing

Revision of the WGPD Strategic Plan . WGPD established a task force for revising and updating its Strategic Plan Update will consider: developments and challenges faced by the INTOSAI, as well as the INTOSAI 2017-2022 Strategic Plan SAIs willing to take part: Argentina, Mexico, Moldova, and the Russian Federation

Cooperation with other partners in 2016 . World Bank OECD Virtual mechanism for knowledge-sharing between public debt auditors and the World Bank experts on public debt management Potential element of the Community of Practice to be developed with IDI and the KSC

New WGPD’s Chairmanship SAI of Mexico  WGPD Chair since 1991 2015-2016 call for nominations New perspectives to continue effectively addressing the Working Group’s agenda

New WGPD’s Chairmanship WG members approved the SAI of Argentina’s application to take over the WGPD Chairmanship SAIs of Mexico and Argentina have regular videoconferences for adequate transition INCOSAI  ideal setting to hand over the WGPD Chair

2017 meeting SAI of Argentina will shortly confirm the venue and dates of the 2017 meeting

WGPD membership Argentina (upcoming WG Chair)) Austria Azerbaijan Brazil Bulgaria Chile China Egypt Fiji Finland Gabon India (KSC Chair) Indonesia Jordan Korea Lithuania Mexico (WG Chair) Moldova Portugal Romania Russian Federation Ukraine USA Yemen Zambia IDI (key partner)

Motions 1. To take note of the Working Group’s annual report. 2. To endorse the revised version of ISSAI 5440 “Guidance for Conducting a Public Debt Audit – The Use of Substantive Tests in Financial Audits”, so that it could be submitted for the INTOSAI Governing Board and the 2016 INCOSAI approval.

Motions 3. To take note on the actions carried out by the Working Group’s Secretariat, in coordination with the PSC Secretariat, for the following revised ISSAIs to be approved by the INTOSAI Governing Board and the XXII INCOSAI: - ISSAI 5410 “Guidance for Planning and Conducting an Audit of Internal Controls of Public Debt” -ISSAI 5421 “Guidance on Definition and Disclosure of Public Debt” -ISSAI 5422 “An Exercise of Reference Terms to Carry out Performance Audit of Public Debt” -ISSAI 5430 “Fiscal Exposures: Implications for Debt Management and the Role for SAIs”.

Motions 4. To take note on the actions carried out by the Working Group’s Secretariat, in coordination with the PSC Secretariat, for the ISSAI 5420 “Public Debt: Management and Fiscal Vulnerability: Potential Roles for SAIs” to be definitely withdrawn from the ISSAI Framework. 5. To take note that, in fall 2016, the Working Group will start the revision of ISSAI 5411 “Debt Indicators”. 6. To take note on the current status and actions carried out for the document “Guidance on Auditing Public Debt Information System”, to be submitted to the INTOSAI Governing Board and Congress for approval as ISSAI 5450.

Motions 7. To take note that the guidance to establish a “Public Debt Management Office”, will be shortly exposed for comments by the INTOSAI community, so it could follow the Due Process for potential/future endorsement as the Working Group’s first INTOSAI Guideline on Good Governance (INTOSAI GOV). 8. To take note that, following a call for nominations and the WGPD members’ approval, the SAI of Argentina will take over the Working Group’s Chairmanship from the XXII INCOSAI on.

Working Group on Public Debt Annual Report to KSC Mr. Juan M. Portal, CPA Auditor General of Mexico WGPD Chairman 8th Meeting of the Steering Committee of the INTOSAI Committee on Knowledge Sharing and Knowledge Services (KSC) September 7-9, 2016 Mexico City, Mexico 09.2016 | WGPD