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Supreme Audit Institutions - Key Emerging Issues

Dear Colleagues

Last week in South Africa, the members of the International Organization of Supreme Audit Institutions (INTOSAI) held their triennial congress, XX INCOSAI, culminating a period that has been prolific in collaboration with development partners and the production of technical standards and guidance.  XX INCOSAI was attended by about 600 delegates representing around 140 SAIs, as well as 104 heads of SAIs and 54 observers, including the World Bank.

While the body of work addressed at the INCOSAI was extensive, this note intends to summarize the three key areas -with links to the pertinent documentation- that should be of particular relevance to Bank staff engaged in analytical services or financial support to SAIs.

1. Progress and agreements made under the INTOSAI-Donor MOU

This is important for staff because, as signatory of the MOU, the Bank has made commitments to better target, coordinate and share information on its capacity building support to SAIs.  It is therefore expected that the MOU principles and operational agreements will be taken into account when designing and overseeing implementation of operations that benefit SAIs or Global/Regional SAI Organizations.

Summary of Documentation

The second meeting of the INTOSAI-Donors Steering Committee - Partnership MoU - took place from November 18-19, 2010.  Important progress has been made in setting strong foundations for this historic initiative to build capacity of SAIs.  Salient points include:

  • Participants (about 50) included 12 bilateral and multilateral donor agencies, 15 Supreme Audit Institutions (including representatives of 5 Regional Organizations), and the Partnership Secretariat.  
  • The Steering Committee (SC), chaired by the Bank and Saudi Arabia (US GAO and DFID are Vice-Chairs), discussed and approved the Stocktaking Report on Capacity Development of Supreme Audit Institutions (which can be found here):
    • The Report is the result of a historical survey distributed to 204 SAIs and 8 Regional Secretariats, with an impressive response rate of over 90%.
    • It provides rich information on key SAI characteristics, receipt of capacity development support, needs assessment and indicative funding gaps, availability of strategic and development action plans, and identified good practices on SAI capacity development.
    • The significant efforts put into collecting and analyzing this large set of data evidences the strong commitment (and expectations) of the SAI community.
  • The meeting also discussed the Draft SC Action Plan 2010-2011 and made several agreements (summary points can be found here):
    • Considerations and good practices to take into account when analyzing activities to support in the short, medium and long term.
    • Indicative list of short-term activities for consideration to finance at the regional and global level.
    • Development of funding proposals for the identified short-term global and regional activities (with some donor agencies already expressing willingness to support these activities).
    • Establishment of a data-bank with an inventory of ongoing and planned donor SAI support. Donors will contribute to, access, and make use of the data-bank to enhance coordination.
    • Establishment of a global pooled fund as a complement to other funding modalities. The arrangements will be developed over the next months.
    • Enhanced communications with signatories of the MOU, potential signatories and other stakeholders.
    • Joint work program of the SC, including -in addition to the above- the mapping and possible development of performance measurement tool for SAIs, mechanisms for review of SAI strategic and development action plans and funding levels of SAIs.
    • Other administrative decisions.

2. Adoption of International Standards of Supreme Audit Institutions (ISSAIs)

This is important for staff because INTOSAI now has a comprehensive framework of international auditing standards, an effort supported by the Bank through the DGF-funded Global FM Partnerships (FM global public goods).  The International Standards of Supreme Audit Institutions (ISSAIs), which are largely based on the International Standards on Auditing (ISAs), should serve as the primary point of reference for building SAI capacity to perform public sector audit work in general and in Bank-financed operations in particular. 

Summary of Documentation

INCOSAI XX adopted around 40 new ISSAIs, resulting in a comprehensive framework of international auditing standards that the individual SAIs can use as a reference point for their activities. INCOSAI also underlined the need to use and apply these standards and guidelines in a practical context. The INTOSAI professional standards  can be found here.

The ISSAIs consist of all documents endorsed by INCOSAI with the purpose of guiding the professional standards of SAIs. This includes recommendations on the legal, organizational and professional prerequisites as well as on the conduct of the auditing and other tasks with which SAIs may be entrusted. The ISSAIs are classified as follows:

Level 1: Founding Principles – contains the founding principles of INTOSAI. The Lima Declaration.
Level 2: Prerequisites for the Functioning of SAIs – state and explain the basic prerequisites for the proper functioning and professional conduct of SAIs.
Level 3: Fundamental Auditing Principles – contain the fundamental principles in carrying out auditing of public entities.
Level 4: Auditing Guidelines – translate the fundamental auditing principles into more specific, detailed and operational guidelines that can be used on a daily basis for auditing tasks. Included are Implementation Guidelines on Financial Audit, on Performance Audit and on Compliance Audit, as well as Specific Guidelines on particular topics.

Other documents of interest produced by INTOSAI's Professional Standards Committee (PSC), such as a Mapping Report on the scope of auditing assignments in 37 SAIs across the regions of INTOSAI, can be found here.

3. Capacity Building Guidance 

This is important for staff because INTOSAI's Capacity Building Committee (CBC), in which the Bank participates as observer, and the INTOSAI Development Initiative (IDI) have produced relevant guidance on aspects such as capacity building/learning practices and strategic planning. In the interest of benefitting from economies of scale, it is expected that SAIs who receive Bank support will make use of these reference materials as deemed pertinent to country circumstances.  

Summary of Documentation

The CBC is concerned with building the capabilities and professional capacities of SAIs through training, technical assistance and other development activities. Recent pertinent outputs (which can be found here) include:

Building Capacity in Supreme Audit Institutions, a guide
Introducing professional qualifications for audit staff, a guide for Supreme Audit Institutions.
How to increase the use of audit reports and impacts of audit reports, a guide for Supreme Audit Institutions.

A component of the CBC, the IDI is a non-profit organization that aims to enhance the institutional capacity of SAIs in developing countries through programs with INTOSAI regions and groups of SAIs. The traditional "training arm" of INTOSAI, IDI has been shifting its focus from individuals to institutions and from training to broader capacity building. Recent guidance produced by IDI (accessible to Bank staff through OPCFM) include:

Capacity Building Needs Assessment: A Guide for SAIs
SAI Strategic Planning Handbook
Learning for impact –
A Practice Guide for SAIs

For further information regarding the content of this note, please contact Manuel Vargas (OPCFM).

Best regards.


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