1. The realization of the subproject ‘Analysis of opportunities on the use of KNI for international comparisons in the context of sustainable development and recommendations’ Dr. Gyula Pulay Supervisory manager

2. The purpose of the subproject The purpose of the subproject is to test the applicability of the internationally accepted sustainable development indicators (which can be considered as key national indicators as well) during the audits conducted by the supreme audit institutions (SAIs).

3. General principles of the work of the subgroup Each member of the subgroup carries out an audit in one of the indicated themes using one or a set of indicators selected from the internationally accepted sustainable development indicators. The members of the subgroup share with each other the audit experience concerning the application of the indicators. For the communication concerning the different steps of the pilot project, members use the internet platform established for this purpose. The coordinator SAI is responsible for the preparation of a summary of the audit experience (comparative analysis). The subgroup informs the Working Group about the activity and the findings of the subgroup. Both the coordinator and the subgroup members would report on the experience of the relevant audits also at the meeting of the Working Group.

4. The organisation of the subproject The subproject is implemented by those members of the Working Group who volunteered for this task. The coordinator SAI of the subgroup is the State Audit Office of Hungary. Each member of the subgroup selects its own topics in which the SAI wants to test the application of sustainable development indicators and selects the indicators, too. The coordinator develops an audit framework and sends it to the members.

5. Members of the subgroup The following SAIs undertook to conduct a pilot audit: –Austrian SAI, –Bulgarian SAI, –Kazakh SAI, –Lithuanian SAI, –Russian SAI. Previously other SAIs have also indicated their intention to take part in the subproject, so their joining to the subgroup is also expected.

6. Selection of the audit theme and indicators Audit themes: –Austrian SAI: demographic changes: public finance sustainability; –Bulgarian SAI: measures for guaranteeing of social protection of vulnerable groups. –Kazakh SAI: assessment of the implementation of the Strategic Plan of the Ministry of Labor and Social Protection of the Republic of Kazakhstan Audit indicators: –Austrian SAI: retirement age; –Bulgarian SAI: risk of poverty.

7. The audit framework 1. Conduct of the audit : Each member of the subgroup conducts its own audit individually, based on its own annual audit plan and its own audit program. The members of the subgroup have to carry out the audit in 2013 or 2014 and the audit ought to be completed no later than December, 2014. This means that it should be suitable for drawing and sharing the methodological conclusions, but does not mean that the SAI should finalize the audit report itself by December 2014.

8. The audit framework 2. Methodological basis We recommend as a common methodological basis the INTOSAI’s ISSAI 5130, Sustainable development: The role of Supreme Audit Institutions, Within this particular document Part 1. Background and Part 3. Sustainable development at the program level.

9. The audit framework 3. Questions to be answered: Are the applied indicators specific enough to create a direct link between the indicator and the audited theme? Are the applied indicators supported by the country’s national statistics? Does the audited program include the performance requirements as a target? Is the methodology of the selection of the indicators correct?

10. Are the applied indicators specific enough to create a direct link between the indicator and the audited theme? How could you bridge the level difference between macro indicators and audits carried out at the level of sectors or institutions? The problem can be resolved more easily where it is possible to interpret and calculate the indicator at the level of sectors and institutions. The task is more complex, for example, in the case of healthcare, where effectiveness indicators depend on a large number of factors, among which the healthcare system is important, but far from being the only factor.

11. Are the applied indicators supported by the country’s national statistics? SAIs have to explore whether –the required data is easy to access, –the collection of the data is systematic, –the findings are comparable.

12. Does the audited program include the performance requirements as a target? It is an important prerequisite to provide the conditions for accountability in good time prior to an audit, since the SAI obviously cannot impose requirements for performance that are entirely new and unfamiliar to the institution or sector under review. Where it exists, a strategy with specific targets and indicators can serve as the basis for accountability.

13. Is the methodology of the selection of the indicators correct? Is there an internal regulation of the SAI that gives weight to the selection of the indicators for performance audits and the application of indicators? If it exists, do the selected indicators comply with this?

14. Final results We will inform the Working Group on the final results at the 8th meeting of the working group in Bulgaria. Each member of the subgroup will present its own results and the coordinator will sum up the common messages of the subproject.

15. Thank you for your attention!