HELPING THE NATION SPEND WISELY The Development needs of Supreme Audit Institutions Richard Maggs Director General for International Relations, UK National Audit Office

HELPING THE NATION SPEND WISELY What are Supreme Audit Institutions  SAIs can be defined as the highest level of independent external audit of National Governments  They exist in different forms in virtually every country  There are two basic models –Westminster –Court

HELPING THE NATION SPEND WISELY Why are they important – a logic chain  The biggest obstacle to peace is poverty  A root cause of poverty is poor governance and a lack of ethical standards  SAIs have a key role in raising standards and promoting ethical behaviour  More than 2/3rds of the SAIs in the world are ill equipped to meet this challenge

HELPING THE NATION SPEND WISELY Why don’t they work?  Lack of real independence –Legal –Financial  Lack of capacity –People –Process –Technology

HELPING THE NATION SPEND WISELY Some redeeming features  An extremely active international community of SAIs –INTOSAI and its various organs and working groups –Bilateral and multilateral technical co- operation

HELPING THE NATION SPEND WISELY INTOSAI  Development of public sector audit standards  Enhancing capacity among its members  A big tent philosophy on the generation and sharing of knowledge

HELPING THE NATION SPEND WISELY Bilateral and Multilateral Cooperation  A wide range of SAIs acting as donors in the provision of technical assistance  The experience of European SAIs in transition  Capacity building enshrined as one of the three main goals of INTOSAI  A new global reach

HELPING THE NATION SPEND WISELY NAO’s Technical co-operation work  Europe –Major Twinning projects with Hungary, Slovenia, Romania, Bulgaria, Latvia, Lithuania, Poland, Turkey, Croatia and Albania –Other work with Czech republic, Cyprus, Estonia, Malta, Slovakia and Russia –Work with ministries of Finance in Latvia and Albania  Asia –Small scale projects with India, Sri Lanka, Maldives

HELPING THE NATION SPEND WISELY NAO’s Technical Co-operation work  Africa –Major project in Ghana and bid for work in Sierra Leone –Smaller scale work in Lesotho, the Gambia Mozambique Morocco and Mauritius  Latin America –Small scale work in Peru, Chile and Brazil

HELPING THE NATION SPEND WISELY NAO’s partners on TC work  SAIs: Denmark, France, Germany, the Netherlands, Spain, South Africa, Sweden  Private Sector: KPMG, PWC, PKF,  INTOSAI Development Initiative (Norway)  CAROSAI  IDI trained staff in development countries

HELPING THE NATION SPEND WISELY Major challenges in working with SAIs  Getting the right direction of change –The move from control to audit –The move from legality to financial audit –The benefits of addressing performance  Making change sustainable –culture changes slowly

HELPING THE NATION SPEND WISELY Lessons learnt  Good project design essential but often superficial – the vet’s challenge  Audit is an annual business and changes can take 2-3 years to implement  Technical issues are rarely the major issues – Policy, HR, IT and Communications are often key

HELPING THE NATION SPEND WISELY Key success factors  High level Commitment –Auditor General –Ministry of Finance –Parliamentary committees  Long term donor support  Ownership of the project  Integration with wider governance work

HELPING THE NATION SPEND WISELY Why SAIs are important to the Bank  A key role to play in the achievement of the Millennium development goals  The move from project support to budget support makes the effective audit of total government spending essential

HELPING THE NATION SPEND WISELY Why they are not well supported  Country programming inevitably focuses on Government priorities –Not all governments welcome the idea of effective external scrutiny of their actions –SAIs themselves may be wary of seeking development funds from those they audit  Lack of donor awareness of the benefits of supporting SAIs

HELPING THE NATION SPEND WISELY The way ahead  Raising awareness and liberating funding –Donors –SAI community  Forming effective multi-dimensional partnerships –At a strategic, regional and country level –Between INTOSAI and the donors –Between providers and recipients of technical cooperation  Delivering sustainable support to SAIs

HELPING THE NATION SPEND WISELY Questions

HELPING THE NATION SPEND WISELY INTOSAI at a glance  Triennial Congress - INCOSAI  18 member Governing Board  7 autonomous regional groups  A range of Committees and working groups to develop best practice  INTOSAI Development Initiative

HELPING THE NATION SPEND WISELY INTOSAI’s three goals and Committees  Professional Standards –Accounting and Auditing Standards, Internal Control, Independence, Int. Institutions  Capacity Building –New Committee proposed  Knowledge Sharing –IT, Environment, Public Debt, Privatisation, Program Evaluation, Money laundering

HELPING THE NATION SPEND WISELY INTOSAI key future developments  WB Decision on support of standards work  Approval of Strategic plan (October 2004)  Creation of a new task force or Committee on Capacity Building (October 2004)  Selection of new Director of strategic planning and other steps needed to put new strategy into action (March 2005)