1. 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. Background I. 1.Prior to the meeting held in Riga last year, two questions were addressed to the members of the Working Group: –Whether your Supreme Audit Institution (SAI) participates in the elaboration or development of the national indicator system of sustainable development (and if so, please indicate how) and –Whether your SAI has already tried to utilise these indicators during SAI audits, especially performance audits (if so, please indicate how and in which topics).

3. Background II. 2.We received eight responses to the questions. 3.The meeting held in Riga provided further valuable input on the issue. 4.In the meantime, we used examples from specific audits to review the applicability of KNIs in the practice of the State Audit Office of Hungary. 5.Prepared discussion paper based on all these inputs was sent to the members of the Working Group for comments. 6.We received eight answers related to the document.

4. Application of KNIs by supreme audit institutions Basis: INTOSAI’s ISSAI 5130, Sustainable Development: The Role of Supreme Audit Institutions Sustainable development (1987 Brundtland report): “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” The balance and harmony of social, economic and natural environmental objectives are also important considerations. The specific way in which a SAI contributes will depend on the mandate of that SAI. Audit of sustainability strategy (plan, programme) at level of government or specific individual programmes.

5. Hungarian audit experience We have reviewed three audit programmes: public employment and related training, hospitals and national parks. Conclusions: –It is an important prerequisite to provide the conditions for accountability in due time prior to an audit. –A general methodological problem is to bridge the level difference between macro indicators and audits carried out at the level of sectors or institutions. –The internal regulation of the SAI should give weight to the indicators selected for performance audits and the application of indicators should be incorporated into the methodological regulation of performance audits.

6. Thematic basis of international comparison Themes reported by the SAIs may be of interest to others: –Environment and environmental management (4) –Healthcare (3) –Social inclusion (3) –Public education, public employment and related training (2) –Research and development (1) The application of the KNIs in the above themes could serve as the basis for a pilot project on the comparison of key indicators.

7. Indicators to be applied I. Eurostat indicators: –The indicators underlying the strategy of the European Union on sustainable development. –The hierarchical indicator system comprises 11 headline indicators and more than a hundred additional indicators. –Eurostat indicators are around challenges such as social inclusion, climate change and energy. The largest number of Eurostat indicators support the themes of environmental protection and environmental management, followed by social policy, employment, health and training, with research and development.

8. Indicators to be applied II. Other indicator alternatives: Based on the three-pillar approach: (all economic, social and environmental systems must be simultaneously sustainable in and of themselves) –Indicator system of the OECD –Indicator system of the UNCSD –As well as the Eurostat Based on the capital approach: (the indicator of total national wealth is an ideal indicator of sustainable development) –Indicator system of the UNECE/OECD/Eurostat Working Group on Statistics for Sustainable Development

9. Recommendation I. The members of the Working Group who want to take part in the pilot audit form a subgroup. The coordinator SAI of the subgroup would be 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.

10. Recommendation II. Each member of the subgroup using the selected indicators carries out the audit in the indicated theme. The members of the subgroup share with the subgroup the audit experience concerning the application of the indicators. The coordinator SAI (State Audit Office of Hungary) is responsible for the preparation of a summary of the audit experience (comparative analysis). The subgroup inform the Working Group about the activity and the findings of the subgroup.

11. Recommendation III. For the communication concerning the different steps of the pilot project, members would use the internet platform established for this purpose. Subgroup members would report on the experience of the relevant audit also at the meeting of the Working Group. Seven SAIs indicated their intention to take part in the pilot project.

12. Thank you for your attention!