Accountants With Opinions: How Can Government Audits Drive Accountability?

By Vivek Ramkumar, International Budget Partnership— Nov 07, 2016

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The International Budget Partnership (IBP) recently convened a group of leading experts and practitioners from the field of government auditing to discuss how to make audits more impactful. The event brought together luminaries of the auditing world, including the heads and former heads of the supreme audit institutions (SAIs) in India, Kenya, Korea, Nepal, and the Philippines, together with representatives from civil society, academia, bilateral donors, and international development banks.

Auditors have one of the toughest jobs in government: ensuring that powerful politicians, officials, and institutions are held to account. They painstakingly comb the books for evidence of corruption, malfeasance, and ineptitude, reporting on their findings to drive improvements. In this way, SAIs are essential to accountable governance. Yet, as the Open Budget Survey has revealed time and again, SAIs face serious limitations in many countries. Audit reports are withheld from the public, hearings on audit findings take place behind closed doors, and findings are not acted upon. Many of these problems stem from SAIs lacking the requisite independence to do their jobs effectively.

Given the potential of these institutions to drive more accountable governance, IBP wanted to bring together experts and practitioners to identify challenges, devise solutions, and discuss practical steps for taking these forward.

What Needs to Change?

International budget partnership audit workshopWhile recognizing that government auditors face a host of roadblocks particular to their country contexts, the participants identified a number of challenges common to many SAIs around the world. Alongside sharing these challenges, the group drew on their experience to discuss ways they could be overcome.

Many agreed that the findings of audit reports often go unheeded by the powers that be. To tackle this SAIs need to get better at connecting with other players in the accountability ecosystem. This includes legislatures, which are often the first to see audit reports; anti-corruption agencies and other official bodies that need to act on audit findings; along with civil society actors and journalists, who can bring findings to wider public attention and help to ensure that reports don’t get buried. One participant pointed out the potential of establishing cross-government working groups to break down silos and ensure audit findings were acted on.

Communications was identified as another area that SAIs could stand to improve. Engaging the media and the public in their findings was seen as key to pushing the government to act. If and when an SAI uncovers a grand case of official corruption, coverage in the media and public outcry is often assured. But audit findings that point to more mundane inefficiencies or ineptitudes can often pass unnoticed. Such findings are crucial for driving the incremental improvements in government functions and services that could make a real difference to people’s lives.

In addition to issuing individual audit reports, SAIs also need to learn how to communicate their role and responsibilities better. There is a need to firmly establish in the public consciousness the importance of their independence and objectivity, as well as the crucial part they play in driving better governance. If more people understand what SAIs do, more will to come to their defense when the targets of their audits turn up the heat.

On the technical side, SAIs need to be smarter at linking their reports with other decision-making processes, particularly those related to government budgets. A report that uncovers deficiencies in the education sector won’t have the kind of impact it should if the budget priorities for education have already been set. There are also gains to be made by linking their audits to global agreements and institutions, such as the Sustainable Development Goals (SDGs) and the Open Government Partnership (OGP) commitments in their country action plans. These could prove to be crucial entry points for auditors to use their findings to point out the government initiatives that are not on track.

Some Practical Ideas for Improvement

Participants were keen to establish practical steps that could be taken to improve the effectiveness of SAIs. At the international level, one idea is to establish a body made up of former SAI senior officials to engage with relevant global agreements and international institutions. Such a body could point out how essential the audit function is to realizing the aspirations of, for example, the SDGs and OGP commitments, and push for SAIs to be considered a more serious player in this arena.

Participants also pointed out that regional and international networks of legislators and auditors (such as the Inter-Parliamentary Union and the International Organization of Supreme Audit Institutions) could be useful for drawing attention to the issue of audit findings not being acted upon. Many also agreed that international organizations should produce more research and guidance on how SAIs can better approach engaging with external stakeholders and communicating with the public.

At the national level, participants suggested that SAIs could launch public awareness campaigns that raise the profile of their audit reports and educate citizens about the role they play in keeping governments on track. Such a campaign could be built around a database that tracks what the government is doing to address audit findings. Another idea was to establish an annual “Accountability Day” that looks back at recent government performance around the time the government announces the subsequent year’s budget. To help build relationships and connect the dots between various players, groups of CSOs, journalists, legislators, and anti-corruption officials could be established to tackle specific problems identified in audit reports and keep important issues on the agenda.

From IBP’s side, we’ll be building on the success of the meeting to explore how we can help turn these ideas into realities. Alongside a series of blogs that delve deeper into the audit function, we are working on a concept note that draws on the discussion to establish concrete steps for improvement. We’ll also be looking at ways we can work with our civil society partners to make better use of audit findings and forge stronger relationships with auditors.

2 comments:

  1. There is a growing consensus that SAIs need to strengthen links with external stakeholders to ensure their reports do not go unheeded, yet a gap persists in the evidence on how this happens and which mechanisms may lead to improved relations and increased accountability for greater citizen trust in government. In 2015-16, the EIP[1] compiled experiences from auditing authorities on their connections with different stakeholders in their accountability ecosystems. A global survey explored how citizens become aware of their own role in SAIs, what channels exist for participation in audits and the extent to which SAIs disseminate their work and legitimate authorities follow up to audits findings. The survey uncovered the challenges and advantages that these institutions perceive in engaging with external actors:

    • SAIs in high-income countries are not necessarily the most advanced in engaging with external stakeholders. Non-OECD countries are more likely to engage in two-way more participatory and interactive approaches than OECD countries. However, OECD countries are the most advanced in terms of the type and quantity of information they disclose.
    • It is more common for SAIs to engage with parliament than with civil society or NGOs and the media. While engagement mechanisms concentrate at the planning and dissemination stage of the audit process, follow-up to audit recommendation is the stage where engagement is at its lowest. However, this is the stage where external actors‘ engagement may have the highest impact in terms of oversight.
    • In terms of accountability eco-systems engagement mechanisms, there is a lack of systematic understanding and concrete evidence of what improvements make a difference, how they contribute to citizen engagement and under what conditions.
    • There is poor institutionalisation of engagement practices. For example, collaboration with parliament, beyond reporting obligations, occurs mostly informally.
    • Experience is not yet systematized nor easily accessible for other SAIs. More learning on engagement with civil society is available than on engagement with parliament and the media. SAIs should develop a systematic and thoughtful approach to peer learning around engagement with external actors in order to enhance the potential to share innovations in engagement.
    • There are complex and multiple incentives and barriers underpinning engagement practices, including not only financial resource and normative frameworks but also the perceived risks of engagement practices such as media sensationalising and public pressure. For example, SAIs might not have the manpower to follow up complaints or denouncements filed by citizens or parliamentarians beyond the scheduled audits. Equally, SAIs fear being perceived as manipulated by political parties while engaging with the parliament.
    • Remaining gaps in knowledge include: how to understand and map external stakeholders, which communication strategies to adopt, how to develop medium-term engagement strategies oriented towards specific accountability results, and how to formulate risk mitigation strategies.

    [1]In order to strengthen understanding of interaction practices of Supreme Audit Institutions with external stakeholders, the EIP is developing lessons on this type of engagement and has suggested a learning alliance on this topic in order to bring together SAIs, parliament, media and CSOs. The alliance should initially take place in Latin America with Brazil, Chile, Paraguay and Ecuador have expressed interest in undertaking the exercise. The Effective Institutions Platform (EIP) is an alliance of over 60 countries and organisations that support country-led and evidence-based policy dialogue, knowledge sharing and peer learning on public sector management and institutional reform. The EIP supports its members in their development of accountable, inclusive and transparent public sector institutions capable of delivering responsive policies, effective resource management, and sustainable public services for poverty reduction and inclusive growth.

    The EIP does this through hosting a different kind of conversation; using collective learning processes to capture innovation, stimulating experimentation and bringing this learning to a wider audience through an influential global network.

  2. It is important to note that the recent event in Washington DC drew representation from Tanzania as well where we had the participation of the former Controller and Auditor General, Ludovick Utouh and a representative from Civil Society.
    Moving forward, we can strategically capitalize on the improved relationship that exists between SAIs and Civil Society. As mentioned before, SAIs’ independence is limited in several ways and as such their work does not yield expected impact in the society. With many CSOs informed of the work of SAIs and improved understanding of how these CSOs could contribute to impactful auditing, there is a potential of improved advocacy by CSOs to demand for accountability measures. For example, CSOs could advocate for adequate budget for the office of the Auditor as a first step. Then it is also true that CSOs including the media, are better positioned to demand more attention to the audit reports. This includes adequate time for discussion of the reports in the Parliament, close follow up of the past recommendations to ensure accountability and findings of the auditing being shared widely with the public.

    The above is premised on the assumption that CSOs engage closely with SAIs not only after the production of the audit reports but in the whole process from identifying possible auditing areas to the production of the report. If CSOs are adequately engaged, they are likely to closely follow up on the implementation of the audit findings.

    From the recent engagement that Policy Forum had with the National Audit Office, it was evident that the office see potential in CSOs in terms of making their work more impactful. It is quite disappointing that only a fraction of audit findings receives attention. Gladly, in the same session there were officials from the ministry responsible for local authorities where the problem of mismanagement of public resources is quite notable. Therefore, as Policy Forum works closely with local authorities, it is in our priorities to keep reminding the councilors as oversight at local level to keep their eyes open especially when discussing audit reports. We need to see that oversight institutions at local level (Full Council for the case of Tanzania) possess the requisite skills and are able to make sense of audit reports and demand accountability. With pressure from CSOs and these oversight institutions at local level there is likelihood of improved impact of the auditing exercise.

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