The Impact of Audits in Argentina, India, and the Philippines

Almost every country in the world has a supreme audit institution (SAI) tasked with monitoring the utilization of the country’s resources. SAIs assess the proper use of public funds by conducting financial audits that examine the legality of financial transactions and performance audits that assess whether public funds have been used efficiently and effectively. Audit reports issued by SAIs contain recommendations on how governments can improve financial management.

The Open Budget Survey shows how SAIs are constrained in playing their oversight role, often preventing audits from resulting in accountability. Since SAIs are rarely well known institutions, their work can often go unnoticed. In 2016 IBP commissioned case studies that assessed the impact achieved by audits conducted by the SAIs of Argentina, India, and the Philippines.

These cases illustrate the effectiveness of audits within the broader accountability ecosystems in countries. The paradox noted by scholars who have studied accountability institutions is that although independence is a crucial feature of SAI strength, SAI effectiveness ultimately depends on the quality and fluidity of the relationships with other actors of the overall accountability system. These case studies demonstrate the importance of the role of public opinion, media, judiciary, CSOs, and other accountability agencies in taking audit findings and recommendations forward in order to hold those audited accountable. They also show that circumstantial factors, such as the political saliency of the topic and the timing of the audit, can trigger the use of audit reports by other accountability stakeholders and, in turn, lead to accountability.

Is India’s Ministry of Coal Effective in Supporting Coal Production?

Coal is a nationalized industry in India, and Coal India Limited (CIL) is the state-owned company responsible for coal production. Prior to 1991, the government set the prices that companies companies producing steel, cement, and power would pay for coal. Economic reforms replaced this system with one that allocates coal blocks to individual public-sector entities and private companies. But the gap between the demand for coal and the supply continued to widen, so the Comptroller and Auditor General (CAG) of India conducted an audit investigation to examine the adequacy of the administrative system. The audit exposed lack of transparency, gross irregularities, and inefficiency in the process during the period of 2004-2009. This case study details the findings and examines the impact of the Comptroller and Auditor General’s 2012 audit report.

Accountability for Safe Train Service in Argentina

This case study details the findings and examines the impact of the Argentina General Audit Office’s (AGN) March 2012 report pointing out irregularities concerning maintenance and procurement issues related to train services provided by the private company Trains of Buenos Aires (TBA). The audit report was issued just days after a fatal train accident in which a train operated under a contract held by TBA crashed into the Once station in Buenos Aires, killing 52 and injuring nearly 800 passengers. Though the AGN had previously issued audit reports pointing out similar issues related to train services provided by TBA, its March 2012 report, coming just days after the Once tragedy, had a much greater impact. It received widespread media coverage and broad citations from the judiciary, lawyers for the victims’ relatives, and civil society organizations.

Philippines’ Commission on Audit Key to Unearthing “Pork Barrel” Scandal

The “pork barrel system” of lump sum grants to members of the Philippines Congress to fund a list of community-based or small-scale infrastructure projects was revived during President Corazon Aquino’s administration and operated under a series of programs, most recently through the Priority Development Assistance Fund (PDAF). Two unrelated investigations in 2012, ­one by the National Bureau of Investigations (NBI) and the other by the Commission on Audit (CoA), shed light on the misuse of the PDAF by members of congress, government officials, and NGOs. The CoA report, together with testimony from a whistleblower, provided key information that resulted in the arrest of three high-ranking senators; the indictment of several members of congress, government officials, and NGO practitioners; and the Supreme Court’s declaration of the PDAF as unconstitutional. This case study examines the impact of the CoA’s findings.