MEASURING PERFORMANCE OF SUPREME AUDIT INSTITUTION

1. MEASURING PERFORMANCE OF SUPREME AUDIT INSTITUTION M. Mozammal Hoque Sr. Financial Management Specialist (OPCFM)

2. Pillars of National Integrity System Sustainable Development National Integrity System The Judiciary Civil Society The Media Political Will Parliament Admin. Reforms The Private Sector Watch Dog Agencies* Economic Reforms *Anticorruption agencies, Supreme Audit Institution, and Ombudsman's Office

3. People Parliament PAC PEC PUC SCM Accountability Relationship Reports C&AG Audit GOB Donors Media Public Financial Accountability

4. Building Trust: Capturing the Promises of Accountability Accountability Mechanisms • Parliament • Performance reports • Audits • Redress Mechanisms • Media Long-term Goals • Improved Services • Confidence • Trust Intermediate Objective • Transparency • Disclosure • Redress

5. Revenue Administration • Pensions & Payroll • Procurement • Internal Control • C&AG’s Office • Parliamentary Committees Budget Oversight Budget Implementation Budget Preparation Budget Evaluation • Macroeconomic Framework • Development & Recurrent Budget • Sector Strategies • MTEF • Annual Reports • Value-for-money Audits • Report on Budget Implementation Strengthening Financial Management

6. Financial Accountability Cycle: 3 Questions • What information can Oversight Agencies obtain about the Government’s activities; how relevant, accurate, timely and comprehensive is the information? • How well are the Oversight Agencies able to analyze the information, and develop action-oriented conclusions? • What kind of response are Oversight Agencies able to generate from the executive?

7. Role of SAI • Determining the SAIs role upfront may dictate how we conduct their assessment • Role may be one or more of the following: • A line function: ex-ante control • To enforce legal compliance • To carry out ex-post financial audits • To enhance bureaucratic performance

8. Questions for Discussion • Can the SAIs possibly escape the larger political environment? • Does the Bank have a bias towards Ministries of Finance which works against the pursuit of SAI independence?

9. KEY ISSUES IN SAI PERFORMANCE -1 Independence • Appointment and tenure of the head(s) of the audit institution • Arrangements for funding of the audit institution; not beholden to the Executive • Adequacy of funding • Autonomy from other government controls (e.g. perhaps civil service rules) • Freedom to select topics for review

10. KEY ISSUES IN SAI PERFORMANCE - 2 Scope and authority • Extent of coverage of the whole public sector (off-budget and secret accounts, government business enterprises, sub-national government) • Right of access to all necessary information • Powers to report publicly • Is there an executive role ( e.g. power of surcharge against wrong doers) • Is there a judicial (prosecutorial) role ?

11. KEY ISSUES IN SAI PERFORMANCE - 3 • Quality of auditing processes • Extent of follow-up on audit recommendations • Impact: Budget savings, reduction in corruption, policy changes, organizational changes, legislative changes, etc. (role of PACs) • Demand for financial accountability and extent of public interest • Who does this work? Extent of professionalism • Integrity of SAIs staff

12. KEY ISSUES IN SAI PERFORMANCE - 4 • Procedures for audit reports • Timeliness and availability of external audit reports • Clarity of the audit opinion and relevance/significance of the issues discussed • Capacity of the legislature to follow up audit reports and the extent to which follow up occurs • Capacity of the media in follow up and the extent to which such follow up occurs • Quality and relevance of management letters provided to auditees • Adequacies of processes for pursuing legal actions which may arise from the audit

13. KEY ISSUES IN SAI PERFORMANCE - 5 Performance and accountability of the SAI • To whom is an SAI accountable ? • Independent audit and review of the audit institution • Adherence to international auditing standards (which ones ?) • Extent of self assessment of performance – existence of some measures of audit costs and impact, apart from merely formal institutional arrangements • How “pro-active” or “hands on” should an SAI be in recommending changes to improve financial reporting, legal compliance or performance (value-for- money) • If the SAI makes detailed recommendations for changes, will this compromise its “independence”, as it then must review its own recommendations (?)

14. KEY ISSUES IN SAI PERFORMANCE - 6 Appropriate relationship with other audit/review organizations and anti corruption bodies • Clarity and appropriateness of relationship to internal audit institutions • Clarity and appropriateness of relationship with anti-corruption bodies and related prosecutorial bodies • Relationship with procurement reviews and procurement audits, procurement complaints authorities etc.

15. Integrated Financial Management and Control Approach Go for Pilots and Roll out Public Accounts Committee Public Undertakings Committee Parliament: Oversight Functions Committee on Estimates or Finance Ministerial Standing Committee • Submit annual performance report to Parliament Identify change agents from Minister/Secretaries • Introduce Strategic Planning in Ministries • Form Budget and Audit Committees • Give a Corporate look to Ministries/Department • Focus on outputs as well as inputs/measurement concept • Address human infrastructure of Ministries • Move from red taped file to a technology based system • Link with broader administrative reforms Ministries • Chief Executive Officer • Principal Accounts Officer • Chief Accounts Officer