CAROSAI’s 30 th Anniversary Conference August 2018 Robert Buchanan, Legal Consultant to PASAI

1. The independence of SAIs in smaller jurisdictions – the experience from the Pacific CAROSAI’s 30th Anniversary Conference August 2018 Robert Buchanan, Legal Consultant to PASAI

2. About PASAI • PASAI is the Pacific regional group of INTOSAI • It has 28 members, from across the Melanesian, Micronesian and Polynesian ethnic/language groupings and from Australia, the French Pacific territories, and New Zealand • PASAI’s work is overseen by a Governing Board, appointed by the Congress, and implemented by a full-time Secretariat • PASAI’s primary development partners are the Australian and New Zealand aid programs and the IDI, supported by assistance from the Asian Development Bank, The World Bank, and the EU

4. PASAI’s strategic objectives • PASAI’s guiding principle under its 10-year Strategic Plan (2014-2024) is to seek improved management and use of public resources through increased transparency and accountability to the peoples of the Pacific • The Plan has five strategic priorities: • Strengthen SAI independence • Strengthen accountability and transparency in Pacific Island countries • Promote and enhance effective public financial reporting, audit, and oversight • Strengthen SAI’s capacity and capability to perform their mandates • Strengthen the Secretariat

5. PASAI’s Strategic Plan 2014-2024

6. Independence objectives: Strategic Priority 1 • SAIs are independent with a modern mandate, consistent with the UN General Assembly resolution on SAI Independence and the Lima and Mexico Declarations. • SAI independence is supported by adequate resources and capability. • SAIs demonstrate and effectively communicate their independence and relevance to citizens and stakeholders. • SAIs share information and promote independence within their SAI and support other SAIs to meet challenges to their independence.

7. PASAI’s independence-related activities • Facilitating independence assessments (including through a regional approach to SAI PMF self-assessment with peer review) • Developing independence resources, and facilitating SAIs to share information about their independence challenges • Assistance to individual SAIs to promote modernization of their constitutional and legal frameworks, and to develop independence strategies • Capacity building with Public Accounts Committees of the region’s parliaments and congresses

8. Recent achievements in promoting independence • Most of PASAI’s members have undertaken Domain A assessments using the SAI PMF • Successful modernization of SAI legislation has been achieved in Tonga, Samoa, Tuvalu and Kiribati, with ongoing assistance being given in other jurisdictions • PASAI has produced an independence resource kit, containing background materials, self-assessment tools, and case studies (www.pasai.org/introduction) • A 2015 study of financial independence and operational autonomy of SAIs across the region enhanced understanding of this topic

9. Global survey results for Pacific SAIs (2017) • 75% have full or moderate independence under their constitutional or legal frameworks • The legal mandate is defined in the SAI’s legal framework in nearly all cases • 80% of SAI heads have some degree of legal protection • Only 30% have been subjected to interference in selecting their audit program • But 60% have been subjected to interference in setting their budget • The legislature oversees the budget request in only 40% of cases

10. Independence challenges: resources • Lack of institutional recognition for the SAI as an independent entity: most Pacific SAIs are treated as an instrument of the executive government for funding and staffing purposes, even if the SAI head has constitutional status and independence • Consequently, SAIs are often frustrated in securing funds and resources based on their work plan requirements • Most Pacific SAIs report they have insufficient funds and resources to carry out their mandates effectively, even if they have high levels of operational autonomy (2015) • Recruitment of staff with technical accounting and auditing skills remains a major challenge, despite years of capacity development work

11. Independence challenges: reporting and follow-up • Despite measurable gains in SAIs’ reporting and communications capability, the follow-up of audit recommendations through legislative oversight mechanisms remains a challenge, due in large measure to: • infrequent sittings of the legislature, delaying tabling of reports • poor understanding of the SAI’s role by legislators • inadequate support capacity for PACs • insufficient time given to consideration of the SAI’s reports • But PASAI’s program of multi-stakeholder workshops with PAC members has noticeably addressed these issues

12. The challenge of professionalization • The standard post-colonial SAI model (a constitutionally independent officer, supported by civil servants supplied by the state) is no longer fit for purpose • Auditing in the public sector has transformed into a standards-based, risk-based activity that requires a professionalized, independent workforce and a discrete institutional form • Achieving this capacity and recognition is a significant independence-related challenge for SAIs, especially those in smaller, less developed jurisdictions • PASAI believes this challenge must be addressed at the individual SAI level, with regional and global support • Professionalization: PASAI’s regional paper (INCOSAI 2016)

13. Independence in law and in practice • Significant progress has been made in strengthening SAIs’ constitutional and legal frameworks in many developing nations, both in the Pacific and in other regions • But independence is also a state of mind, and sits in a context of relationships and understandings – not just as a set of rules • This is a critical success factor in small countries, where checks and balances may be less enduring and understandings harder to achieve • Success can also be deeply affected, or moderated, by political and social culture – the Mexico Declaration recognizes this

14. Defining independence in practice • Practical independence refers to conditions which must exist to effectively maintain the independence of the SAI within the existing legal framework. For example: • being protected when the SAI’s independence is challenged • getting resources, and being accountable for their use • being able to recruit and be supported by professional and well rewarded staff • being led and staffed by people of impeccable character, leadership and integrity • effectively using the power to select and conduct audits, make and follow up on its reports, and communicate its work to stakeholders • IDI’s Independence Guide, 2017

15. Independence as a “journey” • Achieving independence is a process, not a product. It’s a “journey”, a process with milestones and roadblocks, an evolving construct • SAIs do not speak of having “achieved” independence. Seeking independence can be a strategic endeavour, which often involves making the most of an outdated or inadequate legal framework while advocating for legal and practical reforms • Independence must also be adaptive: using vigilance to remain relevant and involved, as – • governments adopt new ways of delivering services • new forms of communication with stakeholders develop and evolve at an alarmingly fast rate • IDI’s Independence Guide, 2017

16. Thank you for your attention, and for inviting me to join your Congress