“Influencing Supreme Audit Institution Independence” - a keynote speech at the 25th PASAI Congress 2024
“I am with you today as the Goodwill Ambassador for the International Organisation of Supreme Audit Institutions (INTOSAI) Donor Co-operation. In this capacity, I advocate for the independence of Supreme Audit Institutions. Coming from the South Pacific, I have a particular interest in the good work which public audit offices in our region are doing to strengthen their performance.
I was pleased to contribute online to the 23rd PASAI Congress in 2021, and to the webinar in 2022 on “building strong national integrity systems in the Pacific region”, but it is a special pleasure to be with you in person today.”
Rt Hon Helen Clark;
IDC Goodwill Ambassador for SAI Independence
Keynote address:
“Influencing Supreme Audit Institution Independence”
25th PASAI Congress, Cook Islands, on
Strengthening Performance: Making a difference in the lives of Pacific people.
May 20th 9:30 AM, Rarotonga, Cook Islands.
House of Ariki,
Religious Leaders, and
Cook Islands Government.
Kia Orana,
I would like to acknowledge:
The King’s Representative Sir Tom Marsters and Lady Tuaine Marsters.
Cook Islands Prime Minister Hon Mark Brown.
Leader of the Opposition Tina Browne.
Cabinet Ministers.
Members of Parliament.
New Zealand and Australian High Commissioner.
Heads of Ministries and public sector representatives.
Bilateral, regional, and multilateral partners, and
Auditors General, Public Auditors, and all delegates and representatives from across the Pacific.
Ladies and Gentlemen,
Meitaki Maata (Maytaki Maata) for the wonderful Cook Islands welcome, including from the drummers and dancers.
And thank you to Desmond Wildin, Director of Audit Cook Islands, and his team, for inviting me to attend this 25th Congress of PASAI, held under the theme Strengthening Performance: Making a difference in the lives of Pacific people.
Thank you also to the Pacific Organisation of Supreme Audit Institutions.
I am with you today as the Goodwill Ambassador for the International Organisation of Supreme Audit Institutions (INTOSAI) Donor Co-operation. In this capacity, I advocate for the independence of Supreme Audit Institutions. Coming from the South Pacific, I have a particular interest in the good work which public audit offices in our region are doing to strengthen their performance.
I was pleased to contribute online to the 23rd PASAI Congress in 2021, and to the webinar in 2022 on “building strong national integrity systems in the Pacific region”, but it is a special pleasure to be with you in person today.
My comments will focus on the importance of independent external auditing and the need for sound public financial management, good governance, and transparency.
Independent oversight of public financial management must be part of the checks and balances existing in systems of government, and it is also essential for maintaining the trust of citizens in government. By providing independent and expert opinion on how governments use public resources, Supreme Audit Institutions serve a vital public accountability function.
But they can only perform their tasks well if they are fully independent of those they audit. They need to have institutional, organisational, and financial independence. This firm principle was articulated by the International Organization of Supreme Audit Institutions (INTOSAI) in 1977 in its Declaration on Audit Principles, also known as the Lima Declaration. Since then, several legal instruments have reiterated this call, including two United Nations General Assembly Resolutions (A/RES/66/209 and A/RES/69/228).
The 2007 INTOSAI Mexico Declaration on SAI Independence identifies eight pillars of independence as benchmarks against which to assess the level of independence of SAIs. These are:
1. The existence of an appropriate and effective legal framework. Audit office independence should be firmly established in the constitution and/or legislation of a country.
2. The independence of the head and staff of the Supreme Audit Institutions. They should have security of tenure, and be free to act independently from the executive arm of government. It is expected that a head will be appointed, reappointed, or removed by a process which is independent of the Executive.
3. The Supreme Audit Institutions should have a sufficiently broad mandate, and have full discretion on how they perform their roles. They should be free from direction or interference from the Legislature and the Executive in the selection of audit issues, as well as in the planning, conduct, reporting, and follow-up of audits.
4. The SAIs should have unrestricted access to information. They should have adequate powers to obtain timely, direct, and free access to relevant documents and information.
5. They should have both the right and the obligation to report on their work. They should never be restricted from reporting the results of their audits.
6. The SAIs should have the freedom to decide the content and timing of audit reports, and to publish and disseminate them. They should be able to report directly to the legislature on their audit work, and be able to report at any time on any matter which they consider warrants such a report.
7. The existence of effective follow-up mechanisms on Audit recommendations – this can help ensure that audit recommendations are implemented. Arrangements should be in place to allow the legislature, or a legislative committee, to consider an audit report.
8. The SAIs should have sufficient financial, managerial, and administrative autonomy to fulfil their mandate. Their budgets should be set independently of the Executive, and they should be free to appoint staff independently.
Unfortunately, the evidence we have suggests that only a small fraction of SAIs in developing countries meet the independence criteria outlined in the INTOSAI Lima and Mexico Declarations. Supreme Audit Institutions often do not have the necessary independence to perform their duties, and that trend is moving in an adverse direction according to recent data.
The INTOSAI Development Initiative recently published the 2023 edition of its triennial Global Stocktaking Report (GSR). It measures and assesses developments and trends in Supreme Audit Institutions (SAIs) around the world.
For the third consecutive Stocktaking, SAI independence levels are assessed to have declined. Their access to information continues to fall, and interference in budget execution and audit planning has increased. Ten per cent of respondents to the 2023 Global Survey reported interference against SAI leadership.
An SAI Independence Rapid Advocacy Mechanism (SIRAM) was established in 2018 by the INTOSAI Donor Cooperation. It advocates for SAI independence, and it raises awareness of threats to and breaches of that. It can also broker support for SAIs facing challenges to their independence.
Analysis of cases which have come to the attention of the mechanism, including in Sierra Leone and Ghana in Africa; Poland and Montenegro in Europe; and Colombia and Dominican Republic in central and South America, suggest two trends:
One – that threats to the independence of SAIs are by no means confined to low- and middle-income countries. In my view, there are growing reasons to be concerned in some high-income countries too where assumed barriers to corruption and cronyism are under pressure.
Two - threats to independence are generally part of a broader set of challenges which are also affecting other independent institutions. These are associated with the deterioration of conditions around accountability, including the shrinking of civic space which is all too common these days. Witness the ongoing upheaval in Georgia in the Caucasus where the government has just pushed Russian-style legislation restricting civic space through the country’s parliament.
How can these trends be countered? Some ways forward could be:
· Building global coalitions to support upholding global standards on SAI Independence, and create greater global awareness about the importance of this.
· Developing regional approaches which take into consideration the context in which SAIs operate, and create synergies among regional actors.
· Raising the profile of the independent SAIs at the country level to strengthen legitimacy and support around their actions.
Allow me to elaborate on each of these points and share some reflections for your considerations.
1. Building coalitions at the global level can raise awareness of the importance of SAI Independence and enhance the potential for collective action.
Coalition building should include Development Partners and other relevant platforms:
- The INTOSAI Donor Cooperation is a natural place to discuss these issue as it brings together SAIs and Donors. Its Kingston Implementation Plan ramps up its efforts on SAI independence.
- The INTOSAI Development Initiative, the OECD ,and the IMF have launched a Global Project on SAI Independence. It is expected to result in the OECD guidelines on SAI Independence which are drawn to the attention of Parliaments and Ministries of Finance.
These global partnerships could also be inclusive of civil society, and contextualised to sectors like the extractives industries and health where there are significant corruption risks. The relevance of the SAIs in addressing those risks could be made more visible. I chair the Board of the Extractive Industries Transparency Initiative (EITI), which works for transparency and good governance in that sector. It is vital that audit institutions are aware of and use the EITI disclosure data at country level.
2. Developing regional approaches to take into consideration the context in which SAIs operate and create the necessary synergies among regional actors.
SAIs within the same region will often face similar realities and challenges – although within a region contexts can also be very diverse. In the Pacific context, PASAI has done an excellent job in supporting its members. Its Secretariat is an example of a responsive and member-driven organization. Constructive relationships and dedicated support from key regional development partners like Australia and New Zealand have also helped strengthen SAIs in the Pacific.
Strengthening SAI Independence was the first of PASAI’s five strategic priorities under its 2014-2024 strategic plan. Several SAIs have been supported, and SAIs in Tonga and Tuvalu have passed landmark legislation strengthening key aspects of their independence.
Concurrently, relevant regional approaches to advocacy were developed by PASAI. One of them focused on addressing independence through an integrity lens, and facilitating dialogues with other integrity institutions such as parliaments, anti-corruption bodies, and ombudspersons. The webinar in which I took part on this in 2022 showed how focused Pacific participants were on strengthening their integrity ecosystems.
I am convinced that PASAI’s new strategic plan, which is due to be adopted during this Congress, will build on the achievements of the previous one, and help drive efforts to strengthen the independence of SAIs in the Pacific. It will also support SAIs to contribute to good governance policy objectives in their respective jurisdictions.
3. Raising the profile of Independent SAIs at the country level, to strengthen legitimacy and support around their actions.
Public trust in national audit institutions is very important to effective advocacy for their independence. A strong reputation is a resource which an SAI can draw on if its autonomy is threatened. Therefore, public audit offices should not feel shy about being proactive in raising their own profile.
Public trust will be maintained when audit reports are of good quality and timely. That requires dedicated professionalism from staff and high-quality management systems.
As an example, the publication of audits of stimulus packages provided during the COVID-19 pandemic have helped raise the profile of SAIs at the country level.
Finally, SAIs should also focus on stakeholder engagement and their interactions with other actors in the national accountability ecosystem. These include Parliament, Ombudspersons’ Offices and other such statutory offices, and non-state actors, such as civil society organisations with a transparency focus, and news media.
An example of a collaborative approach is currently taking place here in the Cook Islands, where the Audit Office is working with Parliament on strengthening the Office’s legal framework and achieving greater independence. As well, the Office is working with partners across the Cook Islands public sector to promote a culture of accountability and transparency. Their vision is of a high-performing and trusted Cook Islands public sector which works in the best interests of the people.
Ultimately, the Cook Islands Audit Office exists for the benefit of all Cook Islanders. It holds an important place in the integrity system of the country. A strong Public Financial Management System within the Cook Islands is of utmost importance – as it is for all countries.
Alongside their key stakeholders, many who are here today, Cook Islands Audit work to ensure that the people of the Cook Islands can have trust and confidence in government and the wider public sector.
The proceedings of this conference are supportive of all the good work which public audit offices across the Pacific are doing, and I hope help make the case for ensuring their independence.
Meitaki Maata (thank you very much), and thank you for your kind attention.