Back at number one and it’s personal

“Putting people first in maintaining integrity” was a theme in Lyn Provost’s last speech as Auditor-General at the fifth Transparency International Leaders Integrity Forum last week.

This point was echoed by the Brian Picot Chair in Ethical Leadership at Victoria University, Professor Karin Lasthuizen.

New Zealand has worked hard to have a public sector with high integrity, which has been reflected in our ranking on Transparency International’s Corruption Perceptions Index for a long time. We are usually ranked either first or first equal in the world, but we slipped to second and fourth in 2014 and 2015.

It’s certainly good to be back at number one (at least, first-equal with Denmark) on the 2016 index. But we are not complacent.

In 2012, our Office’s work on fraud helped lead to an increase in awareness and action. Now all of us in the public sector have an opportunity to raise awareness and understanding of bribery and corruption.

Lyn told the Integrity Forum that the second word in “Corruption Perceptions Index” matters as much as the first. She has seen an increase in accusations of corruption during her term as Auditor-General, even though the Office’s inquiries have not upheld those accusations.

The increasing perception of corruption should be of concern to us all, Lyn said.

“Without transparency, allegations of corruption will flourish. Without transparency, people wonder what their politicians and officials are trying to hide. We can hardly blame them.”

As public sector auditors, we meet thousands of public servants committed to improving the lives of New Zealanders. They’re doing a great job, but our reputation is a fragile thing. There is plenty that can go wrong. Public entities can get too focused on avoiding risk, ticking boxes, following processes, and managing throughputs. Of course we need systems, but what comes first in maintaining integrity is concern about people.

Karin’s presentation on research in ethical leadership reinforced Lyn’s emphasis on concern for people. She told the forum that ethical leadership and explicit communication about ethics is particularly important for combatting unethical behaviour. Communication about ethical values and norms, and open discussion about ethical dilemmas, helps reduce perceptions of favouritism inside an organisation, and discrimination outside of it.

The Kiwis Count Survey run by the State Services Commission shows that New Zealanders' trust in public services by experience is consistently much higher than their perception of trust. By both measures, trust has increased markedly since 2007. It shows that their trust is closely linked to their personal contact with the public sector.

In her last address as Auditor-General to the public sector, those at the Forum might have expected a discussion of accounting and financial management challenges and of the systems that could be improved. But Lyn showed the forum the trait that has made her distinctive as an Auditor-General – her willingness to talk about the issues that matter for people.

She challenged the public sector to focus on, and find ways to improve, five issues that trouble us all and blight so many of our lives: and that undermine our integrity:

1. Suicide – the third leading cause of premature death in New Zealand. Every suicide is a tragedy. Our Office has tried to contribute to this complex problem by looking at how information is collected and used to prevent future suicides.

2. Mental health – in our Office, as in communities throughout New Zealand, no one’s life is untouched by the pain of suicide and mental health related issues. In the next few months, the new Auditor-General, Martin Matthews, will present a report on acute care of mental health patients.

3. Māori education – too many Māori children leave school without the education they deserve. The achievement gap between Māori and non-Māori is closing too slowly. As an Office, we are proud of our reports on Māori education, and we hope the sector will have the courage to do what is needed to help Māori students achieve their full potential.

4. Jobs for youth – we are an organisation that recruits graduates who are beginning careers to become our future public sector leaders and finance managers. Too often we hear the phrase “we want experienced people”! How does a young person get experience with that attitude?

5. Family violence and its impact on children – in her eight years in Police, Lyn says she saw the impact of family violence again and again. Family violence is not acceptable.

Staying at number one on the Corruption Perceptions Index means making it personal – having the uncomfortable conversations to find ways to tackle the issues that matter for people.

FULL ARTICLE AT: https://oag.parliament.nz/blog/2017/back-at-number-one

““Without transparency, allegations of corruption will flourish. Without transparency, people wonder what their politicians and officials are trying to hide. We can hardly blame them.””

— Lyn Provost

Spotlight on Success: Regional Collaboration to Close the Accountability Gap-the PASAI Approach

THE CHALLENGE

Several smaller island nations in the Pacific have limited auditing capabilities. For example, back in 2009, theTuvalu Office of the Auditor-General (TOAG) and the Kiribati National Audit Office (KNAO) were not completing audits in a timely manner. They had backlogs of audits and struggled to keep up with changes to international financial reporting and auditing standards.

One of their main challenges was in the area of human resources, a typical problem faced by small island nationsin the Pacific. The untimely audit of the government’s accounts entailed reduced accountability for the use of public funds in Tuvalu and in Kiribati, as the Parliaments and the citizens did not receive assurance that funds were spent as intended.

THE RESPONSE

The Pacific Association of Supreme Audit Institutions (PASAI) designed a Sub-regional Audit Support Programme (SAS) to support some of the smaller and most vulnerable SAIs that were facing similar challenges with staff capabilities, audit methodologies and systems. The programme was linked to PASAI’s strategic plan and its work program, the Pacific Regional Audit Initiative (PRAI). 

The SAS programme was operational from 2009 to 2016. It supported TOAG and KNAO capacity building by helping them complete financial audits, train SAI personnel and improve information sharing. This effort was made possible by a team of secondees from each participating country and supported by consultants to assist in the audit of public accounts using updated auditing standards.

The Asian Development Bank financed the SAS programme, through the Japan Fund for Poverty Reduction.  The Australian Department of Foreign Affairs and Trade and the New Zealand Ministry of Foreign Affairs and Trade have been the primary funders of the PASAI Secretariat, whichhas helped implement the programme.

THE RESULTS

• The KNAO is now up-to-date with the whole of government audits
• The TOAG has audited all financial statements submitted, including the whole of government financial statement for 2015
• The competency, confidence and experience of the staff involved in the SAS programme have significantly increased.
• The timely completion of the whole of government audits has positively contributed to the availability of up to date and reliable financial information for the respective governments in preparing budgets and in formulating relevant policies, which will benefit citizens

The results in PASAI have been made possible with the support of donors who have aligned behind PRAI and PASAI´s strategic plan, leading to well-coordinated support to the SAIs in the region.

PASAI’s regional approach to capacity development has enabled scarce resources to be utilized in an effective way, as synergies have been realized and peer SAIs have worked together to improve performance at the country level. The approach has included staff training and development, sharing resources regionally and aligning policies to strengthen national capacities. This isa good illustration of the key principles for SAI capacity development in the INTOSAI-Donor Memorandum of Understanding.

On the basis of the same regional approach, the INTOSAI- Donor and PASAI secretariats have designed a programme for measuring performance that is in line with PASAI’s regional priorities. Financed by the Australian Department of Foreign Affairs and Trade, this newly developed initiative facilitates SAI Performance Measurement Framework (SAI PMF) assessments for numerous smaller SAIs throughout the Pacific region. Using a combination of self- assessment and peer reviews, the goal is to effectively address the challenges associated with staff and skill limitations.

The TOAG takes part in the SAI PMF programme. The TOAG assessment was conducted in 2016 using a combination of internal assessment and peer review by the Samoa Audit Office with support from PASAI. Following the completion of the draft assessment, the peer review team presented preliminary findings to TOAG management and staff, who acknowledged and accepted the constructive feedback for improvement.

FOR FULL ARTICLE CLICK HERE

SAS committee May 2013

SAS Committee May 2014 - signing new MOU

Martin Matthews - Controller and Auditor-General

On 1 February 2017, Martin Matthews began his seven-year term as New Zealand’s Controller and Auditor-General.

Martin has worked in the public service for more than 36 years.

He joined the (then) Audit Office in 1979 and spent the first 18 years of his career in the office. He was an Assistant Auditor-General from 1990 to 1998, holding various portfolios during this period.

Martin then spent 10 years as Chief Executive of the Ministry of Culture and Heritage. He later served as Secretary for Transport and Chief Executive of the Ministry of Transport, from 2008 to June 2016.

Martin was the select committee’s advisor on the Public Finance Act 1989 and led much of the policy design work for the Public Audit Act 2001.

As Controller and Auditor-General, Martin's principal functions and duties are set out in the Public Audit Act 2001. In summary, they are to:

• ensure that the office carries out its obligation to conduct audits of public sector bodies, and report to Parliament on the results of the audits; and
• ensure the efficient, effective, and economical management of the Office of the Auditor-General. 

Martin is a Fellow of Chartered Accountants Australia and New Zealand, New Zealand Institute of Management, New Zealand Institute of Chartered Logistics and Transport, and Companion of the New Zealand Institute of Professional Engineers. 

STORY COURTESY OF: http://oag.govt.nz/our-people/martin-matthews

PASAI Independence Resource Kit

Excerpt from the CBC website at : http://www.intosaicbc.org/pasai-independence-resource-kit/

PASAI has prepared this independence resource kit under as one of its strategic priority to strengthen SAI independence, and for the benefit of its members. The resource kit is now available on PASAI’s website, for use by SAI’s in the Pacific but also more widely. PASAI will update the kit to reflect development in SAI independence both in the Pacific and globally. Please read more on the PASAI page in the main menu on CBCs website or go to PASAIs website to find out more: http://www.pasai.org/introduction

Retaining Staff - We train them and then they leave!

Excerpt from the CBC website at : http://www.intosaicbc.org/retaining-staff/

As we implement the ISSAIs, especially the financial audit ISSAIs, we need professional staff but how do we train and re-train them? In one way or other this was a constant refrain in the formal and informal discussions at the recent Congress in Abu Dhabi. Once we have trained people, and especially once they have professional accounting qualifications, how do we pay enough to keep staff. This is not an easy one to solve and is something Auditors-General and Senior Managers wrestle with across the SAI community. But there are some solutions which I have seen work.

At base, it is important to understand the market in which a SAI operates. What is the going rate in the private sector or in other parts of the public sector for qualified accountants or auditors? It is useful to engage a consultancy body with experience of carrying out such comparator exercises? In one country where we did this the comparators were some of the private sector firms but also the Revenue Authority. Knowing the going rate is a useful starting point. A SAI may not need to match the private sector completely because working in the public sector brings many other benefits which are not available to the private sector – usually better pensions, access to wider training opportunities, longer holidays and shorter days, better job protection, a wider variety of work, and the public sector ethos of contributing to wider social benefits. However, having hard data of this kind makes it easier to make a defensible case for salary uplifts (if warranted) with Parliaments and Ministries of Finance.

In situations where a SAI needs to follow public sector wide salary bands, then it can be difficult to make a special case for improvements to the salaries of SAI staff. Again data on turnover or problems with recruiting qualified staff should be collected to help substantiate claims. But equally a SAI can forge links with other key public sector bodies needing to employ qualified financial experts for example the Ministry of Finance, Revenue Authority and Internal Audit Services and make a joint proposal to the Public Service Board or equivalent putting the case for a more market responsive salary scale for financial staff. Such cases can be made stronger if the SAI shows how recruiting qualified financial staff can generate efficiencies and not just lead to an increased staffing bill.

Where the SAI is a training organisation, then it risks losing a proportion of these staff once they gain their professional qualification. The UK NAO provides for this risk by training more than it wishes to eventually retain – recognising that even during training such staff are productive and play a major role in carrying out the routine aspects of the annual audits. At the same time, it is important that these trainees are well supported and motivated during training so that they can see a satisfying career in the NAO when they become qualified. Early in their career we seek to expose these newly qualified staff to a wide range of interesting assignments, to continue to invest in their professional development and to make sure they feel valued members of the organisation. In Rwanda a number of years ago, a colleague asked one of the shining middle-manager stars what it would take from the SAI to keep people like him in the office, as she had identified him as just the type of person the office would need in order to keep progressing. His reply was that a recognition such as that would go a long way. If he only knew that top management saw him as an important part of the office’s development and that they were willing to invest in him that would make a difference. He said nothing about the salary.

It is also sometimes practical to make sure that the accountancy or audit qualification offered by the SAI is one which is oriented to the public sector (so making private sector poaching less likely). In other situations, a SAI may choose to offer staff accounting or auditing certificates or diplomas which are at sub-professional level with only a few being taken through the full courses needed to become full members of the professional associations.

But staff will leave – and it is important that their leaving is managed well. They can be important ambassadors for the SAI when they move elsewhere, they can make useful contributions to improving public financial management elsewhere and in some cases they may want to come back with new skills and experiences into more senior roles in the SAI. It can be a win-win!

David Goldsworthy

Former Head of Technical Cooperation and International Relations , National Audit Office - ‎United Kingdom

INTOSAI Leading by Example in Performance Measurement

In a historic day for public external auditing, the International Congress of Supreme Audit Institutions today unanimously adopted the SAI Performance Measurement Framework (PMF) as an official INTOSAI document. The SAI PMF is a holistic and evidence-based tool supporting the professionalization of SAIs. It enables SAIs to live up to public expectations of being credible institutions, and to measure and report on their performance.

The need for a framework to support SAIs to better measure their performance was identified at the 2010 INTOSAI Congress in South Africa. The INTOSAI Working Group on the Value and Benefits of SAIs was given the role, and a task team of volunteer SAIs and Donors established. SAI PMF development, consultation and piloting was coordinated by the INTOSAI-Donor Secretariat in the INTOSAI Development Initiative (IDI). INTOSAI published a Pilot Version of the SAI PMF in 2013, which was piloted in more than 20 volunteer SAIs from Brazil to Nepal (being the first to publish its assessment), and from Burkina Faso to the Slovak Republic during 2013-15. Experience from the pilot assessments, and global consultation, led to extensive lessons learnt and ultimately development and approval of the SAI PMF.

INTOSAI also gave its support to the SAI PMF Implementation Strategy for 2017-19, including the INTOSAI Capacity Building Committee taking on the role of INTOSAI strategic governance lead and a new SAI PMF unit within IDI taking the role of the operational lead for SAI PMF support. This will ensure SAI PMF is firmly anchored within INTOSAI, and provide support to SAI PMF as a tool that all heads of SAIs are encouraged to utilise, on a voluntary basis.

Meanwhile, SAIs around the world continue to utilise SAI PMF to support needs assessments, strategic planning and performance management. In 2016, Sierra Leone became the first country to conduct a repeat assessment, through peer review, providing objective evidence of performance improvement since its first assessment in 2012. In November, New Zealand completed its self-assessment, tabling a summary of the report in Parliament and publishing the assessment in full. Auditor General Lyn Provost noted that "the results were largely as expected, which is pleasing. However, the assessment has also identified a few areas which require more focus within our SAI, which should lead to further improvements in our performance".

Throughout 2016, SAIs across the Pacific have worked together, with support from IDI, to undertake peer-assessments through a coordinated, regional approach.

The development and piloting of SAI PMF represented a successful partnership effort between INTOSAI and the donor community. The INTOSAI-Donor Cooperation, involving INTOSAI and 23 international development partners, provided significant funding and strategic advice, built on experience from similar tools such as the Public expenditure and Financial Accountability (PEFA) framework. Individual assessments in different countries have been resourced by combinations of SAI's own resources, in-kind support from peer SAIs, and donor funding, especially from the Inter-American Development Bank in Latin America and the Caribbean. The Donor Community will remain involved in SAI PMF implementation, through voluntary membership of a SAI PMF Independent Advisory Committee, as well as by supporting implementation efforts at the regional and country level.

Contact Details

SAI PMF Secretariat in IDI: saipmf@idi.no

http://www.idi.no/artikkel.aspx?MId1=102&AId=704

Lara Taylor-Pearce Auditor-General of the Republic of Sierra Leone on transparency and accountability in public financial management

The Auditor General of Sierra Leone is an IDI Board member who was interviewed by Jamie Hitchen, a policy researcher at Africa Research Institute. The result is a thought provoking article on transparency and accountability in Public Financial Management. One of the best articles on the work of SAIs that I have read in many years, and worth 5 minutes of everyone’s time.

Available via the IDI website at http://www.idi.no/Artikkel.aspx?AId=1475&back=1&MId1=44 and directly at the Africa Research Institute: http://www.africaresearchinstitute.org/newsite/publications/lara-taylor-pearce-transparency-accountability-public-financial-management/

Auditor General of the Republic of Sierra Leone, Lara Taylor-Pearce

Cape Town After-meeting Documentation Now Available

The presentations and CBC Steering Committee Resolutions from the Annual Meeting in Cape Town are now on the INTOSAI Capacity Building Committee website HERE

FIPP - Call for Candidates

Please find below a letter from the Chairs of the Knowledge Sharing Committee, the Capacity Building Committee and the Professional Standards Committee inviting your SAI to nominate candidates for the Forum for INTOSAI Professional Pronouncements (FIPP). The deadline for nominations is 1 November, 2016 and they should kindly be submitted to ir@cag.gov.in.

Call for candidates for FIPP 2017

FIPP ToR 2016

Nomination Form FIPP 2017

OLACEFS Request for feed-back on Capacity Building Plan

When Brazil’s Federal Court of Accounts (TCU ) became Chair of the Capacity Building Committee (CCC ) of the Organization of Latin America and Caribbean Supreme Audit Institutions (OLACEFS ) in the beginning of 2016, it established a bold and broad agenda focused on strengthening the Committee, with a view to interinstitutional cooperation and professional development in every Supreme Audit Institution (SAI) in the region. This pragmatic approach reflects the need to broaden the range of initiatives aiming to build capacities and increase professional technical skills.

Many educational activities have been carried out this year, in accordance with guidelines from previous years combined with strategic initiatives introduced by the TCU’s candidacy to chair the Committee. These activities include more than 20 eLearning courses, coordinated audits in various phases, a high-level seminar on Information Technology and Sustainable Development Goals (SDGs), a three-day innovation workshop for technical staff of all regional SAIs, and the publication of a diagnosis of regional capacity-building needs based on a robust methodology and extensive SAI participation.

For the remainder of the 2016 to 2018 period, the CCC plans to provide continuity to longtime activities, but also to undertake completely new and innovative initiatives that will demand considerable financial and human resources.

Due to its strategic importance, the CCC recognizes the need to count on contributions from partner institutions, so that the capacity-building plan best captures opportunities and meets needs for the region. In this regard, the proposals presented herein are still subject to suggestions, refinements, and further detailing, and may even add new initiatives and programs.

By publishing and sharing a first version of this document with strategic partners, the CCC sees an opportunity to thus improve the proposals, incorporate innovate ideas, and maximize the impact of efforts by identifying synergies and complementary initiatives in the development of solutions that share common objectives.

In practical terms, this document is therefore open to contributions, for a limited time, in order to incorporate suggestions, improvements, and recommendations from partners within and outside of the CCC in a timely fashion.

Specifically, the CCC Chair requests feedback and contributions from CCC members, other SAIs and OLACEFS committee, other INTOSAI regions, the CBC, IDI, and KSC and other INTOSAI bodies, and cooperating institutions such as the German Cooperation Agency (GIZ), the Inter-American Development Bank (IADB), and the World Bank, among others.

The deadline for receiving these contributions is October 26, 2016, which will allow the CCC Chair to publish a second, definitive version of the Plan in time for the upcoming INTOSAI Congress (INCOSAI) in early December.

Please find the above-mentioned plan here: OLACEFS Capacity Building Plan 2016-2018

EUROSAI Conference on the Importance of Ethics and Integrity for SAIs

Integrity is not a simple concept to define. Many overlapping and distinct definitions are used. The term integrity is derived from the Latin in-tangere, meaning untouched. It refers to virtue, incorruptibility and the state of being unimpaired. Integrity is closely related to the absence of fraud and corruption, but it also entails common decency.

According to the Operational Plan of EUROSAI Goal Team 1, EUROSAI would like to “Promote the use of SAI PMF pilots, ethical and other integrity based self-assessment tools by informing EUROSAI members about these concept”. On behalf of Task Force on Audit and Ethics and Goal Team 1 on Capacity Building, State Audit Office of Hungary organised a Conference on the importance of ethics and integrity for Supreme Audit Institutions between 14 and 15 September, 2016 to enhance this objective.

During this conference, the participants had the great opportunity to receive information about different concepts relating to the issue of integrity:
- SAI leading by example – ISSAI 12,
- ISSAI 30, INTOSAI Code of Ethics,
- ID programmes against fraud and corruption,
- Promoting an ethical culture in public organisations.

The conference was followed by the 10th meeting of the Goal Team 1 on Capacity Building.

More details are on the Newsportal of the State Audit Office of Hungary.
All the documents are published on the Training section of the EUROSAI Website.

Fourth INCOSAI Newsletter

Please find below the fourth INCOSAI newsletter recently published by the hosting SAI of the United Arab Emirates.

In this newsletter you will find an update on the two main themes for the Congress. Furthermore, there is an update about the latest information on the preparations for the Congress, including further details on the booths and seminars (including the newest initiative: “The discussion forum”). Finally, the hosting SAI of UAE will brief you on the Congress in the light of recent developments within INTOSAI.

INCOSAI Newsletter no. 4

Strengthened Strategic Direction for the INTOSAI-Donor Cooperation

The 9th meeting of the INTOSAI-Donor Steering Committee was kindly hosted in Cape Town on 5-6 October by the Auditor-General of South Africa, Mr. Kimi Makwetu. Participants welcomed the synergies from holding the meeting, for the first time, in connection with the annual meeting of INTOSAI’s Capacity Building Committee (CBC). Together, the meetings saw participation from over 100 representatives from SAIs and development partners. 

The Steering Committee approved a new strategic direction for the INTOSAI-Donor Cooperation. The Global Call for Proposals will continue to be the flagship activity of the Cooperation. It will take a two-tier approach: Tier 1 will be an inclusive, rolling process where applicants can submit concept notes at any time, while Tier 2 will provide more intense support to a smaller group of SAIs that have a stronger need for scaled-up and strengthened support, such as those in fragile and conflict environments. 

Through an increased focus on communicating capacity development results and successes, the Cooperation’s stakeholders focus on influencing behaviour change to strengthen the way support is provided to SAIs. To support this, the Cooperation will also launch the INTOSAI-Donor Cooperation Portal – a new web-based platform which will integrate all activities of the Cooperation, and provide a common space for presenting information on SAIs and capacity development projects worldwide. Stronger measurement of results will also be central to the Cooperation. 

Steering Committee members also expressed their support for the 2017-19 strategy for the SAI Performance Measurement Framework (SAI PMF). The SAI PMF is a global tool to assist SAIs to better measure and manage their performance, and is expected to be endorsed by the global SAI community at the INTOSAI Congress this December. The Cooperation has been a strong supporter of the SAI PMF and contributed to its development through strategic advice and financing pilot assessments and training events. It will remain engaged in an advisory role and through partnering on implementation of assessments. From 2017, the CBC will take on the role of strategic governance lead for SAI PMF, while the INTOSAI Development Initiative (IDI) takes the operational lead. 

Background

The INTOSAI-Donor Cooperation is a strategic partnership between the International Organization of Supreme Audit Institutions (INTOSAI) and 23 development partners to scale up and strengthen support to Supreme Audit Institutions (SAIs) in developing countries. It was established with the signing of a Memorandum of Understanding (MoU) in 2009. The Cooperation is unique in bringing together partners who share a common goal of enhancing accountability, public financial management, transparency, and good governance through strengthening SAIs. 

Leadership of the INTOSAI-Donor Steering Committee is provided by Joint Chairs and Vice Chairs from the INTOSAI and donor communities. The SAI of Saudi Arabia is Chair and the SAI of United States is Vice Chair for INTOSAI. The World Bank is Chair and the UK Department for International Development is Vice Chair for the Donors. 

For further information on the INTOSAI-Donor Cooperation, please contact the INTOSAI-Donor Secretariat within the INTOSAI Development Initiative (IDI): intosai.donor.secretariat@idi.no