www.intosaijournal.org spring 2019 edition
The International Journal of Government Auditing is
published quarterly in Arabic, English, French, German
and Spanish on behalf of INTOSAI (International
Organization of Supreme Audit Institutions). The Journal,
which is an ofcial organ of INTOSAI, is dedicated to
the advancement of government auditing procedures
and techniques. Opinions and beliefs expressed are
those of individual contributors and do not necessarily
reect the views or policies of the organization.
The editors invite submissions of articles, special reports,
and news items, which should be sent to the editorial
ofces at:
U.S. Government Accountability Ofce
441 G Street, NW, Room 7814
Washington, D.C. 20548
(Phone: 202-512-4707; Fax: 202-512-4021; E-mail:
Given the Journal’s use as a teaching tool, articles most
likely to be accepted are those that deal with pragmatic
aspects of public sector auditing. These include case
studies, ideas on new audit methodologies, or details
on audit training programs. Articles that deal primarily
with theory would not be appropriate. Submission
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Spring 2019
Vol. 46, No. 2
Board of Editors
Margit Kraker, President, Rechnungshof, Austria
Michael Ferguson, Auditor General, Canada
Nejib Gtari, Premier Président, Cour des Comptes, Tunisia
Gene L. Dodaro, Comptroller General, United States of America
Manuel E. Galindo Ballesteros, Comptroller General, Venezuela
James-Christian Blockwood (U.S.A.)
Vice President
Michael Hix (U.S.A.)
Heather Santos (U.S.A.)
Special Contributors
Arunas Dulkys (Lithuania)
Wilf Henderson (U.K.)
Administration and Operations
Peter Knopes (U.S.A.)
Associate Editors
AFROSAI Secretariat
ARABOSAI Secretariat
ASOSAI Secretariat
CAROSAI Secretariat
EUROSAI Secretariat
OLACEFS Secretariat
PASAI Secretariat
INTOSAI General Secretariat
Ofce of the Auditor General, Canada
Ofce of the Auditor General, Tunisia
Ofce of the Auditor General, Venezuela
U.S. Government Accountability Ofce
News in Brief
Feature Stories
Banking Oversight: Developing a Useful SAI Framework
Detect Fraud, Improve Internal Control Using Popular Strategy,
Performance Tool
Corruption and Money Laundering: The Nexus and the Way Forward
Eradicating Corruption: Measuring, Monitoring SDG16 Progress
Spotlight on Capacity Building
by James-Christian Blockwood, Managing Director of the
U.S. Government Accountability Ofce Strategic Planning and
External Liaison and President of the International Journal of
Government Auditing
In his 1996 speech as World Bank President, James David
Wolfensohn stressed the need to address accountability,
capacity and transparency to ensure sufcient and efcient
use of resources, particularly for those most in need.
In that same speech, he underscored the belief that we must
also deal with the “cancer of corruption.” It’s a compelling
message describing actions that rob a nation and its citizens,
undermine trust and weaken condence in governments.
Viewing corruption through this lens also made it clear—
the world must do more than merely treat this "disease."
We must work toward a cure and implement measures to
prevent its return.
Though we have made progress in addressing corruption,
given the global climate where uncertainties are inherent
in complex systems of governance—shifting demographics,
economic changes, new and evolving risks and technological
innovation—we still have work to do.
We must lead by example. We must communicate. We
must also translate our words into actions and forge
enduring partnerships with a true spirit of cooperation
International Journal of Government Auditing—Spring 2019
"We must lead by example. We
must communicate. We must also
translate our words into actions
and forge enduring partnerships
with a true spirit of cooperation
and unmatched integrity."
and unmatched integrity. I am fortunate, and proud, to be
part of an organization and part of a global community
enhancing visibility, partnerships and capacity to address
these topics—topics that bear considerable importance to
us as individuals, organizations, nations and the world.
In recent years, technology and data have greatly impacted
anti-corruption and transparency initiatives, so it’s no surprise
these trends have risen to the forefront of our conversations.
At the same time, highlighting efforts
in communication, collaboration and
capacity development is crucial, as
these elements will remain at the
core of ghting corruption.
The U.S. Government Accountability
Ofce (GAO) has made great
strides in creating a climate rich
with the vital ingredients necessary
to help combat fraud, waste, abuse
and mismanagement and promote
good governance. Critical to its success in these areas
are GAO’s development and deployment of tools such
as Generally Accepted Government Auditing Standards,
Standards for Internal Control in the Federal Government,
and Framework for Managing Fraud Risks in Federal
Programs. Under the leadership of the U.S. Comptroller
General, Gene L. Dodaro, GAO has endeavored to impart
knowledge widely and partner to assist when and where
I aspire to employ the same approach as Managing Director
for GAO’s Strategic Planning and External Liaison (SPEL),
which oversees several programs with global reach—the
International Journal of Government Auditing (Journal),
International Auditor Fellowship Program (IAFP) and
Center for Audit Excellence (CAE)—that lend themselves to
communicating, connecting and cultivating capacity to foster
positive change in the global accountability community.
The Journal is the ofcial communication organ of the
International Organization of Supreme Audit Institutions
(INTOSAI), an umbrella organization that provides an
institutionalized framework for 194 member Supreme
Audit Institutions (SAIs) worldwide. An essential resource to
inform and educate, the Journal has been instrumental in
increasing our ability to share insight and best practices
across INTOSAI more pervasively and quickly through social
media (our Twitter audience has more than doubled over
the past two years) and more substantively by introducing
spotlight sections and developing thematic approaches, such
as this edition on anti-corruption and good governance.
The Journal’s ability to incorporate
and convey diverse perspectives
and experience spanning the
globe creates a force multiplier in
our efforts to connect more broadly
and expose approaches that can
help shape the accountability
community of the future.
As our community continues to
adapt and adjust, communicating
will become an increasingly important skill that, when
combined with collaboration and leadership, will transform
how we ght corruption and how we advance good
The IAFP weaves all of these concepts together by
emphasizing communicating and collaborating across
regions and cultures while also stressing the importance
of leadership. The program, designed to empower
future generations, has graduated more than 600 audit
professionals in its 40-year history and has created a
network of colleagues with a collective understanding about
the power of communicating, collaborating, and leading
and the power that comes with harnessing these skills to
effectuate change.
Change is not easy, especially when facing headwinds of
corruption and limited accountability. Through the CAE, we
leverage the knowledge and experience of former GAO
senior-level professionals and partner with world-renowned
organizations to provide training and technical support to
improve performance and transparency and ensure the
"I am fortunate, and proud, to be part of an
organization and part of a global community
enhancing visibility, partnerships and capacity
to address these topics—topics that bear
considerable importance to us as individuals,
organizations, nations and the world."
International Journal of Government Auditing—Spring 2019
sound use of public funds. We recently signed an agreement
with the World Bank that strengthens our existing partnership
and expands capacity development support.
SPEL collaborative efforts include managing GAO
participation in INTOSAI, which has several working
groups—Fight Against Corruption and Money Laundering,
Value and Benets of SAIs, and Big Data—that promote
integrity, open data and transparency initiatives. GAO has
also partnered with the INTOSAI-Donor Cooperation (IDC),
a strategic global partnership between INTOSAI and 23
development partners. The IDC has led to augmented SAI
capacity support resulting in far-reaching achievements that
have positively affected SAIs around the globe, especially
in the African and Pacic regions.
In addition to existing partnerships, creating new ones
is also part of the agenda. Groups like the Organisation
for Economic Co-operation and Development (OECD)
Auditors Alliance provide unique global forums encouraging
cooperation and facilitating information exchange on topics
of global interest. In March, I attended the Auditors Alliance
meeting, which highlighted “Auditors and Technology” and
included enriching discussions on interesting digital trends
impacting audit work with a particular emphasis on how
audit institutions are taking steps to prevent corruption and
resource waste.
Technological advances in articial intelligence, automation
and data analytics provoked stimulating exchanges on
employing these tools to create efciencies and enhance
audits; however, modernization does not eliminate the need
for auditors. In some instances, modernization will involve more
human interaction and dialogue—leveraging communication
platforms to more broadly disseminate audit ndings to
increase transparency and providing human interpretation
into data results to help uncover root causes of corruption.
The goal is to integrate, not replace. Incorporating new
technologies and new approaches will force us to reexamine
our strategies, build data literacy and nd ways for more
collaborative work.
The digital evolution brings ample opportunities, as well
as sizable challenges. This evolution, along with the global
climate, will require substantial adaptation—individually,
organizationally, nationally and globally—which, in turn,
will require considerable strengths in communicating,
collaborating and capacity development if we are to build on
the progress we have made in addressing good governance
and successfully dealing with the “cancer of corruption.
James-Christian Blockwood, GAO SPEL Managing Director, and
Ceyla Pazarbasioglu, World Bank Vice President, sign agreement
reafrming commitment to provide assistance to developing countries
News from Vietnam
The State Audit Ofce of Vietnam (SAV) issued its 2019
audit plan, which will include 190 audits in the coming year.
The plan, ofcially announced earlier this year by Vietnam’s
Auditor General (AG) was developed through feedback
received from the National Assembly Standing Committee,
Prime Minister, Central Inspection Committee and Central
Internal Affairs. The plan also incorporates comments from
the Government Inspectorate regarding the 2019 inspection
Key highlights in the SAV 2019 audit plan, include:
Reduction in audited units and audit topics. This aims to
improve audit quality and efciency, particularly for
the State budget, where the SAV will conduct 59 audits
(14 ministries and branches, as well as 45 provinces and
municipalities). Twelve performance audits are scheduled,
which include auditing resource use and management in
four districts and cities and State-funded programs and
investment projects.
Implementing 30 Thematic Audits. Audit themes include
import and export tax collection management; national
target program on sustainable poverty reduction for
2016-2020; nancial autonomy in public hospitals and
universities; and Build-Transfer (BT) investment projects.
Some audits are larger-scale to address comprehensive,
cross-sectoral management evaluations in using public
Auditee/Audit Venue Pilot Rotation. For the rst time, the
SAV will conduct a pilot rotation of auditees and audit
venues among SAV audit units in an effort to improve audit
quality, transparency and accountability. Simultaneously,
the SAV will continue improving audit planning methods in
accordance with international practices.
Dr. Ho Duc Phoc, Vietnam's
AG, issued an audit framework
on nal settlements of public
enterprise state capital when
ofcially transformed into joint-
stock companies. The framework,
supported by sample forms that can
be applied to audit-related reports
and documents, calls for specialized audit
departments and regional state audit ofces to
focus on:
Data truth and fairness in parent company
nancial statements;
Equity expense settlements and money
Funding support for redundant workers;
Corporate nancial values;
Land management and use conversion;
State budget obligations; and
State capital determination.
The framework also highlights assessing
corporate compliance with laws and
regulations and evaluating corporate
methods used in choosing strategic
News from Japan
International Journal of Government Auditing—Spring 2019
News from Singapore
News from Myanmar
Dr. Mari Kobayashi assumed the Presidency of Japan’s Board of Audit (BOA) on December 7,
2018. She succeeds Mr. Teruhiko Kawato, who retired from ofce on October 22, 2018. Prior to
assuming her position as BOA President, Dr. Kobayashi served as BOA Commissioner (since 2013)
and as Acting President upon Mr. Kawato’s retirement. Her previous experience also includes a
professorship at the Graduate School of Political Science at Waseda Univiersity in Tokyo.
In a related move, Mr. Hajime Okamura was appointed as BOA Commissioner. He joined the Board
in 1983 and has held several important positions within the BOA General Executive Bureau, including Secretary General,
prior to his appointment as Commissioner. For additional information, contact the Board of Audit via email at liaison@jbaudit.
go.jp or visit www.jbaudit.go.jp/English/.
Ms. Goh Soon Poh was appointed Auditor General of Singapore on February 8, 2019, by the
President of Singapore. She succeeds Mr. Tan Yoke Meng Willie, who retired on the same date.
Prior to joining the Auditor General Ofce (AGO), Ms. Goh held senior management positions in
various public agencies, including the Ministries of Education, Finance, and Home Affairs, as well as
the Prime Minister’s Ofce. For additional information on the AGO, visit http://www.ago.gov.sg or
email the ofce at ago_email@ago.gov.sg.
The Supreme Audit Institutions (SAIs) of Myanmar and
Norway jointly held an Environmental Audit workshop in Nay
Pyi Taw, Myanmar, in February. The workshop, designed to
introduce environmental auditing in line with the International
Standards of Supreme Audit Institutions (ISSAIs), included
senior ofcials, ofcers and staff from SAI Myanmar (headquarters and regional ofces). Experts from SAI Norway dened
environmental auditing concepts, theories, frameworks and related standards and guidelines and discussed performance
auditing using an environmental perspective. Expert guidance also included establishing connections and relationships (to,
between, among) the Sustainable Development Goals (SDGs); risk assessments and analyses; and audit design.
The two-day event provided participants with a deeper understanding and increased capacity to conduct environmental
audits that comply with ISSAIs, select audit topics, and disclose audit ndings in reports.
News from Belarus
The Supreme Audit Institution (SAI) of Belarus introduced a new selective inspections system at the
beginning of the year. These audits, coordinated by the SAI and carried out by monitoring and oversight
bodies per national law, are based on risk assessment criteria established (and ranked) by evaluating
legal violation probabilities.
This risk-oriented approach, developed and employed by each control and oversight body, ensures
transparency, objectivity and validity and provides a mechanism to prioritize audit work. The approach
also provides exibility, as the SAI has dened standards that allow risk assessments and ranking to be
modied should certain benchmarks occur. For example, a risk assessment score can be lowered if an
absence of violations is found during an audit.
The monitoring and oversight bodies will determine which business entities to audit using this newly implemented
methodology every six months. The audits are summarized in the “Selective Inspections Plan” posted on the SAI Belarus'
website http://www.kgk.gov.by/ru.
The Comptroller General’s Ofce of the Republic of Costa Rica, the nation’s
Supreme Audit Institution (SAI), has undertaken actions to strengthen compliance
follow-up activities—a task of great relevance aimed at improving processes
that contribute to making a difference in citizens’ lives (International Standards
of Supreme Audit Institutions (ISSAI) 12).
As part of these efforts, SAI Costa Rica created the “Dispositions and
Recommendations Compliance Institutional Index” (IDR), designed to systematically measure and present audited
organizations’ compliance rate based on three factors:
Efcacy: compliance progress percentage;
Efciency: rate at meeting stipulated deadlines; and
Management: observing regulations and standards associated with the disposition follow-up process.
The rst IDR was completed in 2018, which measured compliance achievements for 173 institutions during the period
2016-2017. Results showed an average of 74 points, with more than half obtaining high marks in efcacy, efciency
and management. The numbers demonstrate audited entities’ concrete advancement in rectifying deciencies identied
during audits. The results also shed light on institutional behaviors, which can be used to establish future measures aimed
at continuity and improvement.
The IDR tool provides important input to establish best practices and activate accountability efforts, control mechanisms,
and process enhancing initiatives that generate a great deal of value to the public.
News from Costa Rica
News from Iran
International Journal of Government Auditing—Spring 2019
The Supreme Audit Court of the Islamic Republic of Iran
(SAC) submitted the Annual Audit Report for Fiscal Years
2017-2018 to Parliament. Dr. Adel Azar, SAC President,
presented the report's summary during the Ofcial General
Session of the Parliament in January, where he briefed
on several aspects, including revenues and expenditures;
performance-based budgeting; and recommendations to
improve the budget process.
The 9th International Conference on Performance-Based
Budgeting (PBB) was held at the Al-Zahra University
Conference Center January 8-9, 2019. Dr. Adel Azar,
SAC President and Conference Chair, delivered remarks,
where he pointed to the PBB Maturity Model and the
Islamic Republic of Iran's Supreme Leader as instrumental in
reforming the country's current budgeting system. Dr. Azar
also emphasized the SAC has implemented the necessary
performance audit efforts nationwide.
Mr. Fayyaz Shojaey, SAC Prosecutor General, participated
in the 3rd International Organization of Supreme Audit
Institutions (INTOSAI) Forum of Jurisdictional Supreme Audit
Institutions (SAIs) held January 24-25, 2019 in Istanbul, Turkey.
Mr. Shojaey shared a presentation, "The Judicial System of
the Supreme Audit Court of I. R. Iran and Measures Taken to
Fight Fraud and Financial Corruption," and best practices with
forum members. During the meeting, Mr. Shojaey also met
with several SAI counterparts that highlighted the exchange
of experiences, bilateral cooperation and contributions.
The SAC and the Board of Audit of the Republic of Indonesia
(BPK RI) conducted a joint seminar in Tehran last year to share
experience and best practices on several topics, including
auditing banking institutions and
public universities, government
e-procurement and improving
audit report quality. The BPK RI
delegation, who included Board
Member, Ms. Isma Yatun, as well
as Indonesian Ambassador to
the Islamic Republic of Iran, Mr.
Octavino Alimudin, also met with
Dr. Adel Azar, SAC President.
Azar noted that the cooperation
between the two SAIs can be
enhanced by expanding Action
Plan 2019, which was signed at
the seminar's conclusion.
SAC President, Dr. Adel Azar,
joined the leaders of nearly 50
SAIs attending the 2018 Asian
Organization of Supreme Audit
Institutions General Assembly
(ASOSAI) in Hanoi, Vietnam. In
addition to the assembly, Dr.
Azar met with numerous high-
level SAI delegates to promote
bilateral cooperation and share
public audit knowledge and
News from China
Ms. Hu Zejun, Auditor General of the
National Audit Ofce of China (CNAO),
at the XIV Asian Organization of
Supreme Audit Institutions (ASOSAI)
Assembly in Hanoi, Vietnam, assumed
the ASOSAI General Secretariat role
and responsibilities. In the coming years,
Ms. Hu would like the CNAO and ASOSAI to
achieve certain milestones.
"As the CNAO Auditor General, I believe it is essential to
follow the national development strategy," she said.
She pointed to a focus on (1) high-quality development, (2)
adhering to structural reform, and (3) continuing to promote
the audit of public funds, state-owned assets and resources
in an effort to ensure full and strict audit coverage with clear
By 2020, the CNAO will establish an audit oversight
mechanism to improve China’s audit system functionality.
"It will be a centralized, unied, authoritative and efcient
audit system with full coverage that ts the modern
national governance system and governance capacity,"
she explained.
Key goals include strengthening coordination, enhancing
guidance, promoting audit administration system reform,
optimizing audit resource allocation, and improving the
means for utilizing audit results.
Ms. Hu added that accelerating audit law revisions,
improving national audit standards, and increasing
cooperation with internal and private sector auditing
entities are also at the forefront of the CNAO agenda, as
are conducting real-time audits of major policy measures,
investment projects, special funds and emergencies.
Capacity building remains a priority. Enhancing audits
through technology—more fully integrating applications;
disseminating the digital audit mode of “overall analysis,
doubts identication, separate verication and systematic
investigation;" improving big data analytics capabilities—
can optimize resources and efciency.
Ms. Hu underscored, "We must be fully aware of our
mission as auditors, achieve our goals through innovative
and standard operations and establish our credibility
through self-improvement."
She added that, by developing sound training and
management mechanisms, the CNAO hopes to build a team
of "high-quality, results-oriented, professional auditors with
conviction, expertise and integrity."
Adhering to the principle of mutual respect and using the
win-win cooperative approach, promoting innovation and
development, improving governance, better serving all
members, and helping build a community with a shared
future are regional imperatives Ms. Hu nds essential.
A primary goal is to jointly build ASOSAI into a model
international organization, one that makes greater
contributions to developing the audit cause.
ASOSAI has recognized the urgency associated with
building capacity—a central task for all Supreme Audit
Institutions (SAIs)—individually and institutionally. Ms.
Hu champions expanding capacity and knowledge using
diverse methods with a particular emphasis on learning
and mastering new technologies.
Ms. Hu also noted SAIs should facilitate the sustainable
economic and social development of various countries,
especially with the adoption of the United Nations 2030
Agenda for Sustainable Development.
The International Organization of Supreme Audit Institutions,
along with auditors across the world, have attached great
importance to Agenda 2030 and have studied how SAIs
can contribute to national Sustainable Development Goal
"We should continue focusing on sustainable development
and urge members to better serve sustainable development
initiatives within their country, as well as the entire Asian
News from the United States
International Journal of Government Auditing—Spring 2019
“Supported by the leadership and vision of the U.S. Comptroller General,
Gene L. Dodaro, we are committed to strategic foresight as an important
management tool, as well as a mechanism to guide us as we plan our future
work,” noted James-Christian Blockwood, Managing Director of the U.S.
Government Accountability Ofce (GAO) Strategic Planning and External
Liaison (SPEL) ofce.
To achieve positive, long-term outcomes, Blockwood believes creatively
and critically thinking about emerging trends and future challenges and
collaborating with experts are necessary efforts—efforts facilitated through
the Center for Strategic Foresight (CSF).
The CSF, which Blockwood helped establish and will oversee, aims to enhance GAO's
ability to identify, monitor and analyze emerging issues and their implications to
agency operations and work performed for Congress.
“The CSF’s focus on strategic foresight reects the full scope of GAO’s oversight mission
across the federal enterprise, the agency's mission to support Congress and its core
values of independent, non-partisan analysis,” Blockwood said.
Consisting of strategic foresight experts (Fellows) from around the world, the CSF held its
rst meeting in January to discuss the evolving nature of identity and other trends with the
potential to signicantly impact the nation—as individuals, organizations and governments.
Long gone are the days where dates of birth, ngerprints or social security numbers are
the sole means to identify individuals. Today, our faces, our voices, even the way we drive
and browse the internet can be used to quickly identify us.
Dodaro, who opened the inaugural meeting, pointed out that cybersecurity has been on
GAO’s High Risk List since 1997 and stressed, “Protecting privacy and sensitive data is
one of the four major challenges GAO has identied related to cybersecurity.
Dodaro also underscored the importance of GAO foresight activities, particularly in
planning efforts where CSF experts complement current GAO advisory entities and
organizational initiatives.
CSF Fellows noted several opportunities and challenges when it comes
to identity and its evolution. Worldwide, credible digital identity systems
help assure access to essential government services; however, potential
risks to privacy and civil liberties lurk, particularly in cases involving a
few large players with unprecedented access to data who operate in an
environment where government policy does not keep pace.
CSF FELLOWS 2018-2020
Former Director, Exxon Mobil's International Political
Strategy; former Director, National Security Council
Russian, Ukrainian, and Eurasian Affairs
University of Houston Head of graduate studies and
Assistant Professor of Foresight; "Thinking About the
Future and Teaching About the Future" co-author
Executive Director, National Hispanic Corporate
Council; former Vice President, Government Relations
and Strategic Partnerships at Cultural Strategies
Senior UnitedHealth Group Behavioral Health
Medical Director; former Chief, U.S. Air Force Clinical
Medicine; founder of Federal Health Futures Group
Co-founder and Director, School of International
Futures; Director, FromOverHere and Director, NHJ
Strategic Consulting
Co-Founder & CEO, The Global Foresight Group;
former Head of Strategic Foresight at the World
Economic Forum
Special Adviser to the United Nations (UN) Secretary-
General; former UN Development Program Assistant
Administrator (Assistant Secretary-General)
Professor at NYU’s Stern School of Business and
Founder of the Future Today Institute; Author of
"The Signals Are Talking"
Senior Director of the World Energy Council; former
Head of Strategic Foresight at Organisation for
Economic Co-operation and Development (OECD)
What if the public sector was more involved?
Jens Wandel, CSF Fellow and Special Adviser to the
United Nations Secretary-General, believes, “If citizens
see the public sector regulating and using data for good
purposes, then citizens will be more likely to accept it, but
if they see data being abused or excessive risk exists,
then there will be problems.
“Governments must use data correctly to enhance benets
and value. This is a global problem, not just a rst-world
problem,” he added.
CSF goals and activities are designed to be impactful
and inspirational.
“We are confronting deep global uncertainties across
a myriad of sectors, and there has never been a more
urgent need for strategic guidance at the highest levels
of government,” remarked Amy Webb, a futurist, author
and professor at New York University’s Stern School of
She added, “It is my civic duty, and my honor, to serve as
an inaugural Fellow in the Center for Strategic Foresight.
A strictly nonpartisan organization, the CSF is uniquely
positioned to act as a central hub for research, data-driven
models and strategic assessment. The CSF's nine Fellows
represent a diverse set of global experience providing
expertise in foresight, planning and futures studies from
government, private sector, non-governmental, academia
and international organizations.
Stephen Sanford, CSF Director and GAO's Strategic
Planning and Innovation Manager, said the CSF Fellows
"count among the world’s top experts in strategic
foresight, and we are very pleased to have them support
an effort that is an important pillar to the broader
foresight ecosystem we’ve been building at GAO.
The CSF was established in 2017, and the Fellows were
selected in 2018. They will serve a two-year, renewable
News from Bulgaria
International Journal of Government Auditing—Spring 2019
The deprivation of Bulgaria's valuable architectural heritage
has become particularly noticeable in recent years, as
many architectural sites are in ruins and hundreds more
have been demolished and replaced with new buildings
that do not t into the surrounding environment. As a result,
old neighborhoods have lost the historic identities that once
attracted tourists.
The Bulgarian National Audit Ofce (BNAO) recently
completed an audit of the Ministry of Culture and the
National Institute for Immovable Cultural Heritage with a
focus on analyzing:
Necessary conditions for architectural asset preservation
and maintenance;
Activities associated with identifying, declaring and
granting cultural value status; and
Monitoring and control activities.
The audit, which covers the period from January 1, 2015
to June 30, 2018, aimed to provide an independent,
objective assessment on preserving and maintaining historic
structures and raise awareness about the current state of
architectural treasures and issues related to keeping them
in good condition for future generations.
The BNAO audit resulted in several ndings, including:
Conservation and maintenance efforts are neither
efcient nor effective and are not well-regulated or
An absence of strategic documents creates ambiguity on
the state policy’s vision, objectives and priorities;
The national system is not fully established; the principle of
its decentralized management has not been implemented,
and coordination among relevant bodies is lacking;
There are serious omissions in conservation management,
resulting in key outstanding issues that, if not addressed,
could lead to irreversible loss;
Due to insufcient resources, some essential activities
have not been implemented, while others are carried out
in very limited volumes;
More than 90% of the the immovable cultural values have
not been assessed, and no regimes for their protection
have been established; and
The National Documentary Archive is in urgent need of
updating and digitization—it currently does not meet
regulatory requirements.
To learn more about the BNAO and its activities, visit www.
News from Kuwait
Experts from the U. S. Government Accountability Ofce
Center for Audit Excellence delivered a training program
to State Audit Bureau (SAB) of Kuwait staff on planning
and conducting performance audits. The program, held
in SAB headquarters March 10-21, 2019, was based on
the project agreement signed between both parties late
last year.
The SAB signed a cooperation agreement with the Turkish
Court of Accounts (TCA) during a TCA visit to SAB headquarters
in December 2018.
The SAB visited the Court of Audit of Morocco and the State
Audit Institution of Oman recently. The ofcial trips also
included site visits to the International Renewable Energy
Agency's Photovoltaic Power Station “Noor” (NOORPV1)
and the Petroleum Development Oman Company's Miraah
Project for Solar Energy. As part of the SAB Strategic Plan
2016-2020 objectives, the visits focused on gathering
data on renewable energy as part of supporting and
developing institutional capacities.
The SAB hosted the Premier President of Tunisia's Court
of Accounts (COA), as well as the Secretary General
of the Arab Organization of Supreme Audit Institutions
(ARABOSAI) in January to explore cooperation between
the SAB and the COA and discuss progress in supporting
ARABOSAI and other key stakeholders.
SAB delegates participated in several meetings and
training events, including the third Forum of Supreme Audit
Institutions with Jurisdictional Functions hosted by the TCA;
2019 Integrity Seminar held in Hungary that highlighted
the most challenging integrity issues with a focus on
contracting and procurement practices; and the Financial
Audit and Accounting Subcommittee meeting in Abu Dhabi,
United Arab Emirates.
As part of the SAB's cooperation with the National Audit
Ofce of Estonia, the SAB hosted a joint symposium on
“Waste (Medical and Hazardous) Management Issues”
and “Marine Pollution and its Effects on Fisheries Stock”
March 25-27, 2019, at the SAB headquarters.
The SAB launched the 20th Annual Research Competition
across all SAB sectors. The 2019 competition includes ve
individual, ve joint and two group categories.
News from United Arab Emirates
International Journal of Government Auditing—Spring 2019
The United Arab Emirates (UAE) Supreme Audit Institution
(SAI) hosted the rst Asian Organization of Supreme Audit
Institutions (ASOSAI) meeting on using big data analysis in
reviewing national Sustainable Development Goal (SDG)
implementation. The event was held at SAI UAE headquarters
in Abu Dhabi and included delegates from 15 SAIs who met
to develop strategies and practices in reviewing national
performance in implementing the SDGs.
Dr. Harib Saeed Al Amimi, SAI UAE President and Chairman
of the International Organization of Supreme Audit Institutions
(INTOSAI), opened the meeting by emphasizing the SAI’s
signicant role in INTOSAI SDG initiatives. He also stressed a
desire to continue sharing knowledge and experiences with
SAIs in the region.
The two-day seminar included a presentation from the UAE
Federal Competitiveness and Statistics Authority, which
focused on organizational and national roles in coordinating
necessary work for SDG achievement. Workshops highlighting
SAI roles, audit methodologies and practices, strategic
planning, as well as public information management, allowed
participants to formulate proposals, recommendations and
best practices.
Dr. Margit Kraker, INTOSAI Secretary General and President
of the Austrian Court of Auditors, and Dr. Harib Saeed Al
Amimi, INTOSAI Chairman and SAI UAE President, met with
John Brandolino, Director of the United Nations Ofce on
Drugs and Crime (UNODC) Division for Treaty Affairs.
The meeting, which took place at UNODC headquarters
in Vienna, included a discussion on harnessing synergies
and enhancing cooperation, particularly in the ght in
against corruption. The two organizations envisage signing
a Memorandum of Understanding at the 72nd INTOSAI
Governing Board meeting in Moscow later this year.
SAI UAE participated in an international conference earlier
this year organized by the Kuwait Anti-Corruption Authority.
The conference, dedicated to “Integrity for Development,
brought together global organizations to discuss best
practices, promote cooperation and exchange experiences
in establishing and cultivating transparency, integrity and
anti-corruption initiatives.
The conference included several sessions that highlighted
national anti-corruption strategies; successful public sector
practices in preventing corruption; the importance of
integrity in supporting economic reforms and improving
decision-making; transparency and its role in strengthening
trust; and monitoring integrity and corruption and the impact
these concepts have on achieving the SDGs.
News from Peru
Last year, a law was enacted to strengthen Peru’s Supreme
Audit Institution (SAI) and National Control System (NCS),
marking a historic milestone in the ght against corruption
in the Peruvian State. Since then, SAI Peru has implemented
a series of measures to modernize and fortify supervisory
capacities in the use of public goods and resources and
combating functional misconduct and corruption.
To promote integrity and transparency, SAI Peru is employing
a new measure—Filing Sworn Statements to Manage
Conicts of Interest—aimed at preventing conditions that
may affect audit work independence and objectivity. While
the initial implementation has been rolled out to the more
than 7 thousand public ofcials and civil servants employed
by SAI Peru and the NCS, the goal is to extend this practice to
the entire public sector (a projected reach of 1.5-2 million).
The statements contain the declarant's personal and labor
data, educational level, information on nancial assets and
political afliations, among other aspects. As the sworn
statements contain condential information, SAI Peru will
ensure adherence to appropriate privacy rights protection.
As part of the recently enacted law, this new measure is based
on International Standards of Supreme Audit Institutions
(ISSAI) 21, which outlines the principles of transparency,
responsibility and good practices; ISSAI 30, Code of Ethics,
specifying SAI personnel are to be free from impediments
affecting independence and objectivity; and Peruvian law
covering Civil Service Code of Ethics requiring ofcials and
public servants to act with rectitude, trustworthiness and
For more information about the law, contact the SAI Peru at
News from Poland
International Journal of Government Auditing—Spring 2019
In 2019, the Supreme Audit Ofce of Poland (NIK) celebrates
the centenary of its establishment. As part of the celebratory
events, the NIK hosted an international conference on “The
Role and Challenges of the State Audit in the Modern World”
where members from the International Organization of
Supreme Audit Institutions (INTOSAI), European Organization
of Supreme Audit Institutions (EUROSAI) and the European
Court of Auditors (ECA) came together to share views on
public auditing goals—current and future.
NIK President, Krzysztof Kwiatkowski, opened the event by
sharing the NIK's rich history and expressing gratitude to
staff—dedicated experts who contribute to organizational
achievements through knowledge and expertise.
Throughout the conference, independence, transparency, and
reliability proved to be common themes, and participants
pointed to a need for strengthened cooperation among
Supreme Audit Institutions (SAIs) and improved stakeholder
relations in the face of modern world challenges.
“State auditing in the modern world is much more than
ensuring budget spending follows the rules. I think it is
equally important that tax money spent delivers value to the
citizens,” noted Klaus-Heiner Lehne, ECA President.
In addition to adding value, attendees cited the need to
enhance audit processes to remain relevant—by investing
in contemporary technologies and improving transparency.
Developments, such as articial intelligence, blockchain,
machine learning and quantum computing, are transforming
the world of audit, and Dr. Harib Saeed Al Amimi, INTOSAI
Chairman and President of the United Arab Emirates
State Audit Institution, concluded that “auditors should be
innovative and open to new tools and solutions.
EUROSAI Chair and President of the Turkish Court of
Accounts (TCA), Seyit Ahmet Baş shared his perspective
improving audit work through SAI efforts in preparing and
publicizing consolidated monitoring reports on measures
taken by institutions in response to audit recommendations.
Kwiatkowski stressed the importance of continuously improving
internally to be able to competently advise other institutions
and remarked on the advantages SAI cooperation brings
through an exchange of experience and best practices. In
his closing remarks, Kwiatkowski remarked on the event's
inspirational value.
“I am convinced that we will recall the words, views and
opinions heard here, and that we will use them in our future
The Heads of European Union SAIs will celebrate the NIK’s
centenary during the Contact Committee meeting scheduled
for June in Warsaw.
News from Slovenia
by Tomaž Vesel, President, Court of Audit, Slovenia
Supreme Audit Institution (SAI) independence can be compared
to the roots of a tree—the more deeply rooted, the stronger
the tree. Independence is a precondition enabling state bodies
to efciently exercise powers that provide value and benets
to the lives of citizens. In today’s rapidly changing environment,
Slovenia’s Court of Audit, the nation’s SAI, must be responsive
to key public nance challenges while following the principles
of good governance and sustainable development. Our audit
work, international relations and communications efforts are
essential mechanisms supporting this endeavor.
Last year, we issued 62 audit reports and two summary reports
that considered 102 auditees and 689 implemented corrective
measures (a considerable improvement from previous years).
Annual gures also show a decline in people anonymously
reporting issues to be audited, perhaps indicating increased
condence in the work we do and services we provide. While
168 written responses point to a need for public sector entities
to have better guidelines for work, we are eager to increase
our advisory services (a function often overlooked by public
We published 26 post-audit reports in 2018 that included
assessments on 139 corrective measures—91 were found to
be adequate, 30 partially adequate and 18 inadequate.
Moving forward, we strive to focus on areas where corrective
measures were not (or will not be) fully adequate. We also
aim to monitor the planned corrective measures designed to
improve operations in the medium term.
Internationally, we continue strengthening relationships and cooperative efforts. We actively participate in the Organisation
for Economic Co-operation and Development (OECD) Auditors Alliance; continue an exchange of audit practices with other
SAIs, such as our auditor secondment agreement with SAI Malta; and, we work closely and collaboratively with regional
counterparts, committees and programs as part of the European Organization of Supreme Audit Institutions (EUROSAI).
We adjusted our communications to broaden our audience and capitalize on digital trends that continue to transform our
work and our society. Modern, fast, simplied—we revamped our website (http://www.rs-rs.si) to provide faster, up-to-date
information and functionalities. We began designing press releases with stakeholders in mind by providing audit report
summaries along with an infographic to easily convey complex and lengthy information. Social media engagement expanded
our reach, and we continue to share information and experiences with the global audit community through articles and news
appearing in the International Journal of Government Auditing and EUROSAI Magazine.
In watching over how our public resources are utilized, we are caring for our future, much like cultivating a tree. We planted a
tree, donated by SAI employees, in front of our building as a symbol of the roots we will establish (and grow) as we continue
to exercise good governance and promote sustainability.
News from Angola
International Journal of Government Auditing—Spring 2019
In accordance with constitutional powers and in keeping with
the proposal of the Judiciary Superior Council, the President
of the Republic, João Lourenço, appointed new COA judges
in an ofcial ceremony at the Presidential Palace in June
2018. Dr. Exalgina Renée Vicente Olavo Gambôa assumes
the role as COA President, and Domingas Alexandra Garcia
now holds the position of COA Vice President.
"We intend to establish close cooperation with all audit
institutions, so that all work can be transparent," stressed Dr.
President Lourenço expressed condence in the capabilities
of the appointed judges and stated, "They are in a position
to face the challenges for the good of national justice and
As part of a project conceived by the Deutsche Gesellschaft
für Internationale Zusammenarbeit (GIZ) and the African
Organization of English-Speaking Supreme Audit Institutions
(AFROSAI-E), a three-day workshop on the Public Financial
Management Reporting Framework (PFM RF) was held
at COA headquarters. The training, attended by staff
representing all COA levels, focused on the PFM RF tool's
fundamental principles, origin, utility and benets while
incorporating local, real-time data.
Dr. Exalgina Gambôa, COA President, offered opening
remarks, where she cited the PFM-RF as an extraordinary
support instrument in inspecting public nance and nancial
On February 15, 2019, Angola's Court of Accounts (COA)
signed a technical and scientic cooperation agreement with
the São Tomé and Príncipe COA.
Dr. Exalgina Gambôa, President, Angola's COA, said the
agreement "promotes action, emphasizes the importance of
partnerships and highlights the work of both Supreme Audit
Institutions (SAIs) within the region and globally as part of
the International Organization of Supreme Audit Institutions
The President of São Tomé and Príncipe's COA, Dr António
José Monte Cristo, afrmed that the cooperation agreement
between the two SAIs generates tremendous opportunities
for exchanging information and experiences, particularly in
technical training aspects.
"Good Governance: A Look Into the Free-riding Phenomenon"
—Dr. Arunas Dulkys, Auditor General, SAI Lithuania
Banking Oversight: Developing a Useful SAI Framework
Detect Fraud, Improve Internal Control Using Popular Strategy, Performance Tool
Corruption and Money Laundering: The Nexus and the Way Forward
Eradicating Corruption: Measuring, Monitoring SDG16 Progress
International Journal of Government Auditing—Spring 2019
Once upon a time in the Bulgarian city of Gabrova, the
renowned capital of humor, each citizen agreed to bring
a bucket of good wine, pour it in one large barrel, and
present it as a gift at the city’s festival. When the rst ladle
of the festive wine was tasted, it was apparent…the barrel
held nothing but pure water.
Some citizens do not contribute to the common public
good. This global phenomenon, free-riding, is widespread,
often manifesting itself in several forms, such as not voting
in elections or evading taxes. States themselves may also
be guilty of free-riding (when not paying proportional
contributions to help solve international problems yet still
reaping the benets of positive outcomes).
Is free-riding really detrimental to anyone? Undoubtedly,
yes. And, the higher the level at which free-riding occurs,
the greater its destructive power. Mistrust forms a breeding
ground for free-riding, which makes maintaining the social
contract between citizens and the State next to impossible.
While deliberate free-riding is easy to pinpoint, less obvious
free-riding can occur when incomplete or partial information
exists. This information gap leads to uninformed decisions, thus
turning the information age into the age of disinformation.
For example, national budget decisions based solely on
revenue and expenditure cash ows (without analyzing net
asset values) can be problematic, as these gures do not
demonstrate true worth. This beckons the questions, “Are the
right decisions being made? Do we really know our State?”
Perceptions and attitudes toward the State differ—some see it
as a problem rather than a problem-solver. Others recognize
its potential positive economic role. Despite varying views, a
survey commissioned by the National Audit Ofce of Lithuania
(NAOL) and conducted by Vilmorus, a Lithuanian-based
market research company, indicated citizens believe there
is a clear need for the State (90% of respondents selected
“need” or “partial need” on the survey). Additionally, nearly
60% felt, to the extent possible, they personally contribute to
Knowledge on how the State spends tax money also differs.
Approximately one-half of the survey respondents believed
the most signicant share of public funds were allocated to
security and defense, and a much less sizable portion was
used to administratively maintain the State. In reality, security
and defense received the smallest allocation. The largest sum
(roughly 70%) was set aside for public welfare, including
education and health care.
This lack of awareness demonstrates an information disparity
that shapes public perception and potentially discourages
willingness to contribute to the common public good. People
are more likely to support the common cause if they feel
by Arunas Dulkys, PhD, Auditor General,
National Audit Ofce of Lithuania
the contribution is fair, honest, and equitable (everyone else
is doing the same). Therefore, examining several examples
from public audits about what is known, and, perhaps more
importantly, what is unknown, is essential to creating an
environment that encourages participation and discourages
Public Projects. Every year, hundreds of new projects are
launched without assessing how many have already begun,
and sometimes that same amount are brought to a standstill,
resulting in postponed implementation deadlines and frozen
funds (gures nearing €230 million in 2015). To date, about a
third of the projects have dragged on for over a decade, and
the approximate value of those launched but not completed
is approaching €10 billion.
State-Owned Real Estate. Records concerning State-owned
real estate are equally as controversial. While real estate
amounts to more than 10 million square meters, truly objective
gures are non-existent primarily due to varying formulas
used for calculation (sometimes real estate is divided by
total number of public sector staff; sometimes it is divided by
the number of civil servants—a gure eight times smaller).
The business world is surprised. The public is outraged. In
reality, nearly 80% of State-owned real estate bears no
direct relation to public sector working conditions, and most
of it is low-value structures.
Education. An NAOL audit on general education published
last year revealed a nationwide average of 34% of
families employing private tutoring services for school-
aged children. In larger cities, this practice is more frequent
(upwards of 40%). Why should people entrust their taxes
to the public education system if learning is outsourced to
parallel shadow schools?
Practical Training Centers. In recent years, 42 sectoral practical
training centers have opened. They are important, and no one
doubts their relevance. The centers, furnished with state-of-
the-art equipment, represent a €120 million investment, and,
so far, the extent of training in most centers has not reached
even half of the planned hours (one center has conducted no
training at all). Public auditors have questioned additional
proposals to allocate €50 million for further infrastructure
development of these seemingly underused resources.
Health Care. Life expectancy in Lithuania is the shortest of
all European Union (EU) countries (six years behind the EU
average). What does this suggest? That we don't provide
enough treatment? That the quality of treatment is poor? On
the contrary, we are ranked second in the EU when it comes
to hospital bed availability. We have more doctors than
the EU average, but we do not have standard procedures
to handle treatment for 80% of diseases. Moreover, we
do not record 60% of the adverse side-effects, making it
impossible to learn from mistakes. We buy tons of expensive
medical equipment, but 59% of it is not fully utilized, and
7% is not used at all. A majority believe the primary health
sector problems stem from long queues and waiting lists.
Telecommunications. Electronic communication networks in
Lithuania account for approximately 20,000 kilometers of
physical infrastructure. Over the last four years, some €40
million was spent on infrastructure development, while an
additional €30 million has been earmarked for maintenance.
No single organization is responsible for coordinating
national network development, which may account for the
duplication of an estimated 4,000 kilometers of physical
infrastructure. Until 2020, an additional €90 million has
been planned for infrastructure development.
Business Oversight Authorities. Very little is known. Today
there are 56 such authorities; however, not one government
report includes any activity analysis, extent to operational
efciency, or costs. Preliminary estimates show business
oversight annually receives an estimated €230 million
from the budget. The exact gures remain unknown. In this
context, it is not surprising to hear dissatised rumblings on
contributing tax money to funding such activities.
What if no one paid taxes anymore? Was it worth talking
about free-riding at all? When too little time and attention
is given to facts and the conceptual discussion of public
problems, the threat of mistakes in strategic decision-making
increases. These mistakes are followed by huge expenses.
Facts can be boring and often difcult to understand
and remember. Facts can be unattractive. Facts can be
threatening, as they summon the need to take responsibility.
Balancing the needs of "me" and "us" is crucial to improving
the quality of life, which requires uniting the public and
private sectors.
In asking how well we know our state and seeking answers
to that question, it's not just a quest for numbers. Its what we
do once we have that data. Far from merely showing how
Lithuanian funds or assets are managed, this article sheds light
on free-riding by illustrating instances where disinformation
impacts the ability to make informed decisions, which, in turn,
hinders our ability to exercise good governance and creates
a State that is not sustainable.
If the State nds itself lled with 100% free-riders, there
will be 0% State left.
International Journal of Government Auditing—Spring 2019
by Ghorban Eskandari, Senior Auditor, Supreme Audit Court
of Iran
Corruption and Fraud—The Issue
Corruption and nancial fraud are very challenging issues
within the banking system that can inict irreparable
harm to a nation’s development and growth. The potential
widespread and destructive effects can reduce social
capital and increase poverty, social injustice and class
The banking system will continue to face these issues far
into the future until successful counteraction initiatives are
Basic banking oversight concepts and principles have been
expressed in the Basel III framework, an internationally
agreed upon set of measures created in response to the
nancial crisis of 2007-2009 that aim to strengthen bank
regulation, supervision and risk management.
A multifaceted issue, oversight in the banking sector
requires the cooperation of various regulatory bodies,
each performing tasks according to individual organization
mechanisms and objectives.
While these regulatory agencies and various monitoring
structures are in place, the world economy remains exposed
to nancial abuse, and evidence points to inefcient banking
systems and weak regulatory procedures and guidance.
A Study to Determine a Successful Framework
This article discusses appropriate frameworks through a
study, “Surveillance Authority of Supreme Audit Institutions
(SAIs) in the Banking Sector,” that assessed the status quo
and identied potential mechanisms to achieve favorable
Research Methodology. The study used a qualitative
approach to identify, analyze and report patterns within
the data. An open-ended interview of 21 local experts
(selected using the snowball sampling method) was the
primary tool to gather data. The research was conducted
using a four-phase process:
1. Identify goals and identify the status quo;
2. Formulate concepts governing regulatory framework
3. Analyze pathology and problems in the banking eld;
4. Gather additional data through expert interviews and
reach a consensus on a nancial monitoring framework.
Study Findings. Every oversight system requires determining
specic objectives and identifying the responsibilities and
activities necessary to achieve them. Study results showed
that a key challenge for SAIs within the banking sector
tends to be unidentied goals, which means associated
tasks and responsibilities are also unclear.
Additionally, oversight activities should be updated as
changes occur in the environment, since these changes can
impact and inuence banking oversight on many levels—
economically, organizationally, socially, culturally and
The study also identied several factors resulting in,
hampering, or completely preventing successful banking
sector oversight, including:
Auditors lacking a comprehensive understanding of bank
The volume of regulatory bodies;
Organizational expansion cost reduction measures
negatively impacted efciency and effectiveness; and
Oversight authorities potentially limited by mandates,
available human resources and facilities, and participating
in investigations and/or audits having no real purpose
(simply justifying existence or creating false needs for
Study ndings, combined with extensive research, resulted
in developing an oversight framework (see Figure 1 on
following page) that incorporates conditions, concepts,
activities and potential consequences attributable to, and
affecting, SAI audit work in the banking sector, such as:
The pivotal phenomenon, or main theme, derived from the
study is targeted surveillance (monitoring).
Causality conditions are events that create situations and
issues related to the phenomenon. These conditions, to an
extent, also explain how and why individuals and groups
engage in this phenomenon.
To address underlying conditions (internal and external
characteristics considered primary challenges to the audit),
factors affecting targeted monitoring were identied.
Mediator conditions are macro and general conditions
that inuence the effect of causal conditions on the
phenomenon under study.
Strategies are the key activities auditors consider and
Finally, in the context of possible outcomes, expected
results, consequences, stemming from strategies and
actions were identied.
For more information about the study, research and
supervisory framework for SAIs in the banking sector, email
the author at ghorbaneskandari@yahoo.com.
International Journal of Government Auditing—Spring 2019
Level: SAI
No clear goals
Lack of human
Software weaknesses
Hardware weaknesses
Lack of operational
Political tendencies
Lacking culture of
Level: Banking System
Information asymmetry
Legal barriers
Regulatory authority
Supervisory authority
Lacking accountability
Director Independence and
SAI Impartiality
Auditor's Personal
Attitude, emotional
Experience, expertise, skills
and knowledge
Inquirer's mind and
Honesty and integrity
Bank Characteristics
Organizational culture
Attitudes of bank managers
Professional training
Transaction complexity
Information condentiality
Inherent high risk of fraud
SAI Social Responsibility
Reducing expectations gap
between society & SAI goals
General societal conditions
Public interest; varied
stakeholders, users;
governmental economy
Societal Culture of
Accountability, Transparency
External Auditing Environment
Budget pressure and level of
Professional audit supervision
Bank Characteristics
Inherent high risk in bank
activities, fraud
Managerial turnover
Ownership nature and type
Bank manager, government
ofcial reciprocity
Managerial ability to
inuence auditors
Bank's internal control status
Staff wage dissatisfaction
Level: Audit Work Assessing
Internal Control System
Increased accuracy and
Bank nancial stability
Use professional hesitation
Track contradictory
evidence and discover
contradiction causes
Increase surveillance use
Assign tasks to members;
engage them
Increase professional on-
the-job training
Employ guardians
Level: SAI
Identify inherent risks
Understand industry and
banking impact on budget
Hire and train professional,
ethical staff
Select appropriate audit
team members
Rotate audit staff, groups
in banks
Maintain bank nancial
Coordinate monthly audit
group member meetings
Incorporate brainstorming
techniques in
Apply appropriate
procedures (audit, non-
Emphasize critical thinking
Include work programs,
Level: Audit Work
Assessing Internal
Control System
Further adherence to
audit standards
Quality evidence
Detect material
Reduced risk of non-
Improving judgments
and conclusions
Appropriate opinion
Achieve work goals
Maintaining banking
system nancial
Level: SAI
Preservation and
promotion of fame
Reducing disciplinary
measures against
Increasing community
trust in Higher Audit
Hedging economy to
systemic risk
(Targeted Surveillance)
by Estrella Rivera, Supreme Audit Institution Ecuador
Research suggests a principal cause of fraud to be a weak,
limited internal control system. In Ecuador, the nation's Organic
Criminal Code (COIP) addresses fraud and crimes against
public administration, and the COIP considers embezzlement,
illicit enrichment, bribery, and inuence peddling among the
primary forms of corrupt activities. These crimes, generally
discovered through audit interventions and/or complaints,
demonstrate the need for a robust internal control system.
An internal control system aims to (1) comply with legal,
technical and administrative order; (2) promote an entity’s
efciency and effectiveness; (3) guarantee information
reliability and timeliness; and (4) take appropriate measures
to correct control deciencies.
In addition to strong internal controls, the auditor’s role in
detecting fraud is crucial, as the auditor evaluates internal
controls to prevent risk; promote efciency, effectiveness,
transparency and economy; protect assets and public
resources; and mitigate possible fraud.
Several organizations have tried to
standardize the internal control concept,
including the Committee of Sponsoring
Organizations (COSO) Tradway
Commission, whose report
stresses the need
for internal
control to be incorporated into organizational objectives and
strategies. For Ecuadorian public institutions, this approach
is envisioned in the national agenda (Agreement 39-CG-
2008), which cites the following as necessary internal control
Control Environment. An environment including principles
of integrity and ethical values governing the company.
Risk Evaluation. Dening objectives; risk identication and
evaluation; determining risk management; probability of
fraud; and evaluating events or changes affecting the
internal control system.
Control Activities. These activities refer to policies and
procedures established to reduce risks that may affect
achieving objectives.
Information and Communication. The information necessary
for the entity to carry out internal control responsibilities
that support achieving outlined objectives.
Supervision Activities. Self-control activities incorporated
into the supervisory and monitoring processes that are
designed to evaluate and improve operations.
Given the intricacies of the internal control system, this
article describes incorporating the "Balanced Scorecard"
(scorecard) method during the evaluation process to reduce
audit complexity and facilitate fraud detection.
The scorecard has traditionally been employed as a strategic
planning tool—measuring organizational performance and
evaluating corporate goal achievement. Based on both
nancial and non-nancial indicators, the scorecard
is a exible tool that lends itself to internal
control component integration.
The tool's exibility also
facilitates detecting
fraud because of its
ease of application
and evaluation.
International Journal of Government Auditing—Spring 2019
Combining the scorecard method with audit and documentary
forms, an internal control evaluation matrix was developed
that: (1) generates questions (by areas of application) for an
organizations administrative and nancial management; (2)
establishes weight (importance) and level of occurrence; and
(3) denes key performance indicators along with respective
parameters, ranges, levels or thresholds from which alerts
are generated or triggered in the control panel (similar to a
trafc signal).
This tool facilitates recognizing risk situations that can lead to
fraud; helps detect (with greater precision) people involved,
controls that may have been violated and possible resources
affected or economic damage caused; and optimizes time
and ability to make audit work more effective.
To demonstrate the tool’s practical application, the below
example provides in-depth situational questions, indicators
and weights potentially suggesting fraud:
1. Are there pre-numbered or pre-printed forms to control
the income? No. Frequency: Daily; Weight: 10; Likely;
Indicator: Forms.
2. Is the deposit of securities in nancial institutions made
within 48 hours after collection? Yes. Frequency: Daily,
Weight: 10, Very Likely; Indicator: Bank Deposits.
3. Are collection reports made daily? No. Frequency: Daily;
Weight: 10; Very Likely; Indicator: Reports.
4. Are deposited values versus collected ones reconciled
daily? No. Frequency: Daily; Weight: 10; Very Likely;
Indicator: Conciliations.
5. Are there differences between the values collected and
deposited? Yes. Frequency: Daily; Weight: 10; Likely;
Indicator: Conciliations.
The negative responses to questions 1 and 4 and positive
response to question 5 may suggest the occurrence of a
malicious act (embezzlement). To conrm the assumption,
the auditor should gather necessary, pertinent and sufcient
evidence as a probative element of the determined ndings.
This tool also allows for information tabulation and
processing to develop reports by component, making it
possible to measure risk and condence levels. Subsequently,
components can be ranked to demonstrate the critical nature
of each component and interference with organizational
objectives. Identifying the most critical factors (based on
rank) provides the foundation for an improvement plan
where essential recommendations to correct observations
are formulated to strengthen the internal control system.
Fraud raises questions about audit work’s responsibility
and scope, as well as the auditor’s role in fraud detection.
Therefore, special attention must be paid to the entity’s
assessment methodology and the sufciency of the applied
audit procedures.
Accordingly, auditors can combine management tools with
internal control components to reduce audit complexity and
prevent fraud. To that effect, the balanced scorecard method
can help analyze nancial and non-nancial indicators.
These indicators, combined with evaluating internal control
components, assist in risk identication and fraud detection.
Applying an internal control tool based on the balanced
scorecard should be complemented by collecting sufcient,
relevant and competent evidence. Likewise, to ensure a
functional evaluation methodology, the matrix must be
adapted for each audited organization to consider legal
basis, legal nature and related regulations. Measurement
guidelines must also be clearly established.
Assessment results will provide reliable information
regarding internal control effectiveness and/or weaknesses,
allowing for adequate denition of recommendations and
corrective actions.
As preventive measures, an institution’s top management
must promote a high degree of integrity, honesty and
ethical behavior and design and disseminate appropriate
procedures and codes that consolidate transparency that
is reinforced by training actions, active and continuous
supervision, and the execution of effective internal controls.
Click each icon to view examples.
Balanced Scorecard
Weighting Scheme
by Sammer Ahmad, Ofce of the Auditor General Pakistan,
Lahore Ofce
The Concepts Dened
Corruption and money laundering demoralize human
development, international security and national economies.
According to the World Bank and International Monetary
Fund (IMF), corruption is the greatest hurdle to lifting millions
of people from destitution. Money laundering invigorates
corruption, as it does all prot-driven delinquencies.
Corruption and money laundering are mutualistic—they
typically occur together. Yet, perhaps more signicantly, the
presence of one tends to produce, and reciprocally support,
the occurrence of the other.
The United Nations Convention against Corruption (UNCAC)
is more precise in dening corruption as “the active and
passive bribery of domestic and foreign public ofcials,
as well as ofcials from international organizations; the
embezzlement or diversion of public property by an ofcial;
trading in inuence or illicit enrichment by public ofcials;
and bribery and embezzlement in the private sector.
While active bribery denotes the party making the
inducement, passive bribery represents the party receiving
it. This holds true even if advances are rejected and no give-
and-take occurs; it is the intent that matters.
Additionally, offering kickbacks through an intermediary
related to the target is also deemed to be a corrupt activity,
as are ofcials who steal public property (embezzlement) or
favor friends or family in discharging their duties (nepotism).
While corruption, generally comprises monetary stakes,
money is not a requirement.
Corporations can also be held criminally accountable for
corruption, though the criminal liability of parent companies
for criminal acts of subordinate rms is less clear. There
is growing consent that corruption can also materialize
between two private rms (in the past, labeling activities as
corrupt presumed the involvement of government ofcials).
Money laundering, the process of concealing illegal origins
of money derived from crime, occurs after a predicate
offense has brought the capital into the hands of criminals.
The practice has taken on an increasingly international
status with the growth of cross-border crime and progress of
legitimate international trade and nance. Though offenders
have faced a growing number of obstacles returning “dirty
money” to home countries, ample opportunities still exist by
leveraging globalized nancial sectors.
International Journal of Government Auditing—Spring 2019
Questions concerning the effectiveness of current Anti-Money
Laundering (AML) policies have also been raised. A study
in Britain, a nation possessing some of the world’s toughest
AML policies, indicated the cost to laundering money is, on
average, a mere15 percent of the principal amount.
The Relationship and Current Mitigating Mechanisms
For most countries, successfully dealing with corruption and
money laundering collectively is difcult to accomplish as
the close relationship between the two concepts tends to
be historically and bureaucratically skewed. Often, policy
groups and institutions are created to ght a multitude of
offenses without bearing related, yet distinct, missions.
AML Financial Intelligence Units (FIUs)
believe corruption is outside their area
of responsibility, and anti-corruption
bodies believe similarly when it comes
to money laundering.
Some international ofcials that
oversee technical assistance in both
AML and anti-corruption areas within
the same country express the norm is
for each body to have never heard of the other. Ofcials also
suggest money laundering and corruption are not domestic
priorities and believe that several developing countries are
establishing anti-corruption laws, regulations and institutions
simply to impress the global community rather than truly
addressing the topics.
To date, there are a number of international organizations
and projects that have been established to combat corruption
and money laundering, including: the Organization for
Economic Co-operation and Development (OECD) Convention
for Combating Bribery of Public Ofcials in International
Business Transactions; the joint United Nations Ofce on
Drugs and Crime/World Bank Stolen Assets Recovery
initiative; Asian Development Bank/OECD Anti-Corruption
Plan for Asia and the Pacic; Financial Action Task Force;
and Asia-Pacic Group on Money Laundering.
The Way Forward
Experts suggest the single most important tool in preventing
corruption is a register listing public ofcials’ (especially
members holding ranking positions and members of anti-
corruption bodies) assets and income. This register, which
would be updated and audited regularly, forces ofcials to
make a declaration of all assets and liabilities and creates
a benchmark that facilitates discovery of subsequent, large
sums. Declarations may also include assets derived from
spouses and immediate families, particularly those employed
in sensitive, senior positions.
Given FIU roles in collecting, analyzing and disseminating
nancial intelligence, the proper handling of condential
information is acutely relevant, as unauthorized release of such
data can have serious consequences. Past practices indicate
information policies should incorporate provisions to classify
sensitive information, and the “need to know” principle should
be applied to regulate restricted information access. FIUs
may also benet from adopting risk management principles
that call for additional data safeguard
integration, such as dual control and a
general presumption of cross-checking,
reviewing, and segregating duties and
Judicial corruption also represents a
severe threat to the proper functioning
of AML policies and the justice system
itself. Judges may be vulnerable to
inappropriate inuence, particularly
in environments where: (1) they are poorly compensated;
(2) appointments and promotion procedures tend to be
arbitrary or opaque; and (3) there is a general lack of anti-
corruption training.
Circumstances in which a resolution to impeach high-ranking
public ofcials for corruption lies with a minister or political
appointee also generates a serious conict of interest. In this
perspective, prosecutorial authority should be an autonomous
legal authority outside the government.
Baker, Capitalism’s Achilles Heel.
Asian Development Bank, Anticorruption Policy.
See the World Bank’s Literature Survey on Corruption 2000-2005,
the extensive online bibliographies maintained by the World Bank
Institute and Transparency International.
Levi and Gilmore, “Terrorist Finance, Money Laundering, and the Rise
and Rise of Mutual Evaluation”; Wechsler, “Follow the Money.”
Economist, May 25, 2006.
Sharman, ‘Power and Discourse in Policy Diffusion”; “The Bark is the
Reuter and Truman, Chasing Dirty Money, 184; Pieth and Aiol, A
Comparative Guide to Anti-Money Laundering, entitle their chapter on
the diffusion of these same rules “Spreading the Gospel,” 12.
Interviews conducted by David Chaikin and J. C. Sharman from
UNODC and World Bank.
"Experts suggest the single
most important tool in preventing
corruption is a register listing
public ofcials' assets and income."
by Gunarwanto and Dedy Eryanto, Audit Board of the Republic of Indonesia
In September 2015, nearly all United Nations (UN) member countries committed to the 17
Sustainable Development Goals (SDGs)—global goals created to steer policy making
and development funding until 2030. Each goal is comprised of targets, and each
target is further rened through one or two indicators designed to measure
progress. Though global targets and indicators have been established for each
goal, to what extent are they relevant and achievable?
This article highlights SDG16—promote peaceful and inclusive societies for
sustainable development, provide access to justice for all and build effective,
accountable and inclusive institutions at all levels—paying particular emphasis
to eradicating corruption and the ability to measure and monitor progress
using a rst-hand, real-world perspective.
Combating corruption, as outlined in SDG16, should be viewed as a keystone
element to all SDG agendas. In 2017, Transparency International estimated
more than 900 million people in the Asia-Pacic region alone paid bribes to
access basic services like health care and education. This statistic illustrates
additional complexities in achieving SDG3 (better health care) and SDG4
(better education) and demonstrates the pervasive threat corruption has on
the entire SDG program.
Measuring Progress
SDG 16 contains 12 targets, one of which, target 16.5, focuses on corruption
and bribery, calling upon nations to “substantially reduce corruption and
bribery in all forms.Target 16.5 contains two indicators to gauge progress:
16.5.1: Proportion of persons who had at least one contact with a public ofcial and who paid a bribe to a public ofcial,
or were asked for a bribe by those public ofcials, during the previous 12 months.
16.5.2: Proportion of business that had at least one contact with a public ofcial and that paid a bribe to a public ofcial,
or were asked for a bribe by those public ofcials during the previous 12 months.
The target seems quite broad and ambitious in its attempt to minimize all types of corruption. Meanwhile, the assigned
indicators are, perhaps, too narrow, as (1) bribery is only one type of corruption; (2) current measurement criteria may
only capture a small portion of the population; and (3) cultural and personal context and denitions can result in signicant
dissimilarities. These factors make monitoring any real progress extremely difcult.
International Journal of Government Auditing—Spring 2019
Monitoring Progress
Data availability and objectivity represent two key aspects
that making monitoring SDG16 progress next to impossible.
Data is a crucial component to proving a program’s success.
Normally, a target contains specic criteria and indicators
acting as parameters to compare reality (real facts) to the
objective. Data meeting indicator requirements means the
program is successful (and vice versa). However, evaluating
progress is impossible when there is no data available.
Moreover, subjective data can be misleading.
The Institute for Economics and Peace believes this is the
case for SDG16, citing, as of 2017, "Currently, there is not
enough ofcial data or statistical capacity available at the
national level to properly measure SDG16 in a cross-country
comparable way."
By its very nature, corruption is a complex phenomenon with
many dimensions that takes on many forms and usually occurs
behind closed doors. Even when data is available, obtaining
objective data represents a signicant obstacle.
Some SDGs are also, inherently, multidimensional and cannot
be measured using one or two indicators. Target 16.5 seeks
a substantial reduction in corruption and bribery in all forms,
but the approved global indicators measure bribery only
between public ofcials and the public or businesses. There
are no indicators to measure corruption within or between
governments or other forms of non-governmental corruption.
The Indonesian Context
The Government of Indonesia (GOI) generally applies a
strong SDG commitment to national development priorities.
Yet, implemented regulations have not yet signicantly
reduced corrupt practices primarily because the current
political system gives rise to businesses and political actors
to practice corrupt behavior, such as candidates seeking
election for public ofce who require campaign funding
from third party sources.
Indonesia established a Corruption Eradication Commission
that has uncovered some bribery cases originating from
monetary support to campaigns. However, such detection
is limited, since ofcials successful in bids for public ofce
can simply provide kickbacks in the form of preferential
treatment, which is a difcult trail to unearth, follow and
In terms of SDG Preparedness in Indonesian national policy
coherence and integrity, the Audit Board of the Republic of
Indonesia (BPK RI), the nation's Supreme Audit Institution,
noted two key ndings:
GOI has difculty making clear, vertical integration
between central and local governments simultaneously
due to varying public election periods. This creates a risk
of intermittent policy and coherence at each governmental
layer; and
Most government agencies still perform using a silo
mentality in budget execution, which causes coordination
and monitoring concerns and results in a lack of data
Indonesia's experience in combating corruption provides some
valuable lessons learned in improving SDG implementation.
As SDG implementation progresses, additional indicators
relating to corruption eradication should be considered,
particularly given the inadequacy of current measurements
to demonstrate progress in such a broad target.
Chadda, M. (2004). India: between majesty and modernity. In The
Struggle against Corruption: A Comparative Study (pp. 109-143):
Huberts, L., Lasthuizen, K., & Peeters, C. (2006). Measuring corruption:
Exploring the iceberg. In Measuring corruption (pp. 265-293).
Institute for Economics and Peace. (2017). SDG16 Progress Report A
comprehensive global audit of progress on available SDG16 indicators.
Retrieved from http://visionofhumanity.org/app/uploads/2017/09/
Lasthuizen, K., Huberts, L., & Heres, L. (2011). How to measure integrity
violations: towards a validated typology of unethical behavior. Public
Management Review, 13(3), 383-408.
Philp, M. (2016). Corruption Denition and Measurement. In Measuring
corruption (pp. 61-72): Routledge.
Pramono, A. J. (2018). Sharing Experience on Audit SDGs Preparedness
in Policy Coherence and Integration. New York: UN Web TV.
Transparency International. (2017). People and Corruption: Asia Pacic.
Retrieved from https://www.transparency.org/whatwedo/publication/
Transparency International. (2018a). Summary of SDG16 Indicators
and Their Shortcomings.
Transparency International. (2018b). Using Governance Data To Fight
Corruption Across the SDGs Handbook for E-Learning Course.
"Much appreciated by his staff and respected by
parliamentarians and government ofcials alike, Mr.
Ferguson will be remembered by all those who had the
pleasure of knowing him as a humble, compassionate
and thoughtful man.
He cared deeply about conducting audits that brought
value to the public service, always for the greater
good of Canadians."
Ofce of the Auditor General of Canada
"His deep conviction was that an Auditor General plays
a unique role to encourage continuous improvement in
the public service, not for the sake of it, but because,
ultimately, all citizens—especially the most vulnerable
among us—are entitled to governance that maximizes
the public good.
He also believed that, as a leader, he had to foster
a vision of collaboration among all the stakeholders
who must work together to achieve results that truly
make a difference. Mr. Ferguson did all this with
professionalism, dignity and compassion. We will miss
him dearly."
Canadian Audit and Accountability Foundation
"The International Organization of Supreme Audit
Institutions (INTOSA) lost a personality who, over many
years, essentially shaped, inuenced and strengthened
government audit.
There is no doubt his work and expertise have inuenced
the international audit community and will continue to
leave an imprint on INTOSAI."
INTOSAI General Secretariat
International Journal of Government Auditing—Spring 2019
Michael Ferguson, Auditor General,
Ofce of the Auditor General of Canada
It is with great sadness that the Ofce of the Auditor General
of Canada announced the death of Michael Ferguson,
Auditor General, on February 2, 2019.
Mr. Ferguson was appointed Auditor General of Canada
on November 28, 2011. Prior to his appointment, he
served the public in a variety of positions, including Auditor
General, Comptroller and Deputy Minister of Finance in
New Brunswick until his move to Ottawa to take on the role
of federal Auditor General.
“This meeting aims to help SAI experts create connections
within EUROSAI and develop ideas that expand activities
in these areas. I hope this is just the beginning of a broader
initiative, and that, in the following months and years to
come, we will continue exchanging experiences, identifying
challenges and inspiring positive change,” emphasized
Krzysztof Kwiatkowski, President of Poland's Supreme Audit
Institution (SAI).
Audit methodology experts from nearly 30 European
Organizations of Supreme Audit Institutions (EUROSAI) SAIs
gathered in Warsaw, Poland, late last year to attend the
region's inaugural Audit Methodology meeting. Some 60
delegates participated in the two-day event hosted by SAI
Poland to discuss issues related to Quality Assurance (QA),
stakeholder communication and audit planning—three areas
vitally important to SAI operations.
Kwiatkowski noted that the event also underlined analyzing
EUROSAI member needs in terms of institutional capacity
Introductory thematic presentations sparked group dialogue
on the potential risks (challenges) and anticipated needs
(expectations)—each discussion resulting in a list outlining
current hurdles and future requirements.
International Journal of Government Auditing—Spring 2019
Quality Assurance
Oft-cited risks included insufcient distinction between QA
and Quality Control (QC) processes; extensive process
formalization that may reduce audit process exibility
and effectiveness; and staff difculty in accepting QA
process outcomes.
Common expectations delegates noted included raising
awareness; resource provisioning; proper Information
Technology (IT) development and timely use to support,
enhance and monitor the QA process.
Stakeholder Communication
Identied risks included the time gap between performing
an audit and publishing the report, which disrupts expected
communication impact; auditors lacking awareness of the
SAI’s communication obligations; and journalists (who may
not be well-versed in audit speak) publishing supercial
presentations that can negatively affect a SAI’s reputation.
Developing communication strategies, practical training
on communicating audit ndings, and a need for
infographics templates for reporting were the primary
expectations reported by participants.
Audit Planning—Strategic and Operational
Strategically, prominent risks included insufcient public-
sector knowledge and problems related to the length
of time from topic adoption in annual work plans to the
actual audit. Operational planning risks comprise limited
resources and planning issues.
Delegates suggested clear explanations and criteria in
dening strategic planning; ensuring data reliability; and
establishing a connection between QA, strategic planning
and communication on the strategic level. Operationally,
providing a clear link between the organizational strategy
and planning was identied as a principal need as were
IT tool availability and a exible organizational structure.
Access the full story, photos and video interviews with key
participants at https://www.nik.gov.pl/en/news/the-rst-
Air pollution knows no borders,
and recent statistics show that
more than 85% of the citizens
in European Union (EU) cities
breathe air containing harmful
This statistic prompted several
Supreme Audit Institutions (SAIs)
from the European Organization
of Supreme Audit Institutions
(EUROSAI) to join forces, and,
along with the European Court
of Auditors, perform a cooperative audit on air quality.
Participating SAIs, members of EUROSAI’s Working Group
on Environmental Auditing (WGEA), set out to evaluate
individual state activities designed to improve air quality.
Each SAI—Albania, Bulgaria, Estonia, Georgia, Hungary,
Israel, Kosovo, the Former Yugoslav Republic of Macedonia,
Moldova, Netherlands, Poland, Romania, Slovakia, Spain,
Switzerland—provided a national audit report. A joint audit
report, presented to the European Commission in Brussels
in mid-March, was also developed to provide consistent,
comprehensive conclusions and recommendations.
“Thanks to the audits carried out in each country, we can
simultaneously examine and evaluate activities of the
organizations responsible for protecting our air and
compare applied solutions,” noted Krzysztof Kwiatkowski,
President of SAI Poland, who, along with SAI Netherlands,
coordinated the cooperative audit.
The cooperative audit addressed the unquestionable
environmental consequences of air pollution while also
allowing participating members to treat the audit as an
important factor affecting individual national economies.
Access the joint audit report online:
Additional links to news and reports available here:
International Journal of Government Auditing—Spring 2019
The International Organization of Supreme Audit Institutions (INTOSAI) Subcommittee
on Cooperative Audits has developed a self-instructive virtual course, "Guidelines
for the Execution of Cooperative Audits," earlier this year to address fundamental
aspects related to cooperative audits executed between two (or more) Supreme Audit
Institutions (SAIs). The course, designed to guide SAI staff in preparing, implementing
and monitoring cooperative audits, is based on International Standards of Supreme
Audit Institutions (ISSAI) 5800: Guide for the Execution of Cooperative Audits. The
Subcommittee on Cooperative Audits ofcially launched this course on April 1, 2019,
in the Organization of Latin American and Caribbean Supreme Audit Institutions
(OLACEFS) aimed at training one hundred SAI professionals within the region. The
month-long course helps answer questions, such as:
What is a cooperative audit?
What are the differences between the types of cooperative auditing?
How do SAIs select the topic of a cooperative audit?
Is there a subsequent evaluation?
For more information about the course, contact the subcommittee at cooperacion@
At the September 2018 International Organization of Supreme Audit Institutions (INTOSAI) Governing Board meeting in Moscow,
General Secretariats from the INTOSAI regions provided activity updates, and many regions expressed interest in conducting
cooperative audits on topics ranging from water protection and waste management to climate change. To better disseminate
valuable cooperative audit experiences that include themes relevant to the international community, the Subcommittee on
Cooperative Audits invites the INTOSAI community to share experiences and best practices using the Virtual Catalog on
Cooperative Audits at http://www.intosai-cooperativeaudits.org/.
The catalog, a useful reference source for Supreme Audit Institutions (SAIs) interested in conducting cooperative audits, also acts
as a worldwide repository of completed cooperative audits. The catalog includes various lters to rene search results based
on the user's needs. Currently, the catalog, available in English and Spanish, contains over a hundred audit reports resulting
from cooperative audits, and SAIs can publish cooperative audit reports directly to the site by creating a password-protected
account. To learn more about the virtual catalog and publishing reports directly to the catalog, contact the subcommittee at
In an ofcial a ceremony in Mexico City, the Supreme Audit
Institution (SAI) of Mexico transferred the Organization of
Latin American and Caribbean Supreme Audit Institutions
(OLACEFS) presidency to the SAI of Peru. During the oath-
taking ceremony, Nelson Shack Yalta, Peru’s Comptroller
General, committed to implementing the region's current
activities and projects and expressed a willingness to
develop additional initiatives raised by OLACEFS members.
He also proposed the creation of working groups related
to disasters and cases of transnational corruption.
On January 1, 2019, El Salvador's SAI assumed the Presidency
of the Commission of Performance Evaluation and Indicators
(CEDEIR)—the technical arm of OLACEFS—following SAI
Peru's six-year term, which ended on December 31, 2018.
SAI Peru will remain an active member of the commission. As
outgoing president, SAI Peru performed the ofcial transfer of
chairmanship to SAI El Salvador on February 13, 2019. Both
SAIs intend to continue working together to share knowledge
on relevant topics within the region.
SAI delegates from Belize, Bhutan, Bolivia, Chile, Costa Rica,
Cuba, Dominican Republic, El Salvador, Guatemala, Honduras,
Malawi, Nicaragua, Paraguay, Peru and Tunisia completed
the SAI Performance Measurement Framework Advanced
Course in February. As part of the CEDEIR annual operations
plan, the course, coordinated by SAI Peru and the INTOSAI
Development Initiative, provides more in-depth knowledge on
SAI PMF assessment methodology and application.
The OLACEFS Technical Commission of Good Governance
(CTPBG) is currently conducting a project on “Improving
Access to Information and Use of Government Audit Products
in Latin America and the Caribbean” aimed to support SAIs
in improving the level of information availability within
appropriate and relevant standards. Based on constructive
dialogue, the project also promotes the use of auditing
products and how audit reports and other documents may
help to improve government services quality, increase
transparency and accountability in SAIs and audited entities.
To date, the SAIs of Argentina, Chile, Dominican Republic and
Peru participate in this project. In line with this, in January,
SAI Peru performed a readability and comprehension test
of developed products and responded to the project's
diagnosis and baseline. The other participating SAIs have
also conducted this process.
International Journal of Government Auditing—Spring 2019
by Wilf Henderson, International Technical Cooperation Project
Manager (Retired), United Kingdom National Audit Ofce
Preventing fraud and corruption are major challenges facing
governments, particularly those of developing countries.
Government inability to establish effective internal audit
and nancial control systems and adequately establish or
resource organizations charged with identifying fraud and
corruption are just some causes of fraudulent and corrupt
behavior. While no system exists to entirely avert fraud and
corruption, there are measures that can be implemented to
reduce the potential of occurrence.
Supreme Audit Institutions (SAIs) provide assurance that
public monies have been properly accounted for and are
in keeping with established laws and regulations. While not
the SAI's responsibility to investigate and uncover evidence
of fraudulent and corrupt behavior, a general expectation
exists (stemming from society and the media) that SAIs have
a major responsibility in its prevention. SAIs in developing
countries often face considerable challenges and may lack
the capacity to undertake effective audits and seeking
support from development partners to enable technical
assistance is a crucial component to improving audit quality.
To thwart fraud and corruption, building and maintaining
relationships with government, its ministries, departments and
agencies; legislature; development partners; and support
contractors is crucial. SAIs should also cultivate connections,
where applicable, with the Public Accounts Committee
(PAC) anti-corruption bodies, and judiciary and prosecuting
authorities, as reporting and following up on cases of fraud
and corruption, when necessary, are important steps.
These relationships must be based on trust and mutual respect.
Each stakeholder must be clear on the roles and responsibilities
necessary to minimize fraud and corruption, and in my
experience in providing technical support to developing SAIs
in Sub Saharan Africa, there are key actions required.
Government should be fully supportive of an independent,
competent SAI. Encouraging knowledge and use of proper
accounting standards and techniques is essential while also
understanding management must implement systems and
procedures to detect and prevent fraud and corruption.
Government must understand the value of SAIs. Effective
audit work promotes good governance and leads to
improvements in internal nancial control systems.
Government should establish effective internal nancial
control systems, adequately fund bodies charged with
combating and prosecuting cases of fraud and corruption
and sufciently resource internal audit.
Legislature should ensure SAIs are resourced to deliver
effective, objective public audits.
Legislature should champion a competent SAI to build
better relationships and processes with relevant prosecuting
authorities and the PAC. Strengthened relations creates
integrative, informing processes with each organization
fully understanding roles and responsibilities.
Development Partners
Development Partners (DPs) bridge technical assistance
projects and government and are often substantial investors
having a major stake in ensuring investments are properly
scrutinized. This need should be recognized within national
strategies, and SAI development should be included in any
major public reform program.
DPs are important to ensuring requested technical assistance
project support providers are competent, experienced
contractors with comprehensive knowledge of SAI work.
SAI Management
Leadership is essential to a project's efcient functioning
and set the tone throughout the SAI and with support
providers. Employing a collaborative approach is key to
projects thriving in an inclusive and supportive environment.
Work plans should not encourage auditors to seek out fraud
and corruption but to inform appropriate authorities if
suspicious activities are uncovered. SAI management should
ensure follow-up action on such cases has been taken.
Leaders should ensure organizational buy-in, particularly
given the potential changes to a change-averse culture.
Establishing an inclusive learning environment incorporating
staff at all levels is one method to achieve consensus.
Successful contractors respect and work alongside SAI
management and staff collaboratively and recognize
potential challenges within the working environment with
an ability to empathize with staff facing change.
Consultants should have experience with SAI work, thorough
knowledge of International Organization of Supreme Audit
Institutions (INTOSAI) standards and understand SAI roles
and responsibilities in combating fraud and corruption.
Supreme Audit Institutions (SAIs) provide assurance that public monies have been properly accounted for and are in keeping with
established regulations. To help combat fraud and corruption, building and maintaining relationships with government, its ministries
and departments; legislature; development partners; and support contractors is crucial.
GOVERNMENT should support SAI independence,
encourage SAI knowledge and use of proper
accounting standards, techniques, and understand
the value and benets SAIs provide.
LEGISLATURE impacts SAI resourcing, ability to
deliver effective services. They should champion
SAI competence and motivate SAIs to build better
relationships with relevant departments to create
integrative, informing processes.
DEVELOPMENT PARTNERS are the bridge between
a project and the government. They have a major
stake in ensuring investments properly scrutinized—
national strategies should reect this. They also help
ensure experienced contractor selection.
SAI MANAGEMENT is essential for projects' efcient
functioning. They set the tone throughout the SAI,
as well as with contractors. Employing an inclusive,
collaborative approach is vital. Leadership should
ensure buy-in due to change-averse work culture.
CONTRACTORS respect and work collaboratively
with SAI management, staff. Previous work with SAIs
and thorough knowledge of INTOSAI standards,
guidance vital to understanding nature of SAI work
and culture.
Best practices in building effective relationships to
combat fraud & corruption, provide technical support