Working with the Media to Maximize the Impact of Your Audit Work: 

by Kenneth Dye, former Auditor General of Canada: 

[Editor's note: 
This article is adapted from a talk given at the 11th AFROSAI Assembly 
in South Africa (see the report on p. 13).] 

If your audit office does very thorough work but your Public Accounts 
Committee or other committees to whom you report do not pay attention 
or hold hearings on your audits, you have a problem. Parliamentarians 
are very busy people who don't have much time to read printed reports. 
However, parliamentarians around the world tend to be media junkies, 
particularly if media items have something to do with their 
constituencies. SAls need to recognize the reality that audit reports 
may not be read thoroughly or completely and find a way for their 
parliamentary stakeholders to become aware of the good work of the 
SAI. One way to do this is by getting the media to carry your message 
for them. SATs can become partners with the media without compromising 
their independence. In addition, the media is a key channel
to keep citizens informed of the SAT's role in and contribution to 
strengthening your country's well being. A properly informed audience 
will create public pressure on elected representatives, which in turn 
will lead to greater executive accountability and, ultimately, to 
greater transparency and better management of public funds. 

With some planning, you can ensure that your SAI is consistently well 
positioned and well represented in the media. You can create a well-
informed media that can report accurately on audit matters and play a 
role as the eyes and ears of the public regarding public finances. 
They will readily raise awareness on the importance of the SAT's role 
in ensuring public accountability. They will develop interest in the 
work and efforts of audit offices among the general public and 
relevant professional public and private institutions. That will 
enable tax-paying citizens to play appropriate roles to ensure greater 
accountability of public expenditure through the elected 
representatives. 

To accomplish these purposes, you want to ensure that your audit 
findings are transmitted to the media in a way that minimizes the risk 
of them being open to different interpretations. Your audit findings 
play an important role in promoting accountability, transparency, and 
good governance in government operations. However, this contribution 
only becomes truly effective when the audit message is communicated 
without modification and alteration. 

In order to avoid ambiguity or misrepresentation, auditors and 
spokespersons should be aware of and acquainted with media 
requirements and develop technical skills in dealing with the media. 
The following sections describe several key skills for dealing 
effectively with the media. 

Understand What Is Newsworthy: 

An SAI's work will attract interest if it is newsworthy. However, the 
news organization's perception of what is newsworthy, not the 
auditor's, will determine coverage. To be newsworthy, audit work must 
meet some of the following criteria: 

* Significant Issues: The more people, resources, consequences, 
damages, or losses involved, the more significant the issue, and the 
more significant the issue, the bigger the news. 

* Unusual, Unexpected, Contradictory Events: An event that is 
unexpected or that contradicts what has been claimed publicly is news. 

* Information You Need to Be Aware Of: This includes what 
readers/listeners/viewers must know about an individual or 
organization to cast a vote, judge performance of a government, 
purchase a product, or make up their minds. 

* Information You Would Like to Know: This includes information of 
interest due to celebrity status, public profile, personal impact, 
gossip, or personal insights. 

* Information with Impact: This information shows how an event, issue, 
or report affects pocketbooks, taxes, and the performance of 
government or other organizations. 

Develop Principles for Media Relations: 

It is essential to build effective media relations so that the media 
pay attention to you and let you get your audit messages out clearly. 
To build effective media relations, an SAI needs to understand the 
following principles for good media relations. 

* Be accessible: Designate spokespersons for the SAI who are 
knowledgeable and trained to speak on topics within their area of 
responsibility. 

* Be prompt: Always return a journalist's phone calls promptly. 

* Be honest: Always tell the truth. 

* Know what you are talking about: It is important that you be 
knowledgeable about your subject and keep up to date with audit 
findings and the latest reports. If you don't, journalists will stop 
coming to you. 

* Be helpful: Be a good source before you become a good interviewee. 

* Be reliable: When you make a commitment, follow through. 

Understand the Culture of the Media Community: 

Auditors usually do not have training in dealing with the media. Not 
do they understand the culture of the media, have an appreciation of 
the difficulties of their jobs, or speak the same language. So 
auditors who speak of the behalf of their SATs need to understand the 
characteristics of the media community. 

First of all, in most countries, the media cover the public and 
private sectors and are competitive. Because they cover a wide 
spectrum of technologies, interests, and backgrounds, they do not 
represent a single viewpoint. They are under constant pressure to get 
a good story, provide instant analysis, and meet tight deadlines. In 
their routine activities, there are laws and professional codes of 
ethics that journalists must respect. 

Second, most media have what is called a narrow "news hole"—that is, 
the amount of time or space devoted to news and editorials. Television 
has particularly narrow news holes. If it is a busy news day, your 
story might be given short shrift or ignored. Therefore, it is 
important to time the delivery of your news. 

Third, journalists now have instant access to an immense amount of 
information online. Previous media stories about the SAI are 
accessible online. Journalists should be able to get their background 
information from your Web site, if you have one. Once audit reports 
are tabled, they need to be on the Web site as soon as possible. 

Fourth, private sector media outlets are market-driven to build 
ratings and increase market share. The resulting pressure is reflected 
in the assignments, resources, and coverage of popular issues. As most 
media outlets do not assign reporters to the parliamentary beat, 
coverage of government affairs can be sporadic. 

Fifth, in some countries, governments control electronic media and 
some leading print media. In such cases, media offer "what the 
government wants you to know," and negative information about the 
government may be suppressed. Private sector media, as a result, can 
improve the transparency of government. They can freely quote auditors 
general reports or news conference comments. 

Sixth, the media's power emanates from its ability to influence the 
agenda for policy makers and politicians. Since most politicians are 
news sensitive, the media are an important part of their daily lives 
and mindsets. Those who know how to effectively access the media and 
communicate effectively share in that power. 

Finally, the media seek profits. Private sector media journalists are 
being asked to do more with less, which means reduced resources and 
increased expectations for more stories with faster turnaround. Costs 
are under strict control in both the public and private sector media. 

Understand Different Types of Journalists: 

If you wish to succeed with the media, you should also understand the 
nature of journalists. SAI spokespersons and commentators need to 
understand a reporter's background, approach, and attitudes to be 
better prepared for his or her line of questioning. Journalists can be 
grouped into several categories. 

* Sensationalists: These journalists focus on embarrassing personal or 
emotional issues, like to create conflict, and may exaggerate the 
story to build audience. 

* Ideologists: These journalists are driven by a personal, political, 
or social agenda and sometimes shape a story to fit that agenda. They 
tend to make issues black and white. 

* The Well-informed: These journalists rely heavily on knowledgeable 
sources developed over a long time on a specific heat. They take pride 
in knowledge, are respected by colleagues, and are committed to 
getting the real story. They can become valuable friends of your SAI. 

* Followers of the Pack 'Theses journalists allow others to define the 
story of the day but don't want to he seen as having missed the story. 
They can do quick and easy stories. 

* Columnists or Commentators: These journalists are usually paid for 
opinions, which are often controversial. They often aim for the story 
behind the story and like to feed on access and reflect grass roots. 

* Community Journalists: They usually work for small town newspaper 
and radio outlets. They are concerned about their community, sometimes 
at the expense of the story, and are usually less demanding and less 
critical. 

Develop a Media Policy and Strategy: 

If your SAI doesn't already have a media policy, you should develop 
one. A media policy sets out the fundamental principles and procedures 
for dealing with the media. It clarifies how media relations should be 
conducted. In this respect, it includes a statement about the 
importance of media coverage for the SAI and a philosophy for SAI 
media relations. That philosophy should include providing quick 
responses, being organized and efficient, providing both proactive and 
reactive media coverage, and being honest and forthright, even when 
the news is bad or embarrassing. The policy should also define 
responsibility for media communications, including the roles and 
responsibilities for the SAI's Public Relations Office. 

The policy should also describe subjects that are off limits, such as 
criticism of government policies or individual persons, and provide 
assurances for those who follow the media policy in good faith. It 
should outline procedures and suggested time frame for handling media 
meetings, calls, and visits; necessary media tools and appropriate 
sign-offs for their approval; and designated spokespersons or subject 
specialists. 

After creating a media policy, the next step is to develop a coherent 
media strategy and the ability to anticipate, not merely react to, 
changing events in the media community. A media strategy is a means to 
achieve specific public relations goals through an organized media 
campaign. Its purpose is to support the SAT's overall mission 
statement, ensure that media relations are not an issue of concern, 
and allow the SAI to respond to and generate media coverage as desired. 

A media strategy should: 

* focus on an issue or set of issues; 

* define the key stakeholders and identify their needs, concerns, and 
issues; 

* articulate key messages from audit findings and recommendations; 

* outline a program to inform and initiate action; 

* define specific program outcomes; 

* identify its relationship to other communications initiatives; and; 

* describe how it can be objectively evaluated. 

Getting Your Message to the Media: 

There are a number of important steps in getting your message to the 
media. 

First, you need to know your media. Begin by collecting basic 
information on who's who in the media—the media outlets, reporters and 
editors, issues/topics, and contact database. Second, develop ideas 
about your message. Capture the essence of the audit issues that you 
think are worthwhile. Simplify the audit issues so that an average 
citizen can see they are relevant. Use plain language, not "auditese" 
or "accountingese" to describe your issues. 

Third, maintain the flow of information by having the auditor general 
or other spokespersons appear on talk shows or by providing background 
briefings for selected reporters, usually in conjunction with a major 
announcement or event. Accept invitations to editorial board meetings 
to provide in-depth background to newspaper editors. File information 
for journalists to provide background information. Have the auditor 
general or other spokesperson write letters to the editor and guest 
editorials to present comments in their own words. You can also 
encourage media tours of audit office premises and audit sites. 

Have a media advisory or press conference to draw attention to an 
upcoming event. However, such events should be used sparingly to 
communicate new and important messages. You can also hold media 
availability sessions or briefings, which are less formal than a news 
conference. Either the auditor general or other high-level officials 
should be personally available to answer questions. 

In summary, remember that the media need not be a foe of your SAI. 
They can be partners in achieving impact and facilitating needed 
changes identified by your audits. 

[End of article] 

Case Study: Societal Perceptions of the Superior Audit Office of 
Mexico: 

by Arturo Gonzalez de Aragon, Auditor General of Mexico: 

One of the technical themes to be discussed at the XX INTOSAI Congress 
to be held in South Africa in 2010 will be the value and benefit of 
supreme audit institutions (SAI). The public's perceptions of the work 
we carry out and its impact on public administration are an important 
aspect of this discussion. 

SAI auditing involves, above all, a commitment to society to oversee 
the use of public assets and to foster responsible and service-
oriented conduct by government officials. It also involves being an 
effective instrument to reduce waste, improve the quality of public 
service, and attain the goals of public programs in accordance with 
the criteria of efficiency, effectiveness, and economy. In view of 
this commitment, SAIs would do well to ask how much society really 
knows about their role and performance. 

The citizens of any society have a right to know the final destination 
of public resources collected from taxes, as well as the way programs 
and public policies use these resources to improve the collective 
quality of life. A strong culture of transparency and accountability 
within countries is the foundation for modern, democratic, and honest 
governments that are truly committed to society. If governmental 
performance and its outcomes are openly reviewed, public debate can 
become less subjective and can be based on relevant national issues. 

The Mexican Experience: 

In 2000, Mexico passed a constitutional amendment designed to create a 
new and independent SAl with technical and managerial autonomy. This 
legislation resulted in the establishment of the Superior Audit Office 
of Mexico (SAO), whose goal is to ensure a professional auditing 
practice that substantially improved upon the performance of its 
predecessor, the Contaduria Mayor de Hacienda. Consequently, there was 
an important incentive to determine whether this new SAl was meeting 
the expectations of the citizenry. 

In recent years, the SAO learned of several studies regarding its 
performance that different civil organizations or prominent public 
university investigators had carried out. Even though the results of 
those studies were positive, the SAO decided, at the end of 2007, to 
carry out its own research to better understand the citizenry's 
perceptions of its activities. The SAO carried out this research with 
the support of the National Autonomous University of Mexico, the 
country's main research center. 

Results of the Survey: 

The survey asked respondents their views on the SAO's duties, 
credibility, trustworthiness, progress in the fight against 
corruption, and other related elements. The results showed that while 
a significant percentage of the full population is not fully familiar 
with the SAO's tasks and responsibilities, those that do understand 
them have a positive opinion: more than 75 percent approved of the 
results of the SAO's work and its performance in carrying out its 
auditing duties. 

About 77 percent of the population believes it is important for public 
institutions to be held accountable and act with transparency and 
agrees that the SAO's research outcomes should be more widely 
disseminated. 

Many sectors of the population are interested in cases of governmental 
corruption. Of the general population, about 76 percent are interested 
in the cases of irregularities identified by the SAO. For this reason, 
although the SAO's tasks are very technical and only a qualified 
minority fully understands them, the SAO believes it must make an 
effort to offer all citizens simple, clear, and concise information. 

The survey results revealed some interesting findings related to 
specialized sectors of the population (for example, members of the 
Congress, audited entities, state audit institutions, and the media). 

Of these specialized sectors, 83 percent consider transparency and 
accountability very important issues; only 17 percent think these are 
somewhat or not important issues. The SAO's independence of entities 
it audits is also important. The survey results show that the majority 
deem external control the mOst reliable approach to promoting
transparency in the use of public resources. There are doubts 
concerning the autonomy of internal control bodies, even though their 
responsibilities are highly valued as a complement to the activities 
of external control bodies. 

Regarding the quality of the audits, 67 percent believe that the SAO's 
work is performed with technical rigor. The SAO has intensified its 
quality control measures by certifying its processes under the ISO 
9001-2000 International Standard in the light of international best 
practices. 

An adequate supreme auditing practice benefits not only society but 
also the audited entities themselves. Between 67 and 70 percent-—
including the audited entities-—believe that the SAO's findings and 
recommendations have helped to improve administrative processes. 

Important results flow from a process to (1) follow up on the 
recommendations the SAO issues as a result of its audits and (2) 
assess compliance with commitments stemming from administrative 
improvements, process reengineering, simplification, and corrective 
actions. The audit's main goal should be quality improvement through 
corrective and preventive measures, not just the imposition of 
sanctions. 

Collaboration in the fight against corruption is a key component of 
supreme auditing. A significant majority (75 percent) believe that the 
SAO as an institution is achieving this objective. 

As a result of its auditing tasks, the SAO has identified 13 broad 
opacity and risk areas in public administration where government 
actions can be improved. This proactive attitude has fostered 
important law, public policy, and administrative process amendments, 
thereby correcting irregularities that represent a high cost to 
society. 

The perception of the SAO's neutrality should also be pointed out: 74 
percent consider its performance as independent from the government, 
72 percent as impartial, and 67 percent as autonomous. 

The survey shows that almost 7 years after the SAO was established, 75 
percent of the surveyed sample believe that its work has a reasonable 
degree of credibility. This is primarily the result of important 
constitutional and legal amendments that have allowed the SAO to 
conduct more effective work than its predecessor. 

Regarding the SAO's technical staff, 83 percent believe that it 
possesses the expertise necessary to conduct auditing tasks, while the 
73 percent believe that its personnel strictly comply with all due 
regulations when carrying out their tasks. 

In 2008, the SAO was subject to an international peer review of its 
performance auditing practices, with the participation of the SAIs of 
the United States of America, the United Kingdom, Canada, and Puerto 
Rico. The final outcome was largely favorable, as the review found 
that the SAO complies with INTOSAI standards. 

An SAI must complement its technical practices with a professional and 
responsible attitude and ethical values, which it fosters in working 
with its collaborators. In this regard, we were pleased to learn that 
the majority consider that the SAO performs it work with objectivity 
(74 percent) and integrity (79 percent) and that its performance is 
efficient (68 percent). 

Conclusions: 

The survey showed that society places a high value on transparency and 
accountability and that these values are regarded as indispensable 
conditions for fully exercising society's right to oversee the honest 
and efficient use of public assets. 

The research also concluded that the Superior Audit Office of Mexico 
has positioned itself as a trustworthy institution that ensures the 
rights of society and acts with objectivity, efficiency, integrity, 
and independence. 

We believe that INTOSAI's membership can benefit from our experience 
and conduct related surveys to objectively assess the ways in which 
their own societies perceive their SAIs' performance and their impact 
on improving the services rendered by public entities. 

During the XX INTOSAI Congress, we will have the opportunity to 
further discuss these issues, which undoubtedly are of significant 
interest to our fellow SAIs. In this way, we will once again make 
INTOSAI's motto a reality: "Mutual Experience Benefits All." 

For additional information, please contact the SAO at 
agonzaleza@asf.gob.mx. 

[End of article] 

Financial Audit Guidelines to Be Available in 2010: 

by Camilla Brod& and Jonas Hallstrom, INTOSAI Financial Audit 
Guidelines Subcommittee: 

[Editor's note: 
INTOSAI's Financial Audit Guidelines are about to become a reality. 
This et of internationally developed comprehensive guidelines will 
soon be available for public sector auditors around the world to use 
as a reliable tool when carrying out their daily tasks.] 

The Financial Audit Guidelines: What Are They? 

In 2010, after 6 years of work, the Financial Audit Guidelines 
Subcommittee (FAS) will present the INTOSAI Financial Audit Guidelines 
at the XX INCOSAI in South Africa. Representatives from SAIs around 
the world contributed to the development of the guidelines, which 
promote a common framework for SAIs and will enhance the quality of 
audit work internationally. 

[Photograph: Financial audit experts working at a reference panel 
meeting in 2008] 

The Financial Audit Guidelines consist of 40 International Standards 
of Supreme Audit Institutions (ISSAI), which cover relevant areas or 
processes included in financial audits and describe how best to apply 
International Standards of Auditing (ISA) in the public sector 
environment. The first four ISSAIs are the following: 

* ISSAI 1000 — Implementation Guidelines on Financial Audit—
Introduction. 

* ISSAI 1001 — Bridge between INTOSAI Auditing Standards and ISAs. 

* ISSAI 1002 — General Considerations When Applying ISAs in the Public 
Sector. 

* ISSAI 1003 — Glossary to Financial Audit Guidelines. 

These introductory ISSAIs will be followed by 36 ISSAIs that consist 
of a practice note developed by FAS and a corresponding ISA. Each 
ISSAI will be numbered according to a framework developed by the 
INTOSAI Professional Standards Committee, and the ISSAI numbers will 
correspond with the numbering of the ISAs. Since many SAIs have 
mandatory tasks that go beyond auditing financial statements for 
regularity and internal controls, SAIs may also need to apply the 
Compliance Audit Guidelines, which are being developed by the 
Compliance Audit Guidelines Subcommittee. Those guidelines are to be 
approved by the INCOSAI at the same time as the Financial Audit 
Guidelines. 

The guidelines and practice notes will be available in Arabic, 
English, French, German, and Spanish for delegates to use in their 
respective SAIs. The guidelines will be easy to use and accessible for 
all. 

International Involvement in the Work of the FAS: 

Since the project began, FAS' work has been chaired and administered 
by the Swedish National Audit Office (SNA(J) and has involved many 
financial audit experts appointed by almost 100 SAIs. The FAS 
secretariat comprises seven staff members from the SNAO, who have 
contributed on a full - or part-time basis to make the project evolve 
into its present form. 

[Photograph: The FAS chair and members of the FAS secretariat at a 
meeting in London in 2008] 

To reach the goal of having a comprehensive set of guidelines 
acceptable to SAls around the world, many of the appointed experts 
have become involved in different FAS or International Auditing and 
Assurance Standards Board (IAASB) subgroups or task forces and have 
worked in a collaborative manner to share their experiences. The 
challenge of keeping to the main goal has been manageable because the 
contributing SAIs have consistently demonstrated flexibility and a 
willingness to add value. In addition, the significant 
responsibilities that dedicated members of the subcommittee have taken 
on have been another crucial factor in producing the high quality of 
the FAS work. FAS members are from Cameroon, Canada, the European 
Court of Auditors, Mexico, Namibia, Norway, South Africa, South Korea, 
Sweden, the United States, and the United Kingdom. In addition, an 
IAASB technical staff member attends FAS meetings as an observer. 

Why Use the Financial Audit Guidelines? 

The Financial Audit Guidelines make the ISAs applicable to the public 
sector by developing relevant guidance and thoroughly analyzing ISA 
requirements. The guidelines can also be used as authoritative 
reference standards in applying fundamental INTOSAI principles. 
Individual SAIs can use them as a basis for developing financial audit 
manuals. 

The main goal is to apply the Financial Audit Guidelines as the 
authoritative reference standards for audit work. FAS strongly 
encourages all SAIs to apply the ISSAIs, including the ISAs and the 
guidance contained in the practice notes. 

The Financial Audit Guidelines enhance confidence in and the 
credibility of our financial audit work. The ISAs have been recognized 
globally as the standards for financial audits. In some private sector 
environments, laws will require the use of ISAs, which are becoming 
more accepted internationally. By applying the ISAs together with the 
practice note, public sector auditors around the world will have the 
same professional standards, which will not only add to their 
credibility and professionalism, but also provide a basis for 
cooperation among SAIs and auditors in different environments. 

How to Implement the Guidelines: 

As with all INTOSAI standards and guidelines, the Financial Audit 
Guidelines are not mandatory for members of INTOSAI. However, the 
advantages of adopting them are obvious. Sharing the same standards 
and guidelines will make it possible to have regional education or 
training activities together with other SAls. It will be easier to
share experiences between SAIs, and there will be greater 
understanding on the part of all concerned. 

FAS recognizes that implementing the Financial Audit Guidelines is an 
enormous and challenging task, which should not be taken lightly. To 
assist in the proper application of the guidelines, a significant 
amount of education and training will be required and internal manuals 
will need to be developed. In some SAI environments, introducing
this comprehensive set of standards could influence the entire way 
that financial audits are conducted; in others, fewer adjustments in 
the audit process will be needed. However, each SAI may need to 
analyze the need for implementation activities based on its 
environment and existing practices. 

FAS responsibilities will not include implementation initiatives; 
however, after 2010, the FAS will provide introduction and training 
materials to support implementation. 

Credibility: 

The high quality guidance in the Financial Audit Guidelines will be 
relevant and useful to the majority of SAIs. Representatives of all 
geographical regions have given input to the development of the 
practice notes, and the geographical diversity in the comments on our 
work has been important in gaining the necessary credibility for the 
final product. Furthermore, using globally accepted standards will 
enhance confidence in and credibility of our work as auditors. Having 
a common framework will help ensure professionalism and make it easier 
to live up to the expectations of different governments and societies 
around the world. 

For additional information, please contact the FAS Secretariat: 

E-mail: projectsecretariat@riksrevisionen.se. 

Web site: http://pcs.rigsrevisionen.dk/fas. 

[End of article] 

Open Budget Survey Findings on SATs and Independence: 

by Vivek Ramkumar, Open Budget Initiative, International Budget 
Partnership: 

[Editor's note: 
The October issue of the Journal will focus on independence. We are 
publishing the following article because of its findings on 
independence and invite our readers to respond to it with their own 
insights, recommendations, and ideas. Send your responses to 
intosaijournal@gao.gov.] 

Eighty percent of the world's governments fail to give their citizens 
the information they need to hold the governments accountable for 
managing their money. This troubling finding comes from an extensive 
new survey of government budget transparency in 85 countries issued in 
February 2009 by the International Budget Partnership (IBP).[Footnote 
1] The survey also found that nearly 50 percent of the 85 countries 
IBP evaluated provide such minimal information that they are able to 
hide unpopular, wasteful, and corrupt spending.[Footnote 2] 

IBP's Open Budget Survey 2008 is an independent and comprehensive 
analysis that evaluates whether central governments give the public 
access to budget information and opportunities to participate in 
budget formulation, implementation, and evaluation processes. The 
survey also examines the ability of legislatures and supreme audit 
institutions (SAI) to hold their governments accountable.
The survey analyzed the results drawn from a rigorous questionnaire 
that reflects generally accepted good practices related to public 
finance management that international organizations have developed. 
These practices include the International Monetary Fund's Code of Good 
Practices, the Organization for Economic Cooperation and Development's 
Best Practices in Budget Transparency, and INTOSAI's Lima Declaration. 
The survey was managed by IBP and implemented by independent 
researchers with budget expertise from civil society organizations and 
academic institutions established in the 85 countries examined. 

Survey Findings: 

The survey assessed SAIs according to the following key 
characteristics: 

* legal and financial independence from the executive,
* comprehensiveness of audit mandate,
* engagement with the public,
* timeliness in reporting audit results, and, 
* effectiveness of follow-up on audit recommendations. 

Based on these assessments, an average score for SAI strength was 
calculated. The overall average score was 45 out of a possible 100.
The following sections analyze the key findings related to SAIs from 
the Open Budget Survey 2008. 

Independence: 

Independence from the executive branch is one of the most important 
measures of an SAT's ability to provide effective oversight. Legal and 
financial dependence on the executive may cause the head of an SAI to 
withhold reports that are critical of the executive. 

In 26 of the countries surveyed, the executive can remove the SAI head 
from office without the consent of either the legislature or the 
judiciary. Further, in 38 of the 85 countries, the executive rather 
than the legislature or the judiciary determines the SAI's yearly 
budget allocation. In 24 of these countries, the survey's civil 
society researchers felt that funding for the SAI was below the level 
of resources the SAI needed to fulfill its mandate. 

Further, in 21 countries in which the legislature (rather than the 
executive) determines the SAT's yearly budget allocation, researchers 
felt that SAI budgets were not adequate to meet resource requirements.
In 31 of the 85 countries included in the survey, the SAI does not 
have full discretion in law to decide which audits it will undertake. 
In 13 of these 31 countries, SAIs have very limited or no discretion 
to decide which audits they will undertake. 

Comprehensiveness: 

In 48 of the 85 surveyed countries, the SAI does not either release 
its audits of extrabudgetary funds (including oil stabilization funds) 
to the public, audit such funds, or release such reports within 24 
months after the end of the fiscal year during which the audits were 
conducted. Although extrabudgetary funds are technically outside the 
budget, they are governmental in nature and thus should be subject to 
the same audit requirements as other government programs. 

In 33 of the 85 countries, the SAI does not either employ designated 
staff assigned to audit security sector expenditures or undertake 
audits of the security sector. Because the public does not receive 
information on such secret programs, it is essential that legislators 
receive this information, including all audit reports on expenditures in
the sector. SAIs should have staff with security clearances that give 
them access to all information related to secret expenditures. 

Public Engagement: 

In 27 of the countries surveyed, audit reports are not made publicly 
available. Six of these countries do not produce audit reports.
In 44 of the countries,[Footnote 3] the SAT's annual audit report does 
not include an executive summary. Since audit reports can be fairly 
technical documents, an executive summary of the report's findings can 
help make the report more accessible to the media and the public.
It is, however, heartening that in many of the countries surveyed, the 
SAI has some procedures in place to tap the public as a source of 
information. In 46 countries surveyed, SAIs maintain formal mechanisms 
through which the public can register complaints and suggestions 
regarding the agencies, programs, or projects that citizens believe 
the SAI should audit. However, in 12 of these 46 countries, the SAI 
receives little or no information from the public on potential 
subjects for audit. This may suggest that the mechanisms the SAI 
established for soliciting public recommendations are inadequate or 
inconvenient. 

Timeliness: 

Delays in releasing audit reports reduce the opportunities available 
to civil society and the public to use audit information to advocate 
for improvements in government performance. In 30 countries surveyed, 
the SAI either had not audited any expenditure or had not released 
such reports to the public within 2 years of the end of the fiscal 
year. In an additional 13 countries, the SAI completed its audits 
between 12 and 24 months after the end of the fiscal year. In only 15 
countries surveyed did the SAI release its annual report within 6 
months of the end of the fiscal year, as recommended by international 
good practice. 

Effective Follow-up: 

SAIs' mandates usually prevent them from playing a direct policy or 
political role. As a result, the legislature needs to follow up on an 
SAI findings and recommendations if SAI audits are to have practical 
impact. However, in 17 of the countries surveyed, the legislature did 
not follow up on the work of the SAI at all, while in an additional 20 
countries, legislative follow-up was minimal. 

Further, in 64 countries, the executive did not reveal what steps, if 
any, it had taken to address audit recommendations. In addition, 
neither the SAI nor the legislature reported to the public on actions 
the executive had taken to address audit recommendations in 64 
countries. Failures to publicize actions taken in response to audit 
findings make it easier for governments to ignore audit 
recommendations. 

Conclusion and Recommendations: 

The survey results reveal that in most of the surveyed countries, 
several serious constraints undermined the oversight capacity of SAIs 
(and legislatures). Effective accountability depends not only on 
transparency (and the public's access to budget information) but also 
on the strength of institutions like SAIs and legislatures. 
Unfortunately, the survey found that the countries with the weakest 
SAIs and legislatures were also the countries that had the least 
transparent budget systems. Thus, budget oversight in each of these 
countries was frustrated by both limited access to information and 
weak formal oversight institutions. 

IBP offers two recommendations to assist SAIs in their oversight role. 
First, SAIs could begin to engage more closely with civil society 
organizations (CSO) and with the public. Such collaboration could 
bring more publicity to audit findings, build pressure on the 
executive to follow up on audit recommendations, bring new ideas and 
evidence for audit investigations, and increase the resources 
available for SAIs to use in conducting audits. 

A recent example from Honduras illustrates these points. In 2007, the 
Honduran Tribunal Superior de Cuentas (the national SAI) began a pilot 
program to solicit greater public participation in its audits. Based 
on public input received at a public meeting, the SAI selected eight 
agencies—including hospitals, schools, and municipalities—to audit. 
Subsequently, the SAI sought and received public complaints about the 
functioning of these agencies, investigated these complaints, and 
incorporated its findings into its audit reports. The SAI organized a 
subsequent public meeting to discuss audit reports, and officials from 
the audited entities, who attended the meeting, were asked to respond 
to the audit findings. An assessment of the initiative found that 
public input led to a large number of the audit findings reported from 
these pilot audits—and that many of these findings would not have been 
identified through a regular audit investigation.[Footnote 4] 

Second, the Joint Platform[Footnote 5] established during the XIX 
INCOSAI in Mexico could be used to document good practices in SAI-CSO 
collaboration that enhance oversight of government budgets. INTOSAI 
could then use the platform to encourage SAIs interested in 
replicating such good practices to begin pilot initiatives to 
collaborate with CSOs and assess the results of such collaboration.
IBP's Open Budget Survey provided a broad analysis of SAI practices in 
85 countries. The survey's results provide a baseline of current SAI 
performance, including independence, the timeliness of reports, and 
the level of interaction with the public. 

The results indicate that significant work is needed to ensure that 
SAIs are constituted within the institutional arrangements and perform 
within the standards set forth by the Lima Declaration. SAIs will be 
positioned to effectively hold their governments accountable only if 
they are able to attain these standards. 

For more information on the IBP and on the Open Budget Initiative 
contact Vivek Ramkumar atramkumar@cgpp.org or go to IBP's Web sites:
www.internationalbudget.org and www.openbudgetindex.org. 

Footnotes: 

[1] The IBP collaborates with civil society organizations in 
developing countries to analyze, monitor, and influence government 
budget processes, institutions, and outcomes. The partnership's aim is 
to make budget systems more responsive to the needs of poor and low-
income people in society and, accordingly, to make these systems more 
transparent and accountable to the public. 

[2] The following countries were included in the Open Budget Survey 
2008: Afghanistan, Albania, Algeria, Angola, Argentina, Azerbaijan, 
Bangladesh, Bolivia, Bosnia and Herzegovina, Botswana, Brazil, 
Bulgaria, Burkina Faso, Cambodia, Cameroon, Chad, China, Colombia, 
Costa Rica, Croatia, the Czech Republic, the Democratic Republic of 
Congo, the Dominican Republic, Ecuador, Egypt, El Salvador, Equatorial 
Guinea, Fiji, France, Georgia, Germany, Ghana, Guatemala, Honduras, 
India, Indonesia, Jordan, Kazakhstan, Kenya, the Kyrgyz Republic, 
Lebanon, Liberia, Macedonia, Malawi, Malaysia, Mexico, Mongolia, 
Morocco, Namibia, Nepal, New Zealand, Nicaragua, Niger, Nigeria, 
Norway, Pakistan, Papua New Guinea, Peru, the Philippines, Poland, 
Romania, Russia, Rwanda, Sao Tome e Principe, Saudi Arabia, Senegal, 
Serbia, Slovenia, South Africa, South Korea, Sri Lanka, Sudan, Sweden, 
Tanzania, Thailand, Trinidad and Tobago, Turkey, Uganda, Ukraine, the 
United Kingdom, the United States, Venezuela, Vietnam, Yemen, and 
Zambia. 

[3] The 44 countries include the 27 countries where audit reports are 
not publicly available. 

[4] Source: International Budget Partnership. See 
www.internationalbudget.org/resources/newsletter44.htm#Honduras. 

[5] At the XIX Congress in Mexico in 2007, INTOSAI established a joint 
platform with the United Nations Department of Economic and Social 
Affairs (UNDESA) and the International Budget Partnership to examine 
how SAIs can foster collaborative practices that will increase civil 
society participation in the audit protocols. More information on the 
Joint Platform is available in this Journal at 
http://intosaijournal.org/pdf/jan2008.pdf, p. 22. 

[End of article] 

Reporting on Nonfinancial Information: 

by Michel Admiraal, Royal Nivra, and Rudi Turksema, Netherlands Court 
of Audit: 

The past few years have seen a growing focus on social responsibility 
and policy results in the public sector. Governors, politicians, 
controllers, and government audit offices have become more interested 
in performance information in budgets and reports. Much of the 
information on social performance and effects is of a nonfinancial
nature. It does not concern uniform measurable monetary units but 
rather numbers or processes and systems. Public sector users are 
especially interested in nonfinancial information, which reflects the 
results and effects of government policy. Therefore, the
reliability and relevance of this information are highly important. 
Auditors can play an important role in providing assurance on the 
reliability of nonfinancial information. 

Unlike reporting on financial information, reporting of nonfinancial 
effects is still comparatively new, and no generally accepted 
principles are yet available. Moreover, the data are very diverse; the 
more qualitative the data are, the more difficult they are to measure 
and assess. Also, the audit of nonfinancial information is a new audit
subject for many auditors. For this reason, Royal Nivra (the Dutch 
organization for the accounting profession) initiated a project that 
resulted in the Nivra guide Nonfinancial information in progress, a 
guide to the reporting and assurance of nonfinancial information in 
the public sector. The guide aims to help develop a universal basis 
for reporting and providing assurance on nonfinancial information. It 
is the result of the work of representatives from different sections 
and disciplines in the Dutch public sector, including the Netherlands 
Court of Audit, the Dutch SAI. 

This article presents the main findings reported in the guide, 
including a number of recommendations and an agenda for the future 
audit of nonfinancial information. 

Need for Guidance on Nonfinancial Information: 

For financial information, comprehensive registration systems and 
generally accepted principles for presenting information have been in 
existence for a considerable time. However, this is not the case for 
nonfinancial information, where there are fewer safeguards for 
reliability and the quality requirements for the information are not
yet standardized. Because suitable criteria and a frame of reference 
for nonfinancial information are not available, it is not always 
possible or desirable to provide assurance, especially in regard to 
measuring policy effects. A theatrical performance may be performed 
perfectly and meet all kinds of objective quality standards, but the 
audience determines whether they consider the performance a success. 
Nonfinancial information, therefore, requires special diligence in 
terms of its definition, frame of reference, and reporting. 

In the guide, we use the following definition for nonfinancial 
information: 

Nonfinancial information comprises all quantitative and qualitative 
data on the policy pursuee4 the business operations, and the results 
of this policy in terms of output or outcome, without a direct link 
with a financial registration system. 

Auditors are increasingly being asked to provide assurance on 
nonfinancial information on a standalone basis or in conjunction with 
financial statements. However, auditors can only provide assurance if 
they have a clear framework for assessing the information. Currently, 
there is no generally accepted system for administering and reporting 
nonfinancial information, which concerns quantitative data such as 
numbers as well as policy effects that are difficult to measure 
because of the heterogeneity of the information and the divergent 
needs of users. This can give rise to debates on the interpretation or 
origin of the information. In sum, there is a need for more 
structuring, standardization and guidance. 

This topic is, of course, not new. There have been various 
developments and initiatives with regard to nonfinancial information 
in the public sector. In some cases, a report on the process of 
preparing the information will suffice, while in others explicit 
assurance on the information itself is required. At an international 
level, INTOSAI has issued INTOSAI Guidance on Good Governance (INTOSAI 
GOV) 9220, Accounting Standards Framework Implementation Guide for 
SAIs: Management Discussion and Analysis of Financial, Performance and 
Other Information. This guideline identifies performance and 
governance information—which are of a nonfinancial nature—in addition 
to financial information. In the private sector, examples include 
corporate social responsibility reports, the involvement of the 
auditor with in-control statements, and privacy audits. The guide 
incorporates these ideas and initiatives. 

Reporting: 

Information is always reported in conformity with a specific frame of 
reference that presents the criteria or standards for the valuation, 
classification, and presentation of the information. Insofar as this 
framework relates to the presentation of information in a report, it 
is referred to as accounting principles. Financial reporting has gone 
through a long period of development, and generally accepted 
accounting principles are available for it. Examples include national 
standards issued by the Dutch Accounting Standards Board and 
international standards, such as International Financial Reporting 
Standards (private sector) or International Public Sector Accounting 
Standards (public sector). 

With nonfinancial information, the quality requirements for the 
information and the way in which it is presented are not uniform. Only 
limited professional rules of conduct for auditors in this information 
field have been developed. The debate on reporting and providing 
assurance on the information is in its early stages. In terms of 
standardization, corporate social responsibility reporting is at the 
forefront. The Global Reporting Initiative issues international 
sustainability reporting guidelines whose application is voluntary. 
Although Royal Nivra published Dutch standard COS 3410N (Assurance 
Engagements Relating to Sustainabiliry Reports) in 2007, little 
experience has been acquired with it in practice as yet. 

Management Cycle: 
To understand the reporting of nonfinancial information, it is 
instructive to consider public governance and the management cycle in 
public organizations. Reporting comprises the financial and 
nonfinancial information by which a public organization renders an 
account on its actions to its stakeholders. This information does not 
exist in a vacuum but forms part of a continuous cycle of planning, 
designing, implementing, measuring, and adjustment. 

As shown in figure 1, public governance requires an adequate 
distribution of responsibilities among the governing body and 
management, policy departments, the controller, the internal auditor, 
the external auditor, and the supervisor. The quality of the 
management cycle of nonfinancial information can only be safeguarded 
if it is integrated or embedded in the governance of the organization. 

Figure 1: Management Cycle for Public Governance: 

[Illustration] 

Phase 1: Formulating and adjusting mission, strategy, and policy 
objectives. 

Phase 2: Designing structure and information system 
(operationalization). 

Phase 3: Executing processes and registering outcomes in systems 
(implementation). (External auditor review) 

Phase 4: Rendering account via information and in conformity with an 
established frame of reference. (Supervisor review, return to Phase 1). 

Involved in all phases: 
Governing body and management; 
Policy departments; 
Public controller; 
Internal auditor. 

[End of figure] 

Auditors and Assurance: 

The auditor comes into play when users or providers of information 
want reliable information. His expertise and knowledge of 
organizations and information systems enable him to play a part in 
assessing nonfinancial information. The contents of this assessment 
are determined by the type of information, the method of rendering 
account, and the needs of the user. In this regard, it is important to 
distinguish between assurance and nonassurance. 

For an assurance engagement, the auditor provides an assurance report 
that gives a predetermined degree of assurance on the reliability of 
an account or another subject matter. This requires that a number of 
specific conditions be met. For a nonassurance engagement, factual 
findings are reported without expressing a conclusion or opinion or 
providing advice. Every type of engagement has its own rules and 
reports, as figure 2 illustrates in regard to International Federation 
of Accountants (IFAC) standards. 

Figure 2: International Framework of Assurance Engagements: 

[Illustration] 

Auditor's encasements: IFAC Code of Ethics: 

Assurance engagements: 

ISA 200-2999: 
Audit and review of historical financial information; 
Financial statements; 
Other financial reports. 

ISAE 3000-3999: 
Other assurance engagements. 

Nonassurance engagements: 

ISRS 4400: 
Agreed-upon procedures. 

Other engagements. 

Legend:
ISA = International Standards on Auditing. 
ISAE — International Standards on Assurance Engagements. 
ISRS = International Standards on Related Services. 

[End of figure] 

The client and user must decide upon the role of the auditor. With 
respect to nonfinancial information, the auditor can have one of three 
following roles: 

* Advisor on the design and improvement of nonfinancial information 
systems and processes in the organization by issuing advice. Only the 
code of ethics applies. 

* Reporter of factual findings on the process of preparing 
nonfinancial information without providing assurance on it. In this 
case, users draw their own conclusions based on the auditor's factual 
findings. The code of ethics and International Standard on Related 
Services (ISRS) 4400 provide the primary basis for this. 

* Assurance provider on the process of preparation or on the 
information itself as an outcome of this process. The auditor provides 
assurance on the reliability of the process or the information by 
providing an assurance report. The code of ethics, the International 
Framework of Assurance Engagements, and ISAE 3000 provide the primary 
basis for this. 

Other experts can be involved in the examination, such as electronic 
data processing auditors, management consultants, or social scientists. 

Recommendations: 

The reporting of nonfinancial information is more than an externally 
directed process with the auditor as assurance provider. It must also 
be part of the governance structure and focus on users' wishes. The 
guide groups propositions into three categories linked with the 
various phases in the management cycle of nonfinancial information. 
They are formulated so that they are relevant to both the public and 
private sectors. 

Strategy and policy: 

* An expectation gap on nonfinancial information can be avoided by the 
participation of and communication with all parties involved, in 
particular the users of the information. 

* The foundation for the reporting and assurance of nonfinancial 
information is at the governance level; accordingly, strategy and 
policy have to be formulated as specifically as possible. 

* An adequate system of nonfinancial information requires unambiguous, 
consistent, and transparent terms and definitions. 

* The reporting on nonfinancial information must focus a limited 
number of relevant policy priorities. 

* In view of the constantly changing social and political environment, 
the design of a nonfinancial information system must always allow for 
flexibility. 

Organization and Implementation: 

* Reporting and providing assurance on nonfinancial information must 
be an integral part of the governance and management control structure 
of an organization. 

* Providing assurance on nonfinancial information is only possible if 
the reporting is embedded in a system of planning and control. 

Reporting and Assurance: 

* Scope for flexibility is also necessary for the assurance of 
nonfinancial information; assurance must be a means to an end. 

* A clear choice must be made in advance regarding the subject matter 
and role of the auditor. 

* The further nonfinancial information is removed from financial 
information, the more desirable it is to work together in 
multidisciplinary teams with other experts. 

Agenda for the Future: 

The guide provides only a snapshot. Developments are continuing, 
especially in the field of information technology and public 
governance. Information is increasingly being provided in digitized 
form, and publication of information via the Internet is becoming the 
norm. The professional rules of auditors are also changing. The agenda 
for the future presents four recommendations for further initiatives 
in the field of the reporting and providing assurance on nonfinancial 
information. Every agenda item is intended for a specific target group 
and lays down a challenge for further action. 

Agenda for Governing Bodies: 

Nonfinancial information must have an explicit place within 
governance. Extensive communication on relevance and reliability is 
required with all parties involved. The accountancy profession can 
play a coordinating role in this context. 

Agenda for Accounting Institutions: 

Accounting institutions need to give auditors more guidance regarding 
examining and providing assurance on nonfinancial information. 

Agenda for Auditors: 

Auditors have a societal role and must also be willing to formulate an 
opinion that is clear to the users on nonfinancial information. 

Agenda for Technical Experts: 

New accounting and audit methods are needed to facilitate reporting and
providing assurance on nonfinancial information. This is a task for 
controllers and internal and external auditors. 

Since there are many parallels between the public and private sectors, 
the guide's recommendations and agenda items are also applicable to 
the private sector. Governance attention at the highest level of 
organizations is an important condition for increased reporting and 
providing assurance on nonfinancial information. Governance and the 
management cycle of information are the foundations for reporting and 
providing assurance on nonfinancial information. 

More information on this project can be found on the Royal Nivra Web 
site: www.nivra.nl. The guide can be downloaded free of charge from 
the Nivra Web site at: 
www.nivra.nl/Sites/Files/0000024233_EnglishversionNFL.pdf. 

For additional information contact the authors: Michel Admiraal, 
project manager at Royal Nivra, at m.admiraal@nivra.nl and Rudi Turks, 
performance audit expert at the Netherlands Court of Audit, at 
r.turksema@rekenkamer.nl. 

[End of article] 

The Office of the State Comptroller of Israel: A Case Study in 
Independent Government Auditing: 

by Shai Mizrahi, Office of the State Comptroller of Israel: 

The chief aim of the Lima Declaration (1977) is to promote independent 
government auditing. As the declaration stipulates, an SAI that cannot 
meet this demand does not come up to standard. SAI independence must 
be anchored in legislation, but this requires that institutions of 
legal security function effectively. As the issue of SAI independence 
continues to be discussed throughout the INTOSAI community, the
Israeli SAI—the Office of the State Comptroller—provides a case study 
in independent state auditing. 

The Mexico Declaration on SAI Independence (2007) recognizes eight 
core principles—based on the Lima Declaration and decisions reached at 
the XVII INCOSAI held in Seoul, Korea, in 2001-—as essential 
requirements of proper public sector auditing. This article outlines 
how these principles are exemplified in the legal framework and 
properties of the State Comptroller of Israel. 

The first principle requires the existence of an appropriate and 
effective constitutional, statutory, or legal framework and of de 
facto provisions implementing this framework. 

In Israel, two laws govern the operations of state audit: 

* The Basic Law: The State Comptroller, enacted in 1988, establishes the
constitutional basis for the independent position of the state 
comptroller, stating that in carrying out his or her functions, the 
state comptroller shall be accountable only to the Israeli parliament 
(the Knesset) and shall not be dependent upon the government. 

* The State Comptroller Law, 1958 (Consolidated Version), as amended 
over the years, provides a detailed framework for the state 
comptroller's governance and activity, ensuring, inter alia, the 
realization of that independence. 

The second principle calls for the independence of the head of the SAL 
including security of tenure and legal immunity in the normal 
discharge of his or her duties. The applicable legislation must 
specify the conditions for the appointment, removal, and retirement of 
the SAI head by a process that ensures his or her independence from 
the executive. Moreover, to enable the head to perform his or her 
duties without fear of retaliation, the appointment must be for a 
sufficiently long and fixed term. 

According to the Basic Law, the Knesset elects the state comptroller 
by secret ballot; the comptroller's term of office is 7 years, and he 
or she may serve only one term. The Basic Law (complemented by the 
procedures determined by the State Comptroller Law) adds that the 
state comptroller cannot be removed from office unless he or she: 

* is permanently unable to perform his or her duties for health 
reasons, following a vote ratifying that decision by a majority of the 
Knesset, or: 

* has behaved in a manner unbefitting the position of state 
comptroller—following a vote ratifying that decision by at least three-
quarters of the Knesset. 

It is worth noting that none of the comptrollers elected to date by 
the Knesset has had prior political affiliation. The State Comptroller 
Law prohibits political activity by the comptroller during his or her 
term of office. In addition, publications made by or on behalf of the 
state comptroller in the execution of his or her duties are immune 
from all libel prosecutions. 

The third principle calls for a sufficiently broad mandate and full 
discretion in the discharge of the SAT's functions. An SAI must be 
empowered to audit the use of public monies, resources, or assets by a 
recipient or beneficiary, regardless of its legal nature; the 
collection of revenues owed to the government or public entities; the 
legality and regularity of government or public entity accounts; the 
quality of financial management and reporting; and the economy, 
efficiency, and effectiveness of government or public entity 
operations. This principle also stresses the SAT's freedom from 
legislative or executive interference in selecting audit issues; 
planning, programming, conducting, reporting, and following up on 
audits; and organizing and managing the SAT's office. 

The Israeli SAT meets all these requirements in both the functions and 
scope of state audit. The state comptroller audits the economy, 
property, finances, obligations, and administration of the state; 
government offices; all enterprises, institutions, and
corporations of the state; and local authorities and numerous other 
bodies or institutions subject to state audit by law. The state 
comptroller also examines the legality, moral integrity, orderly 
management, efficiency, and effectiveness of the audited bodies and
any other matter that he or she deems necessary. Accordingly, even the 
most clandestine defense establishment entities and the most sensitive 
aspects of their activities are subject to audit. The far reaching 
policy changes adopted by the current state comptroller, Judge (Ret.) 
Micha Lindenstrauss, provide a good example of the comptroller's fully 
independent discretion. These changes include a marked expansion of 
real-time audit, the publication of officials' names in audit reports, 
and the investigation of prominent public figures, including the prime 
minister, for acts of corruption. Judge (Ret.) Lindenstrauss also 
established a special anti-corruption task force. The state 
comptroller is thus free to select audit issues and make autonomous 
decisions concerning the planning, programming, conduct, reporting, 
and follow-up of audits. The organization and management of the state 
comptroller's office, including staff conduct and dismissal, are also 
under the comptroller's exclusive authority. 

The fourth principle requires unrestricted access to information. 

The Basic Law itself—which, as emphasized above, is constitutional in 
nature—stipulates that a body subject to audit by the state 
comptroller shall provide without delay information, documents, 
explanations, or any other material that the comptroller deems 
necessary for the purposes of audit. This obligation is not supported 
by any sanction, and audited bodies do occasionally fail to cooperate. 
However, subject to the approval of the State Audit Affairs Committee 
of the Knesset, the comptroller and any person appointed by him or her 
shall have the powers of an enquiry commission, which may subpoena 
witnesses. A witness appearing before the state comptroller within 
this framework is subject to the restrictions and sanctions prescribed 
by criminal law. Auditors in the Israeli SAI have also recently gained 
direct online access to the computers of certain high-ranking 
officials, including government ministers. 

The fifth principle establishes the prerogative and obligation to 
report on the SAT's work; namely, the SAI should not be prevented from 
reporting the results of its audit work and should be required by law 
to make such reports at least once a year. 

The Basic Law states that the state comptroller shall submit to the 
Knesset reports and opinions within the scope of his or her functions 
and shall publish them in the manner and subject to the restrictions 
prescribed by the State Comptroller Law. This law stipulates that no 
later than February 15th each year, the comptroller shall submit a 
report to the prime minister and the chairman of the State Audit 
Affairs Committee on the results of the audits of government offices 
and state institutions[Footnote 1] carried out during the previous 
financial year. Within 10 weeks of receiving the report, the prime 
minister shall present the comptroller with his or her observations 
concerning each defect and violation detailed in the report and the 
responses of the audited bodies to the report. Thereafter, the report 
is tabled in the Knesset. 

The sixth principle calls for freedom to decide the content and timing 
of audit reports and to publish and distribute them. The SAI should be 
free to decide the content of its audit reports and include 
observations and recommendations. It should also be at
liberty to decide on the timing of its audit reports, except where 
specific requirements are prescribed by law, and to publish and 
distribute its reports once they have been formally submitted to the 
appropriate authority. 

The State Comptroller Law provides that in the audit report, the 
comptroller shall summarize his or her activities in the field of 
audit and specify any violation of moral integrity and any defect or 
infringement of law or the principles of economy and efficiency as, in 
his or her opinion, deserve to be included in the report; make 
recommendations to rectify and prevent the defects; and specify any 
improvement or outstanding actions that he or she deems worthy of 
inclusion. Apart from the annual report discussed above, the state 
comptroller may carry out audits and publish reports on any body or 
matter within the scope of his or her authority, as he or she deems 
necessary, and freely decide on the timing of such reports. All the 
comptroller's reports are publicized; however, a report or parts 
thereof may not be submitted to the Knesset and may not be publicized 
where necessary to safeguard state security or avoid impairing foreign 
or international trade relations. 

The seventh principle deals with the existence of effective follow-up 
mechanisms on the SAI's recommendations. The SAI should submit its 
reports to the legislature or one of its commissions for review and 
follow-up on specific recommendations for corrective action and should 
also operate its own internal follow-up system. 

In Israel, once the audit report has been tabled in the Knesset as 
detailed above, the State Audit Affairs Committee of the Knesset 
studies it and submits its conclusions and proposals, including follow-
up measures, for the Knesset's approval. The State Comptroller Law 
also stipulates that the head of every audited body must appoint a 
team to rectify the defects disclosed in the audit report. The team is 
required to discuss ways to rectify the defects, make decisions 
regarding their rectification, and report to the head of the audited 
body on its discussions and decisions. The head of the audited body 
must report the decisions to the comptroller, detailing the method and 
time frame for rectifying the defects. The comptroller may at any time 
demand reports in addition to those enumerated above and may also set 
out a framework for reporting the rectification of defects, specifying 
the details to be included. 

The eighth principle provides that the SAI should enjoy financial and 
managerial or administrative autonomy and the availability of 
appropriate human, material, and monetary resources. Accordingly, the 
executive should have no control over the access to these resources. 

The Basic Law states that the budget of the State Comptroller's Office 
shall be determined by the Finance Committee of the Knesset, upon the 
proposal of the state comptroller, and shall be published together 
with the state budget. It should be noted that to date the Office of 
the State Comptroller has enjoyed the full understanding and 
cooperation of the Knesset regarding its financial needs. The state 
comptroller manages his or her office's budget and allocates it as he 
or she deems appropriate. 

In conclusion, the State Comptroller's Office has almost fully 
implemented the Lima Declaration principles, as outlined in the Mexico 
Declaration on SAI Independence. We hope that our experience helps 
other SAIs facing challenges in strengthening their independence.
For additional information, contact the Office of the State Comptroller
 at int_relations@mevaker.gov.il. 

Footnote: 

[1] The comptroller's reports on other audited bodies are subject to a 
separate procedure, which also complies with the fifth principle. 

[End of article]