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INTOSAI International Journal Of Government Auditing: 

January 2012: 
Volume 39, No. 1: 

Board of Editors: 
Josef Moser, President, Rechnungshof, Austria: 
Michael Ferguson, Auditor General, Canada: 
Abdelkader Zgoulli, First President, Cour des Comptes, Tunisia: 
Gene Dodaro, Comptroller General, United States of America: 
Adelina González, Acting Comptroller General, Venezuela: 

President: Helen H. Hsing (U.S.A.): 

Editor: Muriel Forster (U.S.A.): 

Assistant Editors: 
Linda J. Sellevaag (U.S.A.): 
Melanie Papasian (U.S.A.): 

Associate Editors: 
Office of the Auditor General (Canada): 
Jagbans Singh (ASOSAI-India): 
Luseane Sikalu (PASAI-Tonga): 
CAROSAI Secretariat (St. Lucia): 
EUROSAI General Secretariat (Spain): 
Khemais Hosni (Tunisia): 
Basilio Jauregui (Venezuela): 
INTOSAI General Secretariat (Austria): 
U.S. Government Accountability Office (U.S.A.): 

Administration: 
Sebrina Chase (U.S.A.): 
Paul Miller (U.S.A.): 

Members of the Governing Board of INTOSAI: 
Terence Nombembe, Auditor-General Office of the Auditor-General South 
Africa; 
Liu Jiayi, Auditor General National Audit Office, People's Republic of 
China; 
Osama Jaffer Facieeh, President, General Auditing Bureau, Saudi Arabia; 
Josef Moser, President; Rechnungshof; Austria, Secretary General; 
Terrance Bastian, Auditor General, Department of the Auditor General, 
Bahamas; 
M. Moussa Kone, President, Chambre des Comptes, Cote d'Ivoire; 
Carlos Ramón Pólit Faggioni, Contraloría General del Estado, Ecuador; 
László Domokos, President, Allami Számvevöszék, Hungary; 
Vinod Rai, Comptroller and Auditor General, Office of the Comptroller 
and Auditor General, India; 
Ibrahim Hamad Balkir, President, Audit Bureau, Libya; 
Juan M. Portal-Martinez, Auditor General Auditoria Superior de la 
Federation, Mexico, Chairman; 
Lyn Provost, Controller and Auditor-General, Office of the Controller 
and Auditor-General, New Zealand; 
Jurgen Kosmo, Auditor General, Riksrevisjonen, Norway; 
Muhammad Akhtar Buland Rana, Auditor-General, Office of the Auditor-
General, Pakistan; 
Sergey Vadimovich Stepashin, Chairman, Accounts Chamber, Russian 
Federation; 
Amyas Morse, Comptroller and Auditor, General National Audit Office, 
United Kingdom; 
Gene Dodaro, Comptroller General, Government Accountability Office, 
United States of America; 
Adelina González, Acting Comptroller General, Contraloría General de 
la República, Venezuela. 

The International Journal of Government Auditing is published 
quarterly (January, April, July, October) in Arabic, English, French, 
German, and Spanish on behalf of INTOSAI (International Organization 
of Supreme Audit Institutions). The Journal, which is the official 
organ of INTOSAI, is dedicated to the advancement of government 
auditing procedures and techniques. Opinions and beliefs expressed are 
those of editors or individual contributors and do not necessarily 
reflect 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 offices at: 

U.S. Government Accountability Office: 
Room 7814, 441 G Street, NW: 
Washington, D.C. 20548: 
U.S.A. 
(phone: 202-512-4707; 
fax: 202-512-4021; 
e-mail: intosaijournal@gao.gov) 

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. 

The Journal is distributed to INTOSAI members and other interested 
parties at no cost. It is also available electronically at [hyperlink, 
http://www.intosaijournal.org] or [hyperlink, http://wwwintosa.org] 
and by contacting the Journal at spel@gao.gov. 

Articles in the Journal are indexed in the Accountants' Index 
published by the American Institute of Certified Public Accountants 
and included in Management Contents. Selected articles are included in 
abstracts published by Anbar Management Services, Wembley, England, 
and University Microfilms International, Ann Arbor, Michigan, U.S.A. 

Contents: 

Editorial: 

Thoughts from the Chairman of the Board: 

News in Brief: 

The Role of SAIs in Maintaining Financial Stability: 

EUROSAI Seminar on Communication: 

PASAI Congress: 

EUROSAI-ARABOSAI Congress: 

Spotlight on ISSAIs: 

INTOSAI-Donor Cooperation Update: 

Inside INTOSAI: 

IDI Update: 

INTOSAI Calendar: 

[End of section] 

Editorial: Developments in the CAROSAI Region: 

by Averil James-Bonnette, Secretary General of CAROSAI, and Alaistair 
Swarbrick, Auditor General of the Cayman Islands and Chair of the 
CAROSAI Institutional Strengthening Committee. 

The 21 members of the Caribbean Organization of Supreme Audit 
Institutions (CAROSAI) carry out their mandates against the background 
of rapidly changing environments and emerging accountability issues. 
Many face tremendous challenges in the areas of legislation and 
mandates, operations, budgets, methodologies, inactive Public Accounts 
Committees (PAC), and the failure to be recognized as fully 
independent organizations within the governance modality. Additional 
challenges arise in the CAROSAI region from the small size of the 
countries and their limited human and institutional capacities. 

A brief look at the Cayman Islands, one of the CAROSAI members, will 
illustrate the broader issues facing governments and SAIs in the 
region. A British overseas territory with an area of only 151 square 
kilometers and a population of 55,700 in 2009, the Cayman Islands is 
one of the wealthier countries in the Caribbean. It has the world’s 
largest offshore banking sector and reported real GDP per capita of 
$42,605 in 2010. 

However, the Cayman Islands’ government operations—and related 
governance, transparency, and accountability issues—have not kept pace 
with its wealth, GDP per capita, and status as a developed nation. The 
Office of the Auditor General (OAG) of the Cayman Islands experiences 
the same challenges as its counterparts in the less developed nations 
of the Caribbean. These challenges include the following. 

* Operational and financial independence: While the Auditor General of 
the Cayman Islands has constitutional independence, in reality the 
government controls the financial resources and the appointment of 
staff. The Ministry of Finance sets the OAG’s budget. The Auditor 
General must seek approval for contract renewals, pay rates, and any 
new staff from the head of the civil service. Thus, the OAG is 
technically part of core government. 

* Publication of reports: Although the Cayman Islands (unlike most 
territories in the region) now has a functioning PAC, there have been 
and continue to be efforts to restrict when the Auditor General’s 
reports become public documents. For example, some important 
stakeholders believe the PAC’s role is to challenge the veracity of 
the Auditor General’s findings rather than consider whether there are 
things that government should do more efficiently, effectively, and 
economically. As a result, they would like to see the publication of 
Auditor General reports delayed until after the PAC considers them and 
issues its own reports. This could lead to a situation similar to the 
one that occurred not so long ago when the PAC had to review all 
reports before they were issued—and because the PAC was inactive at 
that time, reports were not published for years. 

* Technical Capacity: While the OAG has fortunately had a high level 
of qualified staff, its biggest challenges are keeping up to date on 
developments in auditing and accounting standards, updating the audit 
methodology, obtaining appropriate technical advice on difficult 
technical issues, and meeting the quality control requirements of 
auditing standards. This is exacerbated by the small size of the OAG 
staff (only 19 members) and the challenges of dedicating resources to 
such important areas. 

Other fundamental issues related to institutional capacities plague 
almost all SAIs in the region. The INTOSAI Development Initiative 
(IDI), one of the major supporters of CAROSAI capacity-development 
initiatives, sponsored the Quality Assurance Review (QAR) program in 
2010 and the Risk-Based Approach to Financial Auditing (RBAFA) program 
in November 2011 to help strengthen regional institutional capacity in 
those areas. The RBAFA and QAR programs were valuable initiatives, but 
the ability of individual SAIs to effectively implement these 
methodologies may be limited. Regional SAIs are in different phases of 
development and have varying audit approaches. Capacity, capability, 
and ultimately institutional strength are key issues that may impede 
implementation. 

Another issue is the need for effective technical support for 
standards for financial auditing and accounting (as well as for 
performance and information technology auditing). In the CAROSAI 
region, it is difficult to get effective technical support and advice 
for small audit offices. The auditing and accounting standards have 
changed tremendously in recent years, and maintaining and acquiring 
knowledge on them is a challenge. 

Development of a Regional Strategic Plan: 

To address some of these issues that have been plaguing the region for 
some time, CAROSAI developed a regional strategic plan. 

CAROSAI’s strategic plan for 2008–2011 has four goal areas. 

Goal 1: Raise the profile of SAIs. 

Goal 2: Assist member SAIs in strengthening their institutional 
capacity. 

Goal 3: Help member SAIs develop their professional capacity. 

Goal 4: Establish an effective information-sharing process. 

Given the many challenges facing SAIs in the region, goal 1 of the 
strategic plan seeks to: 

* encourage the adoption of legislation that establishes strong 
independent SAIs, 

* promote improvements in the relationship between SAIs and PACs in 
order to increase the utilization and impact of audit findings, and, 

* strengthen relationships with key regional bodies. 

To promote the achievement of this goal, CAROSAI received an 
institutional development grant from the World Bank in 2009 to 
strengthen fiduciary oversight in the Caribbean. The United Kingdom’s 
National Audit Office (NAO) was given the contract in 2010 to be the 
consultant for this project. The NAO delivered an initial report in 
June 2011 that outlined the delivery and approach for the project. The 
following are the main components of the project: 

* helping to build members’ institutional capacity, 

* strengthening the legislative framework of CAROSAI members, 

* strengthening Parliamentary/SAI relationships, 

* preparing an institutional needs assessment, and, 

* designing a peer review mechanism and mentoring CAROSAI members in 
its use. 

CAROSAI is currently implementing the grant at the regional level with 
a view toward applying the knowledge gained at the national level. It 
is also seeking to update its strategic plan for 2012–2015 to further 
strengthen the capacity of SAIs to promote and enhance public sector 
accountability in the region by creating a well resourced Secretariat. 

[End of section] 

Thoughts from the Chairman of the Board: 

The World Is Desperate for an Independent Voice of Reason: 

by Terence Nombembe, Chairman of the INTOSAI Governing Board and 
Auditor-General of South Africa: 

In the year that has passed since my appointment as Chairman of the 
INTOSAI Governing Board, I have been privileged to interact with a 
number of regional INTOSAI structures and our key external 
stakeholders. I have also reflected on developments in the world in 
which we are living. These interactions and reflections have provided 
me with some insights on how INTOSAI can respond to these developments 
and, by doing so, provide what the world is desperate for: an 
independent voice of reason. 

We live in a world seeking liberation from poverty, a poverty that 
reveals itself in a number of ways-—even in unexpected ways and 
places. We have all witnessed a number of pivotal events unfolding 
before our eyes. The most recent is the news that the world population 
has reached the 7 billion milestone. According to projections, the 
population will grow to 8 billion in 14 years (2025) and 9 billion in 
32 years (2043). The next three decades thus present INTOSAI with a 
unique opportunity to diagnose the root causes of poverty and provide 
independent insights on sustainable solutions that will mitigate this 
risk. 

In certain situations, we are poor by virtue of the fact that 
populations are booming in some regions where available resources are 
being misused by those entrusted with reducing poverty levels, as 
envisaged in the Millennium Development Goals. Here, fraud and 
corruption involving business and cross-border activity, as well as 
selfishness and mismanagement by government leadership, are the 
biggest enemies of the growing population. Lack of credible, 
transparent, and timely reporting is another real risk under such 
circumstances. 

In other situations, nations are exposed to extreme levels of poverty 
by virtue of overcommitment to debt at both personal and government 
levels. Global political leaders are preoccupied with finding a 
lasting solution to this trend, which seems to be gripping nations one 
by one. This fever may have started in the United States and continued 
into Europe, where it is having serious repercussions. It surely is 
not going to end there. Consequently, the growing population will be 
rendered even poorer by this global financial crisis, which is largely 
caused by government and business leadership’s mismanagement of public 
funds and lack of transparency to the citizens. 

Citizens all over the globe, particularly the youth, are increasingly 
expecting a better economic life and employment opportunities. 
Unemployment is a real source of poverty, and it is growing steadily 
in many communities and resulting in protests and revolutions, as seen 
recently in some parts of the world. The phenomenon of high levels of 
youth unemployment prevails throughout the world and with the growing 
population projections it will—unless mitigated effectively—continue 
to expand and trigger anger and protests in other parts of the world 
too. The reality here is that levels of education are not high enough 
or sufficient to absorb the youth into the productive sectors of the 
economy as the main impetus of productivity. Instead, most of our 
young and growing populations fall short of pursuing and acquiring the 
highest levels of education and training while still in their prime 
learning years (ages 20 to 30) and rather rush into the job market 
prematurely—hence the frustration with unemployment and poverty. 

The intertwined matters of environmental and natural disasters cannot 
be excluded from this scrutiny, as they too can present unbearable 
hardship to the growing population. In this regard, we need elevated 
levels of commitment by the leaders of our nations to implement and 
monitor mitigation and adaptation practices. Without such commitments, 
the world we are living in with its growing population will no doubt 
be rendered all the poorer as a consequence of unfavorable and 
unpredictable natural conditions. 

In all likelihood, the growing population will be subjected to a 
number of poverty-related developments in the next three decades and 
beyond. The key question is what we as INTOSAI can do to mitigate such 
risks and respond to the loud and desperate call for an independent 
voice of reason. 

At this juncture, we have an opportunity as SAIs to begin to reflect 
deeply about the significance of our independence in a way that 
demonstrates our respective abilities to apply this noble master key 
that we possess. SAI independence can be adapted to any situation in 
which we as SAIs find ourselves. All we need to use this master key is 
the ability to understand the door in which we want to use it so that 
the door can open effortlessly. We need to refrain from complacency 
when it comes to matters related to the Lima and Mexico Declarations. 
We need to demonstrate mature leadership, tact, and strategic 
influence, even in those settings that may at face value appear to be 
the most difficult, such as capacity building and institutional 
autonomy. 

The bottom line is simple: as heads of SAIs, we need to take primary 
ownership of the knowledge and capacity building of our institutions. 
Nobody else, not even the most repressive regime on the planet, should 
ever influence this space. By building the knowledge base of our SAIs, 
we make ourselves more dependable, even for the most reckless regimes. 
The more we build a knowledge base capable of excelling in independent 
audit scrutiny, risk analysis, and constructive insights, the more we 
make ourselves dependable, regardless of the environment in which we 
operate. Let us take advantage of the limited resources that our 
governments are providing to us as heads of SAIs and build a knowledge 
base that is capable of providing independent insights to these same 
governments. The INTOSAI-Donor Cooperation is certainly one of the 
developments that has provided a lasting solution to the long-standing 
need for capacity building among SAIs. Let us use this platform and 
many others that are working for us in our respective regions to 
liberate ourselves and strengthen our independence with the weapon no 
one could dare take away from us: the knowledge of auditing that 
equips us with independent thought and analysis. 

History has proven that institutional autonomy will and always does 
lag behind autonomy of knowledge. The efforts of the United Nations in 
passing the resolution that enshrines the Lima and Mexico Declarations 
in international law will fall on barren territory if expertise is 
lacking in our SAIs. This knowledge autonomy will respond to the risk 
of world poverty that the growing population is likely to face in all 
economies of the world—developed, developing, and underdeveloped. All 
nations are vulnerable, and thus citizens of the world are desperate 
for that independent voice of reason—the INTOSAI voice of reason, the 
SAI voice of reason. Now is the time we need to put the INTOSAI motto 
into practice and continue to share our experiences so that we can all 
benefit from our respective breakthroughs and success stories. 

The 62nd INTOSAI Governing Board meeting was a great revelation and 
inspiration as it gave us the opportunity to reflect on regional 
communication regarding capacity building and knowledge autonomy. I am 
pleased that all our regions are making significant strides in these 
critical areas and thus taking ownership of them. In this way, we are 
indeed advancing the fundamental doctrine of independence rather than 
being complacent and not responding meaningfully to the desperate 
international call for an independent voice of reason. 

As INTOSAI, it is our time to shine, and we shall indeed shine. 

[End of section] 

News in Brief: 

Azerbaijan: 

Chamber of Accounts Marks 10th Anniversary: 

On November 2, 2011, the Chamber of Accounts of the Republic of 
Azerbaijan celebrated its 10th anniversary in a ceremony held in its 
administrative building in the capital city of Baku. Participants 
included representatives from the national Parliament, government 
ministries and departments, and international organizations. The heads 
of SAIs from Russia, Turkey, Kazakhstan, Moldova, Ukraine, and 
Kyrgyzstan also attended. 

Heydar Asadov, Chairman of the Chamber, welcomed the participants to 
the ceremony, during which he and other chamber members and staff were 
recognized with awards from the government. Mr. Asadov expressed his 
sincere appreciation to the President of Azerbaijan for his support of 
the chamber’s activities and provided a brief summary of the chamber’s 
development over the past 10 years. 

The constitution of Azerbaijan authorized the establishment of the 
Chamber of Accounts. In 1999, the law on the Chamber of Accounts was 
adopted, and legislation was passed in 2002 that approved the chamber’
s internal regulations. In that same year, the chamber became a member 
of INTOSAI, EUROSAI, ASOSAI, and ECOSAI. The chamber also signed 
agreements on cooperation and established professional relations with 
other SAIs. Currently, the chamber is exploring additional cooperative 
agreements with similar institutions in other countries. Changes and 
amendments to the chamber’s authorizing legislation in 2008 
strengthened its role in the system of public finance control, and the 
chamber gained expanded powers to carry out its functions and fight 
financial irregularities. 

[Photograph: Heydar Asadov, Chairman of the Chamber of Accounts of 
Azerbaijan, delivered the opening address at the SAI’s 10th 
anniversary celebration] 

The chamber has concentrated on auditing the preparation and execution 
of the state budget and extra-budgetary funds in state-owned and 
private entities, the internal controls and compliance with tax 
legislation of entities collecting revenue, the effective utilization 
of state budget and extrabudgetary funds, and the implementation of 
state investment programs and social services, including science, 
education, health, and culture. The chamber has also focused on 
proposing improvements to budgeted programs, eliminating gaps in 
legislative acts, developing regulatory and methodological documents, 
and improving legislation. Over the past 2 years, the chamber has sent 
50 proposals to the Cabinet of Ministries. The relevant government 
authorities have supported most of the proposals and taken actions to 
implement them. 

Mr. Asadov stated that the chamber has emphasized postaudits of fiscal 
operations and had significantly increased its audits and opinions 
from 41 in 2008 to 83 in 2010. The chamber has not only detected gaps, 
shortcomings and financial irregularities but also taken action to 
eliminate them, reinstate improperly spent budget funds, and punish 
those responsible. 

[Photograph: The heads of other SAIs attending the anniversary 
celebration for the SAI of Azerbaijan gathered for an official photo] 

Over the past 3 years, the Chamber of Accounts has succeeded in 
returning millions of Azerbaijani manats of budget monies to 
appropriate cash accounts, the State Budget, and the State Social 
Protection Fund budget. The chamber has prevented excessive, 
unjustified, and inefficient payments and ensured appropriate use and 
recording of public monies in accordance with legislation. The total 
amount of savings is many times more than the chamber’s operating 
budget. 

In response to serious shortcomings identified by its audits, the 
chamber has also referred four cases to the Prosecutor General’s 
Office for further investigation, and the Tax Ministry has initiated 
criminal proceedings against 11 taxpayers with large arrears to the 
state budget. Relevant authorities have taken administrative measures 
against hundreds of people responsible for identified shortcomings. 
Within the framework of cooperation between the Republic of Azerbaijan 
and the World Bank, the chamber has drafted a strategic development 
plan, and a grant has been received to implement it. The World Bank 
will also carry out a corporate and public sector accountability 
project. 

Mr. Asadov noted that the Chamber of Accounts is currently playing an 
important role in managing the budget and ensuring transparency and 
efficiency in the activities of executive authorities. He noted that 
the chamber is determined to continue its successful actions to 
develop public auditing in the Republic of Azerbaijan. 

For additional information, please contact the Chamber of Accounts: E-
mail: office@ach.gov.az: 
Website: [hyperlink, http://www.ach.gov.az]: 

Japan: 

Annual Audit Report: 

On November 7, 2011, Hiroyuki Shigematsu, the President of the Board 
of Audit, submitted the annual report for fiscal year 2010 to Prime 
Minister Yoshihiko Noda. The report contains the results of audits the 
Board of Audit conducted in 2010–2011 on the final accounts of the 
annual expenditures and revenues of the state and government-
affiliated institutions for fiscal year 2010 and on other matters. The 
cabinet will submit the audit report to the Diet together with the 
final accounts of the expenditures and revenues of the state. 

For additional information, contact the Board of Audit: E-mail: 
liaison@jbaudit.go.jp: 
Website: [hyperlink, http://www.jbaudit.go.jp/english/]: 

Kuwait: 

Tribunal on Financial Violations Inaugurated: 

Kuwait has convened for the first time an independent tribunal to 
prosecute government officials for financial crimes. The authorizing 
legislation of the State Audit Bureau (SAB, the Kuwaiti SAI) provided 
for the establishment of this tribunal, whose decision-making process 
is separate from the SAB. The tribunal is chaired by the president of 
the Kuwaiti Legal Advice and Legislation Department, and its members 
include officials from the SAB, the Ministry of Finance, and the Civil 
Service Commission. The SAB president is the only person empowered to 
bring to the tribunal charges against officials whom the SAB has found 
to have committed financial crimes. The tribunal is considering a 
number of issues referred to it by the SAB. 

SAI Administrative Restructuring: 

The SAB’s administrative structure has been reorganized and some of 
its units have been renamed. The new structure includes the following: 

1. Companies Audit Sector. 

2. Audit of Investment and Subsidiary Bodies Sector. 

3. Pre-audit Sector and Information Technology. 

4. Oil Audit Sector. 

5. Audit of Ministries and Public Departments Sector. 

6. Financial and Administrative Affairs Sector. 

For additional information, contact the SAB: E-mail: 
president@sabq8.org: 
Web site: [hyperlink, http://www.sabq8.org]: 

Lithuania: 

Memorandum of Understanding Signed with the SAI of Georgia: 

In September 2011, Giedre' Švediene', the Auditor General of 
Lithuania, and Levan Bezhashvili, the Chairman of the Chamber of 
Control of Georgia, signed a memorandum of understanding (MOU) to 
share knowledge and exchange experiences in the area of public audit. 
The MOU was signed in Vilnius during the visit of the Chairman of the 
SAI of Georgia to the SAI of Lithuania. 

Under this MOU, the cooperation plan for 2011–2012 focuses on 
delivering practical training to the SAI of Georgia for financial and 
compliance audits in the Ministry of Finance of Georgia. In addition, 
consultations, recommendations, and expert support will be provided to 
the Georgian SAI in the following areas: 

* the opinion on the draft state budget; 

* the opinion on the financial statements and reports on 
implementation of the state budget including revenue audits; 

* the opinion on the report on state-owned property; and; 

* information technology audits. 

For additional information, please contact the National Audit Office 
of Lithuania: E-mail: nao@vkontrole.lt: 
Website: [hyperlink, http://www.vkontrole.lt/en/index.php]: 

Netherlands: 

New Board Member of the Court of Audit: 

[Photograph: Kees Vendrik] 

C.C.M. (Kees) Vendrik was appointed to the Board of the Netherlands 
Court of Audit, effective April 15, 2011, by a March 31 royal decree. 
He succeeds Gijs de Vries, who became a member of the European Court 
of Auditors in Luxembourg in January 2011. Mr. Vendrik was a member of 
the House of Representatives for GroenLinks (Green Left Alliance) from 
1998 to 2010. From 2002 to 2008, he was the financial spokesperson for 
his party. He was also a member of the Public Expenditure Committee. 
As a Member of Parliament, his interests included energy, the 
environment, economic affairs, agriculture, traffic, health care, and 
education. 

Court of Audit Hosts First Into-SAINT Moderator Training: 

The Netherlands Court of Audit (NCA) hosted a moderator training for 
Into-SAINT, an integrity self-assessment instrument, September 19–23, 
2011. 

With Into-SAINT, SAIs can analyze their integrity risks and assess the 
maturity level of their integrity management systems. 

The 46 participants in the training represented the SAIs of Aruba, 
Austria, Botswana, Chile, Georgia, Ghana, Indonesia, Korea, Kuwait, 
Macedonia, Mexico, Mozambique, Norway, Russia, Rwanda, South Africa, 
Tunisia, Turkey, Vietnam, and Zimbabwe; the European Court of 
Auditors; AFROSAI-E; and the INTOSAI Development Initiative. 

The participants not only completed the training successfully but also 
offered valuable suggestions for designing a rollout strategy to 
promote the use of Into-SAINT in their countries and regions. The NCA 
will report on the Into-SAINT initiative at the XXI INCOSAI in Beijing. 

For additional information, contact the NCA: 
E-mail: internationalaffairs@rekenkamer.nl: 
Website: [hyperlink, http://www.courtofaudit.nl/intosaint]: 

Peru: 

II International Conference against Corruption: 

The SAI of Peru-—an active member of the INTOSAI Working Group on the 
Fight against Corruption and Money Laundering—-hosted the II 
International Conference against Corruption in Lima October 3–4, 2011. 
Attendees included international anticorruption experts, government 
officials, businessmen, and other representatives of the private 
sector. In discussions and presentations throughout the conference, 
participants acknowledged the latest developments in the fight against 
corruption and shared their related experiences. 

At the conference, Peruvian Comptroller General Fuad Khoury Zarzar 
gave an overview of the anticorruption strategy his SAI is proposing. 
The strategy encompasses seven components: a high-level government 
commitment, 360-degree legislation, state policy, education and 
values, involvement of the private sector, communication, and the 
measurement and monitoring of results. 

This model will promote the development of instruments in the legal 
and operational framework of government audit. It will also appeal to 
and actively involve institutional and citizen stakeholders in 
strengthening tools to promote internal control, prevent corruption, 
and address civil complaints. Most importantly, it will encourage a 
cooperative and integrated approach among institutions responsible for 
fighting corruption. 

Daniel Kauffmann, a researcher with the Brookings Institution, stated 
that corruption is an important symptom of institutional failures and 
that the causes of the systemic fault must be identified. While causes 
may vary from one institution or country to another, they are mostly 
due to the lack of transparency. Whenever there is impunity, the 
incentives are so great that officials take the risk and become 
corrupt. 

He also stated that in order to establish a winning strategy in the 
fight against corruption, essential aspects of democracy must be at 
work. The media, instead of being monopolized and corrupt, must be 
effective and competitive. Most importantly, the government must be 
open and transparent, aware of the problems, and able to measure 
indexes of corruption. 

In this context, Kauffman pointed out that if problems in the 
institutional, government, and corruption frameworks are not 
addressed, countries such as Peru will not be able to maintain the 
level of growth they have experienced during the past 5 or 6 years. 

Patrick Alley, one of the founders of Global Witness and a 2003 Nobel 
Peace Prize nominee, discussed the global necessity of a frank 
discourse with the governments of countries that have low levels of 
corruption but whose banks may be receiving funds from corrupt sources 
and concealing the identity of the perpetrators of corruption. 

János Bertók, an official of the Organisation for Economic Co-
operation and Development, affirmed that preventing corruption should 
involve the carrying out of legislation, the training of human 
resources, the implementation of internal controls, the strengthening 
of external controls, the commitment of leadership, and a “meritocracy”
in public administration and accountability. 

On a similar note, Francesca Recanatini, head of the World Bank’s 
Anticorruption and Governance Thematic Group, recommended the 
implementation of e-government to reduce the risk of corruption and 
improve transparency and accountability. She also pointed out the need 
to implement an integrated legal framework, as well as the need for 
oversight of institutions responsible for monitoring and presenting 
results to citizens. 

Taryn Vian, an associate professor at Boston University, charted the 
extent of damage caused by corruption, stating that it may be costing 
the public sector in Latin American countries $28 billion dollars a 
year. Furthermore, it has limited the impact of improvements 
envisioned in the health sector, such as lowered child mortality 
rates. Although health costs in the region have doubled during the 
past 14 years, services have not improved, with the greatest impact 
being felt by the poorest sectors. 

She added that a map of risks in the Latin American health sector had 
identified problems such as the absenteeism of medical staff, the 
robbery of supplies, patients not receiving health care or being 
overcharged for services, and the withholding of reimbursements to 
patients. She noted that measures that had demonstrated success 
included promoting social control and accountability and publishing 
the international drug price indicator guide in order to compare 
prices. 

By hosting the II International Conference against Corruption, the SAI 
of Peru highlighted the challenges to reducing corruption in 
government institutions. This task is not the sole responsibility of 
institutions investigating, monitoring, and penalizing cases of 
corruption; rather, it is the responsibility of administrators and 
public sector managers charged with establishing order, presenting 
results, and fighting against corruption in their own areas, 
institutions, programs, projects, and sectors. 

For additional information, contact the SAI of Peru: 
E-mail: contraloria@contraloria.gob.pe: 
Website: [hyperlink, http://www.contraloria.gob.pe]: 

Romania: 

Official Visit from the Spanish Tribunal de Cuentas: 

At the invitation of Nicolae Vacaroiu, President of the Romanian Court 
of Accounts, a Spanish delegation led by Manuel Nuñez Pérez, President 
of Spain’s SAI (Tribunal de Cuentas) and Secretary General of EUROSAI, 
visited Romania September 5–8, 2011. 

[Photograph: Nicolae Vacaroiu, President of the Romanian Court of 
Accounts (right) and Manuel Nuñez Pérez, the President of the Tribunal 
de Cuentas (left), during their September 2011 meeting in Bucharest] 

The meetings included discussions of bilateral institutional 
cooperation in the context of INTOSAI and EUROSAI. In addition, 
presentations were made on the role of SAIs in relation to measures to 
address the economic and financial crisis; SAI contributions to 
transparency, accountability, and good governance in public 
management; and the impact of the EUROSAI statement on SAI 
independence that was approved at the VIII EUROSAI Congress. The 
Spanish delegation also met with the First Deputy Governor of the 
National Bank of Romania. 

For additional information, contact the Romanian Court of Accounts: 
E-mail: international.romania@rcc.ro: 
Website: [hyperlink, http://www.curteadeconturi.ro]: 

Vietnam: 

New Head of SAI: 

In August 2011, Dinh Tien Dung was appointed Auditor General of the 
State Audit Office of Vietnam by the National Assembly of the 
Socialist Republic of Vietnam, succeeding Vuong Dinh Hue who became 
the Minister of Finance. 

[Photograph: Dinh Tien Dung] 

Mr. Dinh was born in 1961 in Ninh Binh and has a master’s degree in 
economics. He has broad leadership experience in finance and 
accounting, as well as other fields, at both the central and 
provincial levels. Previously, he was Chief Accountant in the 
Corporation–Ministry of Construction of Vietnam. In October 1997, he 
was appointed Director of the Finance and Accounting Department of the 
Ministry of Construction and, in June 2003, he was named Deputy 
Minister of Construction. In May 2008, he was elected as Vice-
Secretary of the Dien Bien Provincial Communist Party and in July of 
that year became Chairman of the Dien Bien Provincial Communist People’
s Committee. In October 2010, he was elected Secretary of the Ninh 
Binh Provincial Communist Party. 

Modifications Proposed to the State Audit Law: 

Since 2006, Vietnam’s State Audit Law has provided regulations on the 
organization and operation of the State Audit Office of Vietnam (SAV). 
Over the 6 years of the law’s implementation, audits have increased in 
scope and quality and the SAV’s role has become more clearly defined. 
However, the law’s limitations have become apparent. For example, the 
SAV’s legal status does not reflect its position as the highest state 
financial inspection agency. This leads to insufficient awareness-—in 
government sectors and among the public-—of the SAV’s position, roles, 
functions, and tasks. Also, for the purpose of audit activities, the 
relationship between SAV and agencies of the National Assembly has not 
been specified. In addition to these limitations, the SAV functions 
and tasks as set forth in the State Audit Law have not: 

* completely covered the inspection and supervision of management and 
use of the state’s budget, money, and assets; 

* focused on auditing the management and use of national resources; 

* audited the management and use of the state’s capital and assets in 
enterprises where the state does not hold dominant shares; 

* audited tax and public debt frequently; or; 

* specified preaudit tasks. 

In order to overcome these and other identified limitations of the 
State Audit Law, the SAV submitted a proposal for modifying the law in 
the National Assembly’s upcoming session. 

To guarantee the quality of the modifications that the SAV will 
propose, SAV will gather opinions from civil servants and auditors 
regarding the practical requirements of auditing work. The SAV will 
also gather opinions from agencies of the National Assembly, 
ministries, government sectors, localities, and related organizations 
and individuals on the feasibility of any proposed modifications to 
the State Audit Law. The SAV will work with these groups to reach 
consensus on the nature and implementation of the proposed 
modifications. 

For additional information, contact the SAV: 
E-mail: vietnamsai@hn.vnn.vn: 
Website: [hyperlink, http://www.kiemtoannn.gov.vn]: 

[End of section] 

The Role of SAIs in Maintaining Financial Stability: 

by Thomas Hagberg, Swedish National Audit Office: 

Since it is in the public interest to have stable and resilient 
financial systems, governments around the world are committed to 
maintaining financial stability. Supervising a country’s financial 
system and promoting financial stability are often within the realm of 
central bank operations. Many countries also have separate authorities 
to supervise individual financial market participants. According to a 
report by the INTOSAI Global Financial Task Force: Challenges to SAIs, 
the role of SAIs in maintaining financial stability is to evaluate the 
appropriateness of the supervisory structure for financial markets, 
even if the work of central banks may fall outside the audit mandate 
of some SAIs. 

In 2011 the Swedish National Audit Office (NAO) audited the 
supervision of Swedish banking operations in the Baltic region before 
the worldwide 2008–2009 global financial crisis.[Footnote 1] The 
Swedish NAO studied how the Swedish Central Bank and Swedish Financial 
Supervisory Authority, the two entities charged with oversight 
responsibilities for banking operations, assessed and reported the 
risks that arose in the Swedish banking system from 2005–2007, a time 
when commercial banking operations expanded rapidly in the Baltic 
countries. The results of this audit identified important findings 
related to the government’s responsibility to maintain financial 
stability and provide, therefore, an example of the role that an SAI 
can play in maintaining financial stability by evaluating the 
supervisory structures for financial markets. 

The Swedish NAO’s audit resulted in the following key observations and 
recommendations: 

The Baltic Expansion Implied an Increased Risk in the Banking Sector: 

The Swedish banks increased their risks by rapidly expanding into the 
Baltic region during a time of uncontrolled growth in the region’s 
economies. Signs of a high risk level included extreme credit 
expansion, rapidly rising home prices, lending in foreign currency, 
and rising labor costs with fixed exchange rates. All in all, the 
risks increased to the point that they materialized during the 
financial crisis. 

The Authorities Underestimated the Risks: 

Although concerns became more substantial as imbalances grew, the 
risks were considered to be manageable during the entire 2005–2007 
period, in part because of the banks’ good capital adequacy. The 
authorities underestimated the credit risks but, most importantly, 
they misjudged the liquidity risks, especially those regarding the 
banks' foreign financing. However, this mistake was shared by almost 
all other central banks, supervisory authorities, academics, and the 
investor community across the world. 

The Authorities’ Mandates Need to Be Revised and Clarified: 

The Swedish Central Bank and Swedish Financial Supervisory Authority 
have different tools and analysis functions. The former oversees the 
financial system as a whole, while the latter focuses on individual 
institutions and can apply sanctions if a financial institution falls 
short in areas such as capital adequacy or risk management. The 
mandates of these authorities need to be revised and clarified, and 
tools to safeguard financial stability in a broad sense need to be 
developed. Furthermore, a macroprudential policy—an expressly 
legislative mandate to manage risks in the financial system as a whole—
does not exist. The Central Bank and Financial Supervisory Authority 
should determine how a regulation framework for such a macroprudential 
policy should be developed and who ought to be responsible for it. 

Supervision of Banks with Operations in Several Countries Was 
Inadequate: 

The Baltic authorities felt that they had few tools and could not 
control the development of their own credit markets. They could only 
apply a strict legal framework on local banks, and the branches of 
foreign banks—such as Sweden’s—could not be included in modified 
rules. After the crisis, a new structure and several new regulations 
were created within the European Union to handle, among others, issues 
regarding cross-border banks. This should improve conditions so that 
the issues that branches of foreign banks experienced in the Baltic 
region will be easier to manage in the future. 

The Communication by the Two Authorities Was Inadequate: 

The audit identified a gap between the Central Bank’s view of its 
communication of the risks in the Baltic region and other 
participants. Representatives from the Central Bank believed that they 
had sent out a stronger message regarding the risks than what the 
recipients perceived. The fact that the Central Bank discussed the 
risks in the Baltic region in its biannual reports on financial 
stability seems to have had little effect on the banks’ actions. 
Establishing a public arena with regular hearings on financial 
stability in the Swedish Parliament would force both the Central Bank 
and Financial Supervisory Authority to take a clear stand on the risks 
and communicate them to a broader audience. 

A Need for Better Coordination: 

Coordination between the two authorities and between them and the 
government needs to be strengthened. Sweden’s institutional structure 
demands significant coordination between its Central Bank and 
Financial Supervisory Authority, on the one hand, and between these 
authorities and the Ministry of Finance on the other. The audit 
demonstrated a good climate of cooperation between the Central Bank 
and Financial Supervisory Authority, aided by personal contacts 
between members of staff in both entities. However, it is important to 
have operations and methods for collaboration that go beyond personal 
contacts. Furthermore, although the two entities had had an agreement 
on methods for collaboration since 2003, the collaboration had not 
been evaluated. The Central Bank and Financial Supervisory Authority 
should continue their close cooperation to maintain financial 
stability and report to the Parliament or government on how the 
cooperation has been carried out during the year. A decision should be 
made as to whether this cooperation should be evaluated internally or 
externally. 

The Stress Tests Were Not Tough Enough: 

Overly cautious assumptions were made in the stress tests of the 
financial institutions’ resilience to adverse economic outcomes. The 
stress tests that the Swedish Central Bank carried out were based on 
either assumptions of a geographically isolated downturn in the Baltic 
economies or a normal business cycle slow-down. A more plausible test 
would have assumed that the Baltic countries were having problems at 
the same time the rest of the world was facing an economic downturn. 
By using cautious assumptions in stress tests, the banks’ strength was 
overrated and the risks to financial stability were underrated. The 
Central Bank should clarify what stress tests aim to measure and 
ensure that stress test assumptions reflect realistic risks. Future 
stress tests could assume downturns of different magnitudes in the 
economy, which would provide more information on the banks’ strength. 

The Government Has No Tools for Limiting Its Implicit Guarantee to the 
Financial Sector: 

The government has an implicit responsibility to support the banking 
system when crises emerge. The Icelandic example shows that the 
guarantee can be unreasonably costly when the banking sector grows 
very quickly in proportion to the rest of the country’s economy. 
Today, the Swedish government has no tools to limit the size of the 
banking sector and, thus, its implicit guarantee. Since the Swedish 
banks had a dominant role in the Baltic payments systems, the Swedish 
government also assumed an implicit responsibility for these and, 
thereby, for the countries’ economic stability. The development shows 
that the Swedish government can have an indirect responsibility for 
other countries’ economies when Swedish banks achieve a dominant role 
in a foreign credit market. The government should examine whether 
risks in the banking sector and the implicit state guarantee can be 
limited. The government should make sure that it is regularly informed 
of all risks involved—not only those regarding the banks’ capital 
adequacy, but also those that the banks’ operations in other countries 
entail. 

Conclusion: 

The global financial crisis highlighted the importance of the 
stability in and an efficient regulation of financial markets. 
Governments’ implicit guarantees to the financial market imply that 
vast sums of taxpayers’ money are at stake. The Swedish NAO’s audit 
pointed to several challenges in the institutional setup for the work 
with financial stability in Sweden prior to the crisis. The fact that 
the responsibility for financial stability is divided between several 
independent authorities and the government requires effective 
cooperation and coordination between these entities. The audit also 
identified problems in assessing systemic risks and an ineffective 
regulatory system for cross-border banks. To promote financial 
stability, the audit recommended that a regulation framework for a so-
called macroprudential policy should be developed and that the 
Parliament should examine the possibility of regularly organizing 
public hearings on financial stability. These audit results underscore 
the important role SAIs have in promoting financial stability by 
evaluating the effectiveness of the supervisory structure for 
financial markets. 

For additional information, contact the author at 
thomas.hagberg@riksrevisionen.se. 

Footnote: 

[1] Maintaining Financial Stability in Sweden—Experiences from the 
Swedish banks’ expansion in the Baltics (RiR 2011:9). An English 
translation of the audit can be downloaded in full from the Swedish 
NAO’s website [hyperlink, 
http://www.riksrevisionen.se/en/Start/2011_9]. 

[End of section] 

EUROSAI Seminar on SAI Communication with the Public via the Media: 

by Kamila Zyndul, Supreme Audit Office of Poland (NIK): 

Supreme audit institutions (SAI) have a mandate to inform citizens 
about the state of their governments as revealed in the audit reports 
they produce. Therefore, it comes as no surprise that SAIs are very 
concerned about the issue of communication, which has become a 
challenge in the modern world where new technologies and trends, as 
well as information tools, are rapidly developing. 

In recent years, communication has become an issue of vital importance 
for the whole INTOSAI community. The first INTOSAI communication 
policy, which was adopted by the XIX INCOSAI in 2007, and the 
communication strategy and guideline, which were adopted by the XX 
INCOSAI in 2010, defined communication as a priority issue for all 
INTOSAI members. This, naturally, has given rise to initiatives aimed 
at discussing communication from the SAI perspective. For example, the 
most recent United Nations/INTOSAI symposium discussed communication 
as an element of effective cooperation between SAIs and citizens to 
enhance public accountability. 

Since communication is a very broad issue, it can be looked at from 
various angles. The SAI of Poland (NIK), which chaired the EUROSAI 
Governing Board from June 2008 to June 2011, organized a seminar for 
EUROSAI members that focused on a specific element of SAI 
communication—cooperation with the media. Because participants were 
from only one INTOSAI region, the discussion could be limited to the 
European context and focus specifically on European issues. 

[Photograph: Participants in the EUROSAI seminar on SAI cooperation 
with the media] 

As reported in the July 2011 issue of this Journal, the seminar 
(entitled SAIs’ Communication with Public Opinion via the Media) was 
held in Warsaw May 10–11, 2011. More than 50 participants from 21 
European SAIs attended. It was targeted to SAI staff responsible for 
designing and implementing media policy as well as public 
relations/media/press officers. Its main objective was to discuss the 
communication process from the perspective of both an SAI’s public 
relations services and the media and to consider how communication 
between SAIs, the media, and the public could be improved. 

In his opening address, NIK President Jacek Jezierski emphasized the 
importance of cooperation between SAIs and the media. His presentation 
attempted to explain why SAIs should present their audit results in 
the media and focused on the need for civil society to be informed if 
it is to make informed decisions in a democracy. Since an SAI’s 
mission is to provide information on the functioning of government 
institutions, and since mass media are the main source of public 
information, cooperation between SAIs and the media is a necessity, 
and they both should strive to make it as effective as possible. 
Furthermore, in a democratic country with independent media, citizens 
can trust that independent and credible journalists have verified the 
information they get via the media, which adds to its reliability. 
President Jezierski also stated that all SAI staff, not only media 
officers, should keep the issue of communication in mind because, as 
authors of audit reports, they all contribute to the information 
presented to the public. The audit reports should be written in a 
reader-friendly manner and present audit findings in an understandable 
way. 

Session 1: The SAI Public Relations Perspective: 

To open the first seminar session, a well known Polish public 
relations (PR) expert discussed contacts between SAI PR services and 
journalists and explained why friction frequently occurs between them. 
He stated that good communication with representatives of the media 
contributes to the effectiveness of PR services, and partnership is 
the best way to make their collaboration effective. 

After that, representatives of the SAIs of Germany, the Russian 
Federation, and the United Kingdom described the information policies 
adopted in their institutions, and the tools they have developed to 
communicate with the media. They also described opportunities and 
threats arising from the contacts between SAI PR services and the 
media. They stressed that SAIs should strive for good relations with 
the media so that their audit results can reach the public, their main 
addressee. They observed that SAIs should be honest and trustworthy if 
they want to have good relations with journalists. For that reason, 
they should not overstate their messages and should present their work 
in a reliable way, without trying to make their audit reports more 
attractive to make them sell better. SAIs should be supportive by, for 
example, organizing press conferences to inform the media about their 
audit findings and offer materials to journalists. However, SAIs must 
be cautious when handling sensitive data so as to not damage the 
interests of their auditees. 

Session 2: The Media Perspective: 

The second day of the seminar started with a session dedicated to the 
media’s perspective on collaboration with SAI PR officers. Well-known 
Polish journalists from the press, television, and radio discussed 
their experiences and described the ideal media officer they would 
like to cooperate with. Such a media officer would be easily available 
and well-informed and would understand the nuances of information 
transmitted via the media. The journalists also stressed that SAI 
spokespersons should not treat them as enemies but rather as partners 
who provide them with an opportunity to inform a wider audience about 
their work. 

However, cooperation between SAIs and the media poses a significant 
challenge, since the goals and operating modes of the two entities 
seem to be totally different. 

* Auditors generate long, carefully elaborated reports, while 
journalists need short, catchy news items. 

* Auditors employ professional jargon containing specialist terms, 
while journalists use straightforward news language. 

* Auditors must comply with a long audit process, while journalists 
must have information now-—“later” is frequently much too late for 
them. 

Therefore, SAIs need to make a special effort to collaborate 
effectively with the media. Nevertheless, according to the majority of 
the seminar participants, such an effort is worthwhile in the modern 
world, where an organization that wants to actively participate in 
public debate cannot be absent from the media. 

Session 3: Problems Communicating with the Media: 

In the third session, representatives of the SAIs of Lithuania, 
Poland, and Spain discussed their information policies, collaboration 
with the media in their countries, and potential problems that may 
arise from specific SAI mandates. They emphasized that SAIs should 
assist the media in understanding the nuances of their work. To inform 
the public effectively on audit results and their impact on the 
functioning of the government, journalists should be aware of the 
special role SAIs play in the democratic system. The speakers also 
highlighted the importance of regional media, which in some countries 
are the main source of information for many citizens. SAIs should also 
develop tools for cooperating with representatives of the local press, 
television, and radio stations. After the presentations, seminar 
participants had the opportunity to ask speakers additional questions 
and discuss the topics they found most interesting or controversial. 

While summarizing the results of the seminar, NIK President Jacek 
Jezierski stated that despite differences in the ways SAIs communicate 
with society, they all have the same goal: to provide the public with 
reliable information on the results of their audits. SAIs can use the 
media to meet this goal but should not neglect their relationship with 
audited bodies while they are focusing on developing good relations 
with the media. To conclude, the President of the NIK emphasized that 
SAIs must be free to decide on the timing and content of the 
information they present to the public, as well as their methods of 
presenting that information. Freedom to disseminate audit results is a 
precondition of SAI independence, as set forth in INTOSAI’s Mexico 
Declaration. 

For additional information, contact the NIK: 
E-mail: wsm@nik.gov.pl: 
Website: [hyperlink, http://www.nik.gov.pl]: 

[End of section] 

PASAI Notes Significant Accomplishments at 14th Congress: 

by Lin Weeks, PASAI Capacity-building Consultant: 

The members of the Pacific Association of Supreme Audit Institutions 
(PASAI) celebrated 25 years of progress when they met August 2–5, 
2011, in Nuku’alofa, Tonga, for their 14th congress, whose theme was 
the value and benefits of SAIs. The delegates formally adopted INTOSAI’
s Johannesburg Accords, shared their recent experiences and 
accomplishments, endorsed the ongoing capacity-development activities 
of the Pacific Regional Audit Initiative (PRAI), and discussed next 
steps toward implementing PRAI programs and products across the region. 

[Photograph: Congress delegates and observers gathered outside the 
Convention Center in Fa’onelua Park, Nuku’alofa, Tonga for the 
official group photograph] 

This year’s congress, one of the largest ever held in the Pacific 
region, brought together the heads of 21 national and state audit 
offices as well as representatives of development partners and other 
key stakeholders. Audit office delegates came from American Samoa; the 
Australian National Audit Office and the Australian states of New 
South Wales and Victoria; the Cook Islands; Fiji; the Federated States 
of Micronesia: Kosrae, Pohnpei, and Yap; Guam; Kiribati; the Marshall 
Islands; Nauru; New Caledonia; New Zealand; Palau; Papua New Guinea; 
Samoa; the Solomon Islands; Tonga; and Tuvalu. Donors and stakeholders 
attended from the Australia Agency for International Development, the 
New Zealand Aid Program, the Asian Development Bank, the Pacific 
Island Forum Secretariat, and the Pacific Financial and Technical 
Assistance Centre. 

Opening Ceremony: 

During the opening ceremony, the chairmanship of PASAI was formally 
transferred from Raimon Taake, Auditor General of Kiribati, to Pohiva 
Tu'I’onetoa, Auditor General of Tonga. 

Lord Tu’I’afitu, Deputy/Acting Speaker of Tonga’s Legislative 
Assembly, delivered an opening address noting the close working 
relationship between SAIs and the legislatures they serve and the part 
SAIs play in bringing about change and improvements. He underscored 
the SAIs’ important role in assuring the people that their governments 
are working economically, efficiently, and effectively to meet their 
needs and expectations. 

Lyn Provost, PASAI’s Secretary General and Auditor General of New 
Zealand, also welcomed the delegates and stakeholders. She shared 
information and observations from the XX INCOSAI in Johannesburg. 
Echoing Lord Tu’I’afitu’s remarks, she noted that the INCOSAI 
discussions had emphasized the value and benefits of SAIs as an 
important pillar in democratic systems. She stressed that each SAI 
should strive to be recognized as an institution that makes a 
difference to the citizens it serves and should issue reports that are 
clear, concise, and accessible to the public as well as to clients and 
stakeholders. Ms. Provost drew attention to the other Johannesburg 
themes on environmental auditing and implementation of the 
International Standards of Supreme Audit Institutions (ISSAI), which 
would serve as the basis for subsequent PASAI discussions. She 
emphasized that PASAI’s challenge is to implement the Johannesburg 
Accords in the Pacific region—in the Pacific Way. 

Special Reports: 

The delegates next heard special reports from stakeholders and 
received updates from representatives who had participated in various 
INTOSAI meetings. 

Pacific Island Forum Secretariat: 

Sanjesh Naidu, the Economic Advisor to the Pacific Island Forum 
Secretariat (PIFS), challenged the group to take a more active role in 
promoting economic development across the region. He pointed out that 
the Pacific region lagged behind other areas in terms of economic 
growth but that implementation of the Pacific Plan, which aims to 
strengthen regional integration and cooperation, aims to change this 
pattern. He encouraged the SAIs to become familiar with the plan’s 
four pillars—economic growth, good governance, security, and economic 
development—and to look for ways to lead efforts for change and seek 
new ways to support the plan. He particularly emphasized the need for 
improved communication and efforts to coordinate activities. 

INTOSAI Committees and Programs: 

The presentation regarding the Working Group on Environmental Auditing 
(WGEA) highlighted the impact of PASAI’s cooperative performance audit 
on solid waste management, which had been featured at a recent WGEA 
meeting. PASAI’s accomplishments were also featured at the Capacity 
Building Committee meeting, and the Secretariat has already received 
requests from committee members for PASAI capacity-building manuals 
and training materials. At a meeting of the INTOSAI-Donor Steering 
Committee, donors had been receptive to a regional approach and had 
commended PASAI for the results it has already achieved through the 
PRAI. 

SAI Presentations: 

The delegates made presentations on their SAIs’ progress and 
accomplishments in adopting and implementing the Johannesburg Accords. 
Several significant themes emerged through the presentations and 
subsequent discussions. 

* The different frameworks-—Commonwealth, U.S., and French—-in the 
region provide a wide range of good practices that SAIs can share and 
consider. 

* The value of audits can be assessed by follow-up on audit issues, 
formal and informal surveys of committees and key stakeholders, and 
peer reviews. 

* SAIs can communicate the value of their work in various ways. The 
most common include reporting to legislatures and their committees, 
audit entities, boards and audit committees. SAIs can also issue media 
releases, prepare an annual report, provide information on websites, 
distribute good practice guides, and conduct workshops or seminars. 

* Environmental auditing is an important topic for the Pacific island 
nations, and the cooperative performance audits conducted in the 
region have had a significant impact. 

* Some SAIs are already applying the ISSAIs, which—-although 
relatively new-—generally concur with other international auditing 
standards. With the introduction of PASAI’s manuals and training 
courses, SAIs in the region will be able to move forward with 
implementing the ISSAIs. 

* Some SAIs are engaged in efforts to enhance their audit legislation 
in order to ensure greater independence. 

Progress with the Pacific Regional Audit Initiative: 

The PRAI was developed in 2007 to address the challenges posed by 
variable standards of public auditing in the Pacific. It provides 
support within the overall framework of regional cooperation under the 
Pacific Plan as it emphasizes that public auditing practices are 
central to achieving good governance outcomes, which, in turn, can 
contribute to improved economic performance and growth outcomes for 
Pacific island countries. 

At the congress, the delegates reaffirmed the PRAI’s regional basis 
and relationship with the Pacific Plan and received reports on the 
completion of several major achievements. 

The first round of the Subregional Audit Support program was 
successfully completed in 2010. The program involves a cooperative 
approach to the completion of financial audits in Kiribati, Nauru, and 
Tuvalu. The audits have had significant benefits for in-country public 
financial management and governance and for the capacity development 
of the three SAIs and their staff. The second round of the program 
commenced in June 2011 in Kiribati and will be completed in early 2012. 

PASAI’s first cooperative regional performance audit, on solid waste 
management, was completed in 2010. The project involved the 
participation of 10 member SAIs and resulted in individual country 
reports (seven of which have now been presented to the respective 
country legislatures) and an overarching regional report (available at 
[hyperlink, http://www.pasai.org]). Fieldwork on a second audit, 
involving the management of safe drinking water, had been completed 
and the project had moved into the reporting phase. The congress also 
endorsed a third audit of sustainable fisheries management across the 
Pacific region. 

PASAI’s capacity-building program continued to show significant 
success. Staff from SAIs across the region had participated in working 
groups to develop manuals and training programs. The congress endorsed 
new manuals on human resource management, quality assurance, and 
reporting; in addition, financial and performance audit manuals were 
in final review. These manuals complement the skill-based 
comprehensive training program being piloted in the region. By early 
2012, a series of training courses will provide professional 
development for staff from entry-level to management positions. 

In another capacity-building initiative, the delegates learned more 
about the progress on certification. This PRAI activity aims to 
identify courses and on-the-job opportunities that meet the SAIs’ 
needs and professional bodies’ certification requirements. Where there 
are gaps, the committee expects to liaise with the universities to 
introduce new courses and explore options for establishing internships 
while also expanding the pool of SAIs that could serve as approved 
training organizations in the region. 

The congress also endorsed a survey of the state of accountability and 
transparency in the region. The study, which is being funded by the 
New Zealand Aid Program, follows up on a 2009 survey and includes in-
depth studies in several countries in the region. 

Looking toward the future, the congress endorsed the adoption of a 
PASAI performance framework, which has been prepared under the 
oversight of PASAI’s governing board with the support of its 
development partners and stakeholders. By implementing the framework, 
PASAI can measure the PRAI’s achievements in improving governance, 
consistent with the Pacific Plan and other outcomes. 

Workshops: 

The congress also included workshop sessions on introducing ISSAIs and 
leading organizational change. 

Introducing ISSAIs: 

Sarah Lineham, from the Office of the Auditor General of New Zealand, 
provided the delegates with information about the ISSAIs, introducing 
them specifically to the framework dealing with the prerequisites for 
the functioning of SAIs. She circulated an ISSAI checklist that 
allowed delegates to compare their SAIs’ current position with the 
prerequisites outlined in the ISSAIs. 

As the delegates completed and discussed their assessments, many SAIs 
noted constitutional or organizational challenges in meeting the ISSAI 
prerequisites. The delegates agreed that the heads of SAIs should 
place a priority on developing and sharing strategies to move their 
SAIs toward meeting the requirements. They also noted that the 
products associated with the PRAI are consistent with and linked to 
the ISSAIs. As the audit offices move toward integrating the PRAI 
products into their offices, they will be effectively moving closer to 
meeting the ISSAIs. 

Leading Organizational Change: 

Chris Kelly, Tonga’s Commissioner of Police, presented a keynote 
address on the changes he introduced as he reformed the Tonga Police. 
He outlined his goals, described the challenges he faced, and 
described the approaches he used to improve practices within the 
police force. This provided an excellent introduction to the workshop 
presented by Lin Weeks, PASAI’s capacity-building consultant. In the 
workshop sessions, delegates identified opportunities for improvements 
in their SAIs and explored strategies that may enable them to make 
changes. In these sessions, they paid particular attention to ways in 
which various PRAI components might be helpful in fostering change. 

Business Sessions: 

The delegates took the following actions in their business sessions: 

* charged the Secretariat and the Secretary-General with developing a 
communications and relationship plan to disseminate information about 
PASAI and encourage enhanced working relationships with development 
partners, stakeholders, professional bodies, training institutions, 
and others; 

* confirmed the members of the Governing Board; and; 

* approved New Caledonia as the site for PASAI’s 2012 congress and 
accepted Guam’s offer to host the 2013 congress. 

Participants in the congress were most grateful for the extensive 
organizational work by staff of the Tonga SAI and PASAI’s Secretariat, 
and the leadership and hospitality provided by the Auditor-General of 
Tonga as the congress host. PASAI now looks forward to another year of 
collective and individual endeavor to improve auditing—and its 
contribution to improved accountability and transparency—in the 
Pacific. 

For additional information, contact Eroni Vatuloka, PASAI Executive 
Director (eroni.valuloka@pasai.org). 

[End of section] 

Third EUROSAI-ARABOSAI Conference: 

by the SAI of the United Arab Emirates: 

In March 2011, the third EUROSAI-ARABOSAI Conference was held in Abu 
Dhabi, the capital of the United Arab Emirates, with participants from 
over 40 countries within the two regions. Held soon after the XX 
INCOSAI in Johannesburg, the conference provided an opportunity to 
reflect on the Johannesburg Accords as well as the conference themes 
of accountability, transparency, and fighting corruption. 

The sessions on transparency and accountability built on the 
discussions at the XX INCOSAI and provided more information on the 
documents included in the International Standards of Supreme Audit 
Institutions (ISSAI) framework along with practical country 
experiences of the issues. The final session on fighting corruption 
was aimed at increasing awareness and looking at the scope of auditing 
or investigating corruption within different jurisdictions. 

The conference produced the Abu Dhabi Declaration, which attempts to 
provide a platform for bringing the regions closer together by 
identifying mutually beneficial methods of collaborating to implement 
the ISSAI framework and enhance the fight against corruption. The 
declaration includes an appendix that lists many documents produced 
within INTOSAI and its regions. It provides significant guidance on 
how to operate as an SAI, ranging from strengthening quality assurance 
functions to elements of an enterprise architecture. 

Preconference discussions with various SAIs disclosed that while 
identifying the quantity of available documentation and establishing a 
framework for SAI operations are both valuable undertakings, 
organizing the information for practical implementation can be 
confusing. For example, it is difficult to implement elements of the 
value and benefits paper from the XX INCOSAI when considering building 
capacity or ISSAIs 20 and 21 (Principles of Accountability and 
Transparency and Principles of Transparency-—Good Practices). To this 
end, the appendix focuses on organizing (rather than creating more of) 
the current information into an architecture. 

The preconference discussions also identified the lack of attention 
paid to fraud and corruption within the ISSAI framework. Its heavy 
focus on auditing (especially attestation audits) and limited guidance 
on inspection and investigation (which are part of many SAI mandates) 
lead to a lack of focus on these areas. 

Overview of Session One: Transparency: 

The host SAI of the United Arab Emirates presided over session one, 
which focused on two essential functions if SAIs are to “walk the talk”
: providing information on their own performance (as explained through 
key aspects of ISSAIs 20 and 21) in the public domain and opening SAI 
doors for scrutiny, as discussed under the peer review mechanism. 
Prior to the meeting, SAIs filled out a survey that provided an 
overview of the key transparency elements. 

Figure 1: Key Transparency Elements for SAIs: 

[Refer to PDF for image: vertical bar graph] 

1b. Has your SAI developed mission and vision statements? 98. 

1c. Has your SAI adopted audit standards and methods that comply with 
INTOSAI and fundamental auditing principles elaborated under it? 93. 

1e. Does your SAI produce summary reports? 90. 

1f. Does your SAI produce other forms of information to support its 
work? 79. 

1g. Has your SAI developed instruments and indicators to ensure that 
information is understandable and audit reports are read? 62. 

Source: SAI Survey on Transparency. 

[End of figure] 

As shown in figure 1, SAIs are moving toward having transparency 
indicators. However, actually putting these mechanisms in place to 
ensure the effectiveness of SAI outputs is still an area for 
development. 

The SAI of France presented a paper outlining the key principles in 
ISSAIs 20 and 21, which are a simple assessment of the aspects needed 
by SAIs to put their mandates in place and help add value and benefit 
to the lives of citizens. This complements the value and benefits 
issues outlined in theme 1 of the XX INCOSAI. The French SAI focused 
on the principles relating to communicating the results of SAI work, 
as highlighted in figure 1. The SAI of Iraq also presented a 
comprehensive paper on its experience in regard to some of the 
principles set out in ISSAIs 20 and 21. 

Peer review is a tried and tested tool that can help SAIs increase 
transparency and enhance their effectiveness. The German SAI, which 
was heavily involved in drafting the peer review guidelines, presented 
a paper on the theory and practice of peer reviews from the 
perspectives of both the peer reviewer and the subject of a peer 
review. 

Knowledge transfer and learning can occur for the entity on either 
side of the peer review. Furthermore, many agreements regarding the 
scope of the reviews center on SAI effectiveness. For example, the 
Norwegian SAI was recognized for the effectiveness of its performance 
audit process, demonstrating how a peer review can add credibility to 
an SAI’s work. 

The SAI of Switzerland presented another peer review experience. For a 
small SAI, a peer review can be an effective opportunity to draw upon 
the resources of larger SAIs in a focused manner. The scope of the 
Swiss peer review addressed far-reaching and important issues such as 
the following: 

* Does the SAI complete its assignments? 

* Does the SAI do its work effectively and professionally? 

* How does the SAI work benefit the auditees? 

The deliberations involved in agreeing upon the peer review engaged 
broader stakeholders, including parliamentarians. 

In addition to demonstrating the value of the SAI, peer reviews can 
highlight areas for development and improvement and provide objective 
advice and guidance. The conference had presentations concerning 
capacity building and a summary of the IDI stocktaking report in which 
SAIs identified areas for development and training. A peer review 
process can help SAIs provide third-party confirmation of the gaps in 
their capacity to meet the needs of stakeholders. 

Finally, peer reviews can address concerns about the return on 
resources invested in SAIs. On a broader level, this issue was 
discussed during the second session on accountability. 

Overview of Session Two: Accountability: 

The SAI of Lebanon chaired the second session, which focused on 
providing information on SAI reporting practices and ensuring that 
audit findings and recommendations are taken seriously. The Russian 
Chamber presented an overview of how its operations affect the broader 
public financial management agenda within Russia. This includes 
assessing the budget at various stages (not simply after the fact). 
The chamber’s presentation explained its accountability process after 
the audit report is issued and considered in various chambers as well 
as the speed of response to audit findings, in particular its ability 
to deal with issues of vital importance. A combination of planned 
activities and responses to issues emerging within the public interest 
help maintain the chamber’s relevance and professionalism. This, in 
turn, ensures public interest in audit results and swift action on 
recommendations. 

The SAI of Jordan provided an overview of the different types of 
accountability under a court-based system, which are broader than 
those of audit offices. Particular emphasis is placed on individual 
accountability and assessing the duties and responsibilities of public 
officials. 

The President of EUROSAI, the SAI of Poland, presented a paper on 
measuring SAI performance, continuing the discussion on this topic 
that began at the XX INCOSAI. The presentation discussed the need for 
such measures and indicators and how they should be introduced and 
reported to stakeholders. A key issue was integrating any framework 
into the fabric of the SAI and abiding by the principle of preparing “
SMART” indicators (that is, indicators that are specific, measurable, 
achievable, realistic, and timely). 

The SAI of Belgium provided an example of an SAI’s value to its 
stakeholder by discussing its work on the social security system. The 
SAI of Malta described its accountability report to Parliament, 
providing an example of the type of information that SAIs can gather 
and report on their performance and activities. 

The Spanish SAI presented an important paper that summarized many of 
the issues raised in this session. This paper reflected on 
accountability in terms of: 

* supporting transparency, 

* identifying issues of public interest and importance, 

* supporting good governance, 

* following up on resolutions and recommendations, and, 

* supporting improvement in laws and regulations. 

Overview of Session Three: Fighting Corruption: 

The final session provided an opportunity for the SAIs, under the 
stewardship of the SAI of Portugal, to discuss the difficult topic of 
SAI involvement and mandate in leading the fight against corruption. 
SAIs need to be leaders in encouraging the prevention of fraud and 
corruption rather than enforcement agencies. SAI mandates in this area 
are not necessarily clearly defined and, therefore, practices across 
SAIs can differ significantly, as demonstrated in figure 2. 

Figure 2: SAI Involvement in Fighting Corruption: 

[Refer to PDF for image: vertical bar graph] 

3b. Does the role of the SAI link with other role players in the 
judicial and law enforcement sectors? 79. 

3c. Is your SAI’s audit approach designed to detect fraud and 
corruption risks? 76. 

3d. Does your SAI have specialists such as forensic accountants, 
investigators, and legal experts? 69. 

3e. Do you have a specific mandate to fight corruption? 45. 

Source: SAI Survey on Transparency. 

[End of figure] 

Several presentations were made on innovative techniques and uses of 
technology to provide some measures to prevent and detect fraud and 
corruption. Presentations by the SAIs of the United Arab Emirates, 
Hungary, and the Netherlands highlighted tips and tricks for assessing 
fraud and corruption. 

Conclusion: 

The EUROSAI-ARABOSAI Conference underscored a number of key issues. 
INTOSAI and its regional working groups are moving toward closer 
collaboration and harmonization, as reflected in the ISSAI framework. 
However, current practices and experiences demonstrate the need for 
further knowledge sharing to enable consistency and high quality 
wherever possible. Limitations in capacity and different mandates 
notwithstanding, SAIs should utilize joint working programs, undertake 
peer review, and develop innovative methods to ensure that they can 
effectively integrate all aspects of the ISSAI framework and cover 
additional elements of fraud and corruption. 

For additional information, contact the SAI of the United Arab 
Emirates: E-mail: president@saiuae.gov.ae: 
Website: [hyperlink, http://www.saiuae.gov.ae]: 

[End of section] 

Spotlight on ISSAIs: 

by Heather Keister and Patrick Frey, U.S. Government Accountability 
Office: 

Second Meeting of the ISSAI Harmonization Project Group: 

From November 29 through December 1, 2011, the International Standards 
of Supreme Audit Institutions (ISSAI) Harmonization Project Group held 
its second meeting at the U.S. Government Accountability Office (GAO) 
in Washington, D.C. The project group, chaired by the SAI of Denmark, 
comprises members from 13 SAIs from around the world. It is charged 
with revising level 3 of the ISSAI framework-—fundamental auditing 
principles—-to ensure that the ISSAIs: 

* describe the general role and auditing function of an SAI and are 
relevant and useful for all INTOSAI members, 

* provide an overview of and further references to the full set of 
ISSAIs, and, 

* provide a consistent set of concepts and an improved link between 
all levels of the ISSAI framework. 

Based on the outcome of the group’s first meeting and feedback from 
the Professional Standards Committee (PSC) Steering Committee, the 
group is framing these revisions by considering the fundamental 
principles inherent in all public audits, as well as their specific 
application to financial, performance, and compliance audits. Toward 
that end, the group gathered at GAO to discuss four new documents: 

* ISSAI 100: The Essence of Public Sector Auditing, 

* ISSAI 200: Principles of Financial Auditing, 

* ISSAI 300: Principles of Performance Auditing, and, 

* ISSAI 400: Principles of Compliance Auditing. 

Each of the four drafting subgroups presented a high level overview of 
the status of the current draft, including the drafting approach being 
used, and any outstanding issues or concerns. 

A common question among the subgroups was how the four new ISSAIs 
should fit together. Should each group be producing a document that 
can stand alone and contain the relevant principles for each audit 
type? Or should the project group aim to produce a series of documents 
that fit together and reference one another? The group also discussed 
how the draft ISSAIs would fit into the broader ISSAI framework, the 
level of authority they would have, and the extent to which the entire 
INTOSAI family would be able to adopt and apply them. They held 
lengthy discussions about how an SAI would cite compliance with the 
ISSAIs, considered various compliance statement options, and discussed 
the relationship between the institutional prerequisites of level 2, 
the fundamental principles of level 3, and the audit guidelines of 
level 4. They took special care to ensure that they produced public 
audit principles that were not only exemplary but also inclusive and 
achievable for the wide variety of SAIs that make up INTOSAI. The goal 
of the harmonization project is to produce fundamental auditing 
principles at level 3 for all SAIs to use and to provide a common set 
of auditing principles for the entire INTOSAI family. 

Although not all issues and questions were resolved, the meeting 
facilitated a hearty exchange of ideas, advanced the overall goals of 
the harmonization effort, and identified several new tasks for moving 
forward. Each subgroup will continue to refine its draft, a new 
subgroup will focus on making the drafts structurally similar to 
facilitate their use, and the project group will raise several 
questions to the PSC Steering Committee for clarification. Overall, 
the 3-day ISSAI Harmonization Project Group meeting resulted in a 
fruitful discussion of dilemmas and considerations for revising the 
ISSAIs, and the group members parted ways with much to consider and 
achieve prior to their next meeting in May 2012. 

For additional information on the ISSAIs, see [hyperlink, 
http://www.issai.org]. For additional information on the harmonization 
project, please visit its website: [hyperlink, 
http://www.psc-intosai.org/composite-280.htm]. 

[End of section] 

NTOSAI-Donor Cooperation Update: 

Busan Partnership for Effective Development Cooperation: 

by the INTOSAI-Donor Cooperation Secretariat: 

Heads of state, ministers, and over 2,000 representatives from all 
types of public, civil society, private sector, and international 
organizations from across the globe met in Busan, Republic of South 
Korea, November 29 to December 1, to agree on a new global partnership 
for effective development cooperation. Terence Nombembe, the Chair of 
INTOSAI and Auditor-General of South Africa, addressed participants on 
the importance of strong, independent SAIs for sustainable national 
development and effective use of public resources. 

Strengthening the Role of Supreme Audit Institutions in Building 
Effective Country Institutions: 

At Busan, the presence of the Chair of INTOSAI and a small delegation 
from the INTOSAI community was another step in INTOSAI’s expanded 
engagement with the international development community. It came 
shortly after members of the INTOSAI Governing Board sent a joint 
letter to the Organisation for Economic Co-operation and Development 
(OECD) Working Party on Aid Effectiveness. This letter set out the 
role and importance of effective country institutions, specifically 
supreme audit institutions (SAI), in reducing poverty and achieving 
the Millennium Development Goals and called for three issues to be 
considered in Busan: 

1. SAIs should be included as significant partners in shaping and 
implementing the building block on Effective Country Institutions 
being prepared for Busan, which heads of SAIs support in principle. 

2. The international development community recognizes INTOSAI as a 
core component of the international development architecture and 
supports the tabling and adoption of a future United Nations General 
Assembly Resolution, entitled “Promoting Transparency and 
Accountability by Strengthening Government Auditing,” which would call 
upon members to implement and apply the principles set out in the 1977 
Lima Declaration of Guidelines on Audit Precepts and the 2007 Mexico 
Declaration on SAI Independence. 

3. The international development community recognizes the SAI as a 
core function of the state, contributing to state legitimacy and 
accountability, and therefore a key building block of effective 
institutions and states. 

Fourth High-Level Forum on Aid Effectiveness: 

This was the fourth high-level forum (HLF4) on aid effectiveness, 
following meetings in Rome (2003), Paris (2005), and Accra (2008). The 
HLF was originally established to discuss concerns with the way aid 
was provided and enhance the effectiveness of aid. The second HLF led 
to donors and aid recipients agreeing on the Paris Declaration on Aid 
Effectiveness, which established five broad principles (ownership, 
alignment, harmonization, mutual accountability, and managing for 
development results) for the way aid is provided. The HLF has become 
the largest and most important international forum for discussions on 
aid and development effectiveness. Since Paris, participation has 
expanded to include countries and organizations involved in all forms 
of development cooperation, significantly beyond the initial focus on 
north-south aid. 

INTOSAI participated in these high-level discussions on the future of 
development cooperation for the first time at HLF4. The INTOSAI 
delegation took away three key messages from the event: 

* The international community will increasingly focus on institutions, 
policies, and partnerships that promote effective development, rather 
than on the effectiveness of aid. 

* There is increased recognition of the importance of accountability 
and oversight institutions, including SAIs and parliamentary 
committees, as part of effective country institutions for development. 
This recognition includes enhancing accountability based on 
transparency in the use of public resources. 

* Global partnerships, similar to the INTOSAI model, are likely to be 
used much more widely as a mechanism to promote south-south and 
triangular cooperation (e.g., a developed country and a country with 
recent successful experience of relevant institutional development 
helping a developing country to find appropriate solutions to its own 
unique challenges), as well as knowledge exchange, peer learning, and 
cooperation. 

The Busan Partnership for Effective Development Cooperation: 

The main outcome of HLF4 was a high-level document designed to set the 
future agenda for development cooperation. This document is intended 
to forge a more inclusive global partnership for development, 
recognizing the roles of south-south cooperation, civil society, and 
the private sector as well as north-south development assistance. It 
set out the following four key principles for all forms of development 
cooperation. 

[Text Box: 
Shared Principles to Achieve Common Goals: 

a) Ownership of development priorities by developing countries. b) 
Focus on results. 

c) Inclusive development partnerships. 

d) Transparency and accountability to each other. 

(Busan Partnership for Effective Development Cooperation, paragraph 
11) End of text box] 

While these principles are firmly embedded in the way INTOSAI works, 
the focus on results reinforces the need for SAIs to effectively 
communicate the value and benefits they offer and to demonstrate the 
results of their audit work and their capacity development 
initiatives. This further highlights the importance of the tasks of 
the Working Group on the Value and Benefits of SAIs, chaired by South 
Africa, and the ongoing work on measuring results by various INTOSAI 
regional bodies. 

The importance of effective and independent SAIs for the future of 
effective development cooperation can be seen throughout the Busan 
Partnership for Effective Development Cooperation document. 

* “The use and strengthening of developing countries’ systems remains 
central to our efforts to build effective institutions.” (paragraph 19) 

* “Focus, at the country level, on establishing transparent public 
financial management and aid information systems.” (paragraph 23b) 

* “Effective institutions and policies are essential for sustainable 
development. Institutions fulfilling core state functions should, 
where necessary, be strengthened.” (paragraph 29) 

* “Implement fully our respective commitments to eradicate 
corruption... This includes our efforts to improve fiscal 
transparency, strengthen independent enforcement mechanisms, and 
extend protection to whistleblowers.” (paragraph 33a) 

Discussions prior to and at Busan recognized that fragile states are 
the most at risk for not meeting the Millennium Development Goals and 
that more needs to be done to understand and help them overcome the 
challenges they face. A new set of Peacebuilding and Statebuilding 
Goals were endorsed, including a focus on enhancing legitimate 
politics and state legitimacy, sound economic foundations (including 
the collection and proper use of domestic revenues), and equity in the 
delivery of services. As Mr. Nombembe emphasized in one of his 
interventions, effective and independent SAIs have the potential to 
enhance state legitimacy and state-society relations if they are seen 
as independent by nonstate actors and are able to publish objective 
reports on the use of public funds. 

INTOSAI as a Model for the Future of Development Cooperation: 

The INTOSAI delegation found it heartening to note the increased 
interest in global partnerships as an effective and complementary form 
of development cooperation. Mr. Nombembe illuminated discussions on 
future forms of development cooperation with a portrait of INTOSAI as 
an inclusive global partnership of organizations from almost 190 
countries with over 50 years of experience. Its successes in promoting 
knowledge exchange, peer learning, and cooperation and in setting 
global standards, developing global public goods, and creating peer 
pressure and mutual support for reform attracted much interest. 
Recognizing these successes and the potential for similar global 
partnerships, the International Federation of Accountants signed a 
Memorandum of Understanding to Strengthen Accountancy and Improve 
Collaboration (MOSAIC) with a group of donors that seeks to apply the 
experiences of the INTOSAI-Donor Cooperation to advancing the 
accountancy profession in developing countries. Procurement bodies 
from around the world also began discussing the possibility of a 
global partnership for the procurement profession. 

Finally, numerous sessions promoted the use of south-south and 
triangular cooperation. To the INTOSAI delegation, it was encouraging 
to hear the approaches INTOSAI has been using for decades, through its 
regional structures, being talked about as the future of development 
cooperation. 

For additional information, contact the INTOSAI-Donor Cooperation 
Secretariat at idi@idi.no. 

[End of section] 

Inside INTOSAI: 

62nd INTOSAI Governing Board Meeting Held in Vienna: 

When: October 27, 2011; 
Where: Vienna, Austria; 
Host: Austrian Court of Audit; 
Participants: SAIs of Bahamas, Brazil, China, Côte d’Ivoire, Denmark, 
Ecuador, Estonia, France, Gabon, Germany, Hungary, India, Korea, 
Luxembourg, Mexico, Morocco, New Zealand, Norway, Pakistan, Poland, 
Russian Federation, Saudi Arabia, South Africa, Spain, Sweden, United 
Kingdom, United States of America, and Venezuela. 

On October 27, 2011, the Governing Board of INTOSAI met in Vienna, 
Austria. The meeting, held in the Parliament Building, coincided with 
the 250th anniversary of the Austrian Court of Audit. The board 
members—18 heads of SAIs for all INTOSAI regions—were joined by 
observers representing committees, working groups, and task forces. In 
addition, the board received reports from the goal chairs and approved 
the annual reports of the General Secretariat, the INTOSAI Development 
Initiative (IDI), and this Journal. A number of specific motions were 
presented and approved at the meeting, including the following: 

* Timor-Leste was accepted as the 190th member of INTOSAI. 

* The SAI of Poland, chair of the INTOSAI Internal Controls 
Subcommittee, will represent INTOSAI to the Internal Auditing 
Standards Board (IASB) of the Institute of Internal Auditors. 

* This Journal will decrease the share of revenue it receives from 
INTOSAI from 25 to 20 percent, a 20-percent decrease. 

* The updated terms of reference for the Professional Standards 
Committee (PSC), which include a rollout model for the International 
Standards of Supreme Audit Institutions (ISSAI), were endorsed. 

* A new Task Force on Financial Foresight, led by the SAI of Norway, 
will be established under the Finance and Administration Committee to 
(1) research the best ways to ensure sustainable long-term INTOSAI 
funding and budgeting and continuous improvement in strategic planning 
and (2) develop a mechanism for INTOSAI to manage emerging issues. 

* The mandate of the Task Force on the Global Financial Crisis will be 
extended for 1 year to conclude its work and determine how INTOSAI 
should address the issue in the future. 

* INTOSAI’s contribution to the 2012 Rio+20 Summit of the United 
Nations for sustainable development will be consolidated with input 
prepared by the Working Group on Environmental Audit. 

* The newly established SAI Database Task Force will conduct a 
technical study to validate the possibility of evolving the SAI 
Information Database into a platform for INTOSAI information. 

* The themes for the XXI INCOSAI will be as follows: 
- Theme I: Governance at the national level and national audit (Chair: 
SAI of China); 
- Theme II: The role of SAIs in safeguarding the long-term 
sustainability of finance policies (Chair: SAI of Mexico). 

* INTOSAI will support the draft resolution that has been submitted to 
the 66th General Assembly of the United Nations (UN). The draft 
resolution expressly appreciates the work of INTOSAI as well as the 
Lima and Mexico Declarations, calls upon UN Member States to apply the 
principles set out in these declarations, and encourages UN Member 
States and the United Nations to continue and intensify their 
cooperation with INTOSAI. 

* The implementation and dissemination of the ISSAIs will be the 
priority INTOSAI theme for 2012. 

* INTOSAI will support the initiative of the Contact Committee of the 
SAIs of the European Union to strengthen the external government audit 
of international organizations in relation to the European Stability 
Mechanism, which was established to safeguard financial stability in 
Europe. 

* The XXI INCOSAI will be held from October 28 to November 2, 2013, in 
Beijing, China. 

The goal chairs and regional working groups reported on their 
activities. 

Goal 1 Chair Henrik Otbo reported on the progress of ISSAI awareness-
raising efforts, the ISSAI Harmonization Project, and the PSC 
subcommittees and projects. See the Spotlight on ISSAIs section on p. 
30 for an update on the harmonization project. Other highlights of Mr. 
Otbo’s report include the following. 

* The ISSAI awareness-raising strategy will leverage existing 
opportunities to promote the ISSAI framework to increase 
implementation, promote ISSAIs as recognized standards, and ensure 
that the ISSAI framework is used as the common frame of reference for 
public sector auditing. 

* The Project on Transparency and Accountability produced final 
versions of ISSAI 20 (which defines key principles) and ISSAI 21 
(which shows examples of best practices). Both ISSAIs were endorsed at 
the XX INCOSAI. 

* Following the XX INCOSAI’s endorsement of ISSAI 40, which was 
designed to assist SAIs in establishing and maintaining an appropriate 
system of quality control for all audits, the Project on Audit Quality 
Control team has agreed to develop further guidance, such as a gap 
analysis tool to help SAIs assess their compliance with key principles 
of ISSAI 40. 

* Following the presentation and acceptance of a comprehensive set of 
ISSAIs at the XX INCOSAI, the Financial Audit Subcommittee will 
continue to contribute to developing International Standards on 
Auditing (ISA) and drafting corresponding Practice Notes to ensure 
INTOSAI members continue to have access to current Financial Audit 
Guidelines. 

* The Performance Audit Subcommittee is participating in the ISSAI 
awareness-raising and harmonization projects and is also producing a 
document to help SAIs in the practical aspects of performance audit. 
The documents are currently being reviewed and will be presented to 
the subcommittee in February 2012. 

* Following the endorsement of the ISSAI 4000 series at the XX 
INCOSAI, the Compliance Audit subcommittee plans to continue 
contributing to the ISSAI awareness-raising and harmonization projects 
and working on specific 4000 series issues, such as sampling, 
assurance, and monitoring systems. 

* The Internal Control Standards Subcommittee is focusing on 
developing examples of internal control measures for internal control 
objectives and control components, promoting the integration of 
INTOSAI Guidance for Good Governance (INTOSAI GOV) internal control 
and risk management elements into ISSAIs, studying internal control 
reporting, and analyzing e-platforms for usability and quality of 
content. 

* The Accounting and Reporting Subcommittee managed the development 
and public exposure of a proposal to withdraw the 9200 series INTOSAI 
GOVs and replace them with links to International Public Sector 
Accounting Standards (IPSAS). In addition, as an observer to the 
International Federation of Accountants IPSAS Board, the subcommittee 
keeps INTOSAI members informed of developments through a link to the 
IPSAS website that can be found on the Accounting and Reporting 
Subcommittee’s website. 

Mr. Otbo has been nominated to the European Court of Auditors, and the 
General Secretary and board recognized his departure, noting his many 
contributions to INTOSAI, in particular his leadership of professional 
standards development and implementation. 

Goal 2 Chair Ahmed El Midaoui reported on capacity-building 
activities, advisory and consulting services, peer reviews, and 
developing cooperation with international organizations. See the 
report on the peer review subcommittee on p. 42. Other highlights of 
Dr. El-Midaoui’s report including the following. 

* Capacity Building Committee (CBC) activities specifically included 
the transfer of the INTOSAI capacity building database to IDI and the 
continued development of CBC and quality assurance guides. Future work 
will include strengthening regional secretariats, the CBC, and e-
learning capacities. In addition, a request for funding to allow 
selected SAIs to participate actively in CBC meetings was presented to 
the INTOSAI-Donor Cooperation. 

* Agreements were reached to reorganize the UN/INTOSAI Platform and 
rename it the INTOSAI Platform for Cooperation with the United 
Nations. INTOSAI and the UN Department of Economic and Social Affairs 
agreed to reassess possible fields of cooperation based on individual 
projects. The new platform will cooperate with the UN, and possibly 
other international organizations, to partner with civil society 
organizations, SAI capacity building, audits of cross-border funding 
for disaster relief, and fighting international money laundering and 
corruption, with near-term emphasis on the latter. 

The SAI of Norway reported on the activities of the INTOSAI 
Development Initiative (IDI). See IDI Update on p. 50 for a summary of 
recent IDI activities. 

Goal 3 Chair Vinod Rai reported on goal 3 activities, which included 
changes in composition and working group leadership, changes to the 
committee website, and work plan tasks. See the report on the Steering 
Committee meeting of the Knowledge Sharing Committee on p. 42 for a 
summary of goal 3 activities. 

Goal 4 Chair Osama Jafar Faquih summarized goal four activities, which 
included reports on budget and expense issues, donor cooperation, and 
future Finance and Administration Committee (FAC) activities. 
Specifically, he reported that INTOSAI had received 90 percent of its 
annual expected revenue and that external auditors had provided a 
clean audit opinion for INTOSAI’s 2010 financial statements. See the 
report on the recent FAC meeting on p. 48 for additional information 
on goal 4 activities. 

Future FAC priorities include close monitoring of the implementation 
of the INTOSAI strategic plan; active participation in the INTOSAI-
Donor Steering Committee; careful assessment of INTOSAI membership 
dues and contributions; and monitoring of the work of the new 
Financial Foresight Task Force. 

Mr. Faquih also provided the following information on the status of 
the INTOSAI-Donor Cooperation. 

* The Islamic Development Bank has become the 16th signatory to the 
agreement. 

* A 2011 action plan includes initiatives for focusing on AFROSAI-E, 
CREFIAF, CAROSAI, and the global INTOSAI community through a project 
to support implementation of the ISSAIs. 

* The Steering Committee is reviewing the proposals for capacity-
development initiatives benefiting SAIs in developing countries that 
were submitted in response to its global call for proposals and has 
agreed to establish a task force of like-minded donors to develop a 
mechanism for pooled funding. Nine donors have expressed interest in 
this effort. 

* The Donor Cooperation Secretariat is in the early stages of mapping 
and potentially developing a credible performance measurement 
framework for SAIs in cooperation with the INTOSAI Working Group on 
the Value and Benefits of SAIS, the Capacity Building Committee, the 
INTOSAI-Donor Steering Committee, volunteer INTOSAI regional bodies 
and SAIs, and stakeholders from the donor and nongovernmental 
organization communities. 

The 63rd Meeting of the INTOSAI Governing Board will be held in late 
October or early November 2012 in Chengdu, China 

For additional information, contact the INTOSAI General Secretariat: 
E-mail: intosai@rechnungshof.gv.at: 
Website: [hyperlink, http://www.intosai.org]: 

Third Meeting of the INTOSAI-Donor Steering Committee: 

The third meeting of the INTOSAI-Donor Steering Committee was held in 
Washington, D.C., on July 19–20, 2011. The World Bank hosted the 
meeting, which was attended by more than 50 representatives of INTOSAI 
and the international donor community. 

The meeting revealed the rich diversity of existing peer-to-peer 
cooperation and support provided to the INTOSAI community and marked a 
significant advance in implementing the memorandum of understanding 
(MOU) between INTOSAI and 16 donor partners. Recognizing the important 
role of SAIs in strengthening accountability, transparency, and good 
governance, the MOU aims to increase and enhance the support provided 
to SAIs in developing countries. 

The Steering Committee agreed to move forward with additional 
financing arrangements for the INTOSAI-Donor Cooperation following a 
three-pronged approach. 

* A global call for proposals for capacity development projects in 
need of support, announced in September 2011, will be followed by a 
process that matches applicants with donors and SAIs willing to 
provide support. 

* A task force of like-minded donor organizations agreed to work 
together to develop a global pooled funding framework for SAI capacity 
development. The pooled fund will provide an additional funding 
channel, in particular for SAIs in countries with limited donor 
presence. 

* A global databank on SAI capacity development projects will enhance 
the coordination of support to SAIs and thereby contribute to more 
effective support. 

For additional information, contact the INTOSAI-Donor Secretariat: 
E-mail: intosai.donor.secretariat@idi.no: 
Website: [hyperlink, http://www.idi.no]: 

Compliance Audit Subcommittee: 

The Compliance Audit Subcommittee (CAS) held its ninth meeting in 
Batumi, Georgia, September 27–29, 2011. The committee was pleased to 
welcome new members from China and Romania; it now consists of 16 
members from all INTOSAI regions. 

Following the endorsement of the International Standards of Supreme 
Audit Institutions (ISSAI) 4000 series on compliance audit at the XX 
INCOSAI in 2010, the committee turned its attention to establishing 
compliance audit in public sector auditing on a global basis. 

[}photograph: Members of the Compliance Audit Subcommittee at its 
September 2011 meeting in Batumi, Georgia] 

The committee’s subgroups on awareness raising, harmonization, and 
issues related to courts of accounts presented their work to the 
committee, which affirmed the importance and impact of each activity. 

* Many CAS members are participating in ongoing awareness-raising 
activities in the INTOSAI community related to the ISSAIs. These 
efforts are vital to the implementation of the standards. As the 
compliance standards on level 4 are being implemented, a group from 
CAS is also collaborating with the Professional Standards Committee 
(PSC) in the harmonization of the standards at level 3 (fundamental 
auditing principles), which is crucial to understanding public sector 
auditing and the ISSAI framework. 

* The CAS members discussed a draft document presented by the project 
group on harmonization. 

* The specific needs of courts of accounts have long been on the CAS 
agenda, and an exposure draft ISSAI on court of accounts issues was 
introduced to the committee for the first time. The basic differences 
between SAIs that have an auditor general system and those that are 
courts of accounts was explored in depth during discussions, and this 
provided a good basis for further development of the document. 

As the ISSAI 4000 compliance audit series is endorsed and implemented, 
the committee’s future task will focus on maintaining the standards. 
The committee members discussed maintenance issues in light of their 
experiences in implementation. These discussions demonstrated the 
professional dedication of the committee members, who are willing to 
share their experiences and further develop compliance audit, 
suggesting a bright future for compliance audit within INTOSAI. 

For additional information, contact the Compliance Audit Subcommittee 
at riksrevisjonen@riksrevisjonen.no. 

Update from the Subcommittee on Peer Review: 

Subcommittee 3 of INTOSAI’s Capacity Building Committee (CBC) met in 
Vienna, Austria, September 8–9, 2011. This subcommittee is tasked with 
promoting best practices and quality assurance through voluntary peer 
reviews. As part of the meeting, which was hosted by the SAI of 
Austria, the subcommittee set its agenda for 2011–2016. This agenda 
includes the following action items: 

* Further develop and update the existing peer review documentation 
posted on the CBC website [hyperlink, http://cbc.courdescomptes.ma]. 

* Promote a climate-—especially among INTOSAI’s Regional Working 
Groups—in which the benefit of voluntary peer reviews is appreciated, 
by, for example, giving papers in connection with regional seminars. 

* Gather additional feedback on the Peer Review Guide and Checklist 
and revise them as needed. 

Furthermore, members of the subcommittee will participate in the 
project to develop a framework for evaluating the performance of SAIs, 
which is led by the INTOSAI Working Group on the Value and Benefits of 
SAIs. 

The subcommittee has already started working on some of these action 
items. For example, to develop and update existing peer review 
documentation, the subcommittee sent a questionnaire on peer review 
projects to all INTOSAI members in late 2011. The subcommittee 
expresses its thanks to the INTOSAI members for their participation in 
the peer review survey and for sending any materials that could 
further develop the documentation. Moreover, it invites all SAIs to 
forward comments and suggestions on the Peer Review Guide. The 
questionnaires on peer review and for feedback on the guide can be 
downloaded from the CBC website: [hyperlink, 
http://cbc.courdescomptes.ma]. 

For additional information or to make peer review documents available 
to other SAIs, please contact the German SAI at 
international@brh.bund.de. 

Meeting of Steering Committee of the Knowledge Sharing Committee: 

The Steering Committee of the Knowledge Sharing Committee (KSC) held 
its third meeting in Moscow, Russia, October 5–6, 2011, to share 
information on the activities and progress of the KSC’s working groups 
and task forces in preparation for the 62nd INTOSAI Governing Board 
meeting. Vinod Rai, Comptroller and Auditor General of India and KSC 
Chairman, presided over the meeting, which was hosted by the Accounts 
Chamber of the Russian Federation, the KSC Goal Liaison. 

Nineteen representatives from the SAIs of Austria, Denmark, Estonia, 
France, Morocco, Mexico, Norway, Russia, and the United States of 
America and from the European Court of Auditors attended, along with 
representatives of the INTOSAI Development Initiative (IDI) and this 
Journal. 

Before the meeting, Alexander Piscanov, Deputy of the Accounts Chamber 
and head of the Secretariat for the Working Group on Key National 
Indicators (KNI) (which the Russian SAI chairs) gave a three-
dimensional presentation on KNI. Sergey Stepashin, Chairman of the 
Accounts Chamber, welcomed the delegates, noting that the SAI of 
Russia was actively participating in many INTOSAI working entities. 
Mr. Rai welcomed Gjis de Vries, a member of the European Court of 
Auditors, who took over in January 2011 as Chair of the Working Group 
on Accountability for and Audit of Disaster-related Aid. Mr. Rai also 
reported that the KSC website [hyperlink, http://www.intosaiksc.org] 
had been revamped and has three new features: a forum, a survey 
system, and archives. A section for the newly created Task Force on 
SAIs Information Database that Mexico chairs has also been added. 

Monika Gonzalez Koss, INTOSAI Director for Strategic Planning, 
presented the report of the INTOSAI General Secretariat on behalf of 
the Secretary General and a report on the implementation of the 
Strategic Plan 2011–2016. She updated participants on the status of 
the initiative aimed at strengthening SAI’s independence by 
incorporating the principles of independence in the Lima and Mexico 
declarations into international law by means of a United Nations (UN) 
resolution. The General Secretariat has undertaken a new initiative to 
promote knowledge sharing by posting on the INTOSAI website all 
executive summaries of existing INTOSAI guidelines and standards for 
the benefit of auditors and stakeholders. The first set was to be 
available on the website at the end of 2011. During the 21st 
UN/INTOSAI Symposium, the UN invited INTOSAI to participate in the 
Rio+20 Summit of the United Nations on Sustainable Development. The 
General Secretariat, in close cooperation with the Working Group on 
Environmental Auditing, has prepared a draft text for presentation at 
the summit. 

Elizabeth Walmann, IDI Project Manager, reported that during the last 
year, IDI had worked with all INTOSAI regions to meet SAI capacity-
building needs and that it has enjoyed a fruitful cooperation with 
several INTOSAI committee and working groups. Gene Dodaro, Comptroller 
General of the U.S. Government Accountability Office, presented the 
2010 annual report and audited financial statements of this Journal. 
He noted that the Journal had received a clean opinion and continues 
to maintain adequate cash reserves and that the Finance and 
Administration Committee has approved a proposal to reduce the 
percentage of members’ dues that the Journal receives from 25 to 20 
percent. 

The Professional Standards Committee (PSC) and the Capacity Building 
Committee (CBC) also reported on their activities. Ane Elmose, head of 
the PSC Secretariat, stated that the PSC Chair would be responsible 
for maintaining the INTOSAI Standards of Supreme Audit Institutions 
(ISSAI) at levels 1–3 of the ISSAI framework, for which there are no 
standing committees. The relevant PSC, CBC, and KSC subcommittees 
would be responsible for the appropriate maintenance and review of the 
ISSAIs and INTOSAI GOVs at level 4. This information was to be posted 
on the ISSAI website [hyperlink, http://www.issai.org]. Mohammed Kamal 
Daoudi, Senior Magistrate in the Court of Accounts of the Kingdom of 
Morocco, informed the committee members on the CBC’s mission and new 
strategies for 2011–2016 and elaborated on the CBC’s governance 
through its main committee, steering committee, three specialized 
subcommittees, and the UN-INTOSAI platform. 

Highlights of the working group and task force reports are as follows. 

* The Working Group on Accountability for and Audit of Disaster-
related Aid (chair: European Court of Audit) has further developed 
audit guidance material and good practices since the XX INCOSAI. Its 
work program for 2011–2013 has 13 tasks related to audits of disaster-
related aid and disaster preparedness and accountability for disaster-
related/humanitarian aid. 

* The Working Group on the Fight against International Money 
Laundering and Corruption (chair: Egypt) met this year and developed 
its work plan. However, since the SAI of Egypt was unable to attend 
the steering committee meeting and deliver a progress report, it was 
asked to present its report at the 62nd Governing Board. 

* The 2011–2013 work plan of the Working Group on Environmental 
Auditing (chair: Estonia) includes updating and developing new SAI 
guidance materials; facilitating concurrent, joint, and coordinated 
audits; enhancing information dissemination, exchange, and training; 
and cooperating with other international organizations and INTOSAI 
entities. A representative will be sent to the 2011 UN Climate Change 
Conference in South Africa and the 2012 Rio+20 Summit. (See the report 
on this working group on p. 46.) 

* The new website [hyperlink, http://program-evaluation.ccomptes.fr] 
of the Working Group on Program Evaluation (chair: France) has been 
operational since November 2010. The group plans to survey INTOSAI 
members to collect case studies and information on methodology and 
experiences. 

* The Working Group on IT Audit (chair: India) held its 20th meeting 
in 2011 and is continuing to make progress on five research projects. 
It is seeking INTOSAI members to volunteer to (1) serve as the editor 
of the journal intoIT and (2) host its website [hyperlink, 
http://www.intosaiitaudit.org], tasks previously performed by the 
United Kingdom’s National Audit Office. 

* The Working Group on Public Debt (chair: Mexico) held its annual 
meeting in 2011 and prepared a 2011–2016 work plan that includes 
updating existing products to share with the INTOSAI community. The XX 
INCOSAI endorsed the final version of Debt Indicators in the five 
official INTOSAI languages. Two investigation themes are being 
considered as possible official products for the XXI INCOSAI in 2013: 
Impact of Financial Crises on Public Debt and INTOSAI Initiatives, 
prepared by the SAI of the United States, and Evaluation of 
Information Systems Related to Public Debt Management, prepared by the 
SAI of Brazil. 

* The Working Group on Key National Indicators (chair: Russia) has, 
since its establishment over 3 years ago, prepared a review of 
international experiences, established Principles of SAIs Application 
of KNI, developed Recommendations on the Development and Use of KNI in 
Innovative Economies, and contributed to the INTOSAI Glossary of Audit 
Terms. At its 2011 annual meeting, it approved the following 
subprojects for the next 3 years: preparing a draft methodology on KNI 
selection for use in SAI activity; analyzing opportunities to use KNIs 
for international comparison; developing and using KNIs for research 
and development evaluation; and using KNIs to assess global economic 
imbalances. The working group’s materials are posted on its website 
[hyperlink, http://www.ach.gov.ru/en/intosaikni], maintained by the 
SAI of Russia. 

* The report of the Working Group on the Value and Benefits of SAIs 
(chair: South Africa) was presented by the SAI of Mexico since the 
South African SAI could not attend. The working group’s website 
[hyperlink, http://www.intosai-wgvbs.org] has been launched and an 
annual planning meeting was held in August 2011. Its 2011–2013 work 
plan identified four projects; the KSC endorsed its first project 
proposal, preparing a framework on the value and benefits of SAIs. 
(See the report on this working group on p. 47.) 

* The establishment of the Task Force on SAI Information Database 
(chair: Mexico) was approved at the 60th Governing Board meeting. Its 
purpose is to create an updated and specialized SAI database to 
strengthen communication and knowledge sharing among SAIs and 
stakeholders. The task force recently held its first working meeting 
and has developed terms of reference, a work plan for 2011–2013, and 
specific strategies for achieving its objectives. 

* The Task Force on the Global Financial Crisis (chair: United States) 
has posted on the INTOSAI website the papers of subgroups 1 (Causes of 
the Financial Crisis and Lessons Learned) and 2a (Immediate Actions to 
Minimize and Avert the Crisis). Task force members are reviewing the 
draft papers from subgroups 2B (Stimulus Efforts on the Real Economy) 
and 3 (Challenges to SAIs). Once the final versions of these papers 
are finalized, they will be posted on the INTOSAI website as well. The 
task force was to propose a motion to the 62nd Governing Board to 
extend its mandate. The SAIs of Mexico and the United States plan a 
joint meeting of this task force and the Working Group on Public Debt 
in early 2012 to coordinate their plans. 

Mr. Rai thanked Dr. Stepashin and his officers for their excellent 
organization of the meeting, warm and generous hospitality, and active 
participation. He also reported that the European Court of Auditors 
had volunteered to host the next KSC Steering Committee meeting. 

For additional information, contact the KSC: 
E-mail: cag@cag.gov.in, pdir@cag.gov.in: 
Website: [hyperlink, http://www.intosaiksc.cag.gov.in]: 

Working Group on Environmental Auditing: 

The Working Group on Environmental Auditing (WGEA) held its 14th 
General Assembly and 11th Steering Committee meetings November 7–11, 
2011, in Buenos Aires. The meetings were hosted by the SAI of 
Argentina and included 140 participants from 55 SAIs. The WGEA 
Steering Committee and Secretariat arranged for a 1-day training on 
environmental auditing for beginners to be held before the meetings. 

[Photograph: A truly global audience from 55 SAIs attended the WGEA’s 
14th General Assembly] 

Review of Progress on the WGEA Work Plan for 2011–2013 The main focus 
of the General Assembly was an interim review of progress in 
developing the research papers and guidance materials included in the 
WGEA’s work plan for 2011–2013. Two sets of guidance material are to 
be issued in 2013: one for auditing water issues and the other on 
integrating fraud and corruption issues into auditing environmental 
and natural resource management issues. Research materials are under 
development in the following areas: 

* environmental and sustainability reporting, 

* environmental data, 

* land use and land management practices, and, 

* environmental issues associated with infrastructure. 

The participating SAIs contributed to the success of the meeting by 
sharing innovative audit experiences and introducing cooperative 
audits that had been conducted. SAI audit work was also presented in 
parallel sessions organized by the SAIs leading projects in the WGEA’s 
work plan. In addition, presentations were made by international 
organizations, including the World Bank, INTERPOL, Transparency 
International, the Association of Chartered Certified Accountants, and 
the Organisation for Economic Co-operation and Development. 

Rio+20 Summit: 

In 2012, leaders from around the world will gather again in Rio de 
Janeiro to review global environmental and development problems and 
search for further ways to promote sustainable development. The WGEA 
is developing a compendium for the Rio+20 Summit that introduces 
environmental audits conducted worldwide. A draft of this document was 
discussed at the General Assembly. 

Future WGEA Activities: 

The Estonian National Audit Office (NAO) has been the chair of the 
WGEA since 2007 and proposes to hand the chairmanship over to the SAI 
of Indonesia during the XXI INCOSAI in 2013. This proposal will be 
submitted for approval to the INTOSAI Governing Board. 

The next WGEA General Assembly will be hosted by the NAO of Estonia in 
2013. 

For additional information, contact the NAO of Estonia: 
E-mail: info@wgea.org:
Website: [hyperlink, http://www.environmental-auditing.org]: 

Working Group on the Value and Benefits of Supreme Audit Institutions: 

The Working Group on the Value and Benefits of SAIs met in Montego 
Bay, Jamaica, in August 2011. Terence Nombembe, Auditor-General of 
South Africa, chaired the meeting, which was hosted by Pamela Monroe-
Ellis, the Auditor-General of Jamaica. During the meeting, the working 
group identified four projects and approved a work program that 
includes the projects’ scope, deliverables, member allocation, 
coordinators, and time frames for 2011–2013 leading up to the XXI 
INCOSAI. To avoid overlapping and duplication of efforts, the 
importance of collaboration and cooperation with other INTOSAI bodies 
was emphasized during the meeting. 

The following four projects (and their related deliverables for the 
XXI INCOSAI) were identified: 

* Preparation of a framework on the value and benefits of SAIs to be 
included at level 1 in the ISSAI framework, in line with INTOSAI’s due 
process requirements for professional standards. (Deliverable: An 
ISSAI for final endorsement by the XXI INCOSAI). 

* Development of credible measurement tools to support the evaluation 
of SAIs’ performance within a framework for communicating and 
promoting the value and benefits of SAIs. (Deliverable: A single, 
global performance measurement framework for SAIs). 

* Development of appropriate instruments and tools to communicate and 
promote the value and benefits of SAIs to all SAI stakeholders, 
including civil society organizations and citizens. (Deliverable: A 
guideline for communicating and promoting the value and benefits of 
SAIs and interacting with citizens). 

* Development of a guideline on effective practices of cooperation 
between SAIs, the legislature, the judiciary, and the executive that 
focuses on the SAIs’ ability to promote accountability and leads to 
administrative or corrective sanctions being imposed. (Deliverable: A 
guideline on effective practices of cooperation between SAIs, the 
legislature, the judiciary, and the executive). 

The next meeting of the working group is planned for June 2012 and 
will be hosted by the SAI of Mexico. During this meeting, the project 
groups will have the opportunity to provide detailed feedback on their 
work. 

For additional information, contact the SAI of South Africa: 
E-mail: lelaniev@agsa.co.za; agsa@agsa.co.za: 
Website: [hyperlink, http://www.intosai-wgvbs@agsa.co.za]: 

Meeting of the Finance and Administration Committee: 

On July 18, 2011, the INTOSAI Finance and Administration Committee 
(FAC) held its seventh meeting in Washington, D.C. Committee members 
are the SAIs of Saudi Arabia (committee chair), the United States 
(vice-chair), Austria, China, Ecuador, Mexico, and Norway. In opening 
comments, Osama Faquih, head of the SAI of Saudi Arabia, thanked the 
SAI of the United States for hosting the meeting, welcomed new 
committee members Ecuador and Mexico, and reviewed the committee’s 
accomplishments since its March 2010 meeting in Caracas. 

The FAC is responsible for cooperating with the General Secretariat in 
financial planning; supervising and controlling budget implementation, 
recommending adjustments to organizational dues, and reporting to the 
Governing Board and INTOSAI congresses as needed. 

In a report on the status of the INTOSAI budget, Dr. Moser, INTOSAI 
General Secretary and President of the SAI of Austria, reported that 
90 percent of INTOSAI’s dues had been received as of the end of June 
2011. Dr. Moser also reported that auditors from Malaysia and Oman 
found that INTOSAI’s financial statements for 2010 complied with INTOSAI
’s financial rules. 

The FAC approved a proposal to create a small technical task force to 
conduct a thorough review of INTOSAI’s financial situation and 
sustainable funding for the organization, strengthen continuous 
improvement, and build a foresight capability in INTOSAI to anticipate 
emerging issues. Jurgen Kosmo, head of the Norwegian SAI, will be the 
task force lead. Members will include the FAC members, the Chairman of 
the Governing Board, the Director of Strategic Planning, and 
representatives of chairs of goals 1 to 3. The task force is to 
prepare a report to the FAC, which will then submit a proposal to the 
Governing Board. 

Gene Dodaro, head of the SAI of the United States, reported that the 
International Journal of Government Auditing continues to function on 
a sound financial basis and, with continued attention and stewardship, 
could continue its operations if its allocation from INTOSAI 
membership dues were reduced from 25 to 20 percent. He also reported 
that the Journal is continuing its efforts to upgrade its electronic 
version. The committee approved a proposal to reduce the Journal’s 
allocation. 

In addition, the committee discussed the need to find a permanent 
revenue source to pay for the travel costs of the Director of 
Strategic Planning. In the short term, these costs will be offset by 
other INTOSAI funds and by the funds formerly allocated to the Journal. 

Einar Gorrissen of the SAI of Norway described the background and 
goals of the INTOSAI Donor Cooperation effort under the 2009 
memorandum of understanding (MOU), as well as the progress to date. He 
highlighted the key findings of the 2010 SAI stocktaking, namely that 
while many SAIs receive external support, there is still a 
considerable need for sustainable capacity development, including a 
clear demand for developing and strengthening performance audit 
capabilities. The stocktaking report also underscored the demand for 
expanded peer-to-peer cooperation by increasing the supply of SAIs 
that provide support. He added that the 2011 action plan identified 
short-term prioritized capacity-building projects targeting INTOSAI 
regions and INTOSAI globally. At the time of the meeting, donor 
support had been secured for 8 of the 13 identified activities. Mr. 
Gorrissen also outlined the key issues to be discussed at the 3rd 
INTOSAI-Donor Steering Committee (SC) meeting, which was held 
immediately following the FAC meeting. The FAC discussed and provided 
feedback on these issues: 

* A global call for proposals is needed to ensure a more comprehensive 
approach to implementing the INTOSAI-Donor MOU. 

* Proposals for pooled funding arrangements may constitute a longer 
term effort. 

* A complete databank of donor-funded and peer-to-peer SAI support 
projects that incorporates the existing CBC database, and its related 
protocols for access and publication, is needed. This expanded 
database will assist in improving coordination of capacity-development 
support between the INTOSAI and donor communities and will provide a 
better overview of ongoing support. 

Other FAC agenda items included discussions of ways to encourage full 
participation by all SAIs in INTOSAI activities and strengthen 
information sharing networks across the organization. In addition, the 
FAC approved the reallocation of funds to translate the executive 
summaries of existing INTOSAI guidelines and standards into all five 
INTOSAI working languages. 

For additional information, please contact the FAC at gab@gab.gov.sa. 

[End of section] 

IDI Update: 

IDI Update keeps you informed of developments in the work and programs 
of the INTOSAI Development Initiative. To find out more about IDI and 
to keep up to date between editions of the Journal, look at the IDI 
Website: [hyperlink, http://www.idi.no]. 

Cross-regional Program on Environmental Issues in Forestry: 

IDI is cooperating with the INTOSAI Working Group on Environmental 
Auditing (WGEA) on a Cross-regional Program on Environmental Issues in 
Forestry. The program’s objective is to build professional and 
organizational capacity to conduct performance audits in the area of 
forestry. Fifteen SAIs from ASOSAI, AFROSAI-E, and CAROSAI are taking 
part in this program. 

[Photograph: Participants at the audit review meeting of the Cross-
regional Program on Environmental Issues in Forestry] 

In October 2011, an audit review meeting was held following the 
completion of the pilot forestry-audit phase. At this event, the 
participating SAIs received feedback on their pilot audits and 
discussed findings with peers and experts. The SAIs also gave feedback 
on the WGEA publication Auditing Forests: Guidance for Supreme Audit 
Institutions and shared action plans for implementing the program 
outputs to build internal capacity in forestry audits in their 
respective SAIs after completing the program. 

IDI/CAROSAI Program on the Risk-Based Approach to Financial Audit A 
second round of the Risk-Based Approach to Financial Audit Program was 
launched in CAROSAI in 2011. Nine SAIs took part in a Workshop on the 
Risk-Based Approach to Financial Audit that was held in November 2011. 
At this workshop, the SAIs were exposed to risk-based audit concepts 
and gained some practice using the templates in the IDI/CAROSAI Guide 
on Risk-Based Approach to Financial Audits, developed as part of this 
program’s first round in 2010. 

Strategic Planning Programs in OLACEFS, CREFIAF, and ASOSAI Strategic 
planning capacity is an expressed need for many SAIs in several 
INTOSAI regions. During 2011, new Strategic Planning Programs have 
been launched in three regions to help SAIs improve in-house capacity 
for developing and implementing strategic and operational plans. Based 
on the lessons learned from previous programs in AFROSAI and ARABOSAI, 
IDI has developed a program structure that combines needs assessment 
and strategic and operational planning. In OLACEFS, the Strategic 
Planning Program was launched in October 2011 with a strategic 
planning meeting for the heads and senior delegates of the 
participating SAIs. The aim of this meeting was to agree on roles, 
responsibilities, and outputs and obtain a common understanding of 
program outcomes. 

[Photograph: Magnus Borge, IDI Director General, and Oscar Velazquez, 
Comptroller General of Paraguay, sign the memorandum of understanding 
for the IDI/OLACEFS Strategic Planning Program] 

Due to heightened interest, two groups of Francophone African SAIs in 
CREFIAF are currently taking part in the Strategic Planning Program. 
The first group has completed the Needs Assessment Training and is 
currently conducting needs assessments in their respective countries. 
The SAI heads in the second group met in October 2011 for the initial 
strategic planning meeting to discuss and agree on the content, 
conduct, and outcomes of the program. The second group of SAIs will 
conduct needs assessments at the beginning of 2012. 

IDI is also cooperating with ASOSAI on a Strategic Planning Program 
for seven SAIs. Resource persons from the region met with IDI staff in 
December 2011 to finalize the design of the program components. The 
IDI/ASOSAI team will meet delegates from the participating SAIs in 
January 2012 to familiarize itself with the planning methodology and 
develop action plans for the strategic planning process in the 
participating SAIs. 

Cross-regional Program on Public Debt Management Audit: 

The Cross-regional Program on Public Debt Management Audit, the most 
comprehensive program in IDI’s history, was completed in November 2011 
when an exit meeting was held with the program partners: IDI, the 
INTOSAI Working Group on Public Debt, the Debt Management Program of 
the United Nations Conference for Trade and Development, and the 
United Nations Institute for Training and Research. 

The Public Debt Management Audit—A Practical Audit Guide, one of the 
program’s planned outputs, will be available to INTOSAI members in 
early 2012. The guide is based on relevant International Standards of 
Supreme Audit Institutions and feedback and experiences gained during 
the pilot audits conducted as part of the program. All of the 29 
participating SAIs from seven INTOSAI regions have committed to 
adopting the guide for use in their institutions. 

Internal Evaluation of Selected IDI Capacity-building Programs: 

Comprehensive internal evaluations of selected IDI capacity-building 
programs were initiated in 2010 to facilitate continuous learning and 
performance improvement. The ASOSAI and CAROSAI Quality Assurance in 
Financial Audit programs, which were carried out during 2007–09 and 
2009, respectively, were the first to be evaluated. The evaluation 
report indicates that the desired program outcomes were largely 
achieved and that quality assurance and financial audit processes have 
been improved in the participating SAIs. 

The evaluation of other IDI capacity-building programs was undertaken 
in 2011, and a final report on these programs is expected to be ready 
in the spring of 2012. 

Contacting IDI: 

To discuss any of the issues raised in this edition of the IDI Update, 
please contact IDI: 
E-mail: idi@idi.no: 
Website: [hyperlink, http://www.idi.no]: 

[End of section] 

INTOSAI 2012 Events: 

February 23-25: 
Meeting of the Donor Funding Project Steering Committee, Jaipur, India. 

May 28: 
EUROSAI Governing Board Meeting, Ankara, Turkey. 

May 29-June 1: 
Meeting of the Steering Committee of the Professional Standards 
Committee, South Africa. 

June 14-15: 
Meeting of Subcommittee 1 of the Capacity Building Committee, Tokyo, 
Japan. 

June TBD: 
Meeting of the Working Group on the Value and Benefits of SAIs, Mexico. 

August 31-September 1: 
Meeting of Subcommittee 2 of the Capacity Building Committee, Lima, 
Peru. 

October TBD: 
63rd Meeting of the INTOSAI Governing Board, Chengdu, China. 

Editor’s Note: This calendar is published in support of INTOSAI’s 
communications strategy and as a way of helping INTOSAI members plan 
and coordinate schedules. Included in this regular Journal feature 
will be INTOSAI-wide events and regionwide events such as congresses, 
general assemblies, and board meetings. Because of limited space, the 
many training courses and other professional meetings offered by the 
regions cannot be included. For additional information, contact the 
Secretary General of each regional working group. 

[End of January 2012 edition of The Journal]