International Journal of Government Auditing Contents
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International Journal of Government Auditing January 2001—Vol. 28, No. 1 ©2001 International Journal of Government Auditing, Inc. Board of Editors The International Journal of Government Auditing is published quar- Franz Fiedler, President, Court of Audit, Austria terly (January, April, July, October) in Arabic, English, French, Ger- L. Denis Desautels, Auditor General, Canada man, and Spanish editions on behalf of INTOSAI (International Emna Aouij, Premier President, Court of Accounts, Tunisia Organization of Supreme Audit Institutions). The Journal, which David M. Walker, Comptroller General, United States is the official organ of INTOSAI, is dedicated to the advancement of Clodosbaldo Russian Uzcategui, Comptroller General, Venezuela government auditing procedures and techniques. Opinions and be- liefs expressed are those of editors or individual contributors and do President not necessarily reflect the views or policies of the Organization. Linda L. Weeks (U.S.A.) The editors invite submissions of articles, special reports , and news Editor items, which should be sent to the editorial offices at U.S. General Donald R. Drach (U.S.A.) Accounting Office, Room 7806, 441 G Street, NW, Washington, D.C. 20548, U.S.A. (Phone: 202-512-4707. Facsimile:202-512-4021. Assistant Editor E-Mail: <[email protected]>). Linda J. Sellevaag (U.S.A.) Given the Journal’s use as a teaching tool, articles most likely to be Associate Editors accepted are those which deal with pragmatic aspects of public sec- Office of the Auditor General (Canada) tor auditing. These include case studies, ideas on new audit method- Deepak Anurag (ASOSAI-India) ologies or details on audit training programs. Articles that deal pri- Luseane Sikalu (SPASAI-Tonga) marily with theory would not be appropriate. Michael C.G. Paynter (CAROSAI-Trinidad and Tobago) EUROSAI General Secretariat (Spain) The Journal is distributed to the heads of all Supreme Audit Institu- Khemais Hosni (Tunisia) tions throughout the world who participate in the work of INTOSAI. Yadira Espinoza Moreno (Venezuela) Others may subscribe for US$5 per year. Checks and correspon- INTOSAI General Secretariat (Austria) dence for all editions should be mailed to the Journal’s administra- U.S. General Accounting Office (U.S.A.) tion office, P.O. Box 50009,Washington, D.C. 20004, U.S.A. Production/Administration Articles in the Journal are indexed in the Accountants’ Index pub- Sebrina Chase (U.S.A.) lished by the American Institute of Certified Public Accountants and included in Management Contents. Selected articles are included in Finances abstracts published by Anbar Management Services, Wembley, En- U.S. General Accounting Office (U.S.A.) gland, and University Microfilms International, Ann Arbor, Michi- gan, U.S.A. Members of the Governing Board of INTOSAI Guillermo Ramirez, President, Court of Accounts, Uruguay, Chairman Contents Jong-Nam Lee, Chairman, Board of Audit and Inspection, Korea, First Vice-Chairman 1 Editorial Tawfik I. Tawfik, State Minister and President, General Audit Bureau,Saudi Arabia, Second Vice-Chairman 2 News in Brief Franz Fiedler, President, Court of Audit, Austria, Secretary General Arah Armstrong, Director of Audit, Antigua and Barbuda 6 Pakistan’s SAI Promoting Good Governance Iram Saraiva, Minister-President, Court of Accounts, Brazil Lucy Gwanmesia, Minister Delegate, Cameroon 8 ASOSAI Assembly and Symposium L. Denis Desautels, Auditor General, Canada Mohamed Gawdat Ahmed El-Malt, President, Central Auditing 11 CAROSAI Congress Organization, Egypt 15 Hedda Von Wedel, President, Court of Audit, Germany Audit Profile: Mongolia V. K. Shunglu, Comptroller and Auditor General, India 17 Reports in Print Abdessadeq El Glaoui, President, Court of Accounts, Morocco Bjarne Mork Eidem, Auditor General, Norway 18 Inside INTOSAI Carmen Higaonna de Guerra, Contralor General, Peru Alfredo Jose de Sousa, President, Court of Accounts, Portugal 2000 Index Pohiva Tui’i’onetoa, Auditor General, Tonga David M. Walker, Comptroller General, United States Future Challenges: Reflections After 10-years as Auditor General of Canada By Denis Desautels, Auditor General of Canada As I take my leave after 10 related to these new delivery arrangements. However, what years as Auditor General of I and others have observed is that these changes in public Canada, I wanted to use this sector structures are not always matched by corresponding opportunity to identify some of changes in accountability structures and in the mandates the challenges facing our of SAIs. office—and, I think, many SAIs in the 21st century. In particular, These non-governmental and other entities are doing I want to discuss the need for what, until recently, had been done by government bodies accountability and audit that were subject to government accountability practices practices to keep pace with and structures and fell under the SAI’s mandate. Public public sector reforms. moneys and authorities are still being used in the public Mr. Denis Desautels interest to serve some public purpose. It seems to me that there is no reason why legislative oversight should cease Challenges we have identified for our Office include the or be significantly curtailed just because of a change in the following: form of government delivery used. Yet in Canada, and in a number of other jurisdictions I have visited—especially • rapidly changing information technology, requiring where SAI mandates do not include some form of “follow new skills and new tools for auditors; the dollar”—SAIs are seeing their ability to help legislatures scrutinize these new arrangements reduced because the • recruitment, retention and development of human scope of their audit activity is limited to traditional forms of resources in audit offices; service delivery. At the same time, traditional forms of • changing demands on the auditing profession as reporting to legislatures do not apply to many of these new globalization becomes a reality; arrangements. All of this is not necessarily the intent of public management reforms, but it is a clear result of them. • appropriate funding for audit offices; and Mandates of SAIs and accountability structures always • the impact of new delivery arrangements on the audit seem to be topics of discussion, and are issues in constant and accountability of government. need of attention even in well-established national audit I want to expand a little on the last point. offices. SAI mandates are important: they directly impact on our ability to serve our legislatures. Over the past 10 For many years, governments used traditional means to years, we have seen some attempts by governments to deliver services and programs: namely, direct delivery through reduce or limit the mandates of several SAIs. These attempts government ministries, departments and agencies. For the are well-known and have been monitored with great interest most part, accountability structures matched these traditional by INTOSAI members. But there is another, more insidious, government structures, as did audit office mandates. As a danger facing SAIs in many countries. Their mandates are consequence, accountability reports to legislatures and audit being reduced or limited not by direct action but, indeed, by coverage by SAIs provided quite complete coverage of the inaction—by failing to update mandates as the forms of activities of government and hence of the expenditures and government evolve. Governments have changed the way authorities provided to governments by their legislative bodies. they deliver services, moving service delivery farther away from direct scrutiny by legislatures; SAI mandates often Over the last 10 to15 years, however, many governments, have not kept pace. Furthermore, effective new structures including Canada’s, have moved away from the more traditional for accountability often have not been introduced to ensure forms of delivery and established a wide array of alternative adequate legislative scrutiny. approaches. These include delivery through contracting out to the private sector, delivery through arm’s-length entities, There is a need, I believe, to find the ways and means and delivery in collaboration with other levels of government to adapt the mandates of SAIs and accountability structures or non-governmental entities. to new forms of government. There are no doubt a number of ways this could be done. The recent Sharman review of These types of public sector reform are widespread now the arrangements in the United Kingdom for the audit and in many countries. Many believe that they have resulted or accountability of government in the 21st century is one will result in more effective and efficient delivery of services to such attempt to deal with this problem. citizens. SAIs in many countries have carried out audit work (Continued on page 7) 1 International Journal of Government Auditing–January 2001 News in Brief China European Union however, able to give positive assurance on the revenue, commitments, and staff SAI Reports on Fraud and 1999 Annual Report of the expenditures. Corruption European Court of Auditors The level of errors is not an In October 2000, China’s SAI The reform program set in motion indication of the level of fraud, the Court reported that they had discovered more by the European Commission under emphasized. Most of the errors that the than $11 billion in mismanaged funds in President Romano Prodi is a positive Court found concerned matters such as China’s government offices and busi- response to weaknesses in financial