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SAI capacity, performance and relevance during and subsequent to COVID-19

Replies from Mrs. Pamela Monroe Ellis, Auditor General of Jamaica:

 Q from Indonesia: In your experience, do you have any challenge regarding the availability of data for your audit purposes? If so, how you overcome this challenge? How are you able to do physical verification of goods and stocks during the audit if it is conducted virtually?

 A: Availability of Data

The unavailability of data for audit purposes is a perennial challenge faced by SAI Jamaica, especially data in electronic format as our audits are no longer paper-based but are conducted using electronic working papers.  To reduce the impact of this challenge, we have updated our standard approach to include requests for electronic records, direct on-site or remote access to client databases and standard planning meetings with our clients to discuss our audit approach, the nature, timing and scope of our audits and the information/records that will be required for audit purposes.  The client is usually generally aware of this approach as this would be communicated to them in an Engagement Letter before the commencement of the audit.”

A: Physical Verification of Goods and Stocks

“- SAI Jamaica continues to conduct in-person verification of goods and stocks.  During the pandemic, we requested before hand that our clients outline their safety protocols to ensure that our staff was not at increased risk of exposure to the virus.  We also collaborated closely with the Internal Auditors from some of our clients to assist in the stock count exercise.”

 Q: How do you make sure that your audits have good quality assurance during audit in the pandemic out-break? ­

“- Fortunately for SAI Jamaica, our engagement quality control and assurance process is well established and the pandemic has not resulted in any compromise of this process.  Prior to the pandemic, our audits were conducted using electronic working papers, which facilitated more efficient documentation and review of our audit work.  This along with the use of other collaborative tools such as Microsoft Teams, Zoom, and Google Meets allowed team-members to interact virtually during the pandemic.  These tools facilitated periodic review meetings at the team level, the Unit level, and with the Quality Assurance Reviewers to ensure that the Department’s standards were maintained”.

Q from Brazil:

­My question is related to the bodies to be audited. Are they prepared to meet the demands of the SAI?­

“- Most Ministries, Departments and Agencies (MDAs) are prepared to meet the demands of SAI Jamaica.  The finance and accounting function of most MDAs is already automated and providing information in electronic format is usually facilitated.  A minority of MDAs are still manual in their processes.  This impacts our audit efficiency as access to these records may be more time consuming. Some clients, for IT security reasons, express reservations in allowing direct access to their databases.  However, in these circumstances we collaborate with our internal IT team to provide assurance to our clients of the steps taken to reduce the risks associated with granting us direct access to their systems.”

Q: How can you trust official data on Covid19 that is being produced during the pandemic? How do you analyze data under these complicated times?

“- One opportunity that has been presented to SAI Jamaica as a consequence of the pandemic is the opportunity for greater collaboration with other state agencies, including the tax authority.  This collaboration has assisted us significantly in conducting “real-time audits” of COVID-19 related relief expenditure to reduce the risk of payments being made to ineligible persons.  This exercise has facilitated SAI Jamaica gaining direct access to various databases containing official data on COVID-19 related expenditure resulting in the identification of anomalies before actual payments are made.”

Q from IBP: How is your SAI able to seek citizens’ inputs in the audit process in COVID context?

“- SAI Jamaica as part of its standard process in conducting performance audits invites citizens’ and other stakeholder input through focus group meetings with representatives from various stakeholder groups.  We also invite comments and feedback through our website where the relevant audits in progress are listed.  In light of the pandemic, our face-to-face focus group meetings might not be practical and we will therefore pursue the option of virtual focus group meetings along with our website feedback feature to solicit input from stakeholders”.

Replies from IDI/Einar Gorrisen:

 Qs from Jonathan Agunda (OAG Kenya) Srinivas Gurazada (Worldbank) and Pandeynamuna:

  • How can the independence and level of production of the SAI be maintained when the government finances its resources and budget is significantly cut down?­
  • And how can SAIs protect their budget allocations in the face of national budget constraints?
  • Is there significant threat to SAI independence during COVID-19 as rule books are often kept on the shelf by Governments? ­

A: – “From the perspective of financial independence of the SAI, it is important that the budget decisions be made by parliament/legislatures, without undue interference from the executive, and following the national legislation. Of course, the SAIs budgets can be cut, but it needs to follow due process. SAIs need to engage with relevant stakeholders to make a case for maintaining the level of budget support necessary to carry out their mandate in an effective way. With reference to significant threat to SAI independence, we are seeing possible examples where the mandate of SAIs to do certain audits is being questioned, decisions on audits are made by others and cases where emergency funds are channelled outside the budget thereby removing the possibility of SAI audits. Another way in which SAI independence can be challenged is through access to information which is linked to one of the pillar of the Mexico Declaration. Access to information both in terms of timeliness and comprehensiveness. Having timely access to information will be fundamental in providing real time assurance or performing real time reviews as there is a greater demand for concurrent reviews and audits, and SAIs have to make sure they have the mandate and timely access to information, as well as access to all the relevant information  to perform those tasks.”

Q from Gentil Nkomezi, SAI Rwanda: In your presentation you mentioned the need for consistent horizon scanning and “trade-offs”. Could you please shed more light about “trade-offs” in audit as response to COVID-19?  

A: – “Yes, I made the point that SAIs need to become more resilient organizations that are agile and flexible in a more uncertain world. Resilience entails the ability to survive a crises and to thrive in an uncertain world. It means for instance that SAIs constantly scan the horizon to see how they can add most value, update and have the ability to quickly adjust their audit plans to the challenges and opportunities in their environments. There are no doubt great expectations for SAIs to play an active role in both auditing emergency responses during and after the current pandemic, as well audits of emergency management systems. The need to take up such audits will have to be balanced with audits that SAIs are mandated to conduct.” 

Q from Aziz Idriss (SAI Morocco), Suvarna Hulawale (IBP), Fikret Ibrahimi (SAI Kosovo) and Ahmed El Kasmi (SAI Morocco):

  • Should audit plans (annual and strategic) necessarily be reviewed by SAIs when in emergency like Covid 19?
  • If audit plans are reviewed and redrafted, what are the most urgent and important areas to prioritize?
  • What are the main challenges SAIs are facing in planning and carrying out performance audits?

A: – “SAI Audit plans (annual and strategic) need to be relevant to each SAIs current context. As the pandemic has substantially changed the context which SAIs are operating, we highly recommend the review of audit plans.  The areas to audit will be country specific. We recommend that SAIs endeavour to gain a good understanding of the government’s response arrangements, consult with stakeholders, consider their mandates & capacity, and conduct a risk assessment to determine their audit priorities. As an immediate response, SAIs may decide to conduct agile audits of transparency, accountability and inclusiveness related to use of emergency funding. Areas like emergency procurements, socio economic packages provided by the government in different sectors to individuals or entities could be looked into. In the medium term SAIs could also look into issues like resilience of national public health systems, socio-economic impact of the crisis in different sectors like food security, education, gender equality, debt sustainability etc. One of the biggest challenges created by COVID-19 is the deepening of inequalities. We believe that it would be worthwhile for SAIs to mainstream inclusiveness considerations and examine outreach to vulnerable communities when they audit government response to this crisis. The resources required to conduct a performance audit – expert inputs, performance audit professionals, time required for the audit and extensive inputs from audited entities and stakeholders are some of the challenges that SAIs face in conducting performance audits.”

Q from Luck Mokoena (AGSA): How can IDI assist SAIs to share work experiences on an operational level to enhance international cooperation?­ 

A: “- International cooperation and mutual learning and support has in my view become more important than ever during this pandemic. In the IDI we have quickly repositioned our portfolio to support SAIs during this crisis. This entails enhancing the use of eLearning, and development of Covid-19 related guidance for SAIs (available on the IDI website under our Covid-19 resources) on issues such as implications of Covid-19 for SAI strategic management, the importance of accountability in crises and one pagers to help SAIs in deciding on financial and compliance audits in Covid-19 times and providing relevant weblinks to other standard setters. Efforts have been made to support four regions, EUROSAI, ASOSAI, ARABOSAI and ASOSAI in addition to INTOSAI bodies to use the IDI Learning Management Systems as well as enhancing our own capacity for online work. We have also planned a number of webinars going forward for SAIs to exchange experiences and learn from one another. IDI will also be offering support globally to SAIs on Transparency, Accountability and Inclusiveness (TAI) audits in use of emergency funding for Covid-19. We are also in the process of planning for cooperative audits of strong & resilient national public health systems (linked to SDG target 3D) which for now is planned for ASOSAI, ARABOSAI and CAROSAI. In OLACEFS we are planning a cooperative audit of sustainable public procurement linked to SDG 12.7 which will also examine the impact of Covid-19. And finally, we will support the audit of elimination of intimate partner violence against women (linked to SDG 5.2) for SAI Serbia and Uganda, which also will look at the impact of Covid-19 on intimate partner violence. Under our Green Hat: IDI Innovation Exchange Series, we will facilitate online workshops on ‘ New Normal’. We plan to invite SAI leaders and practitioners to share their work on innovative solutions for adapting to the new normal and building back better.

Q from Bishnu Paudyal: ­Is there any developed module of auditing in the COVID 19 situation?­

A: “- Auditing in the COVID 19 situation has many different aspects. The IDI has several projects in the pipeline, where eLearning modules will be created for supporting SAIs in conducting compliance and performance audits related to COVID-19. IDI also plans to develop a rapid guide for conducting agile compliance audits on the use of emergency funding for Covid-19. The material is expected to be available by October 2020.”