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By Magdalena Karnebäck, chair of CBC workstream for the Audit of Donor Funds 


“SAIs and donors make informed choices when engaging in the audit of donor funds, while safeguarding SAIs’ independence and respecting their national mandate.”

That is the purpose of the new workstream that the CBC steering committee decided to establish in September 2021. The Swedish NAO will be chairing this initiative and we are enthusiastic about the opportunity to engage with colleagues around the world with experiences in this area.

It may sound self-evident that SAIs and donors make informed and well-founded choices when deciding on auditing donor funds. Institutions have their reasons for choosing a certain path and are fully competent to do so. However, it is easy to get carried away in the ambition to prove oneself relevant. SAIs all around the world are dedicated to demonstrating their value and benefit to stakeholders, as described in INTOSAI Core Principles. Donors are striving for aid effectiveness by using country systems, as prescribed by the OECD Development Assistance Committee. Donors and international stakeholders could – and should – make use of, and put trust in, the results of SAIs’ audit work. The past years’ High-Level Fora on Aid Effectiveness (Paris, Accra, Busan), have presented arguments for the use country systems to channel and monitor development funds, including national ownership and avoiding parallel structures. When it comes to audit, SAIs have profound country-context understanding, relevant professional competency and institutional legitimacy. They also have experience of assessing risk and materiality in their particular context. This is of great value for any actor who is interested in how public resources are being spent in a certain country.

Also from the SAIs’ perspective, there are positive side-effects from donors putting their trust in SAIs. For example, it sends a message to the government and the public, that the SAI is seen as a reliable and competent institution. It is also key for a SAI to have the mandate to audit public funds whether it originates from the national taxpayers or from donors’ budget support, to ensure sufficient audit coverage. There are indeed good examples of donors relying on audits carried out by SAIs, and there is no doubt that SAIs and donors have valid reasons to engage with each other in the audit of development funds.

While doing this, however, one needs to be aware of the potential pitfalls. There are unfortunate examples, that unintentionally have created a conflict of aims between aid effectiveness and SAI independence. For example, when SAIs with insufficient resources are offered additional funds or training under the condition that they audit certain donor funded areas, they may prioritize donor audits over the national audit – leaving the SAI unable to deliver on its mandate. Some donors may be providing additional resources to cover that gap, but resources are channeled through the Ministry of Finance and do not always reach the SAI. In some cases, the SAI is instructed by a donor or government to carry out audit of donor-funded programmes, using standards and processes directed by the donor, without considering the SAI’s independence. Agreements about when and how audits should be done are sometimes made between the donor and the government, without involving the SAI in the process.

It is therefore so important, while encouraging donors to make use of country systems and SAIs to demonstrate relevance to various stakeholders, to make sure that the good intentions do not pave the road to undermined independence and crowding-out-effects on SAIs’ regular audit work. Considering the amount of development funds channelled through the national systems, and the fact that half of all SAIs already report having insufficient financial resources to adequately carry out their mandated audit responsibilities (IDI Global SAI Stocktaking Report), SAIs could not take up the role without the risk of severe consequences for SAIs’ national audit mandate and for their citizens.

For SAIs, it is fundamental to independently decide on the scope of our audits, what topics to cover and how to prioritize our resources. SAIs decide what methods to use and what standards to apply, and base their audits on risk assessment and professional judgement, without external interference. National governments or international organisations should be careful not to push their agenda on SAIs, instruct SAIs to audit certain (donor-funded) areas or programmes, or require them to apply different audit standards than they otherwise do. For a donor with an interest in transparency and efficiency in the use of resources, capacity development of SAIs is a good investment. But it should not come with a condition to audit donor funds, as that runs the risk of undermining the independence of the same institution.

The international SAI community has been working hard over the past decades to promote and safeguard SAIs’ independence and to implement internationally accepted auditing standards (ISSAIs). At the same time, the international donor community has invested considerable resources into various projects supporting the same purpose. Let us now cherish these efforts, by making informed and sustainable choices when engaging in the audit of donor funds. One way to do so is for donors to apply so called “full” rather than “supplementary” use of country systems ( While the latter implies that the donors require particular audit that goes beyond the SAIs own priorities, donors may consider making full use of the country system, including the work of independent audit institutions.

Coming back to the CBC work stream on the Audit of Donor Funds, we hope to play a role in encouraging sustainable and responsible cooperation between donors and SAIs, in order to promote transparent and efficient use of resources, while safeguarding SAIs independence and national mandate. With this in mind, we will explore ways for donors to make use of SAIs valuable audit work, and ways for SAIs to be relevant to stakeholders.

Building on the insightful discussions that took place in a CBC webinar in 2020 on the topic of audit of donor funds, the workstream on the Audit of Donor Funds is now gathering good examples and compiling information. We are confident that this will result in useful resources, supporting SAIs and donors to make informed choices when engaging in the audit of donor funds

If you have experience in auditing of donor funds, we hope that you are willing to share your insights.  If you wish to get in contact with the work stream, please contact the Swedish NAO at