The Oversight Role of Supreme Audit Institutions

By: Fuimaono Afele, CFE, Ahsiu Lin, CFE, Norris Mitchell, CFE, and Nafanua Tualatamalelagi, CFE, from the Samoa Audit Office.

Supreme Audit Institutions (SAIs) play an important role in national and global economy by ensuring that public resources are managed properly and in accordance with established rules. They normally produce an audit opinion, which may give opinions about whether the financial statements have been prepared in accordance with the reporting framework. Some SAIs, in addition to performing post-auditing responsibilities, also carry out controller functions of the national treasury--the controller function is a pre-audit function, meaning it is done before the fact. Under the constitutions of some countries, no money can be issued out of the national treasury except in pursuant of a warrant of payment. In addition to this, it is required under the public finance management legislations that, before any such warrant is approved, it should be certified first by the SAI whether the amount thereof may be lawfully issued. Warrants of payments are usually issued based on the appropriations that are approved by the Legislative Assembly, although there are emergency exceptions permitted under the laws of some countries. Even after appropriations are approved by the Legislative Assembly, the finance legislations still require the SAI to pre-audit all payments from the national treasury.  

Post-audit functions make up most of the audit functions of SAIs. The first post-audit function focuses on the core government, consisting of ministries and offices of the constitution and parliament, which delivers pure public goods and services.t. In some countries, the core government has a centralized accounting system, so its financial statements are consolidated into a whole of government public accounts. The SAIs in such jurisdictions conduct audits of the individual entities as well as the whole of government financial statements or public accounts. The second post-audit function of SAIs relates to the public enterprises of the government. These entities are usually established as business or commercial units delivering commercial goods and services. The pre-audits and post-audits discussed above are grouped together as the financial audits of the SAIs. 

SAIs in recent years, however, have developed operational audit capacity and capability. Under those operational audit mandates, SAIs usually establish: 

• Performance and environmental audit function or unit.
• Compliance audit function or unit.
• Information and communication technologies audit function or unit.
• A special audit function or unit conducting the audit of fraud, abuse waste and corruption.

SAIs also provides support services units such as strategic, personnel and corporate services, information and communications technologies, and infrastructure units. Furthermore, SAIs has communications and stakeholder relationships units. While some people consider a communication and relationship unit a support service unit, I think otherwise and consider communication and relationships to be a core function of SAIs. 

It is essential for SAIs to communicate the results of their audit work to stakeholders so that it is immediately relevant and helps improve national governance and quality of life. Reporting to parliament has always been the end result of the audit work of SAIs. The preparation and submission of reports by the communications and stakeholder relationships unit to parliament is usually followed by a robust debate, both within and outside parliament, and provides scrutiny on the national governance and financial and performance accountability of those in charge Once the reports are submitted and the parliamentary process is completed, the reports become available on  SAI and parliament websites to keep  stakeholders and any other interested parties informed.  Reports to parliament are only one of the communication channels SAIs use to convey their message, spread news about good and ethical governance, and raise financial and performance accountability required of those in charge of governance. SAIs may also communicate their findings through blogs, newsletters, bulletins, social media etc.   

Integrity Work in Recent Years

The integrity work of SAIs can use the United Nations Convention against Corruption (UNCAC) as guidelines and standards for its planning, fieldwork and reporting. UNCAC, however, does not appear to cover corruption and bribery in the election of members of parliament. I am of the view that UNCAC should address corruption and integrity violations and breaches in all components of the national integrity system, especially the election of members of parliament. Blessings and good fortunes of a country flow from the top, starting with its leaders and down to its citizens. Auditors believe that the tone at the top of an organization sets the direction of what follows below. Therefore, it is important for UNCAC and all national and international integrity initiatives to consider elections as the most important pillar to focus on within the national integrity system.  The SAIs provide oversight in various ways, such as: 

• Through the controller function over the national treasury.
• As the constitutional auditor of the state or public sector, inclusive of the legislature, executive and judiciary.
• As the constitutional auditor for the people, citizens and taxpayers.
• As an independent advisor to the executive government on its national governance, financial and performance accountability.
• As an advocate for good and ethical governance, accountability, transparency and integrity through its communications, education and awareness activities.
• As a reporter for the people, citizens and taxpayers who are directly affected by the national governance, as well as the financial and performance accountability of the public sector.