www.intosaijournal.

org winter 2020 edition

 Board of Editors
Margit Kraker, President, Rechnungshof, Austria
Sylvain Ricard, Interim Auditor General, Canada Winter 2020
Nejib Gtari, Premier Président, Cour des Comptes, Tunisia Vol. 47, No. 1
Gene L. Dodaro, Comptroller General, United States of America
Manuel E. Galindo Ballesteros, Comptroller General, Venezuela The International Journal of Government Auditing is
published quarterly in Arabic, English, French, German
President and Spanish on behalf of INTOSAI (International
James-Christian Blockwood (U.S.A.) Organization of Supreme Audit Institutions). The Journal,
which is an official organ of INTOSAI, is dedicated to
Vice President the advancement of government auditing procedures
Michael Hix (U.S.A.) and techniques. Opinions and beliefs expressed are
those of individual contributors and do not necessarily
Editor reflect the views or policies of the organization.
Heather Santos (U.S.A.) The editors invite submissions of articles, special reports,
and news items, which should be sent to the editorial
Special Contributors offices at:
Jan Roar Beckstrom (Norway)
Kristie Conserve (U.S.A.) U.S. Government Accountability Office
441 G Street, NW, Room 7814
Laurel Voloder (U.S.A.)
Washington, D.C. 20548
Nelson Shack Yalta (Peru)
U.S.A.
Administration and Operations (Phone: +1 202-512-4707; Fax: +1 202-512-4021;
Peter Knopes (U.S.A.) E-mail: [email protected]).
Michael Huskey (U.S.A.)
Given the Journal’s use as a teaching tool, articles most
Associate Editors likely to be accepted are those that deal with pragmatic
aspects of public sector auditing. These include case
AFROSAI Secretariat
studies, ideas on new audit methodologies, or details
ARABOSAI Secretariat
on audit training programs. Articles that deal primarily
ASOSAI Secretariat with theory would not be appropriate. Submission
CAROSAI Secretariat guidelines are located at http://intosaijournal.org/our-
EUROSAI Secretariat submissions/.
OLACEFS Secretariat
The Journal is distributed electronically to INTOSAI
PASAI Secretariat
members and other interested parties at no cost. It is
INTOSAI General Secretariat also available electronically at www.intosaijournal.org
Office of the Auditor General, Canada or www.intosai.org and by contacting the Journal at
Office of the Auditor General, Tunisia [email protected].
Office of the Auditor General, Venezuela
U.S. Government Accountability Office
TH S
SSUE
4 Editorial

6 News in Brief

8 Feature Stories
Conducting Remote Audits Using Integrated Information Analysis
Systems
Data, Auditing & Strategy: Unlocking Knowledge in Capitalizing on
Opportunities, Addressing Challenges

12 Inside INTOSAI

18 Spotlight on Capacity Building

20 Spotlight on Science and Technology

OGY
NOL
H
TEC
AND
NCE
SCIE
ME:
THE
CIAL
E
SP
 EDITORIAL

"Technology is driving change in society,

and different professions are rediscovering
roles and aligning themselves with the
technological direction of the future. The
auditing profession cannot be immune to
these effects."

THE FUTURE OF PUBLIC SECTOR AUDITING:

LIVING IN TIMES OF CHANGE
by Dr. Harib Saeed Al Amimi, President, State Audit Institution the United Arab Emirates (UAE) launched “Emirates Blockchain
of the United Arab Emirates Strategy 2021” with an aim to transform 50 percent of
government transactions onto a Blockchain platform.
Technology is driving change in society, and different
professions are rediscovering roles and aligning themselves As an international group of SAIs, we have realized the
with the technological direction of the future. opportunities science and technology offer us to add value
The auditing profession cannot be immune to these effects. to our work. Many are taking full advantage of Computer-
With fast-paced and disruptive advancement in science and Aided Audit Tools and data analytics to increase population
technology, it is imperative the auditing professing keep coverage and improve risk identification. SAIs are also using
pace, particularly if we, as Supreme Audit Institutions (SAIs), technology, such as Audit Management Information Systems,
are to remain relevant. to enhance workflow.

Some technologies having great potential to shape human Some emerging technologies are materially influencing
destiny are already here (earlier than we had perceived). audit work, such as Blockchain, which can help reduce efforts
Blockchain, Robotic Process Automation, Artificial Intelligence related to testing, verifying and authenticating detailed
(AI) and Machine Learning are no longer merely topics of physical documents. Blockchain's decentralized, distributed
debate in research journals—practical applications have universal ledger makes every transaction immutable and
already been employed in the world of auditing. For example, provides a high level of transaction assurance and accuracy.

4 International Journal of Government Auditing—Winter 2020

 EDITORIAL

Science and technology are progressively moving beyond improving human life and economic competitiveness, but they
auditor-led analytics. Robotic Process Automation has the also pose new risks.
potential to consume repetitive audit work and do so more
accurately, reliably and tirelessly in a fraction of the time. With the potential to displace workers in some sectors, require
This technology will allow auditors to work at a higher level new skills and adaptability to changing workforce needs,
and perform more meaningful work. and exacerbate socioeconomic inequality, governments and
SAIs must better understand the broad promise, consequences
AI and Machine Learning are, perhaps, the two areas of and policy considerations resulting from these developments.
science and technology having the greatest potential
to determine the audit profession’s direction and future. Our future success will be driven and powered by diverse
Machine Learning, a subset of AI, seeks to use machines technologies. It is time we keep pulse on developments in
and algorithms to perform intelligent work that mimics the science and technology and how they can interface with our
intelligence of a human auditor. The future of audit will not audit work in the public sector.
be solely about robots Robotic Process Automation. Machines
Recognizing this need, the International Organization of
will learn from audit work and apply auditor intelligence to
Supreme Audit Institutions (INTOSAI) Governing Board
similar data.
recently approved the new Working
AI will be leveraged to produce Group on Impact of Science and
auditing algorithms that will replicate "Public audit in the future will Technology on Auditing (WGISTA).
the collective wisdom of an army
of auditing experts. This can lead
leverage technology. Auditor The inaugural WGISTA meeting will take
to deeper analysis and insights on judgment and intelligent skepticism place April 20-21, 2020, in Abu Dhabi,
pre-fed criteria, as well as on the and the WGISTA Chair (UAE) and Vice
will increase and will reinforce the Chair (USA) invite all INTOSAI member
behavioral basis of huge, complex
and multi-source datasets. power of machines." SAIs and international organizations
to join this group and contribute to the
Will these developments in science exciting work of tracking the latest
and technology ultimately lead developments in science and technology that will affect
to robot auditors, completely replacing human auditors? audit work and understanding how to position ourselves to
Certainly not. However, in the not-too-distant future, such be more productive, relevant and value adding to national
developments will likely augment tedious, repetitive audit governance in the face of this ever-changing technological
work and present exciting opportunities. landscape.
Instead, public audit in the future will leverage technology. To join the WGISTA, submit a written application to the
Auditor judgment and intelligent skepticism will increase and WGISTA Chair, SAI UAE, at [email protected].
will reinforce the power of machines.
The future public auditor will increase focus on value-for-
money audits and employ more creative and intelligent work
extending beyond the boundaries of transactional audit and
account certification. SAVE THE DATE
Keeping pace with the transformation science and technology
brings and positioning ourselves for future governance WGISTA INAUGURAL MEETING
models also equates to improving current skills and acquiring ABU DHABI, UAE
new ones, improvising work processes, and enhancing hiring
strategies. APRIL 20-21, 2020
Auditing how governments treat these developments—in
policies, regulations and other relevant programs—will be For more information, contact the WGISTA
critical. Emerging technologies hold substantial promise for via email at: [email protected]

www.intosaijournal.org 5
 NEWS IN BRIEF

NEWS FROM
AROUND THE WORLD

Click buttons to access

news from that country:
AFGHANISTAN
ALGERIA
BAHRAIN
BELARUS
BULGARIA
CHINA
EGYPT
FRANCE
GAMBIA
IRAN
JAPAN
KUWAIT
LITHUANIA
MYANMAR
PERU
UNITED STATES

6 International Journal of Government Auditing—Winter 2020

 NEWS IN BRIEF

NEWS FROM
AROUND THE WORLD

www.intosaijournal.org 7
 FEATURE STORIES

CONDUCTING REMOTE AUDITS USING

INTEGRATED INFORMATION ANALYSIS SYSTEMS

by Mikhail Petrov, Director, Digital Transformation Department, If a remote audit is possible, the IAS provides numerous
Accounts Chamber of the Russian Federation; Ksenia Kostash, advantages, including the ability to more efficiently use
Head of Division, Digital Transformation Department, Accounts resources by reducing the number of on-site inspections (or
Chamber of the Russian Federation; and Aleksandr Chistoborodov,
Deputy Director, Federal Center of Informatization, Accounts eliminating the need for them altogether). Hover over each
Chamber of the Russian Federation icon below to learn more about advantages of the IAS.

The Accounts Chamber of the Russian Federation (Accounts

Chamber), Russia's Supreme Audit Institution (SAI), recently
began using an Information Analysis System (IAS) integrated
with government databases in an effort to conduct remote
audits. The SAI's experience demonstrates benefits of such an
approach and identifies implementation requirements.
Developing an Information Analysis System
As government organizations increasingly use information
In 2015, the Accounts Chamber developed and introduced
technologies to achieve goals, audit agencies may consider
the IAS to conduct remote audits based on 2013 federal
remote audits as an alternative to traditional on-site audits.
law giving the SAI a mandate to directly access auditee
Several factors aid audit agencies in conducting remote
information systems.
audits, including computerization along with database access
that is easier and more secure. However, remote audits may Since the IAS launch, the Accounts Chamber has enhanced
not always be feasible, particularly considering remote access the system’s functionality to provide direct data access from
to classified information. more than 130 information systems in more than 30 state

8 International Journal of Government Auditing—Winter 2020

 FEATURE STORIES

agencies, including the Federal Treasury, Ministry of Finance, Integrated Information Analysis System. When collecting
and Ministry of Digital Development, Communications and audit data remotely, audit agencies can access different
Mass Media. data sources, such as internal databases of audited entities;
systems that aggregate and analyze data collected from
The IAS, with its intuitive interface, allows remote auditors different sources; and websites and publications available on
to quickly target and access comprehensive and reliable the Internet. Accessing data from these sources requires an IAS
information, even during the early stages of the audit process. equipped with a search engine to facilitate data search and
The system streamlines the process through the ability to view sorting. To facilitate analysis, auditors can store the data in
and analyze data and prepare reports. Auditors use IAS tools digital warehouses, which further enables criteria-based data
to analyze text to help identify procedural violations and searches, including source and time period.
attempted concealment in the public procurement process.
With the help of this method, the Accounts Chamber detected Regularly updating relevant information is essential, and
more than 650 violations (10 percent of the total number of audit agencies can do so by:
violations identified that year) in 2017.
• Tracking legal changes related to data content and format;
Statistical analyses of large datasets also facilitates a risk- • Monitoring planned changes in information systems that
based approach to planning. By analyzing the number of could impact interfacing with the audit agency’s IAS;
violations committed by auditees, as well as the amount of
funds allocated to them, auditors can identify entities most • Comparing the data received from different information
at risk of committing violations and then adjust audit focus systems to identify any irregularities to which auditors
accordingly. should pay attention; and
• Monitoring types of data analysis carried out within
Information Analysis Systems to Conduct Effective Remote Audits information systems for possible IAS incorporation.
The Accounts Chamber has found that effective remote audits
require an appropriate legal framework, technical measures As a data collection tool, the IAS is a single-platform source
and system integration: of analytical data that can be used to build data marts,
Legal Framework. There must be an established legal aggregate data and provide prompt analysis and monitoring
framework that (1) regulates procedures for conducting of various indicators contained in external information systems.
remote audits using information systems and (2) grants audit Collecting information onto one platform and providing modern
agencies the right to: data analysis tools, remote audits can lead to additional cost
reductions. Currently, more than 500 state organizations in
• Access audited entity databases at any time; Russia are connected to the automated information collection
• Request detailed information on data related to the tool.
activities under consideration;
To implement this approach, the Accounts Chamber also
• Make data-related recommendations (both content and aims to develop an automated "Digital Inspector" workplace
organization); and designed to work with consolidated qualitative information
• Request data be provided in certain formats. on auditees in "single window" mode. A single entry point
platform based on digitally stored data, Digital Inspector will
Technical Measures. When conducting remote audits, it is also provide powerful risk-oriented analytical models and
recommended audit agencies: visual tools.
• Use Internet security software when remotely accessing The Account Chamber's successful implementation of remote
data; audits using an IAS suggests audit agencies in other countries
• Ensure receipt of complete data from information systems may benefit from a similar approach. While it is important to
of auditees; and continue improving remote audit methods and technologies, it
• Have the capacity to process and compare data in different is equally important to standardize remote audit approaches
formats. locally, regionally and internationally.

www.intosaijournal.org 9
 FEATURE STORIES

by Koen Van der Bracht, Supreme Audit Institution of Belgium

Data has become a prominent auditing buzzword—as

revealed through the increased use of the term throughout the

DATA, AUDITING global accountability community to include the International

Organization of Supreme Audit Institutions (INTOSAI) and its

AND STRATEGY
member Supreme Audit Institutions (SAIs).

While data opens up new possibilities for SAIs, including

interesting prospects for more risk-based audits, it also
presents numerous conceptual, technical and organizational
challenges. This article discusses some of the opportunities
and challenges data brings and provides an overview of
how SAI Belgium has addressed them.

Opportunities
Data availability and data analytics have affected audit—
as a field and profession—particularly as financial process
digitalization has brought new techniques that allow SAIs to
audit 100% of transactions. This ability increases financial
audit efficiency and allows auditors to differentiate
between normal and anomalous transactions. Distinguishing
anomalous transactions creates additional efficiencies, as
auditors no longer need to audit a large sample that may
(or may not) be representative.

Performance auditing traditionally focuses on determining

program economy and efficiency. However, available data
(and the means to more easily analyze it in large quantities)
allows auditors to directly measure program effectiveness.
For instance, when auditing a poverty reduction program,
SAIs can now assess actual changes in poverty resulting
from government intervention.

Challenges
Data proliferation and new techniques present several
challenges that can generally be divided into three
categories: conceptual, organizational and technical.

Unlocking Knowledge in Conceptual Challenges

Data availability and validity remain the primary conceptual
Capitalizing on Opportunities, challenges. To measure policy effectiveness, auditors may
often need to rely on government databases designed for
Addressing Challenges different purposes. For example, labor market participation
may be derived from tax databases that can miss crucial
information necessary to an audit. Prior to performing
assessments using information from government databases,

10 International Journal of Government Auditing—Winter 2020

 FEATURE STORIES

a study on the data’s reliability and validity may be needed. The Belgian Solution
Otherwise, auditors run the risk of asking the right questions SAI Belgium’s strategic plan focuses on directly measuring
and performing the right analyses only to arrive at wrong policy effectiveness, which often goes hand-in-hand with
conclusions due to data flaws. data analytics. To implement this strategic plan, the SAI has
employed numerous tactics, such as:
Organizational Challenges
• Hiring academically trained social scientists with data
SAIs deciding to invest in data analytics may also need
skills;
to adjust ways in which audits are performed. Obtaining
the right skills is crucial and entails a thorough analysis of • Performing a survey to detect experiences (and interest
SAI needs, such as addressing the type(s) of data analytics in) data analytics among existing staff;
desired and necessary support staff, including skills and • Organizing a global training session on the basics of data
knowledge in database administration, data protection analytics; and
regulations and data visualization. Additionally, SAIs should • Forming a “DataLab” discussion group that helped spread
consider how these skills can be obtained, either by training data analytics agency-wide through monthly meetings
current staff or recruiting new employees. incorporating organized training, advice and assistance
from data specialists.
Addressing organizational setup is essential, and many
options are feasible based on a continuum that includes data SAI Belgium chose to allocate data specialists to audit teams,
specialists allocated to teams only performing analyses for where they perform audits from start to finish. However,
other audit teams to data specialists fully embedded into through DataLab, data specialists also support teams that
audit teams performing audits from start to finish and only have no data analytic specialists.
analyzing data for individual audits.
Because several software packages are used simultaneously,
Technical Challenges SAI Belgium continues to face technical challenges—a result
When performing data analytics in an audit context, SAIs of employees with a diverse background using existing
may face technical challenges and require new software or software combined with the relatively new use of data
more robust computers. analytic techniques.
Currently, SAI Belgium is investing in high-performance,
Early consideration to necessary software provides numerous
centralized computers and developing a Structured Query
benefits: potentially minimizing costs while catering to
Language warehouse to store recurrent financial data flows
current and future audit needs; providing a benchmark for
from administration. Cloud-based solutions are also being
skills; and selecting appropriate data protection solutions.
investigated, and the organization's Data Protection Officer
New software solutions may also require high-performing
has established a data protection policy.
computers—for each data analyst and/or for shared
central servers or cloud-based solutions. These options may Conclusion
also depend on how data specialists are allocated. If data Data availability and techniques can offer useful prospects
specialists, for instance, work on audits from start to finish, it for new audit types. While SAI Belgium has fully embraced
may make sense to pool computing resources with central, these possibilities, some lessons learned include the need to
shared servers or cloud-based solutions, as the amount of (1) thoroughly consider a data analytics strategy; and (2)
specialists that will do data analytics simultaneously will be consider potential conceptual, organizational and technical
limited. challenges.
Regardless of the software and hardware options, data While SAI Belgium experienced all of the challenges outlined
protection will always need to be addressed. As more data in this article, the creation of DataLab proved crucial to
are harvested, edited and stored, investments in protecting addressing these challenges, particularly as the group
these data becomes more crucial, especially considering the provided a forum to brainstorm strategies to overcome all
personal and/or sensitive nature of the data. challenges and capitalize on all possibilities.

www.intosaijournal.org 11
 INSIDE INTOSAI

2020 EUROSAI CONGRESS

TO ILLUSTRATE FUTURE OF AUDIT
In the very heart of Europe—Prague, Czech Republic— The XI EUROSAI Congress will feature workshops that include
representatives from all European Supreme Audit Institutions an emphasis on the Sustainable Development Goals (SDGs);
(EUROSAI) will unite to participate in the XI EUROSAI audit output visualization; benchmarking benefits and an in-
Congress from May 31-June 4, 2020. depth look into the Benchmarking Information Exchange Project
(BIEP); Information Technologies (IT) to facilitate translation;
The Supreme Audit Office of the Czech Republic accepted the
opportunity (and challenge) to host the XI EUROSAI Congress European Public Sector Accounting Standards (EPSAS);
recognizing the importance of such an event, particularly in combating corruption; taxation; results from the International
this ever-changing world where Supreme Audit Institutions Hackathon (scheduled for March 3-5, 2020, in Prague);
(SAIs) must remain agile—capable of quickly responding e-Gov project audits; implementing audit recommendations;
to emerging trends and increased stakeholder expectations. developing fast, responsive, facts-only reports that provide
valuable feedback to policymakers; successfully integrating
While the XI EUROSAI Congress will take place at locations the International Organization of Supreme Audit Institutions
steeped in Czech Republic history, the program will present (INTOSAI) Framework for Professional Pronouncements into
a journey to the future of audit and will illustrate how far we,
audit work; and identifying emerging issues SAIs should
as SAIs, can go together through international cooperation.
address.
The XI EUROSAI Congress vision (3C-3E-3I) will provide
the key unlocking much-needed information for auditors The XI EUROSAI Congress will cover many important and
to respond to change and provide continuous feedback inspiring topics that will affect the future of audit with one
to policymakers and the public. With the help of modern goal in mind—help SAIs cope with the challenges these
technology, communication, cooperation, comparison (3C), topics present today.
in combination with information exchange, innovation and
interactivity (3I), can provide more targeted answers as to To learn more about the XI EUROSAI Congress, visit https://
if economy, efficiency and effectiveness (3E) have been met. www.eurosai2020.cz/.

12 International Journal of Government Auditing—Winter 2020

 INSIDE INTOSAI

OLACEFS PARTICIPATES
IN 2019 CAII
Numerous delegates representing OLACEFS contributed to
the 2019 Annual International Conference for Integrity (CAII),
an event hosted by SAI Peru.
FIGHTING CORRUPTION: In his opening address, Nelson Shack Yalta, OLACEFS

OLACEFS LAUNCHES President and SAI Peru's Comptroller General, stressed the
most harmful effect of corruption and functional misconduct

REGIONAL FORUM is the citizen mistrust toward authorities, an aspect that

negatively impacts national stability and economic growth.
As Organization of Latin American and Caribbean Supreme This year’s CAII focused on the “Detection of Corruption:
Audit Institutions (OLACEFS) President, the Supreme Audit
Mechanisms and Strategies for Action” and included keynote
Institution (SAI) of Peru, hosted the first-ever Regional High-
Level Forum of SAIs (FRAN) on December 4, 2019, in Lima. sessions, panels and forums that highlighted big data
The inaugural forum, which highlighted the “Fight Against analytics, open data, science and technology, the Sustainable
Corruption: A Matter of Development—Mechanisms and Development Goals (SDGs) and transnational collaboration.
Good Practices to Improve Government Control and Promote
Good Governance,” responded to the need to provide a space With more than 2,000 participants, CAII 2019 included
for high-level, regional dialogue on combating corruption. specialized experts in using information technology to
detect and fight corruption, as well as Auditors General and
The forum welcomed international experts who encouraged
representatives from SAIs worldwide.
debate among participants on topics designed to improve
oversight and promote good governance, such as how
OLACEFS members participated on several panels where
corruption affects legitimacy, technical and ethical challenges
in using new technologies, psychological perspectives, and they shared findings and experiences in using technological
transnational corruption. Participants included Nelson Shack tools to optimize government auditing, including Dr. Carlos
Yalta, OLACEFS President and SAI Peru Comptroller General Córdoba Larrarte, CG, SAI Colombia, on “Interoperability
(CG); Juan Ignacio Forlón, Auditor General (AG), SAI Systems, Predictive Analytics and Intelligence Systems to
Argentina; Dorothy Ann Bradly, AG of Belize; Dr. Henry Ara, Detect Risks of Corruption”; Dr. Valentina Zárate Montalvo,
SAI Bolivia CG; Dr. Valentina Zárate, Secretary General of SAI Ecuador’s Secretary General, on the panel dedicated to
SAI Ecuador; Carmen Elena Rivas, President, SAI El Salvador; “Transnational Collaboration: Transparency to Strengthen the
Roy Pineda, Magistrate President of SAI Honduras; José Juan Detection of Capital Flows from Corruption”; and Dr. Camilo
Pineda, SAI Honduras Magistrate; Félix Álvarez, Plenary
Member, SAI Dominican Republic; and Dr. Humberto Ramírez Benítez Aldana, CG, SAI Paraguay, on “Anti-bribery Laws:
and Dr. Martín Díaz, Deputy Comptrollers of SAI Peru. Lessons in Application in Latin America.”

www.intosaijournal.org 13
 INSIDE INTOSAI

ARABOSAI GENERAL ASSEMBLY HIGHLIGHTS

DEVELOPMENT AT ALL LEVELS
The State Audit Bureau (SAB) of Qatar hosted the Arab "Major pillars of INTOSAI activities rest on the shoulders of
Organization of Supreme Audit Institutions (ARABOSAI) 13th ARABOSAI members," expressed Herbert Baumgartner in
General Assembly in Doha, Qatar, November 10-14, 2019. his speech at the assembly's opening ceremony.

The week-long event kicked off with the 58th Governing Baumgartner, representing the INTOSAI General Secretariat,
Board meeting, where delegates discussed past progress, as added, "INTOSAI would not have successfully implemented
well as operational and administrative improvements aimed its four goals without ARABOSAI support."
at guiding the region to future success.
The assembly included several highlights shaping the region
Expressing hope for increased regional cooperation, H.E. for years to come, such as SAB Qatar assuming ARABOSAI
Sheikh Bandar Bin Mohammed Bin Saoud Al Thani, SAB Chairmanship from SAB Kuwait; declaring the General Audit
President, officially opened the assembly, which included Bureau of Saudi Arabia as the assembly's First Deputy Chair;
representatives from 17 ARABOSAI member nations, the electing new Governing Board members and committee
International Organization of Supreme Audit Institutions chairs; and approving amendments to the region's statutes.
(INTOSAI) General Secretariat, INTOSAI Development
Initiative (IDI), African Organization of English Speaking A special signing ceremony took place between ARABOSAI
Supreme Audit Institutions (AFROSAI-E), Asian Organization and AFROSAI-E extending the partnership between the to
of Supreme Audit Institutions (ASOSAI), Deutsche Gesellschaft two regions to increase cooperation on areas of mutual
für Internationale Zusammenarbeit (GIZ), and the World Bank. interest.

14 International Journal of Government Auditing—Winter 2020

 INSIDE INTOSAI

The event's robust agenda also included regional progress

reports, dialogue on issues of global importance, and
panel-led discussions and presentations focused on the
assembly's two major themes:

• Organizational and Institutional Development; and

• Professional Development.

Panel participants sparked dialogue by sharing relevant

Supreme Audit Institution (SAI) projects, oversight guidance,
strategic plan implementation, and professional training
efforts designed to achieve maximum effectiveness and
efficiency while also addressing capacity, collaboration,
independence and relevance.

While participants noted the importance in linking

organizational strategies with national policies, they also
pointed to International Standards of Supreme Audit
Institutions (ISSAI) 12, "The Value and Benefits of Supreme
Audit Institutions: Making a Difference in the Lives of
Citizens," as a significant INTOSAI resource and reference
that calls for SAIs to be model institutions.

Assembly delegates indicated improving organizational,

institutional and professional development initiatives
remain essential to enhancing competencies, enriching
performance, refining work mechanisms and strengthening
values. Attendees also expressed such efforts are not
simple, short-term solutions—they must be comprehensive
and continuous.

On the assembly's final day, awards were presented to

winners of the 12th Scientific Research Contest and to
the author of the best article published in the Journal of
Financial Auditing since the previous ARABOSAI General
Assembly in 2016.

Members formally adopted the Doha Declaration as the

13th General Assembly came to a close. The declaration
reaffirms the region's commitment to accountability,
anti-corruption initiatives, institutional development and
transparency.

The next ARABOSAI General Assembly, which is a triennial

event, is scheduled to take place in Mecca, Saudi Arabia,
in 2022.

www.intosaijournal.org 15
 INSIDE INTOSAI

CHARTING THE BEST PATH FORWARD:

PASAI HIGHLIGHTS SDG IMPLEMENTATION
In 2015, 193 nations of the United Nations General Supreme Audit Institutions (PASAI) held its annual Congress in
Assembly put pen to paper and agreed to sign on to Fiji, where member SAIs and development partners shared
implement 17 Sustainable Development Goals (SDGs). They best practices in what SAIs are already doing, as well as
were ambitious goals, targeted for 2030 and envisioned, help SAIs chart an effective path forward.
among other things, ending poverty and hunger, improving
health and education, making cities more sustainable, “The role of the SAI in auditing SDGs is critical, and it is
combating climate change, and protecting oceans and our role as PASAI’s Secretariat, to ensure that every SAI is
forests. equipped to rise to that challenge,” said Tiofilusi Tiueti, the
PASAI Executive Director.
But for goals to be met, action must follow. How does a “We are already responding to the shifts in learning
country chart its progress? How can citizens be sure a nation’s delivery emphasized by the independent Mid-Term Review
government follows through on these commitments? This is at the half-way point of the PASAI 2014-2024 strategy
where a nation’s Supreme Audit Institution (SAI) can play by providing the right support, at the right time, in the
a critical role. Through high-quality audits, SAIs can help right way. With regard to auditing SDGs, the Secretariat
governments examine preparedness for implementation will build a learning and knowledge platform for SAIs to
and help generate a focus on an integrated, “whole of provide information and guidance on SDG-related matters,
government” approach. while also sharing SAI successes and ‘more-work-to-do’ SDG
stories through its communications network.”
One segment of the world’s SAIs spent a week laser-like
focused on these questions and how best to execute the What is a “whole of government” approach? The INTOSAI
important roles SAIs can play. The Pacific Association of Development Initiative (IDI) points out a single SDG can

16 International Journal of Government Auditing—Winter 2020

 INSIDE INTOSAI

impact areas across many different ministries,

plans, policies and budgets (horizontal) and
across different governance levels (vertical), so a
comprehensive approach is required.
“Whole of government” is an overarching term
for a group of responses to the problem of
increased fragmentation of the public sector and
public services and a wish to increase integration,
coordination and capacity. It has three audit
objectives:
• To what extent has the government adapted
the 2030 agenda into its national context?
• Has the government identified and secured
resources & capacities (means of implementation)
needed to implement the 2030 Agenda?
• Has the Government established a mechanism
said Archana Shirsat, Deputy Director at IDI. In fact, IDI is
to monitor follow-up, review and report on the progress
currently developing an audit model—the IDI SDG Audit
towards implementing the 2030 Agenda?
Model (ISAM)—to help SAIs in auditing SDGs.
The SAIs in PASAI have learned a great deal about “The ISAM will support SAIs, across INTOSAI regions, in
performance audits and working on cooperative initiatives reflecting on key strategic considerations at the SAI level and
and plan to consolidate this learning into the strategic planning in conducting ISSAI compliant audits of SDG implementation,”
processes of their offices. Ten SAIs in the Pacific region are Shirsat said.
taking part in a Cooperative Audit on Preparedness for the
Implementation of the SDGs, five of which have already “In keeping with SDG principles, ISAM will provide guidance
published audits or submitted them to Parliament. on examining policy coherence, inclusiveness and multi
stakeholder engagement in implementing nationally agreed
In Tonga, Auditor General Sefita Tangi developed a upon targets linked to SDGs.”
compelling visual tool to track that nation’s efforts on
implementation (see SDGs Radar graphic top right of page). PASAI’s Development and Regional Partners are committed
to supporting these efforts and have already undertaken
“The SDG radar shows that Tonga has best performed in significant work in these areas, which can act as an accelerator.
integrating the SDGs into its national context and least
performed in policy integration and coordination; identification Keshwa Reddy, Program manager for Regional Government
of responsibilities, mechanisms, process of monitoring, follow- and Economic Growth for the Australian High Commission,
ups, reviewing and reporting; performance indicators and said “development partners are committed to sharing
data, and communicating to stakeholders.” expertise, approaches and lessons learned to help shape
SDG advancement in the Pacific.”
Neither Tonga, nor any of the SAIs around the world, are
facing these SDG audit challenges alone. IDI is supporting As the PASAI Congress wrapped up, the host, Fiji Auditor
SDG implementation, and, in cooperation with the INTOSAI General Ajay Nand, said he “hoped that the Congress will
Knowledge Sharing Committee, IDI launched a capacity allow PASAI member countries to share their success stories
development program on “Auditing Sustainable Development on audit preparedness, on implementation of SDGs, and
Goals.” also bring to the forum challenges faced for discussion and
resolution. In this way, the member countries would be better
“IDI envisions effective, accountable, inclusive SAIs making a prepared to carry out the audit of SDG implementation,
difference through high-quality audits of SDG implementation,” which is the next phase.”

www.intosaijournal.org 17
 SPOTLIGHT ON CAPACITY BUILDING

TECHNOLOGY: detecting and sanctioning acts of functional misconduct and

corruption.

OPPORTUNITIES TO In the last two years, the Office of the Comptroller General
of the Republic of Peru (SAI Peru) has transformed how

BUILD CAPACITY, government control is implemented. Based on information

analyses and data recorded in computer applications, SAI

ENHANCE OVERSIGHT Peru now plans and executes audits with greater efficiency
and effectiveness.

by Nelson Shack Yalta, Comptroller General of the Republic For instance, large-scale projects (megaprojects) tend to be
the riskiest public interventions due to funding and economic
of Peru and President of the Organization of Latin American
viability, along with the social, political and environmental risks
and Caribbean Supreme Audit Institutions
they entail. Given this, SAI Peru restructured the organization
to assertively target megaproject audits—a transformation
Technology has changed how we do business, how we
that included creating an exclusive division advocating
conduct public administration and human relations, and
oversight of sizable projects, including specialized investment
how we analyze information. Technological advances have
modalities, such as public-private partnerships.
also affected the auditor´s role with huge implications in
government oversight. SAI Peru developed an audit prioritization model based on:
Using new tools, such as data analytics, Artificial Intelligence • A “Matrix of Relative Importance” consisting of criteria
(AI) and related technologies, Supreme Audit Institutions related to a project’s socioeconomic impact—investment
(SAIs) can now (with greater probabilities of success) analyze amount, number of beneficiaries, investment phase or
existing risks in public management; prioritize interventions project term; and
in the riskiest processes; allocate operational capacity • A “Risk Matrix” identifying risk factors that increase
more efficiently; and obtain greater results in preventing, the likelihood of negative consequences, including those

18 International Journal of Government Auditing—Winter 2020

 SPOTLIGHT ON CAPACITY BUILDING

potentially resulting in loss or damage to the State. Risk methods (topographic tests, geodetic measurements, and
factors, such as the existence of previous audits; quantity aerial photogrammetry), which greatly enriches audit work
of addendums to signed contracts; number of project- through real-time data gathering.
related whistleblowing reports; degree of internal control
By improving public work supervision or enforcing penalties,
system implementation in the sector; and physical and
simultaneous control increases the ability to correct adverse
financial progress, are weighted to establish degrees of
situations in a timely manner.
importance.
For instance, SAI Peru invested less than $2.7 million USD in
Within each criterion and risk factor, a score is assigned executing the CCM to construction and reconstruction works
(and validated by expert judgment) as to the socioeconomic following the 2017 “El Niño” phenomenon. Applying the CCM
impact, magnitude of loss or damage, and probability of resulted in avoiding a potential $26.5 million USD in losses to
occurrence. the State.
In 2019, all megaprojects underway in Peru (900 projects The CCM also comprises indirect implications relevant to public
totaling approximately $63.3 billion United States Dollars management performance. The model’s multidisciplinary
(USD)) were analyzed based on the audit prioritization model. team approach using S&T to expose real-time evidence
Results demonstrated which prioritized projects had the highest supplements capabilities to identify and assess risks, improves
social, environmental and economic impact and allowed SAI oversight, enhances managerial capacity development, and
Peru to better focus available operational capacity to those reduces the probability of committing infringing behavior
projects having the greatest socioeconomic risks. (through the perception of immediate detection).
As SAIs employ more technology and are better able to Conclusion
analyze public procurement processes, oversight demand Technology brings visibility to managerial processes and
will, inevitably, require new audit services responding to behaviors, which translates into an increase in SAI capacities to
the quantity, frequency, complexity and opportunity in enhance good governance. Opportunities new technologies
which risks are presented and detected. As such, a change offer to audit work will certainly continue to modify oversight
potentially transforming government oversight will mean today and well into the future. This imminent reality compels
transitioning from a collection of past facts (ex post) toward us to continue automating audit procedures and innovating
a simultaneous, or concurrent, control of risks reported in with an alignment toward achieving measurable results that
real time (ex dure). benefit citizens.
While risk models help define where and when to intervene, SAI Peru’s recent experience has generated important
identifying the most significant milestones or stages within lessons learned in developing and implementing risk models
specific public intervention processes enhances oversight that guide audit performance and has resulted in a new
efficiency. SAI Peru complements its risk models through control model (the CCM) further improving oversight efforts
its Concurrent Control Model (CCM)—a simultaneous, through risk prevention and avoidance.
systematic, multidisciplinary, non-binding mechanism that
S&T challenges, common to all SAIs, call for collaboration as
employs various techniques and exploits Science and
a fundamental instrument to innovate, transfer knowledge
Technology (S&T) to evaluate process phases and targets.
and share successful practices.
The CCM helps assess the degree to which processes are
carried out according to regulations, internal and contractual Learn more about SAI Peru by visiting the SAI website at
provisions and other applicable stipulations. http://www.contraloria.gob.pe/.
SAI Peru has experienced several benefits through concurrent
control efforts, such as increased capacity in alerting References
officials to potential risks and adverse situations, which aids (1) Section 7.1 of Directive No. 002-2019-CG-NORM "Simultaneous
in timely mitigation; addressing citizen concerns through Control Service" approved by Comptroller's Resolution No. 115-2019-
CG and amended by Comptroller's Resolution No. 269-2019-CG.
timely reporting, which facilitates stakeholder engagement,
(2) Shack, Nelson (2019). Working paper "The Concurrent Control
improves transparency, builds trust and enhances credibility; Model as the Central Axis of a Preventive, Swift and Timely Approach to
and using multidisciplinary teams to apply specialized Public Audit in Peru."

www.intosaijournal.org 19
 SPOTLIGHT ON SCIENCE & TECHNOLOGY

INNOVATION LABS: Provide Exploratory Freedom

Putting three wiz-kids in the same room with an expensive

EMBRACE CHANGE espresso machine does not necessarily lead to magic. The team
must understand the organization’s mission and be positioned

TO REAP REWARDS
to promote creativity. OAG Norway’s Innovation Lab, which
resides in the Support and Development Department, interacts
daily with auditors and receives minimal supervision.
by Jan Roar Beckstrom, Chief Data Scientist, Office of the Auditor Establish Priorities
General of Norway
All ideas are not necessarily good ones. Thus, potential
Innovation Lab initiatives requiring additional resources should
Potentially, useful data are piling up everywhere. Scientific
include cost/benefit analyses. These analyses can be as simple
and Technological (S&T) advances are happening quickly and
as thinking through the necessary resources and identifying
are, just as quickly, becoming difficult to follow. Discussions on
added value should the effort be implemented.
topics—such as audit automation, Machine Learning, Artificial
Intelligence and Blockchain—abound, as does advice to Not Just An(other) IT Unit
move everything to the infamous cloud, and these trends are An audit office Innovation Lab will, most likely, use different
certainly affecting audit work. types of technology for varying tasks. This does not turn the
The International Organization of Supreme Audit Institutions Innovation Lab into an Information Technology (IT) unit. An
(INTOSAI) recently established the Working Group on Impact effective Innovation Lab employs a balance of analytical and
of Science and Technology on Auditing (WGISTA) to focus on methodological capabilities, business knowledge and coding
key S&T developments, and Supreme Audit Institutions (SAIs) skills—it's about data science, cutting-edge analysis, tool
also feel the need to do something—but what and why? fabrication and problem solving.

In 2019, the Office of the Auditor General (OAG) of Norway Goodbye Formality, Hello Informal Collaboration
established an Innovation Lab, which, much like a chemistry Innovation Labs should be, of course, innovative. This means
experiment, involved a hefty amount of trial and error to find avoiding excessive documentation and formal processes,
the right formula for success. The OAG pulled together three which can slow invention. New ideas can (and should) develop
technologically capable people (who also had creative minds, rapidly, and priorities can (and should) change. In this sense,
some coding skills, a touch of audit knowledge and a hint of “showing” (putting new products, processes and services on
quantitative methods comprehension) and added a heaping display) can be more efficient than “telling" (relying on memos
spoonful of freedom. to convey new ideas). Say goodbye to formal meetings and
say hello to direct, informal collaboration with others.
An Innovation Lab—one that truly cultivates a creative,
entrepreneurial spirit—is at the very heart of modernization Show Value Quickly
and improvement. Though a bit risky (as outcomes are Innovation Labs, particularly those operating in a change-
uncertain), innovation is a necessity for SAIs to transform into averse culture, will be met with skepticism. It is important to
first-class audit offices, and the OAG shares its experience, show value-adding capabilities early on by producing a
along with some best practices, in establishing and operating useful product, process or service in the first few months.
an Innovation Lab.
Innovation Labs lead to invention, and there are few greater
Focus on Concrete Problems professional pleasures than creating products, processes and
Armed with empathy and flexibility, an effective Innovation services that actually do or fix something. As a SAI looking to
Lab detects (and solves) concrete problems with which auditors provide cutting-edge solutions to emerging S&T trends, we
struggle. As an Innovation Lab for a public audit organization, must embrace change, embrace risk and embrace the great
working with, and understanding, auditors helps generate rewards that follow.
pioneering solutions to emerging S&T trends affecting the
audit community. The prime target: make the real audit work For more information about Innovation Labs, contact the author
more efficient and easier. at [email protected].

20 International Journal of Government Auditing—Winter 2020

 SPOTLIGHT ON SCIENCE & TECHNOLOGY

INNOVATION LABS TO ADDRESS

S&T IMPACTS ON AUDITING
INNOVATION LABS DEFINED THE NEED AND RESPONSES

Innovation labs, also often referred to as Scientific and Technological (S&T) advances are happening
accelerators, hubs or incubators, are units or quickly. Discussions surrounding S&T abound, and these trends
teams that employ creativity and flexibility are affecting audit work. The International Organization of
aimed at inventing ideas, products, processes Supreme Audit Institutions (INTOSAI) recently established
and services to help solve problems, create work efficiencies the Working Group on Impact of Science and Technology
and address emerging trends. They can function in a variety on Auditing (WGISTA) and Supreme Audit Institutions (SAI)
of ways—operating as a completely separate unit from the want to do something, but what? The Office of the Auditor
organization or functioning as an internal team staffed with General of Norway suggests establishing an Innovation Lab
existing employees. and shares its experience along with some best practices.

BEST PRACTICES IN ESTABLISHING, OPERATING SUCCESSFUL INNOVATION LABS

Collaborate with INTOSAI and its working Establish priorities and analyze the costs
groups, including the Working Group on Big and benefits associated with each potential
Data (WGBD), Working Group on Information initiative to determine the requirements and
Technology Audit (WGITA) and WGISTA. possible returns on investment if implemented.

Employ team members who are technologically Say goodbye to formal meetings and say hello
capable who also posses creative minds, some to direct, informal collaboration, as "showing" is
coding skills, a touch of audit knowledge and often more valuable than "telling" when it comes
a hint of quantitative methods comprehension. to sharing Innovation Lab initiatives.

Focus on concrete problems and work with Show value quickly! As Innovation Labs may
auditors to help generate pioneering, helpful be met with skepticism, it is important to show
solutions to current issues, as well as forward- early successes (within the first few months ) to
looking ideas to address emerging trends. demonstrate organizational value .

Provide exploratory freedom—position the

team for creativity by placing the unit within Have fun and embrace change and risk along
the organization to limit bureaucracy while and with the great rewards that follow!
allowing for regular interaction with auditors.

www.intosaijournal.org 21