Making A Difference In The Performance Of SAIs

Institutional Capacity Building Framework

The (ICBF) consists of five development levels with an institutional perspective at each level. These levels, level 1 to 5 describes the development of a SAI from its founding level: level 1 via the development level: level 2 to the established level: level 3 and further on. An SAI is at level 2 when some tools and audit practices are in place or plans have been made to achieve what a SAI needs to function properly according to international standards and best practice. When the plans, structure, standards etc are implemented and are functioning to almost 100%, then the SAI has achieved level 3, something which can take years. The remaining levels, level 4, the managed level and level 5, the optimized level, are much more difficult to achieve. A SAI on level 4 is in a situation where everything a SAI needs, such as independence, proper audit and communication processes etc are implemented to 100% and most important are functioning to the full satisfaction of all interested parties (the Parliament, the staff etc). SAIs, which are considered to be among the most developed among INTOSAI’s members are generally at level 3 and 4.

The five institutional development areas in the ICBF are: Independence and Legal Framework, Organisation and Management, Human Resources, Audit Standards and Methodology and finally Communication and Stakeholder Management. Each domain contains a number of elements. Some of these can be seen in the figure and all in the the following ICBF. The elements are generic that is they are valid for all the five levels. Indicators are needed to define on what level a SAI is. These indicators are depicted in a Guideline which also provide the reader with a description of the ICBF, its design, how and for what purposes it can be used. The Guideline can be requested from the Secretariat.

The ICBF is mainly to be used for the SAIs’ self assessments. The results are captured in an annual Transversal Activity Report.

Domains with elements for all the 5 levels in the ICBF
Independence and Legal Framework Organisation and Management Human Resources Audit Standards and Methodology Communication and Stakeholder Management
  1. Independence of the SAI
    • Constitutional / legal framework
    • Financial autonomy
    • Managerial and administrative auto-nomy
    • Appropriate human, material and monetary resources
  2. Independence of the Head of SAI and officials of the SAI
  3. A SAI with a sufficiently broad mandate
  4. The Head of SAI and his/her staff have mandate and discretion to discharge its function:
    • Access to information
    • Discretion in selection of audit issues
    • Freedom to decide on content, timing of audit reports and to publish and dissemi-nate them
    • Direct submission of reports to Parliament
  5. Effective follow up mechanism at the SAI on its recommendations
  6. SAIs reporting on its own activities and use of resources
  7. Oversight and accoun-tability: the Parliament or an oversight body appoints the SAI’s external auditors
  1. Leadership and direction
  2. Strategic planning
  3. Annual operational planning
  4. The organisation of the SAI
    1. Organisational development
    2. Existence of a performance audit function
    3. Existence of an IS audit function
    4. Existence of an IT support function
  5. An internal control system in line with Organisation and Management International standards
  6. Use of resources:
    1. A management information system (MIS) trackning key management infor-mation
    2. A time recording system to enable reporting of staff costs
  7. Code of ethics and its monitoring
  1. A human resource and professional develop-ment policy (including:
    • Recruitment
    • Remuneration
    • Performance management system
    • Career development
    • Training
    • Staff welfare
    • Professional develop-ment
    • Job rotation
    • Retaining
    • Exit)
  2. Development plans aligned with the strategic and annual operational plans
  3. Management of perso-nell
    1. Recruitment
    2. Development
    3. Staff welfare
    4. Performance apprai-sals
    5. Retaining
    6. Filling of vacant posts
    7. Exit
  4. Training aspects with monitoring and evaluation mechanisms for
    1. New entrants
    2. Management development
    3. On the job training
    4. Secondments to other SAIs
    5. Audit/accounting qualifications
    6. Coaching and mentoring process
  5. SAI capacity to train its staff
  6. SAI capacity to us information and develop knowledge and skill
  1. Annual audit plan covering:
    • Assessments of constraints
    • Current issues and stakeholder expectations
    • Risk assessments in place for prioritizing audit risk
    • Clear statement of audit coverage
    • Activity plans for regularity and performance audits
    • Addressing of backlogs
  2. Audit manuals:
    1. Aligned to interna-tional standards
    2. Connected to a training programme
    3. Reviewed and updated regularly
  3. Quality control measures and quality assurance:
    1. SAI policy and procedures
    2. Roles and responsibilities
    3. Type of review specified and planned, including nature, scope and frequency
    4. Implementation of a quality assurance handbook or guidance for full compliance to international standards
  4. Quality assurance processes performed by others
  5. Audit techniques such as electronic working papers and computer assisted audit techni-ques (CAATS)
  6. Implementation of the SAI communication strategy for the audit process with the auditees.
  7. SAI communication with
    1. Relevant experts
    2. Professional bodies
    3. Relevant journals
    4. Internal audit
    5. Other public sector audit institutions
  8. SAI reporting should include:
    1. Follow up on previous recommendations
    2. Standard structure of reports, used friendly with materiality consi-derations
  1. Communication policy and strategy covering internal and external communications based on:
    • Legal framework
    • Vision, mission and values
    • Stakeholder analysis (including prioritisation)
    • SWOT or similar analysis
    • Gap analysis conside-rations
  2. Channels of communication between SAI and Parliament, PAC and Judiciary
  3. Ad hoc meetings with Ministry of Finance and oversight bodies
  4. Internal communication including
    1. Alignment of staff to SAI’s vision, mission, goals and objectives
    2. Implementation of effective information sharing practices
  5. Promotion of the SAI via
    1. Engagement with:
    • Media
    • The public
    • Academic institutions
    • International community and organisations
    • Use of effective information sharing practices
  6. Audit performance and results:
    1. Audit coverage of expenditure
    2. Number of signed and issued or published performance audit reports
    3. Number of /percenttage of performance auditors in relation to total audit staff
    4. Integration of IS audit in regularity and performance audit
    5. Coverage of IS audit
    6. Time for submission of the annual audit report to Parliament from the beginning of the year
    7. Time for implement-tation of the recom-mendations
    8. The key stakeholders view on the benefit of the audit