Pacific Regional report on the Cooperative Performance Audit on Public Debt Management

Report ID: 239

This Cooperative Performance Audit on Public Debt Management is the fifth regional cooperative audit conducted by the Pacific Association of Supreme Audit Institutions (PASAI). Supreme Audit Institutions (SAIs) from eight Pacific Island Countries and Territories conducted individual audits on Public Debt Management within their jurisdictions. The SAIs that chose to participate in this audit are: Cook Islands; Fiji; Federated States of Micronesia – National; Federated States of Micronesia — Kosrae; the Federated States of Micronesia — Pohnpei; Guam; Republic of the Marshall Islands and Samoa.

This report synthesizes the findings from the eight individual audits and identifies common findings in the management of public debt in the Pacific. Other jurisdictions may learn from both the individual audit reports as well as from this regional report. The outcomes of this report will also be shared with the INTOSAI Regional Working Committee on Public Debt.

Consolidated findings

Based on the four key concepts of good public debt management detailed in ISSAI 54221, the audit issues identified by all participating SAIs can be summarised under two cross-cutting: governance and monitoring and reporting.

Governance: Four of the eight participating SAIs identified lack of a legal framework and a weak organisational structure for agencies involved in public debt management as being of concern. Common issues were lack of a procedures manual to guide and inform decision makers, lack of defined roles and responsibilities and a lack of coordination and monitoring across key government agencies. Critical operational risks related to weak internal controls of government agencies responsible for public debt management were also identified.

Monitoring and reporting: Six of the eight participating SAIs highlighted a lack of available information or documentation and weak or nonexistent debt management strategies and loan repayment schedules. These issues can be partially attributed to the limited knowledge and experience of staff responsible for debt management activities. Another issue identified was the lack of regular and complete reporting due to sub-optimal use debt management software.

This lack of information brings uncertainty to whether the reported financial condition of a government is complete and accurate.

Key message for Pacific SAIs: Through public sector audits, SAIs can develop a sound appreciation of the issues faced by government agencies that are responsible for public debt management. SAIs can have a positive impact on trust in society because audit scrutiny focuses the minds of custodians of public resources on how well they use those resources, includingmanaging public debt levels.