Transregional Programme on Public Debt Management Audit

Report ID: 122

Objective: To enhance both professional staff development and organisational capacity of target SAIs in public debt management audit

Guide for Auditing Public Debt Management

The Guide aims to provide practical procedures to conduct audits on nine specific public debt management topics:

(1) Public debt legal framework,

(2) Organisational arrangement,

(3) Determination of public borrowing needs,

(4) Public debt management strategy,

(5) Borrowing activities,

(6) Public debt information systems,

(7) Debt servicing,

(8) Debt reporting, and

(9) Contingent liabilities, with emphasis on loan guarantees.

The nine topics were those discussed in the PDMA e-learning course, and were selected as topics for pilot audits by 29 participating SAIs in the Programme.

The primary intended users of the Guide are staff in Supreme Audit Institutions (SAIs) with little or no knowledge of, or experience in public debt auditing.

SAI auditors who are completely new to public debt management auditing are advised to build their understanding of the subject of public debt prior to using this Guide. One option in this regard would be to study the IDI’s training materials on public debt management auditing.

Focusing more in the context of a performance audit, this Guide also provides audit guidance in the context of financial and compliance audit, particularly in the audit planning and reporting phase.

Auditoría coordinada de los ingresos del gobierno por la explotación y producción de hidrocarburos

Report ID: 229

La auditoría de desempeño sobre la fiscalización de los ingresos públicos provenientes de la explotación y producción de petróleo y gas natural en Brasil, Colombia y Perú fue realizada por las Entidades Fiscalizadoras Superiores de los precitados países. Esta auditoria se realizó en la modalidad de auditoría coordinada, en el marco de las actividades del Comité de Creación de Capacidades de la OLACEFS, y contó con el apoyo de GIZ.

La producción de hidrocarburos es una actividad económica de gran relevancia para muchos países latinoamericanos porque, además de su importancia energética estratégica, genera impactos significativos en los ingresos públicos, principalmente por el recibo de participaciones gubernamentales. Debido a eso, la correcta fiscalización de esos recursos, por el Estado, se revela una cuestión sensible.

El objetivo de la auditoria coordinada, bajo el enfoque de desempeño, consistió en evaluar las condiciones normativas, institucionales y operativas en que actúan los organismos y entidades gubernamentales encargados del control de la medición de la producción de petróleo y gas natural y del control del cálculo y del pago de las participaciones gubernamentales provenientes de esa producción, identificando eventuales obstáculos y oportunidades de mejoría, así como buenas prácticas que contribuyan para el perfeccionamiento de la gestión.

Además, en el marco de la auditoria se realizó una análisis de la experiencia de la auditoría coordinada, a partir de a) las perspectivas y principales resultados de la auditoría para los países; b) las perspectivas y principales resultados de la auditoría para las EFS y c) la opinión sobre la experiencia de la auditoría coordinada.

FUENTE: https://www.olacefs.com/wp-content/uploads/2015/06/003.pdf

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.

Practical Advice for Auditors of Foreign Aid Projects in the Pacific: First Co-Operative Financial Audit

Report ID: 242

The regional co-operative audit of funds provided by foreign aid was the first pilot for a co-operative financial audit conducted by the Pacific Association of Supreme Audit Institutions (PASAI) under its co-operative audit program. Supreme Audit Institutions (SAIs) in six Pacific Island Countries (PICs) conducted individual audits. This report summarises the findings across the six individual audits conducted and identifies some of the common weaknesses in the audit of foreign aid projects. Furthermore this pilot program resulted in multiple observations and lessons learned which will assist SAIs in the conduct of financial audits of foreign aid projects in the future.

It is expected that both SAIs and development partners in the Pacific Region may learn valuable lessons from individual SAI reports as well as from this regional report to improve and enhance the quality of the audits of funds provided by foreign aid.

Six SAIs participated (Cook Islands, Fiji, Kiribati, Samoa, Tonga and Tuvalu), with 12 participants attending the planning meeting and 10 participants attending the final reporting meeting.

The conduct of a financial audit does not include any scope for the auditor to comment on the efficiency or progress of the project itself or the effectiveness of the foreign aid received by government. This scope falls under the audit requirements of a performance audit. On this basis, the audit reports provided an audit opinion on compliance with the funding agreement.

The audit findings that resulted from the audits are summarised as follows:

1. non –compliance with the funding agreement in relation to procurement processes and reporting requirements

2. weak controls over the disbursement of payments

3. poor record management systems

4. lack of asset management processes in place (no fixed assets register)

5. budget reports were not sufficiently comprehensive and were sometimes not prepared according to funding agreements (or project operational manuals)

6. untimely budget reporting which limits their usefulness

7. lack of evidence of governance arrangements such as no signing of minutes of steering committees and no sign off by review panelists to engage contractors

The management responses received from the auditees were positive and in support of the audit recommendations raised by the SAIs.

Overall the foreign aid for these projects was generally managed effectively and as a result the findings were not pervasive and the audit opinions issued were therefore unmodified. However, these audit findings are repeated year after year and usually the auditors do not follow up on the implementation of recommendations until the next annual audit. If these audit issues are not addressed by the implementing agency when the auditors raise them, this increases the opportunity in the future of risk of theft, fraud and misappropriation of funds or assets.

Details of the audit scope, including what constitutes a risk-based approach to financial auditing and audit findings can be found in Section 1 and Section 2 of this report.

Efficiency of measures/activities determined by strategic documents/programs for tourism development

Report ID: 249

The Republic of Croatia, Republic of Macedonia and Hungary are countries where tourism is a major economic sector and they all have adopted strategic documents related to further tourism development.

In 2015, the three SAIs signed agreements on mutual cooperation in the field of tourism, in order to assess whether the objectives related to the development of tourism are achieved. The subject of the agreements was to perform coordinated audit on the efficiency of measures / activities determined by strategic documents / programs for tourism development.

The objective of the coordinated audit was to provide exchange of knowledge, experience and good practice, as well as conclusions and recommendations for promoting tourism development.

The participating SAIs developed a framework of audit areas to be addressed in their national audits. Five audit areas and corresponding audit questions were identified: Legal, strategic and institutional framework for tourism development, Implementation of strategic measures and other activities defined in strategic documents / programs for development of tourism, Monitoring and reporting on the achievement of strategic objectives and the measure impact, Implementation of the Agreement between the Government of the Republic of Macedonia and the Government of the Republic Croatia on cooperation in the field of tourism and Implementation of the Agreement of the Government of Hungary and the Government of the Republic Croatia on cooperation in the field of tourism.