Advancing Public Participation in the Audit Process

Event Details

DATE: March 23, 2016

TIME: 11:00 am

Location:Hammamet, Tunisia

A Capacity Building Workshop for the Middle East and North Africa (MENA) Countries

 

Mona El-Chami

Senior Financial Management Specialist

 

Also Mehdi El Batti, Rama Krishnan, Carolina Vaira, Franck Bessette, Wael Elshabrawi, and Keith McLean[1]


Introduction: In recent years, many Supreme Audit Institutions (SAIs) around the world have begun pioneering different citizen engagement models to increase transparency and accountability, enhance the effectiveness of the audit process, and ensure value for money in the use of public resources.  Despite increasing trends toward public participation, engaging citizens throughout the audit process is fraught with potential complications. Indeed, the formal mandate of all SAIs and the general limited experience and capacity of both SAIs and citizens has made it difficult to collaborate in a meaningful and results-oriented way. The challenges preventing effective engagement between SAIs and citizens are many.  For instance, how can space be created for citizens to interact with the audit process and enhance external oversight? How can a set of guiding principles be created for SAIs and citizens to interact and jointly work toward improving the audit process? A recent capacity building workshop held in Hammamet, Tunisia on “Advancing Public Participation in the Audit Process” organized by the Public Resource Mobilization and the Management and the Governance and Inclusive Institutions units at the World
Bank’s Governance Global Practice (GGP) brought together representatives from the SAIs of Egypt, Iraq, Jordan, Lebanon and Tunisia to explore the value of citizen participation in the audit process and identify entry points for engagement.  Tunisia case was selected to be demonstrated as an example form the MENA region supported by its launched process of citizen engagement. International experts from Korea and the Philippines also participated to share their experiences.


The MENA Region: External scrutiny and audit in MENA is generally characterized by weaknesses as noted in a World Bank review [2] that summarized the Public Expenditure and Financial Accountability (PEFA) exercises in 6 countries.  It also compared them to other countries with similar levels of development. The weakness depicted concern both the capacity of the SAIs and the legislative body charged with following up on the audit reports. (See Figure 1). External scrutiny and audit capacity in MENA is comparable to these countries. Results from a regional survey [4] of MENA countries explored the perception of a sample of these countries’ civil society organizations (CSOs) (47) and media (27) concerning the quality of public finance transparency and value of SAIs. The survey provided information about current interactions of different stakeholders with SAIs. Sixty-six percent of those surveyed indicated that they have not interacted with their national SAIs in the last year. Those who interacted, had done so mostly in the last year. When asked about their interest in collaborating with SAIs, 85 percent of respondents indicated that they would like to engage on a range of initiatives including training and/or the creation of joint committees and other related activities to bridge the relationship between the public and the SAIs.  (See Figures 2 and 3). The results of the survey will help to guide regional collaboration between SAIs, CSOs, and the media in the region, as well as World Bank support for these processes.

The Case of Tunisia: Tunisia’s SAI, the Cour des Comptes (the Court), is one of the first movers of the MENA region in advancing a citizen engagement strategy that is expected to gradually address means for SAI-citizen participation in the public audit process.  The Court is increasingly looking for more innovative ways to make information available to citizens, and to engage with them in a more systematic manner. National and Court efforts have been reinforced by global engagements, such as the Open Government Partnership.[5]

 

 

 

The National Action Plan also helps to strengthen the overall authorizing environment for the Court to advance public participation in the audit process, for example, by publishing an annual report on public sector audit activities in a simplified, easily accessible and understandable form for citizens. The vision of the Court is led by the principles of independence, integrity and professionalism. In this regard, the Court is seeking to respond to the legitimate concerns of citizens by identifying the audit topics that matter to them. As the Honorable Abdellatif Kharrat, President of Tunisia’s Court of Accounts, noted: “It is the SAI’s responsibility to make its work known to and understood by the people” and “the work of the SAI is led by the need to respond to the legitimate concerns of the people.” The Court’s new Communication Strategy (2015–2019) provides guidance to foster a collaborative environment from which to advance internal and external efforts on three fronts: (i) Internal Communication: Promoting transparency and the sharing of information to create a sense of ownership among different staff of the Court; (ii) External Communication: Promoting the image of the Court and strengthening its relationships with other stakeholders. The work of the Court needs to be known and recognized by the people that benefit from its work; (iii) Leveraging the use of Transparency International and engaging with social networks to facilitate broader outreach and the timely dissemination of information to communicate with external stakeholders (with the support of bilateral and multilateral donors, such as the Netherlands Court of Audit, the World Bank, and the African Development Bank).

 
International Comparative Cases

 

South Korea: Korea’s engagement with its citizens goes back to the 15th century during the Chosun Dynasty. By hitting a sinmungo (big drum), citizen concerns were elevated to the Emperor. This tradition evolved when the Board of Audit and Inspection (BAI) was established in 1963. From 1971 to 2004, new innovations such as the Civil Petition and Complaints Reception Center, the Fraud Hotline, the Open Audit System and the Business Complaints Reception Center were introduced as enhancements to the BAI’s existing system. The benefits resulting from participatory audits in Korea are enormous. Among the most important ones, citizen participation contributes to reducing blind spots for auditors. Citizens can help to pin-point problems that would otherwise be overlooked. Most importantly, citizen participation has been instrumental in enhancing transparency and accountability, as well as in improving the performance of public sector administration. The underlying success factors include the following: (i) a legal foundation should be in place to ensure continued operation and resource inflows; (ii) top management’s support is necessary to provide motivation to auditors; (iii) offering various but related activities increases citizen satisfaction; and (iv) enhanced access through various online and offline media encourages more active participation (Board of Audit and Inspection of Korea).

 

The Philippines: The relationship between the Philippines’ Commission on Audit (COA) and its engagement with citizens was highlighted through the lens of the Citizen Participatory Audit (CPA) project. The CPA is an innovative initiative that focuses on citizens and state auditors working together in the conduct of joint audits. Under the CPA, citizen representatives are included in the COA audit team. They are trained in the audit process and encouraged to participate in the interests of enhanced government accountability. The project’s desired outcome was to pilot citizen-government partnerships to support the institutionalization of participatory audits in COA. Since it was first launched in 2012, several milestones have been achieved in line with intermediate outcomes, including the establishment of an enabling framework for citizen engagement (policies, systems, and processes), and the ability of civil society organizations to articulate the citizen’s agenda. Within 24 months, the methodology of the CPA was used to monitor the performance of several key projects. The underlying success factors included the following: (i) the importance of leadership; (ii) the use of pilot project(s) to ease the transition of state auditors in working with civil society; (iii) developing an appreciation of the differences of each other’s institutions and systems; (iv) clarifying roles and expectations through a formal document to manage expectations; and (v) state auditors now see citizens as force multipliers, especially given the limited number of auditors in the country.

Lessons for the MENA region: There has been a strong power shift from the government institutions to the people in a number of MENA countries that experienced the Arab Spring.  The people had voiced their demand to basic services, for transparency, and right to hold governments accountable. SAIs need to respond to the popular demands for more accountability and information. Under participatory democracy, the importance of CSOs as stakeholders in SAIs has grown. New Constitutions may stipulate specific new responsibilities assigned to the government, the SAI and/or the citizenry. Like in the case of Columbia and Indonesia, the legislations for SAIs were amended to include in their mandate, the obligation to disseminate audit reports to all relevant actors and implement participatory practices during the audit process. The major challenges faced by SAIs in the MENA region include independence, availability of financial and human resources, and technical capacity.  In addition, a key challenge is how to open spaces where they can interact with citizens to enhance external oversight. A general consensus emerged that SAIs from the MENA region could start taking ideas from the experiences of other SAIs around the world. They could begin taking small steps toward designing tailor-made interventions that can include citizens in the public audit process in the near future. SAIs can begin work with citizens in the areas of least resistance, for instance, in the audit design/planning stages. Like in South Korea and Argentina, SAIs receive proposals on entities and programs to be audited for their potential inclusion in the annual plan. In this context, parallel efforts need to be made to enhance CSO capacity so that they can constructively engage with SAIs. Another entry point would be raising public awareness through the dissemination of audit reports. These entry points could be challenged by limited mutual understanding between the CSOs and the SAIs.  They could also be made more difficult because of existing mandates, systems and processes, as well as the complex nature of audit reports. Furthermore, integrating citizens without undermining objectivity and professionalism remains a challenge.  Better and closer cooperation would bring more opportunities for joint workshops, training CSOs on the audit process, and developing effective communication plans.

 

Possible next steps could include a virtual learning series incorporating additional good practices, as well as peer-assisted processes and technical assistance to promote better SAI-CSO dialogue, the creation of working groups, the building of frameworks for engagement, and the development of guiding principles for interaction during the audit process


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[1]. The authors all work in the Governance Global Practice (GGODR) of the World Bank. 
[2] Public Financial Management in MENA – A Regional Overview, World Bank, 2012.
[3] Public Financial Management in MENA – A Regional Overview, World Bank, 2012.
[4] Public Finance- Multi-Country Survey, World Bank, December 2013.
[5] “Open Government Partnership … is an international organization promoting multilateral initiative and seeking strong commitments from participating government institutions to promote transparency, increase civic participation, fight corruption, and harness new technologies to make government more open, effective, and accountable.”  https://en.wikipedia.org/wiki/Open_Government_Partnership