SAIs and Stakeholder engagement – SAI and Stakeholder engagement : SAI Pakistan

SAIs and Stakeholder engagement – SAI and Stakeholder engagement : SAI Pakistan

By Ms. Bismah Farrukh Khan
Deputy Director, SAI Pakistan

Supreme Audit Institutions (SAIs) have assumed a significant and critical role in better public financial management and financial accountability in their respective jurisdictions. International Organization of Supreme Audit Institutions (INTOSAI) which is the representative body of the SAIs, provides a common platform for resource-sharing to members on matters pertaining to audit as a means to public accountability. INTOSAI also develops common framework and set of standards to allow homogeneity in audit practice in SAIs. Resultantly, the SAIs from developed and developing countries collaborate and benefit from each other’s experiences and expertise.

SAIs cannot work in isolation and their relationship with the relevant stakeholders is of great importance as it provides an enabling environment for them to ultimately take actions relating to their working starting from planning phase to reporting taking into consideration expectation of the stakeholders and also lead to greater audit impact10.Such corrective actions in turn lead to better decision making, transparency and accountability in the public sector.

Thus, the importance of engagement of stakeholders cannot be over-emphasized. The effectiveness of a SAI’s performance can also be enhanced by sustained interaction with the external stakeholders like executive, legislature, civil society organizations, media and the citizens.


The training arm of INTOSAI, INTOSAI Development Initiative (IDI) has been actively involved in capacity building programmes since becoming implementing partner of INTOSAI Capacity Building Committee in the year 2012. To this end, IDI has identified stakeholder engagement as a fundamental area in its strategic plan. The same has also been highlighted as a key area of support in the IDI Global Survey 201411.

Kinds of Stakeholders

The target groups for external communication (stakeholders) identified by INTOSAI are as follows12:

  1. Parliaments/ legislative bodies
  2. Government organizations/executive bodies/agencies
  3. Audited entities
  4. Media
  5. Special interest groups, including civil society organizations, development partners etc
  6. General public/citizens
  7. Academics and public policy organizations and
  8. Professional and standard setting bodies SAI Engaging with stakeholders
12Communicating and promoting the value and benefits of SAIs: an INTOSAI guideline

The personnel responsible for external communication with stakeholders may include head of SAI, senior executives, a public affairs officer and employees of the SAI.

Broadly, SAIs are characterized by two kinds of stakeholders: –

  1. Internal stakeholders
  2. External stakeholders

The internal stakeholders include the Audit managers, audit staff and other operational employees. A good relationship with the internal stakeholders can be inculcated by involving them in policy making in conjunction with an effective rewards and consequences policy based on objective performance evaluation of the personnel.

External stakeholders of SAIs are operational divisions of the government, e.g. Ministry of Finance (Executive), Public Accounts Committee (legislature), audited entities, media, civil society organizations, NGOs, academics, professional bodies, citizens etc.

SAI relationship with Executive

SAIs relationship with the executive arm of government, especially the Ministry of Finance is of paramount importance as the SAI is dependent on it for funding. The ISSAIs level 2 highlight the condition that SAI must have sufficient independence in the discharge of its obligations from legislature and executive, and that the Executive should not control and direct the access of resources to SAI.ISSAI’s require respecting the laws enacted by the Legislature that apply to them, SAI’s should be free from direction or interference from the Legislature or Executive in the selection of audit issues, planning, programming, conduct ,reporting and follow-up of their audits ,organization and management of their office, enforcement of decisions13.

SAI relationship with Parliament14

In a Westminster system of parliamentary democracy, the SAI is a core element of parliamentary oversight. The audit reports are laid before a Public Accounts Committee (PAC) with representations from ruling party and the opposition parties, which gives its recommendations on the issues presented before it after listening to the viewpoint of the SAI and the audited executive department.

In a court of Accounts Model of SAI, the organization comprises of judges as members and a President. The judges impose administrative penalties on illegal transactions and since the accountability of officials is mainly carried out by court hence, there is often no Public Accounts Committee in the national Parliament. The Parliament may receive a report on the court’s work but usually there is limited follow up of reports by the Parliament.

13Principle 3,ISSAI 10; Principle 8 ISSAI 10

In a Collegiate or Board model, a number of members form a college or governing board and take decisions jointly. They are part of parliamentary system of accountability and the reporting mechanism to PAC is similar to Westminster system

The reports and opinions discussed and approved by the college are submitted to Parliament where some Public Accounts Committee (PAC) deliberates and takes action on it. So only the internal structure of this institution differs from the Westminster model.

SAI relationship with Audited entity

An effective communication policy with the audited organization ensures credibility and effectiveness of the audit activity undertaken by the external auditors. It serves as a confidence building measure between both parties and facilitates in obtaining relevant and sufficient audit evidence, hence better reporting of the operations of audited entity. Moreover, effective two way communications will help in determining areas and scope of audit and incorporating views of the entity.

SAI relationship with media

SAI relationship with media is in theory very important as a properly informed media will likely present a better and clear picture of SAI’s roles and performance to the general public/citizens and also put pressure on the elected representatives in the parliament. Media visibility will also give an impetus to SAI for increasing its professional competence. Executive will also take audit recommendations more seriously if the media follows-up regularly on audit recommendations.

SAI relationship with Civil Society Organizations and Non-Governmental organizations

Civil society organizations (CSOs) and Non-Governmental organizations (NGOs) may play an important role as advisors in the various stages of audit as they are advocates of citizens’ rights and possess a keen observation and analysis of the efficiency and effectiveness of public services being provided by the government departments. They can highlight the areas where SAI must focus. Many projects being run by donors’ funding are of special interest to CSOs and SAI can certainly help in alleviating their concerns regarding judicious use of public money.

SAI relationship with citizens

An effective engagement with general public/citizens is necessary to provide easy access to information regarding the roles and responsibilities of the public sector, thereby gaining support in the public arena. The INTOSAI recommends promoting citizen participation by developing mechanisms to receive and monitor complaints about government programs and to give suggestions for improvement in the service delivery and also future areas of audit15.

15Communicating and promoting the value and benefits of SAIs:  An INTOSAI guideline

SAI Pakistan and stakeholder engagement:

The Department of the Auditor General of Pakistan (DAGP) conducted a review in accordance with the INTOSAI’s Strategic Planning Handbook framework that suggested needs assessment by a Supreme Audit Institution (SAI) before strategic planning. Hence, the DAGP completed needs assessment, according to the detailed road map given in INTOSAI’s Capacity Building Needs Assessment (CBNA) 2009. The process included taking stock of the prevailing situation and identification of gaps with the involvement and participation of all tiers of DAGP.

The current strategic plan may be viewed as a continuation of previous efforts but devised in the light of recently completed Needs Assessment Report. The Strategic Plan aims at Communication and cooperation with other SAIs addressed through higher level exchanges of delegations on mutual basis and by arranging conferences and workshops for parliamentarians, media, donors, audited organizations, etc., during the plan period16.

The Department of Auditor General of Pakistan (SAI Pakistan) is allocated charged budget yet it has to be amenable to the control of executive (Finance Division) with regard to the initial allocation, releases of the allocated budget and budgetary cuts. Moreover, the SAI Pakistan does not have right to appeal to legislature for insufficient allocation of resources to fulfill its mandate. The formulation, approval and execution of the Audit Plans in respect of all the thirty (30)  Field Audit Offices (FAOs) is the exclusive domain of DAGP which is free from interference of the executive and the legislature in this regard. DAGP is free to select audit topics and follow-up.

The Constitution of Islamic Republic of Pakistan mandates the President and the Governors to ensure that the reports of the SAI (Auditor General) relating to the accounts of the Federation and provinces respectively are laid before the legislature and discussed by the relevant Public Accounts Committees. The follow up reports are also submitted to the parliament and provincial Assemblies.

The SAI Pakistan reports on overall audit outcomes in the PAC where media is also invited, e.g. the regulatory compliance of budget execution as well as to the correctness and completion of the accounts of various public sector entities. In case of performance audit, the overall efficiency of the concerned executive department is also taken stock of.

SAI Pakistan has a close liaison with the Public Accounts Committee (PAC) of the National Assembly. Federal Audit Operations (FAO) Wing liaises and coordinates with PAC for discussion of SAI Pakistan’s reports in PAC and follow up etc.

The impact of SAI Pakistan is determined by the interest of PAC in reviewing and discussing the audit reports and the frequency of directives issued to the audited executive departments. It is the weakest link in the cycle of effective relationship with stakeholders especially in the areas of performance audit and special sectors audit. Although the current management has implemented a shift in audit policy from compliance audit to areas of performance and special sectors like environment, information technology and forensic auditing by allocating 40% of financial and human resources in all the thirty (30) field audit offices of SAI Pakistan but the audit impact will prevail if the PAC is sensitized on the effectiveness of audit in improving the overall accountability process in the country. The SAI management does take into consideration the expectations of PAC while preparing the Corporate Audit Plan but still the performance audit reports remain unattended at the forum.

16Communicating and promoting the value and benefits of SAIs:  An INTOSAI guideline

In SAI Pakistan, reports are open to media scrutiny after they are laid before PAC. The media reports the audit outcomes leading to a debate & discussion among stakeholders and general public.

Department of Auditor General of Pakistan (SAI Pakistan) receives informal external feedback through media. Some steps taken recently, like regular issuance of press releases, news items, quarterly news bulletin, appointment of Director Media Relations, formulation of Policy Board, regular updating of website, have increased SAI communication and its visibility in public arena. An increased coverage of the DAGP audit findings in a formal manner will increase the credibility of the organization and its independence.

Dissemination of audit reports directly to the public on the AGP official website is also being undertaken and the reports which have been discussed at the forum of PAC will be uploaded in coming months. The DAGP annual report is also accessible to the stakeholders. Moreover, SAI Pakistan being permanent secretariat of ECOSAI regularly updates on the activities of ECOSAI member countries.

In SAI Pakistan, some Field Audit offices like offices of Works Audit and Federal Audit have taken measures to widen access and participation in the audit processes by contacting Non Governmental Organizations.

The SAI administration believes in healthy and effective two way communication with audited entities. The audit personnel communicate with the entity officials in entry level meetings, exit meetings, Public Accounts Committee (PAC) and Department Accounts Committee (DAC) and record all correspondences for future reference.

The Auditor General of Pakistan has introduced a Whistle Blowing Policy in the Department. SAI Pakistan, in order to have a direct communication with the public has installed a toll free number at the headquarter in the vigilance section of Inspection, Regulation, Vigilance and Monitoring of training (IRV &MT) Wing to lodge any complaint against official conduct of any functionary of the Department or to point out any wrong doing in any office.

Presently some steps have been taken in SAI Pakistan which indirectly provide feedback from stakeholders. The revival of a Policy Board which includes external members is one such measure. It may also serve as a forum to encourage public and academic interest.

The Audit Policy board has been in existence in Department of Auditor General of Pakistan/ SAI Pakistan but had remained dormant since 2011-12. It was revived by current Auditor General of Pakistan in 2015. The members of board include representatives from professional accounting bodies (chartered accountants and management accountants), civil society organizations, heads of federal government departments Finance Division, Controller General Accounts, Federal Board of Revenue, Planning Commission, Public Accounts Committee, and State Bank of Pakistan. The Additional Auditors General and Deputy Auditors General are also ex officio members of this board.

The Policy Board deliberates on the various aspects of government accounting and auditing and gives valuable recommendations to enhance transparency and accountability in public financial management. In the Policy board meetings, various reforms and initiatives undertaken by Auditor General of Pakistan are discussed and endorsed. This policy board is a consultative board and has no formal authority. The revival of policy board is a positive step towards improving relations and coordination with private sector organizations. The challenges facing the SAI are also discussed with stakeholders in these meetings. The recommendations of INTOSAI are addressed through effective communication and consultation with stakeholders like Civil Society Organizations (CSO’s) and Non-Governmental Organizations (NGO’s). It will be ensured that the stakeholders are involved in planning, execution of audit and also assist in finalizing the audit reports.

The present administration is keen to develop closer liaison with professional bodies like Institute of Chartered Accountants of Pakistan (ICAP), Institute of Cost and Management Accountants of Pakistan (ICMAP) and Pakistan Institute of Public Finance Accountants (PIPFA). Moreover, Pakistan Audit Department intends to sign an MoU with investigating agencies like National Accountability Bureau (NAB) and this style of collaboration with other accountability agencies will prevent financial embezzlements and irregularities and also assist in transparency and accountability process. An MoU has recently been signed with the 1st University based completely on modern Information and Communication Technologies, Virtual University of Pakistan on collaboration in Information Technology infrastructure and administration/guidance on IT matters.

Department of Auditor General of Pakistan has signed MoU’s with SAI’s Iran, Vietnam and Turkey and will commission an  initial SAI PMF Assessment (PMF) as a peer review with transparent quality assurance process once the development partner i.e World Bank formally agrees to fund the assessment. USAID has collaborated with the DAGP for providing training grants. Moreover, Asian Development Bank (ADB) has drafted a Financial Audit Manual and sent to DAGP for comments which are being developed. World Bank has also been keen to provide assistance to the field audit offices of two provincial governments of Pakistan, for improvement in financial reporting.

The DAGP engages in periodical quality review meetings with the field audit offices and the Federal Audit Operations (FAO) wing monitors the operations and performance of all thirty field audit offices. A team of officers has conducted self assessment of the department through ISSAI Compliance Assessment tools (iCATs) for assessing compliance of DAGP’s audit practices with the International Standards of Supreme Audit Institutions (ISSAIs).On the basis of this evaluation , a strategy was devised which included the training and capacity building of personnel under the framework of ISSAIs.


An effective engagement strategy with stakeholders can prove beneficial for smooth functioning of SAIs and can improve the overall performance as external and internal feedback will keep the focus on public financial management and accounting of public departments thereby ensuring better policy making and improved service delivery to the citizens.

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