SAIs and Stakeholder engagement – The Involvement of Stakeholders in Performance Audit Planning of SAIs

SAIs and Stakeholder engagement – The Involvement of Stakeholders in Performance Audit Planning of SAIs

Dr. Lamia F. Kadhum, Legal Accountant.
Federal Board of Supreme Audit
Republic of Iraq

The concept of “stakeholders” is generally described as the individuals and groups which are characterized by having interactive relationships varying in intensity and impact to the business organization in different forms and common interest. The definition of “stakeholders” according to the ISSAI 12 means any person, group, organization, member or system who can effect or is affected by the actions, purposes, and policies of public sector bodies. When talking about SAIs works and their roles in public sector, the concept of “stakeholders“ indicates the legislative bodies, Auditee, media,  citizens and other targeted groups that have  relation with parties mentioned  above . It considers the work of SAIs as a source of inspiring confidence in society to meet the professional and ethical standards in their work even in the cases where the legal rules are ambiguous, inconsistent or under developed. It would rely on the professional judgment of the SAIs in their reports as a supporting tool of accountability in public sector. Hence, the involvement of stakeholders in the work of SAIs provides a productive, effective and challenging work environment based on mutual constructive relations.

The Auditee is the most affected party by SAIs reports and they represent the main stakeholders. There is no doubt on the impact of the audit reports/results on the audit entities and these include observations, conclusions and recommendations that enhance the transparency and accountability in the public sector organization. However, such impact is based on the nature of information provided by the Auditee to SAIs when they execute their audit work. This represents the core of Auditee involvement in the audit tasks by submitting the desired information in appropriate time, accurately and of desired quality in a way that facilitates active and effective implementation of SAIs’ duties.

In an environment surrounded by corruption, fraud and financial risks, there is a need to involve the auditee effectively for continuous reform and improvement, which can be done initially by enabling interaction among SAIs and the stakeholders. This can be done by creating awareness about the significance and role of the SAI in bringing about the required changes or to ensure effective implementation of work by the Auditee. It will be desirable to create awareness on the duties of SAIs and their active role in detecting deficiency of performance by holding courses, seminars and workshops for Auditee and to exchange thoughts, opinion, and enhanced interaction between two parties that support the role of   SAIs.

The second significant aspect, in which the stakeholders should involve in, is the aspect of planning for the auditing works. In the tasks of auditing performance which aims to achieve accountability, transparency and change of misconduct to a better conduct, within the limits of available capacity and capabilities, the involvement of stakeholders in the stage of planning of the auditing work ensures good work progress and fast delivery. When the SAIs present topics to be included in the future plan, the participation of officials in the Auditee in examining these topics at the stage of preparation and giving opinions on aspects that should be included in auditing of the performance within the planned tasks would raise the efficiency and quality of planning. Such a practice should be achieved without prejudice to the independence of SAIs in selecting the auditing topics and determining the appropriate time and scope of audit.

According to what is mentioned above, and in order to involve the stakeholders in planning the audit tasks, joint audit teams have been formed that involve members of SAIs, representatives from Auditee and researchers who represent public parties or civil society organizations. The joint work will help to focus on negative practices in Auditee that affect directly on the quality and quantity of services provided to citizens generally.

To use modern communication channels, it is possible to view the topics, proposed to be included in the audit plan, in electronic communication by all citizens and receive responses via internet to analyze results and to involve another kind of stakeholders in the planning process, represented by beneficiary communities. As stated in INTOSAI guidelines to define the value and benefits of SAIs, there is a need for citizens involvement by developing mechanisms to receive and monitor complaints about government programs and suggestions for improving public administration and services to determine the fields that future audit should focus.  We believe that such involvement of stakeholders could produce out of box ideas in selecting audit topics, which would lead in discovering a different method in planning as a result of different experiences, interpretations of audit team and the results of analysis of citizen opinions.

In addition, the topics related to the quality of public services become currently a societal requirement. The executive guidelines of audit performance states that the quality of public services are the most significant issues. Thus, the Governments and Parliament look to SAIs to deal with these issues in their performance audit reports. Consequently, another stakeholder represented by legislative bodies participates in audit topics that have significant effect on citizens’ life.

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