What does the coronavirus pandemic mean for Supreme Audit Institutions?

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Only time will tell when the world starts recovering from the severe impact of the COVID-19 pandemic. Auditors, and in particular Supreme Audit Institutions (SAIs), will be able to provide insights on whether government systems were sound and prepared to face a crisis of this scale , whether their responses were reasonable, and how they can make improvements in the future. So, is it a holiday for auditors till then? Far from it. 

Governments are taking drastic measures such as emergency laws, lockdowns, and travel restrictions. They are spending tremendous resources to purchase emergency medical equipment and supplies, build hospitals and morgues, provide stimulus funds to pay the underprivileged, and boost the economy. Controls and checks and balances have taken a back seat, opening opportunities for corruption. Some SAIs are trying their best to mitigate these risks while others are observing how the situation unfolds, but all are eager to learn from previous experiences and help curb the pernicious effects of corruption.  

Supreme Audit Institutions can play an important role during crises.  In 2015, for example, South Korea’s Board of Inspection and Audit (BAI) conducted an audit of the government’s response to the outbreak of MERS (Middle East Respiratory Syndrome). This audit found weaknesses in the response, including lack of transparency and training on early detection, as well as inadequate coordination and communication among authorities. The government and parliament acted quickly to address these weaknesses so that the country would be much better prepared for future pandemics. 

Already in the midst of COVID-19, the Kuwait State Audit Bureau has been performing a real-time audit, as part of its ex-ante audit mandate. They have audited over $650 million worth of pandemic-related contracts so far and saved approximately $7 million.

These examples demonstrate what Supreme Audit Institutions can contribute, whether by performing a real-time audit to minimize fraud and corruption or post-crisis audits when countries face economic recessions. SAIs need to continue monitoring that public funds and public services are delivered properly. However, they face many challenges, including limited accessibility to auditees, technology infrastructure, and connections to perform remote audits, along with high expectations from key stakeholders on audits’ quality and timeliness.

To address these challenges, SAIs must adapt and reform. With COVID-19 affecting all countries, SAIs need to learn from previous case studies and create a repository of lessons learned, proactively communicate with stakeholders, and advise governments on ways to be prepared for future crises.  There are challenges for private auditors as well; the International Auditing and Assurance Standard Board (IAASB) has already communicated that COVID-19 will significantly impact the way that audits are undertaken.

The auditing profession has been evolving for many years. SAIs have professional standards and guidelines on audits of disaster management, but COVID-19 will inevitably take this to the next level, requiring increased creativity, technology, and smarter auditing practices. The International Organization of Supreme Audit Institutions (INTOSAI), regional organizations, and development partners are currently coordinating on the future of the auditing profession in the context of disaster risk management.

The INTOSAI Development Initiative is strengthening its e-learning facilities and will be establishing a cooperative audit of Sustainable Development Goal 3, which aspires to have functional health systems everywhere that will not leave people behind, as some systems are at risk of doing with the current pandemic. For the Middle East and North Africa, the Arab Organization of Supreme Audit Institutions is currently developing a plan to help the region’s SAIs deal with pandemic-related audits. The World Bank is developing a discussion paper by crowdsourcing inputs from its teams who support SAIs, on experiences of auditing disaster management.  

In the meantime, the issue of SAIs’ independence, a long-standing challenge that hampered the effectiveness of SAIs, will worsen during COVID-19. Though necessary in the current circumstances, emergency laws can give governments more power along with relaxed accountability. While the world anticipates a severe recession, every penny counts, and the independence of Supreme Audit Institutions to hold governments accountable and provide audits will be more important than ever. There will be no audit holidays in the foreseeable future.
 

Join the Conversation

Serge Nkuindja
April 30, 2020

Dear Mona,
Your article on the role of SAI during the Covid-19 is spot on. I am currently working along the same line to support the OAG of Mali.
Kind regards
Serge

Mona El-Chami
May 11, 2020

Thanks Serge. I would be very interested to learn about Mali's experience. Good luck.

Basem zain
April 30, 2020

Now I want to save then read later

Asha Narayan
April 30, 2020

Good one, Mona

Mona El-Chami
May 11, 2020

Thanks Asha.

Sirelkhatim Mohamed
May 08, 2020

Very interesting .. well done !

Mona El-Chami
May 11, 2020

Thanks!

Serdar Süngü
May 08, 2020

Firstly I want to congrats for the article. During the Pandemic, there are a lot of different measurement taken by the different public body. Its a kind of crises managemen. Ex. Aid campaign, blood activities, cash delivery, equipment edequacy, local gov. activity, direcly food aid, social help activities, revenues..so on. I think Sai shoul change its way of looking to audit the public bodies. In the complex new world order, governments policies are very important. In external audit generally known/says; "do not criticise the merit of policy"! But if you do not concentrate on policy as an auditor, you can not analise the system of the working/living body. So, Sais should look inside the policies together protect its realistic behaiour but also give its opinion to gain a better political and auditable area. Sais looking sould be remaining methodology as clearly; analise the before and the after activities..
Hi From Turkey, Principle Auditor

Mona El-Chami
May 11, 2020

Thanks Serdar. I fully agree. SAIs are in a very good place to observe, assess, and recommend improvement to policies. This role needs to be better promoted. I would be very interested in knowing how Turkey SAI had been addressing COVID-19 (pre, during, and post). I remember we had drawn on Turkey SAI experience in auditing expenditures related to refugees and IDPs a few years ago.

Serdar Süngü
May 19, 2020

Thank you for your kind return Mona! I fully agree with you about our approach. Generally we focus on expenditure as part of regularity audit. But this time we hope that we are going to focus Covid 19 pandemic in the light of Performance Auditing. If you ask me the reason, its clear! Interdiciplinary, different kinds of public bodies take urgent actions for fighting the virus. They use lots of different tools as politics so Sais should look the alternative wide area in a concentrate manner inculiding; economy, efficient and effective way together with environmental and ethics methods. Another strategic question is: what is the expectation of stakeholders! I think world deeply asking and inspecting the inefficient allocation of public revenues, expenditure, income distrubution, utilities... Reaching equally to healtcare systems is the main problem of countries! If we couldn't sove these problem, reports will not give us any clue how to handle these kinds of problems. Thank you again..

bengassouma
May 08, 2020

Like many of my colleagues in the Tunisian Court of accounts I did not sense quite early the real danger that the COVID-19 could cause for the entire humanity and of course for the Supreme audit institutions. When the COVID-19 Outbreak started mounting, it really meant almost nothing for the Court expect may be having some concerns about whether or not we will be affected by the Coronavirus. We carried on doing or job in normal fashion focusing on day-to-day issues without being involved in the Government’s responsive to the very fast approaching crisis. Then, the very first case was revealed and the number of local COVID-19 infections started to increase. A lockdown has been imposed on 80 % of the country since late March.
The Tunisian Accounting Court offices were closed for like two months and wen all began to experience for the first time ever what remote work is all about. We could not host any in-person events due to COVID-19, but that did not stop us from working —virtually, of course. This new way of working resulted in a new way of thinking and COVID-19 has got a new meaning for the Court as a supreme audit institution.
To make a long story short, I would say that the World Bank-SAI Chat-SAIs & COVID19-April 2, 2020 was very useful for me for many reasons. Let me first state for the record that even though I Could not attend the World Bank-SAI Chat- SAIs & COVID19 dated April 2, 2020, I got the whole documentation in both English and Arabic which I immediately shared with my colleagues who showed the same keen interest for the topic. Short after receiving these documentations, I started online discussions on how we could be inspired by the main experiences that these documentations dealt with for instance the SAI’s of South Korea and of Kuwait. The above mentioned the World Bank-SAI Chat was definitely inspiring.
We started to examine the main issue that Mona formulated in her blog drawing on the chat as follows: SAIs need to learn from previous case studies and create a repository of lessons learned, proactively communicate with stakeholders, and advise governments on ways to be prepared for future crises.
As being in charge of the Health and social care in the Tunisian Accounting Court, I started to pitch the idea that we should learn from South Korea’s Board of Inspection and Audit (BAI) experience related to the audit of the government’s response to the outbreak of MERS. Colleagues got to notice that we needed to design a decisive response to COVID-19 from the Supreme audit institution perspective based on this South Korean experience deemed to be very insightful.
Even though the court is taking so much time to translate lessons learned from this experience into actions, real progress has been already made in terms of communication with stakeholders. Now the Court’s leadership is fully aware that the health department should better advise the government on ways to be prepared for future crises. Actions are underway and we are looking forward to moving to take steps very soon.

Mona El-Chami
May 11, 2020

Thanks a lot for your kind words. It is heart-warming to know that this had inspired further discussions and practical steps in looking at other experiences. It is proven that the most learning happen between peers. South Korea's experience is indeed a remarkable one. We are at the Bank available to help you in advancing the learning experience and in facilitating the connections, if needed. Good luck to you and Tunisia Court of Accounts.

Yavix Avien
May 08, 2020

Thanks Mona for the article. Maybe it is an opportunity for the SAIs to evolve and change rather than waiting . The world will not be same and neither the institutions

Mona El-Chami
May 11, 2020

Thanks Yavix. I fully agree. I am sure SAIs will not wait.

Chukwudike
May 19, 2020

Hello Mona,
This is beautiful. It will be useful in handling Covid 19 audit by SAI Nigeria.
Regards.

Stephan van der Merwe
May 19, 2020

Thanks Mona, really insightfull. Now more than ever real time performance audits on how countries deal with COVID19.