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June 06, 2012

The Independence of Supreme Audit Institutions: Celebrated in New York, But Often Ignored Back Home

Posted by Guilhem Blondy

On December 22, 2011 the 66th United Nations General Assembly adopted the resolution "Promoting the efficiency, accountability, effectiveness and transparency of public administration by strengthening supreme audit institutions." 

The General Assembly recognizes that SAIs can accomplish their tasks objectively and effectively only if they are independent of the audited entity and are protected against outside influence, as well as the important role of SAIs in promoting the efficiency, accountability, effectiveness and transparency of public administration, which is conducive to the achievement of national development objectives and priorities.

The UN General Assembly also takes note with appreciation of the work of International Organization of Supreme Audit Institutions (INTOSAI), and encourages Member States to apply the principles set out in its Lima and Mexico declarations.

The Mexico Declaration (2007) on the independence of the Supreme Audit Institutions consists of eight core principles:

1) The existence of an appropriate and effective constitutional/statutory/legal framework and of de facto application provisions of this framework;

2) The independence of SAI heads and members (of collegial institutions), including security of tenure and legal immunity in the normal discharge of their duties;

3) A sufficiently broad mandate and full discretion in the discharge of SAI functions;

4) Unrestricted access to information;

5) The right and obligation to report on their work;

6) The freedom to decide the content and timing of audit reports and to publish and disseminate them;

7) The existence of effective follow-up mechanisms on SAI recommendations;

8) Financial and managerial/administrative autonomy and the availability of appropriate human, material, and monetary resources.

While the endorsement of the Mexico principles by the UN General Assembly has no immediate consequence, it certainly provides a useful support to SAIs still struggling to strengthen their institutional position in many countries.

The challenges of establishing independent SAIs in developing countries have been summarized by Lewis Murara in a blog post a few months ago.

The Open Budget Initiative provides interesting data on the independence of SAIs, at least for Mexico principles 2 (question 114 of OBI questionnaire on the independence of SAI heads), 3 (question 116 on discretion in the discharge of SAI functions), 7 (question 122 on follow-up mechanisms of SAI observations) and 8 (question 117 on financial autonomy of the SAI). In 15 out of 94 SAIs surveyed in 2010, the head of the SAI could be removed by the executive branch. In the same sample, 31 SAIs had not full discretion in law to conduct audits as they wished to. In only 16 cases, the SAI or the legislature was publishing a report tracking measures taken to follow-up on observations of the SAI. Finally, 33 SAIs had full financial autonomy. Only 11 SAIs were fully meeting these four independence criteria, none was in a low-income country and only three (namely, Bosnia-Herzegovina, Botswana and Chile) were in middle-income countries.

Despite the UN recognition, it seems that there is still a long way to full independence of SAIs in the public sector.

Note: The posts on the IMF PFM Blog should not be reported as representing the views of the IMF. The views expressed are those of the authors and do not necessarily represent those of the IMF or IMF policy.

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