Posted by Tej Prakash.
The Acting Comptroller General of the USA (Gene L. Dodaro) in a recent meeting with parliamentarians from Georgia, Kosovo, Macedonia and Mongolia, talked about the role of the United States Government Accountability Office (GAO) -- click here for a copy of the presentation. This blog provides a brief summary of the main points. In the second part it also briefly reviews the roles and responsibilities of the National Audit office of the UK and of the French Court of Audit.
The GAO
The name of the office, which suggests a focus on accountability rather than traditional auditing,
gives it a much broader mandate. However, many audit offices across the world have also taken on similar roles with greater focus on efficiency and effectiveness of public spending rather on traditional audit.
The GAO supports the US Congress in assuring ‘accountability of government’ to the people. In this role, it performs four basic functions: oversight to detect waste, mismanagement and fraud, advising on making spending more efficient, identifying emerging issues, and resolving bid protests and providing legal opinions.
The GAO has thirteen core mission teams to fulfill its role. These teams are organized around defense, education, health, financial markets, homeland security, international trade, environment, infrastructure, acquisition and sourcing management, applied research, financial management, information technology and strategic issues. This provides the GAO with a very broad mandate stretching across the entire federal government and includes both policy and its implementation.
GAO’s work force is 3141 strong, of which 75 percent work in Washington DC. The Comptroller General (CG) is the head of the GAO. He is appointed for a term of 15 years by a joint selection process involving both the Congress and the President. He can only be removed by impeachment or by a joint resolution of the Congress for specific reasons. All GAO staff are civil servants and not political appointees.
The GAO is an agency of the Congress. It has a high demand for its service. It considers various criteria before accepting any request. It adheres to government audit standards, generally accepted practices such as statistical sampling and quality assurance systems in its work. One interesting feature of this presentation was the quantification of the benefits arising from GAO’s work . For example, it notes that it saved the taxpayer 58.1 billion $ in 2008, against an initially projected 40 billion; and that 83 percent of its recommendations were accepted. Some of the benefits from its recommendations include improvement in spectrum management and increasing requirement for water sprinklers in nursing homes.
The GAO is constantly enhancing its capacity. It participates in International Organization of Supreme Audit Institutions (INTOSAI) and international peer reviews. Internally, it has taken measures to enhance capacity including through core leadership training, contracting the National Academy of sciences (where necessary) and installing state of the art computer systems.
Its emerging challenges include identifying problems before they emerge, providing detailed recommendations in a timely and specialized manner, and designing strategies to cope with constrained resources. Thus it focuses on strategic planning, modernizing professional standards, identifying needed transformations and on constantly building audit capacity.
The Auditor General’s Office in the UK
It is interesting to compare the role and responsibilities of the USA’s GAO with the National Audit Office (NAO) of the UK.
The NAO reports to the parliament. The Comptroller and the Auditor General, the head of NAO, is an officer of the House of Commons. He is appointed by the Queen on the proposal by the Prime Minister who is advised on this appointment by the Committee of Public Accounts of the parliament. Professional staff of NAO (around 850) are not civil servants and are thus independent of the government. The budget of NAO is set by the parliament and not by the government.
The NAO, like the GAO, holds the government accountable for the economy, efficiency and effectiveness in the use of public money. It ‘champions’ the interests of the tax payers as users of public services.
Like the GAO, the NAO’s work is also divided in sectors. These sectors are business and industry, central finance and treasury, children and families, communication with the public, communities, culture and media, defense, education, employment, international affairs, health and social care, housing, private finance, public order and justice, science and technology, taxes and duties, transport and infrastructure, welfare, and environment and rural affairs.
In FY 2007-08, NAO audited over 460 accounts and published over 60 major reports to the parliament. It has also started performance briefings on departmental performance. Since 2000, it has examined, on a cyclical basis, key assumptions underpinning government’s budget and pre-budget reports projections of public finance.
One of the interesting features of NAO’s work are the ‘tool kits’ it has developed to assess how well an organization is doing in a particular area. For example, the ‘efficiency tool-kit’ is an organizational health check designed around 19 modules. It covers everything from vision to systems and processes. These tool kits are available on the NAO website.
The French Court of Audit
Unlike in the Anglo-Saxon models of the UK, USA and similar other countries, the French ‘Court of Audit’ is a quasi-judicial body and is independent of both the legislature and the executive. The French court of Audit was established in 1807, and is the successor to the Paris Court of Finance under the monarchy. In 1946 and 1958, the French Constitution mandated the Court of Audit to assist the parliament and the cabinet in oversight of the public expenditures.
The mandate of the Court of Audit is to conduct financial and legislative audit of all public sector institutions and some private sector institutions. Under article L.111-3 of the code of Financial Jurisdiction, “The Court of Auditors judges the accounts of public accountants”, and it checks “ the correctness of the expenditures described in public accounts.”
The head of the Court is the First President who is appointed by an Order-in-Council of the Cabinet, and he enjoys security of tenure. The Court has its own Office of the Prosecutor, and it is divided in eight chambers by subject matter such as health, finance and social security. Its officials are grouped under three groups by rank: auditors, senior auditors and auditor–masters (among whom are chosen the eight presidents of chambers) .
The audit of the Court includes government accounting, budget and funds, public corporations, national and public institutions, government funded organizations and publicly funded organizations. The Court determines its audit program independently and has broad powers of review and examination. It submits and publishes an annual report to the French President and the parliament. This report provides a detailed account of the use of public funds. This report is debated in the National Assembly and the Senate.
One of the more interesting reports of the Court of Audit includes a preliminary report linked to the government’s report on national economic development and on public finance policies. Another report is on the implementation of the finance laws. Since 2007, the Court certifies the financial statements of the State (see our previous blog posts on the French Court of Audit: http://blog-pfm.imf.org/pfmblog/2009/06/certification-of-the-financial-statements-of-central-government-the-french-case.html and http://blog-pfm.imf.org/pfmblog/2007/11/french-national.html).
The Court can, unlike in the Anglo-Saxon model, impose fines on officials for many reasons such as, for example, late reporting and any errors that caused the state to lose public money.
The French Audit Court is the apex body and under are 27 regional audit courts which were established in 1982 to lighten the burden of the Court of Audit. As in the case of Court of Audit, the regional courts exercise similar jurisdiction and powers over regions and other local authorities. The officers of the regional court also enjoy security of tenure. The orders of the regional court can be appealed to the Court of Audit.
One of the most interesting features of the French system is the concept of personal accountability of public accountants as well as of any other person involved in the handling of public funds.
