Presentation by Kjell Larsson, SIGMA expert, on "Building independence and adapting the organisation", at the regional conference for Supreme Audit Institutions of European Neighbourhood South countries, co-organised by the Algerian Court of Accounts and SIGMA in Algiers, 16-17 December 2014.

1. © OECD
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
REGIONAL CONFERENCE FOR
SUPREME AUDIT INSTITUTIONS OF EUROPEAN
NEIGHBOURHOOD SOUTH COUNTRIES
Building independence and adapting the
organisation
Kjell LARSSON, Sweden
Algiers 16-17 December 2014

2. AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Government Audit before year 2000
• Some particularities in the audit environment.
• Two Audit offices. One worked for Parliament.
A second – the SAI - worked for Government /
Ministry of Finance. Large!
• The second Office, the SAI
 did performance audits since 60’s. Responsible for
financial audits since the 80’s.
 also responsible for developing the financial
management and accountingoperations.
• In 90´s. Public administration reform. Focus
on results. Demands to have SAI attached to
Parliament. Years of turbulent political process
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3. AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
The New SAI; Riksrevisionen I
• Outline for new SAI decided by Parliament in
2000. INTOSAI compliant.
• Started in 2003. Political consensus. Existing
Audit Offices closed down. Staff to SAI.
• Independence in Constitution and laws. Audit
of nearly all gov. funding /activities possible.
• 3 Auditor Generals same power in order to
strengthen SAI independence and objectivity.
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4. AjointinitiativeoftheOECDandtheEuropeanUnion,
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Riksrevisionen II
• 100% audit (performance and financial).
• The SAI decides what, how, when to audit
• No obligation to do audits on external
requests.
• Attached to Parliament. Reports to new
Parliament committee.
• Government now one of the auditees.
• Government and other auditees to answer to
Parliament on SAI reports.
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5. AjointinitiativeoftheOECDandtheEuropeanUnion,
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Some early steps to independence
• Four strong Auditor Generals during 30+ years.
Deeply experienced in government affairs.
• SAI / Auditor Generals
 Prepared the ground for separating audit from
accounting in mid 80’s,
 Established a system of internal audit in major gov.
organisations in early 90’s. SAI helped to implement,
 Took all opportunities to explain modern audit and
independence as pre-condition to general public, all
stakeholders, media as well as SAI staff.
 Took in mid 90’s public stance for a SAI linked to
Parliament.
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6. AjointinitiativeoftheOECDandtheEuropeanUnion,
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New SAI; independence and the 9 sub-
criteria
• Two important aspects of independence.
 To be independent
 To be seen as independent
• Sub-criteria are much about first aspect
 Sub-critera1,2,3,5,6,9all “easy”. Usually solved
by SAI stafflistening and giving good information
 Sub-criteria4,7,8 not as easy to meet. However,
listening and giving good information was essential
also here.
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7. AjointinitiativeoftheOECDandtheEuropeanUnion,
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Some actions taken by SAI linked to
sub-criteria 4,7 and 8
• 4 Unrestricted access to information.
 Several auditees asked for and got clarifications.
Some turned to Gov. and asked for legal advice.
 Real access problems especially when information
sits in other jurisdictions (accounts or databases).
 The SAI had to implement new internal routines
for who may and how to ask for classifieddata.
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8. AjointinitiativeoftheOECDandtheEuropeanUnion,
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Sub-criteria 7
• 7 Mechanisms for following up audit findings
and recommendations
 Parliament not equipped for / interested in?
detailed follow up activities. Governments interest
to provide data faded.
 SAI had to developpartly new routines. And
convince stakeholders to provide relevant data
 Legal responsibilitiesto provide data after an
audit neededto be clarified
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9. AjointinitiativeoftheOECDandtheEuropeanUnion,
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Sub-criteria 8
• 8 Financial, managerial or administrative
autonomy. Appropriate human, material and
financial resources.
 The autonomy both wide and partly restricted as
not thought through in detail. SAI clarified the
lines. SAI view was that autonomy must have
limits similar to other institutions.
 Competition for experts with the private sector
made it difficult for SAI to get appropriate
resources. New ways to attract experts
developed.
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10. AjointinitiativeoftheOECDandtheEuropeanUnion,
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How to be seen as independent?
• Explaining and discussing independence. WHY
and HOW to handle it;
 Among the 3 Auditor Generals
 Internally
 Externally (auditees, Parliamentarians,
government, media and general public).
• Developed “hot” and “cold” quality controls.
• Set up Scientific Advisory Board (and similar).
Discussing ALL aspects of audits.
• Stay focused; accountability, effectiveness,
efficiency, economy.
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11. AjointinitiativeoftheOECDandtheEuropeanUnion,
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But, what did we miss to do?
• ?
• ??
• ???
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12. AjointinitiativeoftheOECDandtheEuropeanUnion,
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Adapting the SAI organisation I
• Several models tested live. With ambition to
 Divide responsibilities between the 3 Auditor Gen.
Still allowing overview and systemicconclusions.
 Delegate non-strategic decisions. Identify and
prepare strategicdecisions for Auditor Generals.
 Facilitate contacts between SAI and the auditees.
 Facilitate internal coordination and exchange of
information between auditors in same areas.
 Increase flexibility.New, vital problems audited
faster.Make systemicaudits possible.
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13. AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Adapting the SAI organisation II
 Increase professional development.
 Systematic,co-ordinatedplanning of all activities
based on relevance, impact and risks.
 Extensivehot quality reviews and cold reviews.
 Effective communication( external and internal).
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14. AjointinitiativeoftheOECDandtheEuropeanUnion,
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Lastly, Parliament evaluated the reform
and decided in 2007-10
• Major findings /changes
 The special committee in Parliament to which the
SAI reported is abolished. Now reporting directly
to the various standing committees.
 A Parliamentary Council established. It should
promote consultation and transparency in SAI. The
work on the most important audits to be reported
to it. And annual budget request to be discussed.
 Performance audits have put too much focus on
accountability.Should now have the 3 E’s in focus.
 One of the 3 Auditor Generals is now responsible
for also administrative management of the SAI. 13

15. AjointinitiativeoftheOECDandtheEuropeanUnion,
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Thank you for your attention
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