Global Call for Proposals–SAI Example Concept Note

1.Concept note proposal and SAI background

1.1 Applicant / SAI X
Application approved by: Mr Smith, Auditor General
1.2 Legal Applicant / SAI X is the legal applicant
1.3 Contact Details / Ms Jones, Director Strategic Planning, Tel:+367 60 51 341 37, e-mail:
1.4 Title and Duration / Capacity Development Support to SAI X, 2018-2022
1.5 Project Purpose / SAI X to contribute to strengthen the accountability in the use of Government funds through increased oversight by PAC.
1.6 Project Outcome / The intended outcome of the project is improved accountability and transparency of government spending, through timely and high-quality work delivered by SAI X.
This entails;
Improved legal mandate and protection for SAI operations: mandate confirmed, independence strengthened, right to publication
Audit coverage: increase in the annual coverage of the audit client base
Audit reporting: more timely submission and publication of the consolidated annual audit report
Implementation of audit recommendations: increased savings from implementation of audit recommendations
Accompanying high-level outcome indicators, including targets, are proposed as:
  1. Passed revised Audit Act by 2023
  2. Increase to 40 percent audit coverage by 2022
  3. Audit reports submitted to Parliament within 9 months after end of financial year, by 2020
  4. 40% Increase in implementation of the SAI’s recommendations

1.7 Problem analysis / SAI X has been established in name for more than 30 years. It undertakes compliance audit activities of Ministries and Agencies. However, it is often prevented from auditing certain Government Bodies, and frequently has its audit reports amended by the Office of the President before they are sent to the audited body or tabled before Parliament. Its reports are not published.
At present there is little scrutiny and oversight of the use of Government resources. Surveys and tracking studies suggest that significant proportions of budgeted funds do not reach their intended recipients, and the quantity and quality of government services remains low. Public perceptions are that the public sector is plagued by corruption and inefficiency, and that public officials are not held to account.
A new President was elected in 2015 on a mandate to reform Government and tackle corruption, and a change in political control within Parliament has created a positive environment for reform. Country X came close to a sovereign debt default in late 2010 and though no bail out was required, the near disaster has focused the country’s attention on the need to pursue fiscal discipline and reduce waste and corruption in the public services. Though historically country X has had little donor presence, following the debt crisis the Donor W and the Government of Y have established a presence in the country and committed to supporting reforms in governance, accountability and public financial management.
A 2015 SAI PMF assessment shows that
  • The SAI has low audit coverage. Each year, the SAI was only able to audit 10% of its mandated audit client base – some Ministries had not been audited in the past five years
  • The Auditor General’s consolidated report on annual audit activities was delivered to Parliament 18 months after the end of the financial year
  • The report was reviewed by some members of the Parliamentary Accounts Committee (PAC) but was not discussed in session. No recommendations for actions were issued by the PAC.
  • Recommendations in the SAI’s reports were rarely actioned by the Executive, and therefore similar recommendations were made each year.
SAI X operates in a challenging environment for example it lacks possibility for training, and it has only sufficient to pay only 35 staff – while the SAI has an approved establishment of 76 staff, only 20 staff are actually in post.
However, the SAI PMF assessment also shows, that the results above are affected by problems with internal capability, such as
  • A poorly defined audit practice, where compliance audits carried out, do not comply with the ISSAIs. The SAI lacks an audit manual, and the guidelines they are using do not provide sufficient support
  • Participation in the 3i programme has identified that rollout of ISSAI compliant practices within the SAI would require comprehensive training of staff
  • Because of the lack of staff, planning processes are informal and lack appropriate documentation.
  • The annual audit programme is not risk based, and this also contributes to the fact that many entities have not been audited for the past five years
Against this background, SAI X is trying to develop its capacity and strengthen audit results. The last three development programmes SAI X has participated in, has allowed it to understand its challenges and better define its priorities. The 2017-2022 Strategic Plan recognises that the SAI is in the early stages of its development and needs to focus on developing its core organizational processes, building up its human resources, and delivering some concrete audit results that will enhance its standing within country X and with donors. Given its overwhelming capacity development needs and limited absorption capacity, the strategic plan focuses on development of financial and compliance audit. Performance and IT audit will be considered for a future phase as the organization matures. The SAI also needs to work closely with Parliament to reposition itself as an independent body and to gradually enhance its financial and operational independence.
The 2017-2022 Strategic Plan identifies four top priorities:
  1. Timely audits
  2. Professional staff
  3. Audits at an international audits standards level
  4. Strengthened relations with key stakeholders
SAI X recognises three categories of capacity development initiatives as a response to these top priorities:
  • COMPONENT 1: Institutional Capacity Development
  • COMPONENT 2: Professional Staff Capacity Development
  • COMPONENT 3: Organizational Systems Capacity Development

1.8 Beneficiaries / The main beneficiary is SAI X. Country X is a Least Developed Country.
1.9 Financing Sought / The financing sought is US $ 997 162 over three years, to cover all three components
1.10 Implementing Partner(s) / The Regional Secretariat is proposed as the implementing partners for component 1 of this initiative.
A selected provider of professional training and the SAI itself is proposed to implement component 2, with the advice and support from relevant regional or global INTOSAI bodies.
SAI Y is suggested to implement component 3. The SAI of Y has previous experience of supporting SAIs in their early stages of development in the region, and can deploy staff with relevant prior experience and relevant language skills.
Key requirements for the implementing partners will include: experience of providing support to SAIs, developing relevant audit procedures and rolling out through joint audits and on the job training, delivering regularity audit training, strengthening human resource policies and introducing performance management systems, introducing audit quality control systems, strengthening SAI governance and corporate support, working with Parliamentary Accounts Committees, experience of public administration and SAI capacity development in the region and ability to deploy experts with appropriate language skills.
1.11 Delivery approach / The implementation of the proposal would require a combination of peer-support, regional support, participation in a regionalprogramme and use of third-party implementers.
For component 1, SAI X proposes to seek the bilateral assistance of the Regional Secretariat. The Regional Secretariat runs a programme for SAI Independence and Stakeholder Management, and has been successful in support other SAIs in the regions in revision and advocacy for Audit Acts.
For component 2, SAI X aims to recruit and retain at least 15 staff, and provide basic level professional training.
20 audit staff would be sent for training at a selected Academy, and Audit Managers would attend Management training in a combined online and on the job training, a course offered by the EXAUD academy in cooperation with the Regional Secretariat.
SAI X aims at the participating in an INTOSAI-led programme for development of staff, or a global or regional INTOSAI programme for capacity in audit standards and practice, in order to the train additional staff, and keep updated on developments related to standards.
Component 3 is suggested to be implemented through peer support, by SAI Y. SAIY will assist in the implementation of all activities under component 3, and responsibilities will further be identified through a ToR.
1.12 Alignment with recent or ongoing support projects / The proposed project is effectively the implementation of the results of the three former support projects carried out by the SAI.
The SAI has participated in a regional SAI PMF facilitation programme, which resulted in a comprehensive analysis of the SAI’s performance. In parallel SAI X participated in IDI’s 3i programme rolled out in 2015-2016, which provided a comprehensive analysis of the SAI’s compliance to ISSAI audit standards and guidelines.
These results were used as input, in the development of the strategic plan 2017-2022, which was the output of the bilateral support provided from DonorAid, in 2016. However, DonorAid will no longer be able to support SAI X, because the end of their programme period has led to a shift in priority away from Country X.
Name and Brief Description / Duration (Dates) / Funding Provider(s) / Implementing Partner(s) / Budget (USD)
3i programme / 2015-2017 / IDI / INTOSAI Region & IDI / Tbc
Regional SAI PMF programme / 2015 / IDI / INTOSAI Region & IDI / Tbc
Bilateral support for development of strategic plan / 2016 / Bilateral donor / INTOSAI Region and peer / Tbc
1.13 Existence of SAI-Donor Coordination Mechanism / SAI X has established a Capacity Development Committee (CDC), chaired by the Auditor General, which is responsible for initiating, approving and coordination any capacity development projects. This Committee has facilitated all communication regarding the recent programmes through this committee.
Please, contact Ms. A. Bailleur from DonorAid for more information about the arrangements SAI X has with DonorAid
1.14 Risk assessment of project / Critical Risks to Initiative Outputs and Outcomes:
  1. SAI X is unable to fill at least 90% of vacancies at the appropriate government pay scale
  2. Staff retention rates are below 80% each year
  3. SAI Y is not able to provide support
Critical Assumptions
  1. Parliament passes the new state audit law establishing SAI X as an independent body receiving funds directly from Parliament and reporting directly to Parliament
  2. Parliament approves the annual budget request of SAI X and makes the budgeted funds available as required through-out the year
  3. Parliamentary accounts committee holds timely meetings to discuss the annual audit report, approves it for publication, and issues binding recommendations to the executive
  4. The executive maintains adequate financial records on which to base audit work, and SAI X is able to access financial records and executive staff
The executive is adequately resourced and able to implement at least 75% of recommendations issued by the Parliamentary accounts committee.
The Capacity Development Committee (CDC) responsible for implementation of the Development Action Plan 2012-2014 will be responsible for risk management.
SAI X will adopt a recognised risk management approach that focuses on identification, tracking and mitigating measures for key risks .
1.15 Monitoring of the project / The Capacity Development Committee (CDC), chaired by the Auditor General, will be responsible for ensuring effective monitoring, reporting and evaluation.
In the first three months of the project, the CDC (including implementing partners) will prepare a project work plan and budget identifying key activities and milestones for each component, including responsibilities for each task.
6 monthly progress reports will be prepared in advance of each CDC meeting, and shared with the funding donors. These will cover:
  • Overall progress against expected outputs and key issues arising
  • Progress against key milestones under each component
  • Proposed changes to the project work plan
  • A financial report, showing use of resources by component, against the project budget
Within three months of the end of each financial year, key outcome indicators (below) will be measured, and progress towards outcome milestones will be reviewed, and the need for changes to the project plan will be considered.
There will be an external (process) evaluation of the project during 2022, which will provide an opportunity to reflect on progress, learn lessons and make changes for the future implementation of the Strategic Plan. This will include a repeat assessment of SAI PMF to measure the progress of the SAI.

2.Project design

2.1 Indicate the tangible outputs to be produced by the proposed project.
Expected outputs:
Component 1: Institutional Capacity Development
1.1 New State Audit Law developed and submitted to Parliament for approval,
1.2 Supplementary guidance and/or regulations to enable implementation of the State Audit Law are developed and issued by the Auditor General
Component 2: Professional Staff Capacity Development
2.1 Job and competency profiles for all grades and roles developed and issued
2.240auditors (financial and compliance) in post, having completed a recognized external finance/accounting qualification, where at least 30 have attended 4 weeks training on audit in accordance to international standards (ISSAIs)
Component 3: Organizational Systems Capacity Development
Audit Standards and Methodology
3.1 Three-year rolling audit plan for SAI X, based on risk and materiality, matched to anticipated resource availability, developed and implemented
3.2 Set of financial and compliance audit standards adopted and disseminated, including training to all audit staff
3.3 Detailed audit manual developed and disseminated, including training, covering:
  • Audit planning (including risk and materiality)
  • Audit execution (including sampling, audit evidence, testing controls and substantive testing)
  • Audit reporting (including report drafting and writing recommendations)
  • Follow-up of audit recommendations.
3.4 Guidance on audit quality control system developed and implemented
3.5 High-quality audit reports, submitted to Parliament and Published in 2020, 2021 and 2022.
3.6 Improved governance arrangements and internal control system for SAI X drafted and implemented
External Stakeholder Relations
3.8 Policy on external stakeholder relations developed and implemented
3.9 Working sessions with the Parliamentary Accounts Committee held and joint guidance on effective relationship between PAC and SAI developed and implemented
2.2 Group of Activities proposed to deliver the tangible outputs
Component 1:
  • Workshops and working sessions with key stakeholders on proposed new State Audit Law
  • Drafting new State Audit Law and supplementary guidance
Component 2:
  • Establish or set up links with professional accountancy training program
  • Design and delivery of management training for audit managers
Component 3:
  • Develop approach to selection of annual audit clients and produce rolling-audit plan annually
  • Develop audit procedures manual for financial and compliance audit
  • Internal training on SAIX audit approach
  • Develop and implement audit quality control system
  • Annual audits incorporating on the job training
  • Workshop with PAC on SAI results
  • Present material and set-up workshop for audit entity managers

2.3Roles of the Applicant and Implementing Partners in the Proposed Project
For component 3, SAY Y has been proposed. The SAI of Y has previous experience of supporting SAIs in their early stages of development in the region, and can deploy staff with relevant prior experience and relevant language skills. The Government of Y has recently signed a 10-year cooperation strategy with the Government of X.
An implementing partner for component 2 will be selected through a full, open competitive procurement process, open to SAI providers and other service providers.
Key requirements for the implementing partners will include: experience of providing support to SAIs, developing regularity audit procedures and rolling out through on the job training, delivering regularity audit training, strengthening human resource policies and introducing performance management systems, introducing audit quality control systems, experience in working with Parliamentary Accounts Committees, experience of public administration and SAI capacity development in the region and ability to deploy experts with appropriate language skills.
2.4Inputs
Inputs are further elaborated in the budget including;
Funding for daily rates for regional or peer experts to deliver support activities under components 1,2 and 3.
Tuition fees for training for professional development for audit staff, and fees for enrolment for manager courses.
Budget for Flights and accommodation for all experts to deliver activities.
INTOSAI or ISA standards for regularity audits, relevant Global Public Goods and guidance material, as well as training material.
2.5 Budget
The costs are budgeted to be USD 373 807 in 2019, USD 373 807 in 2020 and USD 360 344 in 2021, in total USD 1 107 958. SAI X would finance 10 percent of the costs, and the requested external funding would finance 90 percent.
Please note: The example below shows a financial proposal presented by budget head, component and calendar year, as well as the different sources of finance. It also distinguishes between short term and long term experts, and senior and junior experts. The example, including the cost recovery calculations, is for illustration purposes only and is not intended to imply which costs may or may not be acceptable to potential providers of support or how information should be presented: the budget may be modified (in presentation and content) in discussions between the applicant and provider with whom the proposal has been matched.

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