INTOSAI-DonorSecretariat: Narrative Progress Report 2012
INTOSAI-DONOR SECRETARIAT
NARRATIVE PROGRESS REPORT 2012
FINAL REPORT 2010-12
INTOSAI-DONOR COOPERATION
29 AUGUST2013
TABLE OF CONTENTS
ANNEXES
ACRONYMS
EXECUTIVE SUMMARY
1.INTRODUCTION
1.1Report Purpose
1.2INTOSAI-Donor Cooperation Background
1.3Results Framework for Reporting
1.4Support for the INTOSAI Donor Secretariat
2.Report on Phase 1 Overall Results and 2012 Progress
2.1Levels of Results Reporting
2.2Reporting Against the Overall Objective: Has Performance of SAIs in Developing Countries Improved?
2.3Reporting Against the Project Purpose: has the INTOSAI-Donor Cooperation Improved the Effectiveness and Increased the Volume of Capacity Development Support to SAIs in Developing Countries?
2.4Reporting against the 2012 Work Program
3.Financing
3.1Overall Financial Position, 2010-12
3.2Budget Execution, 2012
3.3Budget Execution, 2010-12
4.EXPLANATION OF MAJOR DEVIATIONS
5.ASSESSMENT OF PROBLEMS AND RISKS
ANNEXES
Annex A: Signed English Financial Statements for IDI 2012
Annex B: English notes to Financial Statements for IDI 2012
Annex C: Signed Norwegian Auditors Report for IDI 2012 and translated English Auditors Report 2012
Annex D: Signed English IDI Annual Board Report 2012
Annex E: Annual IDI Progress Report 2012
ACRONYMS
CBCCapacity Building Committee
CooperationINTOSAI-Donor Cooperation
DatabaseSAI Capacity Development database
DFIDUK Department for International Development
EITIExtractive Industries Transparency Initiative
GCPGlobal Call for Proposals
IDIINTOSAI Development Initiative
ISSAIsInternational Standards of Supreme Audit Institutions
INTOSAI International Organization of Supreme Audit Institutions
MoUINTOSAI-Donor Memorandum of Understanding
OAGNOffice of the Auditor General of Norway
PEFAPublic Expenditure and Financial Accountability
PMFPerformance Measurement Framework
ToRsTerms of Reference
SAISupreme Audit Institution
SAI CDFSAI Capacity Development Fund
SCINTOSAI-Donor Steering Committee
SecretariatINTOSAI-Donor Secretariat
WBThe World Bank
WGVBSWorking Group on the Value and Benefits of SAIs
EXECUTIVE SUMMARY
The Memorandum of Understanding (MoU) between INTOSAI and the Donor community signed in 2009 established the INTOSAI-Donor Cooperation (Cooperation), which has since expanded from 15 to 20 donor members. The INTOSAI-Donor Steering Committee (SC) agreed to establish the INTOSAI-Donor Secretariat(Secretariat) based in the INTOSAI Development Initiative (IDI) in Oslo. The donor agencies of Austria, Ireland and Norway agreed to provide financial support to the Secretariat from June 2010 to December 2012. In addition, in-kind staff support was provided by the Supreme Audit Institution (SAI) of Norway. This report summarizes the achievements of the Cooperation, and specifically accounts for the use of funds by the Secretariat.
The overall objective of the INTOSAI-Donor Cooperation is to strengthen public sector auditing in partner countries, with the project purpose being defined as improving the effectiveness and increasing the volume of capacity development support to SAIs in partner countries. The Cooperation sets annual work plans to contribute to this objective and purpose; however achievement of the purpose depends on change within many donor agencies and SAIs. Achievement of the objective requires sustainable changes in the performance and capacities of SAIs, which is a long term change dependent on many factors beyond the control of the Cooperation. Considering this, we report on achievements and progress at the levels of objective, purpose, and work plans.
(i).Overall objective: has performance of SAIs in developing countries improved? (Section 2.2)
Project Contract Indicator 1: / PEFA and other diagnostics shows improvement in external audit capacity in partner countries / Progress: MetProject Contract Indicator 2: / Stocktaking in 2010 and 2012 demonstrates increases in average audit coverage / Progress: Met
Project Contract Indicator 3: / Stocktaking in 2010 and 2012 shows improvements in average timeliness of annual reports / Progress: Met
Analysis of PEFA data shows an improvement in SAI performance between May 2010 and April 2012, both globally and within all income groups. The percentage of SAIs scoring a C+ or higher on PEFA PI-26 increased from 38% to 44%. Examination of 50 countries with repeat PEFA assessments shows that over the period 2005-12[1], the broad direction of change on audit coverage and timeliness of audit reports is positive. However it is noted that the performance of external audit has declined in a small number of countries. Examining SAI performance at the country level, based on 22 published repeat PEFA assessments, shows positive results in English speaking Africa and Europe, mixed results in French speaking Africa and the Pacific, and positive results in other regions for which data exists. It is notable that the amount of data, and variety of data sources on SAI performance, is very limited. A number of ongoing initiatives are designed to improve the quantity and quality of data on global SAI performance.
(ii).Project purpose: has the Cooperation improved the effectiveness and increased the volume of support to SAIs in developing countries? (Section 2.3)
Project Contract Indicator 4: / Stocktaking in 2010 and 2012 shows that higher proportion of capacity development support is based on needs identified in SAI Strategic and Development Action Plans. / Progress: positive progressProject Contract Indicator 5: / Stocktaking in 2010 and 2012 show that SAIs in partner countries on average are recipients of fewer but bigger and more long-term capacity development support programmes. / Progress: no data – awaiting IDI Global Survey 2013
Project Contract Indicator 6: / Evaluations of projects under the auspices of the SC demonstrate increased utilization of identified good practices and harmonization of the manner in which support is provided. / Progress: to early to assess
Based on the 2010 stocktaking, in the first round of project matching the Cooperation prioritised support to development of SAI strategies in regions were these were weak. The 2011 Global Call for Proposals (GCP) sought to ensure that more support to SAIs was based on SAI owned strategies. During 2010-12, new projects were identified and launched, andglobal surveys and evaluations are planned for 2013 and 2014. It is therefore too early to assess the impact of the Cooperation on the effectiveness of support. However, anecdotal evidence shows initiatives such as the GCP and SAI Capacity Development Database (Database) are contributing to better donor harmonization of support in some countries, with duplication of projects being reduced. Finally, forecast figures from the Database suggest the volume of global of support to SAIs is increasing, from USD 41 million per annum over 2010-12 to USD 56 million per annum 2012-14.
(iii).Annual work plans set by the SC.(Section 2.4 and annual progress reports)
The Secretariat has been tasked with, and reported on, implementation of annual work plans for 2010, 2011 and 2012. Progress against priority activities during 2010-12 is summarized below.
Stocktaking of the SAI community. In 2010 the first ever global stocktaking of the INTOSAI Community was carried out with a response rate of above 90% of the 190 INTOSAI members. It identified a clear need to scale up the levels, and improve coordination, of support to SAIs in developing countries.
Matching of regional and global high priority needs. Based on the stocktaking, eight priority global and regional capacity development initiatives were matched with providers of support, including: the global ISSAI Implementation Initiative (3i program); roll-out of the INTOSAI Capacity Building Guides; development of strategic plans for CAROSAI and CREFIAF; two strategic planning programs for 14 SAIs in CREFIAF; and a management development program for SAIs in AFROSAI-E.
SAI Capacity Development Database . The Database was launched in 2012 and contains information on support provided by SAIs, donors and private sector service providers. It comprises more than 240 capacity development projects, and is now actively used by providers of support to coordinate and plan their capacity development efforts.
Global Call for Proposals. In 2011 a Global Call for Proposals was launched to identify and support demand-led SAI capacity development initiatives. Providers of support expressed indicative interest in supporting 44 of the 55 proposals, and a number of these have already been turned into action. These include developing performance auditing in CREFIAF; strengthening the organizational capacity of ARABOSAI and enhancing the training capacity of its members; and SAI level initiatives in countries such as Argentina, Bhutan, Macedonia, and Uganda. Recognizing the need to strengthen the capacity of SAIs to write applications that reflect identified capacity development needs and utilize robust results frameworks, a workshop was conducted for 19 SAIs in CREFIAF.
SAI Capacity Development Fund (SAI CDF). A Multi-Donor Trust Fund has been designed to scale up support, improve allocative efficiency, and reduce transaction costs for SAIs and donors. To date only Switzerland hascommitted fundsand at least one additional donor is required to establish the SAI CDF.
Performance Measurement Framework for Supreme Audit Institutions (SAI PMF). The INTOSAI Congress 2010 mandated the development of a tool to measure the performance of SAIs. The SAI PMF is a standardized framework with objective indicators and a qualitative performance report to give a holistic, high level assessment of SAI performance against established INTOSAI good practices. It enables measurement of performance over time. The Secretariat is coordinating the Task Team established to develop the Framework. During 2011-12, the Task Team successfully completed a mapping of existing assessment tools, produced a concept note which was endorsed by the INTOSAI Working Group on the Value and Benefits of SAIs (WGVBS), published draft version 2.0, piloted it in Norway, Sierra Leone and Djibouti, and conducted a global consultation on the framework.
This first phase has successfully established the Cooperation’s governance arrangements and position in the international Public Financial Management architecture. Successful matching of high priority global and regional initiatives with interested donors helped build mutual trust and momentum for further cooperation. New coordinated global initiatives, such as the Database and the GCP, are helping to strengthen the way support is provided to SAIs, following principles of SAI ownership, alignment and harmonisation. The SAI Performance Measurement Framework (PMF) will better enable a results focus in SAI capacity development support, and sets the ground for future research and evidence based policy making. This will be supported by the IDI global survey: a survey into SAI performance and capacity to be carried out every three years by IDI. More SAIs are expanding peer to peer support and examining ways of making such support more effective, and donors are increasingly recognising the role of Supreme Audit Institutions in building effective states.
With the Cooperation firmly established, a program document for 2013-15 was agreed by the SC in October 2012, funded by the donors of Austria, Ireland, Norway, Switzerland and the UK. The SAIs of Norway and Brazil are providing in-kind staff support, while others such as the World Bank and USAID are financing specific activities. We look forward to continuing support and cooperation between the INTOSAI and Donor communities, to work together to strengthen SAIs in developing countries.
1.INTRODUCTION
1.1Report Purpose
Austria, Ireland and Norway have provided financing for the establishment and operation of the INTOSAI-Donor Secretariat (Secretariat) to support the INTOSAI-Donor Cooperation (Cooperation) in its first phase, June 2010 to December 2012. This report serves two purposes. Firstly, to report on progress of the Cooperation during 2012. Secondly, to act as a final report covering the 31 monthsof phase 1 of support to the Cooperation.
While phase 1 has been completed, work to strengthen Supreme Audit Institutions (SAIs) in developing countries continues. A program document for phase 2 of the Cooperation, 2013-2015, has been approved by the Steering Committee (SC) and financing has been obtained. Austria, Ireland and Norway have all provided core funding for phase 2, and the SAIs of Norway and Brazil are providing in-kind staff support. The World Bank is also providing support to specific themes within the program document.
1.2INTOSAI-Donor Cooperation Background
Recognizing the importance of well functioning, multidisciplinary and independent SAIs, and that progress with donor support to SAIs so far has been varied, in October 2009 the International Organization of Supreme Audit Institutions(INTOSAI) and 15 Donors signed a landmark Memorandum of Understanding (MOU) to augment and strengthen support to SAIs in developing countries. During 2011 and 2012, a further five donor organizations signed the MoU.The MoU establishes the governance structure of the Cooperation, consisting of the SC as the decision making body, assisted by the Secretariat that provides administrative support. The inaugural SC Meeting decided to locate the Secretariat as an integral part of the INTOSAI Development Initiative (IDI) in Oslo, Norway. The Secretariat was established in April 2010 with financial support from Austria, Ireland and Norway. In 2012, the Secretariat establishment was between 3,5-4,5[2] positions. These positions were financed through the budget for the Secretariat, except for one position financed by the Office of the Auditor General of Norway (OAGN) through a rotational secondment arrangement where one member of staff will be on annual secondment to the Secretariat.
1.3Results Framework for Reporting
As the tasks of the Secretariat evolve, and as the roles and responsibilities of the Secretariat depend on the work programs set by the SC, the Annual Donor Meeting in 2011[3]agreed that annual progress reporting should reflect the annual work programfor the Cooperationadopted at the relevantSC meeting. The 2011 annual progress report was against the 2011 work program, and likewise this 2012 annual progress report includes reporting against the 2012 work program, agreed by the SC at its fourth meeting in India in February 2012.The work programs for 2011 and 2012 thereforeupdatethe interim Terms of Reference(ToRs) for the Secretariat[4] which was used as a basis for the 2010 reporting. In addition as a final report on the program 2010-12, this report includes a review against the overall objective, purpose and indicators in the original program document and financing agreement.
The 2012 work program was as follows:
No. / Task / Priority for 2012 / Responsibility / Deadline1 / a) Update and b) administer the SAI Capacity Development Database / HIGH / a) All SC members
b) Secretariat / a) 31 March
b) Continuous
2 / Matching of initiatives submitted under the Global Call for Proposals and donors, hereunder: a) Donors and SAI providers to express concrete interest in proposals by 24 May, b) Summary to be circulated by the Secretariat by 31 May / HIGH / Secretariat / October 2012
3 / Establish SAI Capacity Development Fund / HIGH / Pooled Fund Task Force / October 2012
4 / SAI Performance Measurement Framework – 1st draft and commence pilots / HIGH / SAI PMF Task Team (Coordinator – Secretariat) / December 2012
5 / Develop program document and funding proposal for 2013-15, for Austria, Ireland and Norway / HIGH / Secretariat / October 2012
6 / Facilitate SC leadership and SC meetings / HIGH / Secretariat / Continuous
7 / Support CBC work on strengthening SAI supply side / MEDIUM / Secretariat / Autumn
8 / Awareness raising and communication activities targeting INTOSAI and Donors / MEDIUM / Secretariat / Continuous
9 / Building capacity of SAIs to develop funding proposals / MEDIUM / Regions with support from Secretariat / Initiated in 2012
10 / Acting as a knowledge centre and repository to enhance coordination of support to SAIs / MEDIUM / Secretariat / Continuous
11 / Review of funding levels of SAIs (possibly linked to future INTOSAI stock taking) / LOW / To be discussed with appropriate INTOSAI bodies / TBC
12 / Explore the question of SAI involvement in the audit ofrevenue from extractive industries and INTOSAI engagement with the Extractive Industries Transparency Initiative (EITI) / LOW / Secretariat to coordinate with INTOSAI bodies, OAG Norway, EITI, DFID, NORAD, IMF etc. / TBC
Adopted at the 4th INTOSAI-Donor Steering Committee Meeting, Jaipur, 25th February 2012
The Secretariat carries out the work program activities, with support of the Steering Committee.
Since 2011, the Secretariat has been driving forward initiatives to incorporate results based approaches throughout the INTOSAI community. It has developed a results framework for the INTOSAI-Donor Cooperation as a whole, depicted below, and a monitoring mechanism using a LOGFRAME approachincorporating indicators, baselines and targets for high-level outcomes, initial outcomes and outputs.These were approved and adopted by the SC at its fifth meeting in London in October 2012, as part of the INTOSAI-Donor Cooperation phase 2 (2013-15) program document[5].
The Secretariat is also coordinating an INTOSAI initiative to develop a performance measurement framework (PMF) for SAIs (a PEFA-style drill-down tool) which will enable better measuring and monitoring of SAI performance at country, regional and global levels in future. The baselines, results framework, monitoring mechanism, and SAI PMF will also enable better evaluation of SAI capacity development, and the contribution of donor support to SAI capacity development, in future[6].
The reporting for 2012 reflects the contributions of the INTOSAI-Donor Secretariat in reaching the outcomes and outputsfor the INTOSAI-Donor Cooperation outlined in the results framework below. While this results framework in no ways contradicts the objectives, purposes and expected results outlined in the agreed project summary, included as annex 1 to the financing agreement, it is deemed to be more relevant as a reporting tool as it provides a more holistic framework for measuring and monitoring progress in scaling up and strengthening support to developing country SAIs. Nevertheless, the overall objective, purpose and indicators from the financing agreement have been incorporated into this final report.
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INTOSAI-DonorSecretariat: Narrative Progress Report 2012
Note: ‘Work Program Theme’ relates to the seven themes agreed in the 2013-15 program document.