Why Supreme Audit Institutions are Guardians of Resource Governance
They go by different names and share the same higher principles. Most people do not know they exist, but they are built into almost every national government, working tirelessly to ensure public resources are collected and spent as they were meant to be. They are supreme audit institutions (SAIs), and they are guardians of public financial management and natural resource governance.
Last week, I had the honor of participating in the Third Annual Meeting of the INTOSAI Working Group on the Audit of Extractive Industries in Mombasa, Kenya. The meeting was attended by SAI officials from all over the world, committed to strengthening their role in natural resource governance. Our discussions covered many of the most pressing issues of the moment (e.g., commodity price volatility, economic diversification, artisanal mining and public-private partnerships) and examined the implications for SAIs’ work.
The session I led focused on the factors that help or hinder SAI effectiveness in resource revenue oversight. This included things like legal authority, independence, capacity, leadership, and external relationships and support. In our group discussion, one auditor general stressed how common it is for constitutionally mandated access rights to be ignored by auditees, particularly around sensitive information. Another official lamented excessive bureaucracy that delayed audit reports to the point of uselessness. Others flagged parliamentary indifference as a major challenge, and the danger of having one auditee responsible for releasing operating funds and a second auditee responsible for approving new hires.
The most powerful takeaway of the discussion was the importance of the political will of leadership. A SAI can have all the advantages of in-depth technical expertise, sufficient resources, a comprehensive legal mandate, and a strong auditor general ready to speak out on restricted access and damning findings. But if the head of government does not acknowledge and support the critical role of the SAI, impact will likely be limited.
This makes it critical that resource governance practitioners understand the basics of SAIs and pay attention to their work. The following is a starter guide on SAIs and resource governance:
Dana Wilkins is a capacity development officer with the Natural Resource Governance Institute (NRGI).
Last week, I had the honor of participating in the Third Annual Meeting of the INTOSAI Working Group on the Audit of Extractive Industries in Mombasa, Kenya. The meeting was attended by SAI officials from all over the world, committed to strengthening their role in natural resource governance. Our discussions covered many of the most pressing issues of the moment (e.g., commodity price volatility, economic diversification, artisanal mining and public-private partnerships) and examined the implications for SAIs’ work.
The session I led focused on the factors that help or hinder SAI effectiveness in resource revenue oversight. This included things like legal authority, independence, capacity, leadership, and external relationships and support. In our group discussion, one auditor general stressed how common it is for constitutionally mandated access rights to be ignored by auditees, particularly around sensitive information. Another official lamented excessive bureaucracy that delayed audit reports to the point of uselessness. Others flagged parliamentary indifference as a major challenge, and the danger of having one auditee responsible for releasing operating funds and a second auditee responsible for approving new hires.
The most powerful takeaway of the discussion was the importance of the political will of leadership. A SAI can have all the advantages of in-depth technical expertise, sufficient resources, a comprehensive legal mandate, and a strong auditor general ready to speak out on restricted access and damning findings. But if the head of government does not acknowledge and support the critical role of the SAI, impact will likely be limited.
This makes it critical that resource governance practitioners understand the basics of SAIs and pay attention to their work. The following is a starter guide on SAIs and resource governance:
- SAIs produce highly-detailed audit reports on government accounts and operations, but typically rely on parliament and law enforcement to follow up on their findings. In some countries, reports exposing serious mismanagement and inefficiencies are produced year after year with little action taken.
- SAIs conduct financial (accuracy of accounts), compliance (adherence to legislation and budgets), and performance (efficiency and effectiveness of government programs) audits. Financial and compliance audits are the traditional focus of SAIs, but performance audits have become a popular way to scrutinize resource governance policies.
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SAIs - SAIs are sometimes systematically weakened and restricted by officials with interests in keeping resource management opaque. Such tactics include limiting access to documentation, cutting financial and human resources, and censoring reports.
- Certain conditions—strong leadership, a good relationship with parliament, strategic public communications, and support from development partners and other SAIs—can help SAIs overcome these restrictions.
Dana Wilkins is a capacity development officer with the Natural Resource Governance Institute (NRGI).
