Good Practices for Local Audit in INTOSAI Community

Despite the absence of a separate working body Regional Audit Institutions are involved in the professional dialogue on public audit within OLACEFS. The Organization Associate members include audit bodies of 15 states, one federal district and two municipalities of Brazil, two provinces of Argentina and the city of Bogotá in Colombia, as well as the Association of Members of the Regional Audit Institutions of Brazil (Asociación de Miembros de los Tribunales de Cuentas de Brasil) and the Institute Rui Barbosa (Instituto Rui Barbosa). The Association of Members of the Regional Audit Institutions of Brazil was created in 1992. The main objective is to facilitate the exchange of experience and knowledge between audit institutions, to design development strategies of finance control and management systems at the state, regional and municipal levels. Recommendations, regulations and resolutions are posted on the Association's website. Institute Rui Barbosa is a civil association created in 1973 to assist regional courts of accounts in improving its efficiency and sharing experience in implementing control activities.

In 2023 AFROSAI-E consolidated local auditing practices and developed the Local Government Audit Considerations Guideline. The document covers general considerations for conducting service delivery audits at the local level. It also focuses on the following specific areas: water management service delivery, waste management service delivery, disaster management, infrastructure, financial health. This guideline is not a separate audit methodology, it supplements existing professional pronouncements on Financial, Compliance and Performance Audits.

The EUROSAI Working Group on Municipality Audit (EUROSAI WGMA) set the benchmark in terms of reframing discussions on local (municipal) audit and refinement of methodological approaches. The EUROSAI TFMA activities correspond to EUROSAI strategic goals and promote mutual professional enrichment to have a substantial impact on improving public financial management. Various initiatives are being implemented to foster dialogue with expert community, to highlight risks and current audit problems in municipalities, to highlight and exchange best insights (making studies, compendiums and newsletters on municipal audit issues, organizing workshops and trainings, conducting cooperative audits etc.).

Meanwhile, IDI Global Stoking Report 2023 demonstrates that SAIs face a variety of independence, transparency and performance risks. Considering the close ties between SAIs and Regional Audit Institutions, these challenges not only weaken SAIs institutional capacities but could also have detrimental effects on local audit work. IDI Global Stoking Report could be used as a list of red flags to deal with. Therefore, when determining the risks and directions for the SAI development, IDI Global Stoking Report also maps the way forward to strengthen local audit bodies and to forge reliable national accountability ecosystem.

The Comptroller and Auditor General, head of SAI India inaugurated the International Centre for Audit of Local Governance (iCAL) on 18 July 2024 in the City of Rajkot, Gujarat State. It has been set-up with the vision of creating a collaborative platform uniting policymakers, administrators and auditors which would foster an environment for sharing experiences, expertise and best practices in local governance with focus on its role in achieving Sustainable Development Goals (SDGs), fostering grassroots engagement and nurturing citizen ownership and accountability. The activities envisaged for the Centre include acting as a Knowledge Centre for Local Governance issues; undertaking bilateral and multilateral collaboration projects with different stakeholders for research, technology and data exchange; and conducting training for Local Government Auditors from SAIs and subordinate audit formations. This initiative was preceded by an International Conference on Local Government Audit organised by SAI India, held in Delhi from February 28th to March 1st, 2024, which saw participation from the SAIs of 11 countries, viz.  Georgia, India, Malaysia, Maldives, Malta, Morocco, Nepal, Oman, Poland, South Africa and Uganda. The conference served as a platform for the SAIs to share their experiences, challenges, and best practices in local government auditing, thus fostering a spirit of collaboration and mutual learning. The proceedings included an overview of Local Audit mandates across SAIs; presentations by the 11 participating SAIs on Local Government Audit in their countries, covering mandate, audit execution, reporting and case studies; and a panel discussion focusing on the issues of engaging Stakeholders in the Audit Process, Performance Audit in Local Governments and Capacity Building.

Relevant methodological practices are also discussed by INTOSAI Working Groups. Considering the importance of SDG localization, INTOSAI Working Group on SDGs and Key Sustainable Development Indicators (WGSDG KSDI) headed by SAI Russia. pays great attention to regional perspective of sustainable development and to enhancing cooperation with local audit institutions. 

• In 2021 WGSDG KSDI Secretariat prepared translation of the SDG Audit Model (ISAM) developed by the INTOSAI Development Initiative (IDI). To popularize the document in the CIS region, a training seminar for relevant SAIs was held jointly with IDI on 22 December 2021.
• In 2022 to improve the professional audit competencies in the field of SDG auditing WGSDG KSDI created three online courses (available at the platform of the Digital University for the INTOSAI community,
  U-INTOSAI):
  • SDGs Audit. CIS Countries’ Experience (based on the 2021 online seminar), available in Russian and English
  • Audit of Sustainable Development, accompanied by practical examples of the activities of the Accounts Chamber of the Russian Federation, available in Russian
  • SDG Auditing at the Regional Level, provides SAIs with practical tools and international frameworks for regional SDG audit planning and execution, available in English
• In 2023, WGSDG KSDI completed its work on Practical Guidance on Sustainable Development Goals Audit at the Regional Level. The document is intended to provide practical assistance to auditors when assessing SDGs achievement at the regional level and is aimed at identifying systemic risks in the field of sustainable development.

In addition, special attention should be paid to European Organization of Regional Audit Institutions (EURORAI). The organization includes 99 members (regional audit bodies) and 8 observers.

The objectives of EURORAI are to exchange experiences and best practices between regional audit bodies, as well as to conduct research, prepare and publish educational courses on external public audit at the regional level.

EURORAI Governing Bodies:

• General Assembly – supreme governing body that establishes the policy that will enable EURORAI to reach its objectives and approves changes to the statutory documents of the organization. The Assembly is held once a year.
• Management Committee ensure the correct functioning of EURORAI within the guidelines laid down by the General Assembly. Consists of 7 members (three by right, four members are elected by the EURORAI Assembly for 3 years).
• General Secretariat is responsible for the financial and administrative issues of the organization.

According to the EURORAI Charter, Technical Committees and Working Groups may be formed within the organization. The purpose is to prepare methodological recommendations and other documents on the activities
of regional audit bodies. At various times, the following working groups operated within the organization:

• Working group on auditing fraud and corruption
• Working group on the guidelines for independent regional public sector institutions
• Working group on the improvement of external communications
  of EURORAI member institutions.

One of the main methodological documents (guidelines) developed within the EURORAI for regional audit bodies is the Guidelines for Independent Regional Public Sector Audit Institutions. The document reflects the role and importance of regional audit bodies for ensuring the effectiveness and accountability of public administration, and presents 15 key principles grouped into three main categories: Purpose and types of regional public sector audit, Independence and General principles.

In addition to the Guidelines, the Report with Recommended Practice on Audit Quality was prepared on the basis of the research seminar conducted by EURORAI. Based on the INTOSAI ISSAI 140, the document introduces the concept of “quality control” and aims to integrating the ISSAI 140 standard into the activities of regional audit bodies. EURORAI survey showed that most regional audit bodies are improving the audit and control activities primarily based on their own experience and practice. At the same time, a number of regional audit bodies are seeking assistance and consulting services in improving their methodology from private audit firms.