MODULE 3

The Role of Supreme Audit Institutions and other Oversight Bodies

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What Is It?

A Supreme Audit Institution (SAI) is an independent national oversight entity whose audit function or role is established by a country’s constitution or supreme law-making body.

They are largely responsible for holding a government to account.

While structures, mandates and reporting relationships of SAIs vary, they are central to strengthening and developing strong institutions. Overall functionality of SAIs, including as related to the SDGs, include:

  • Assessing the readiness of a national government to implement the SDGs and ability to report on the SDGs, including the reliability of its data production;
  • Independent performance audits of a government’s SDG implementation efforts;
  • Providing checks on a government’s budget allocation and expenditures;
  • Monitoring the performance of government bodies and ministries in using public funds efficiently and effectively.
  • Ensuring compliance of a government’s programmes with existing laws and regulations; and
  • Working with parliaments, other oversight bodies, civil society and others to hold the government to account.
SAIs join other stakeholders involved in 2030 Agenda follow-up and review, such as parliaments and CSOs, national human rights institutions, and anti corruption commissions in a country’s overall accountability system.

  • Many SAIs support parliaments in budget oversight and spending generally.
  • Some, including with judicial authority, ensure that government programmes are in compliance with laws and regulations.
  • Others undertake performance assessments to determine the effectiveness of government activities.
  • SAIs are often particularly engaged in the fight against public sector corruption.

In addition to SAIs, other important oversight bodies include ombudsman institutions, anti-corruption bodies and financial oversight institutions, such as financial intelligence units.

Why Is It Important

Progress is slow in mainstreaming and monitoring SDG 16 targets focused on institutions, corruption and transparency (16.4, 16.5, 16.6, 16.7 and 16.10). More information on the immense cost of corruption can be found here.

SAIs are established to increase accountability and promote transparency, functions fundamental not just to SDG 16 but for all SDGs.

In the context of COVID-19, this may include oversight in terms of how ‘prepare, respond and recover’ strategies are implemented, including identifying:

  • Fraud in medical supply procurement,
  • Discriminiation in healthcare service delivery, and
  • Limited access to public health data and resources based on states of emergency.

Given the level of technical knowledge required for SDG oversight, capacity development in this regard is key to strengthening their role in advancing SDG 16 through VNR and post-VNR processes and to fully realizing their policymaking potential. The International Organization of SAIs’ (INTOSAI) Development Initiative offers additional useful support in this regard.

Bottom Line: SAIs have the potential to go beyond their traditional oversight role and contribute to better informed policymaking to achieve the SDGs as linked to NDPs and other relevant frameworks.

How Is It Approached?

In engaging with the VNR process, SAIs have:

  • Provided inputs to VNRs;
  • Participated in consultations;
  • Validated draft VNR reports; and
  • Taken part in national HLPF delegations.

However, most VNRs focus on SAIs as auditing institutions, noting their role in both assessing SDG preparation, and SDG implementation and monitoring efforts. Similarly, a number of countries highlighted the role and influence of SAIs in bolstering accountability of domestic SDG-related activities.

SDG Preparedness

As the lead institution charged with conducting performance audits of government preparedness for SDG implementation, SAIs’ role in VNR and post-VNR processes is increasingly acknowledged.

The SAI audits tend to focus on three main questions:

  • To what extent has the government adapted Agenda 2030 to its national context?;
  • Has the government identified and secured resources for implementation?; and
  • Has the government established a mechanism to monitor, follow up and review implementation?

Case Study: SDG Accountability and SDG Readiness, SAI, Chile

SDG Implementation and Monitoring

A growing number of SAIs are also now conducting audits of government performance in SDG implementation, including as related to national targets linked to SDG targets.

  • As of December 2020, INTOSAI had reported that approximately 73 initiatives had been undertaken globally to independently assess SDG implementation, including through follow-up and review systems (VNRs).

Overall, about 30% of 2020 VNR countries (47) noted SAI engagement in VNR preparation or SDG implementation, a marked increase from 2019.

Case Study: SDG Accountability and SDG Readiness, SAI, Chile

In 2019, Chile’s Comptroller General participated in the country’s second VNR, collaborating with the Chilean government across four parameters. The below details these parameters and the work that CGR did in these regards. 1

Assessing the government’s readiness to implement, monitor and report on the SDGs: Between 2016 and 2019, the CGR carried out five audits to evaluate the government’s preparedness. These audits focused on: institutionalization, strategy, coordination (intergovernmental and across stakeholders), monitoring, reporting and transparency, as well as on SDGs prioritized by the government (SDG 16, 7, 5 and 2.4) Recommendations included improved interministerial coordination for national planning, with clearly defined responsibilities, organizational structure and information to feed into the VNR. They also focused on reducing implementation risks related to SDG 2.4, given possible challenges around alignment, coordination and monitoring mechanisms for related public policies.

Auditing Government Programmes that Contribute to the SDGs: This included issuing guidelines and specific tools for auditee reports to consider how government programmes are aligned with, or contribute to, SDG implementation and compliance, framing assessments around SDG 16, and identifying the SDG(s) linked to that audit. To support this process, a virtual desktop was created for audited entities to access observations made and efforts to correct them. A compliance support system was also created for CGR to work with internal auditees.

Exemplifying Transparency and Accountability: The CGR voluntarily raised its compliance standards to meet current, institutional transparency laws. It also created a transparency portal (which goes beyond legal requirements) where citizens can access CGR’s budget and how it was spent, including travel costs of officials and information about staffing (position, grade, salary, paid overtime).

Evaluating and Supporting SDG 16 Implementation: Led by CGR and UNDP Chile, the UNCAC Chile Anticorruption Alliance plays an important role in advancing SDG 16. The Alliance, bringing together 28 institutions from the public, private and civil society sectors, works to implement UNCAC principles through four areas: promotion of integrity (in the public sector, for SMEs that supply the state, and for state companies), training, legislative initiatives, and good practices in compliance with UNCAC.

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The Cost of Corruption

Acting as a governance bottleneck to development, resources lost to corruption could otherwise be used to ensure equal access to basic services like education, health, clean water and sanitation, without having to pay bribes.

Additional consequences include the erosion of rule of law and trust in public institutions, and the undermining of governments’ ability to serve public interests.

Challenges, A Snapshot

Progress is slow in mainstreaming and monitoring SDG 16 targets focused on institutions, corruption and transparency (16.4, 16.5, 16.6, 16.7 and 16.10). This is largely due to four factors:

  • Weak institutional capacity and political will at the national level to implement anti-corruption targets of SDG 16;
  • Knowledge gaps in terms of how to mainstream and integrate SDG 16 and anti-corruption targets in national, sectoral and local development plans and processes;
  • Lack of methodologies and/or existing data; and
  • Lack of effective national coordination and monitoring mechanisms that involve relevant stakeholders (e.g., engagement of audit institutions, anti-corruption agencies, civil society, parliamentarians and others in the SDG-related coordination and monitoring processes).

Further, as the SDGs are often the priority of finance and planning and development ministries, there tends to be little interaction with anti-corruption entities, often exacerbating the persistence of such challenges.

  • Within the anti-corruption community, this includes global anti-corruption actors, the Ministry of Justice and attorneys-general, anti-corruption agencies (i.e., audit institutions) and civil society working on anti-corruption.
  • Within the development community, this includes budget and planning ministries, line ministries and civil society.

Going Forward, Strengthening Links between Anti-Corruption and Development

Coordination between anti-corruption and development communities should be improved, with national anti-corruption strategies being incorporated in national development plans and strategies and more resources dedicated to corruption prevention.

In 2017, Transparency International (TI) developed a common methodology to enable civil society organizations to track their countries’ progress towards four SDG 16 targets especially relevant for anti-corruption: 16.4 on illicit financial flows, 16.5 on corruption and bribery, 16.6 on accountable and transparent institutions and 16.10 on access to information and fundamental freedoms. Since then, over 45 of TI’s national chapters have used the tool to produce spotlight reports that provide independent appraisals of their governments’ anti-corruption efforts, which are essential to improve implementation of the 2030 Agenda across all SDGs.

Recognizing the lack of available data for the IAEG-SDG indicators, TI’s methodology intentionally deviates from the official indicator set, drawing on a wider range of alternative data sources to scrutinize the often-uncritical assessments of national progress presented in VNRs. Going beyond the narrow understanding of corruption captured by the official global indicators, TI’s spotlight reports provide a more holistic assessment of the underlying conditions and drivers of corruption at national level.

The overall aim has been to produce evidence to supplement the official government reports submitted as part of the VNR process. Looking at the quality of national legislative and institutional anti-corruption frameworks and their actual implementation, the tool is designed to enable chapters and other national stakeholders to develop actionable recommendations across a range of relevant policy areas, from anti-money laundering to whistleblowing. In this way, the approach seeks to embed cyclical VNR reporting into a longer process of iterative reform, generating data that can feed into governmental SDG reporting processes in each country.

An independent impact assessment of the tool conducted in 2019 revealed that, among other outcomes, TI’s spotlight reports influenced anti-corruption action taken by governments in Greece and Sri Lanka; informed anti-corruption action taken by international organizations in Togo; enabled TI to establish new partnerships with government agencies in Uganda; and led to a better understanding of national anti-corruption frameworks in Hungary. At national level, there has also been some on-the-ground coordination between TI chapters and other CSOs around VNRs and spotlight reporting.

For these spotlight reports to realize their true potential, however, VNR processes need to give due regard to civil society’s attempt to incorporate a wider range of indicators and data sources than those agreed upon by the IAEG-SDGs. Civil society’s efforts to provide a baseline assessment that can be used as a benchmark to monitor progress towards the 2030 targets should be welcomed by all governments genuinely committed to enhancing peace, justice and strong institutions.

Take-Aways and Going Forward: In many countries, the tool provided a valuable opportunity for civil society organizations to demonstrate their value as providers of actionable data that can help remedy vulnerabilities in a country’s anti-corruption framework. Framing the assessment as a contribution to national-level SDG implementation enabled them to engage the government through internationally recognized channels, particularly if findings were used to complement VNR reports.

While the bulk of the indicators can be answered through desk research, interviews proved useful in verifying findings and gleaning additional insights from public officials, elected representatives, civil society and private sector firms. Moreover, establishing a working rapport with interviewees in government provided TI chapters with ‘entry points’ to key institutions when it came to the dissemination of findings and advocating for the adoption of policy recommendations. However, given that the primary purpose of Spotlight Reports is to scrutinize government performance, there remains a need for distance and researchers have to be somewhat sceptical of their interlocutors’ assertions. Freedom-of-information requests have proven important in filling gaps where insufficient data is publicly available, not least as they can provide information about implementation and enforcement of anti-corruption measures, with unsatisfactory responses often constituting a finding in their own right.

* An example of a Country Score Card is included in the Appendix.

* This case study was provided by Transparency International in 2019.

UN Convention Against Corruption

Despite challenges, progress has been made on global anti-corruption efforts. This has been largely due to the nearly universal ratification of the UN Convention Against Corruption (UNCAC) and the growing importance of governance and anticorruption in enhancing sustainable development.

To effectively do so, focus needs to be placed on:

  • Improving the capacity, efficiency and effectiveness of public institutions;
  • Strengthening coordination and monitoring mechanisms; and
  • Removing governance and corruption bottlenecks that impede progress in achieving development goals.

More on UNCAC

The implementation of the UNCAC as the only global, legally-binding anti-corruption instrument has provided an opportunity for countries to strengthen their institutional capacity to combat corruption and implement anti-corruption reforms, including, at times, as linked to VNRs and NDPs.

It covers five main areas: prevention; criminalization and law enforcement measures; international cooperation; asset recovery; and technical assistance and information exchange.

Case Study: SDG Accountability and SDG Readiness, SAI, Chile

In 2019, Chile’s Comptroller General participated in the country’s second VNR, collaborating with the Chilean government across four parameters. The below details these parameters and the work that CGR did in these regards. 1

Assessing the government’s readiness to implement, monitor and report on the SDGs: Between 2016 and 2019, the CGR carried out five audits to evaluate the government’s preparedness. These audits focused on: institutionalization, strategy, coordination (intergovernmental and across stakeholders), monitoring, reporting and transparency, as well as on SDGs prioritized by the government (SDG 16, 7, 5 and 2.4) Recommendations included improved interministerial coordination for national planning, with clearly defined responsibilities, organizational structure and information to feed into the VNR. They also focused on reducing implementation risks related to SDG 2.4, given possible challenges around alignment, coordination and monitoring mechanisms for related public policies.

Auditing Government Programmes that Contribute to the SDGs: This included issuing guidelines and specific tools for auditee reports to consider how government programmes are aligned with, or contribute to, SDG implementation and compliance, framing assessments around SDG 16, and identifying the SDG(s) linked to that audit. To support this process, a virtual desktop was created for audited entities to access observations made and efforts to correct them. A compliance support system was also created for CGR to work with internal auditees.

Exemplifying Transparency and Accountability: The CGR voluntarily raised its compliance standards to meet current, institutional transparency laws. It also created a transparency portal (which goes beyond legal requirements) where citizens can access CGR’s budget and how it was spent, including travel costs of officials and information about staffing (position, grade, salary, paid overtime).

Evaluating and Supporting SDG 16 Implementation: Led by CGR and UNDP Chile, the UNCAC Chile Anticorruption Alliance plays an important role in advancing SDG 16. The Alliance, bringing together 28 institutions from the public, private and civil society sectors, works to implement UNCAC principles through four areas: promotion of integrity (in the public sector, for SMEs that supply the state, and for state companies), training, legislative initiatives, and good practices in compliance with UNCAC.