INCOSAI XXII

PASAI Regional Paper

Theme II: Professionalization

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Contents

Summary ................................................................................................................................................. 3

Pacific Association of Supreme Audit Institutions .................................................................................... 5

Local: professionalization of SAIs and staff ............................................................................................. 7

Regional: the role of INTOSAI’s regional working groups in professionalization .................................... 11

Global: PASAI under the umbrella of INTOSAI ...................................................................................... 15

Conclusion ............................................................................................................................................. 17

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Summary

Professionalization within the public auditing community is not easily defined. It can include

independence, standard setting, capability building, certification, and professional

development. It can also take place at multiple levels: globally, regionally, at the SAI-level,

and at the level of the individual.

In the PASAI region, we have participated in professionalization efforts at all four levels. We

have come to see that professionalization is not static but occurs on a continuum. We are

also very aware that professionalization must be context- specific.

PASAI‘s members include some of the smallest and most remote nations on earth. Public

auditing in the Pacific region has advanced substantially; however, sustaining these

improvements is difficult in smaller countries because auditing in tight-knit social and cultural

environments involves significant pressures. Within this environment, it is vital that SAIs

develop and adhere to the highest standards of professionalism.

At the individual level, staff of Pacific SAIs have worked to achieve formal qualifications and

membership of professional auditing institutions. These efforts required determination and

commitment to improve the use of public sector resources and, in turn, the lives of their

fellow citizens.

Institutional development of the organization is as much a part of the maturing process of a

SAI as is the need to develop the capacity and capability of those doing the auditing work.

Both elements go hand-in-hand. At the SAI-level, there has been a substantial increase in

professionalization in the PASAI region since the establishment of the PASAI Secretariat in

2009. The efforts of individual staff have been reinforced with capacity development

activities from PASAI. The level of participation from our members is a significant

achievement in itself, developed over many years. The activities undertaken have

contributed to improving SAIs‘ capability to both deliver their mandates and enhance their

level of competency and professionalism. The close-knit nature of PASAI as a regional

organization has enabled its members to draw heavily on its support.

PASAI believes the regional level is where real gains and impacts in professionalization can

be made. PASAI does not have the resources and experience to travel the path to increased

professionalization alone. We have benefited substantially from the support of major

development partners in the Pacific, in particular the Asian Development Bank and the

Australian and New Zealand aid programs. Leveraging information and resources between

regional working groups can also speed up the professionalization process by making

effective and efficient use of existing resources between INTOSAI regions. We also leverage

resources and knowledge through partnerships with INTOSAI organizations such as

INTOSAI Development Initiative (IDI) and the Capacity Building Committee, and with

regional organizations in the Pacific such as the Pacific Financial Technical Assistance

Centre and the University of the South Pacific. In PASAI‘s view, regional working groups

should position themselves as preferred providers of professionalization programs to

members.

Professionalization is an ongoing process that can be helped by compliance with

professional standards. INTOSAI‘s influence, as the umbrella organization of SAIs globally,

is enhanced through the commitment of its members to become professionalized and to

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maintain that professionalism when undertaking auditing functions. The PASAI region is

committed to moving towards applying recognised international standards and values the

support of all global partners to lead and guide developing country members along this

development path. We also urge the INTOSAI community to commit to supporting the

development of a credible and viable auditor certification program. We see this as a

significant need in the PASAI region where many SAI staff do not have academic

qualifications and most our member countries do not have professional accounting bodies.

Establishing such a program is generally beyond the capability and capacity of small island

states. Therefore, INTOSAI leadership is critical.

In the Pacific our ultimate goal is to address institutional weakness undermining

transparency, accountability, equity and efficiency in the management and use of public

resources. PASAI sees its role as one of INTOSAI‘s regional working groups as a vital link in

the chain — taking the resources and guidance of IDI and others, linking them to the

standards and programs developed in the global arena, and applying them to Pacific-specific

initiatives and programs.

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Pacific Association of Supreme Audit Institutions

The Pacific region is home to many small island nations separated by vast tracts of ocean.

The region has a total population of around 39 million people with a total gross domestic

product of around US$1,396 billion in nominal terms. Australia, Papua New Guinea and New

Zealand comprise 94% of the total population figure, and Australia and New Zealand

comprise 98% of the gross domestic product. Eighteen of the 23 countries of the Pacific

region rank in the 50 countries with the lowest populations in the world.

Culturally rich, geographically dispersed, and widely diverse with a multitude of ethnicities,

the Pacific region is grouped according to three distinct areas: Micronesia, to the north/north-

west; Melanesia to the south; and Polynesia to the east. A combination of size, remoteness,

and environmental fragility severely constrains most of these small island countries‘

international competitiveness and growth potential. The region is among the most vulnerable

to external shocks and exposed to natural disasters.

PASAI has 28 members. Our members operate under three different systems of national

governance: most Micronesian nations use the US Congressional system; the Polynesian

and Melanesian nations use adaptations of the Westminster system; and New Caledonia

and French Polynesia are territories of France. The SAIs and state or territorial audit offices

in the Congressional and Westminster systems are responsible to their legislatures, whereas

the French territories operate under the judicial model.

Map of Pacific Islands and the three island groups

For convenience, this paper will use the term ‗SAI‘ to describe all members, irrespective of

their actual status as such.1

1 The term ‗SAI‘ normally refers to a national auditing institution.

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Papua New Guinea is PASAI‘s largest developing SAI with 143 staff and Chuuk State of the

Federated States of Micronesia is the smallest with 3 staff.

PASAI‘s Secretariat office is located in Auckland, New Zealand with a staff of five, headed

by a Chief Executive with ongoing oversight by a Secretary-General, who currently is the

Auditor General of New Zealand.

PASAI is an international body operating under a Charter with its Congress as the supreme

body (comprising all member SAIs) and a Governing Board appointed by the Congress. This

structure was the culmination of several years of work recognizing the need to have a more

formalized and well-resourced regional working group in order to achieve the underlying goal

of more effective public sector auditing in the Pacific region.

PASAI is currently moving into its third phase as an organization. Although the PASAI

community had met prior to the formal commencement of PASAI, PASAI as a recognized

regional working group of INTOSAI can be traced back to 1987.2 In 2009, the start of

PASAI‘s second phase as an organization, the Secretariat was formed under a new Charter

which also established a Governing Board in addition to the Congress of all members. From

2009–2013 was a period of gearing up professionally. PASAI‘s work was undertaken under

an initiative called the Pacific Regional Audit Initiative. A review of PASAI‘s work under this

initiative in 2013 determined that, while PASAI was becoming a successful and respected

regional body, it required further development and support from development partners for it

to successfully achieve the goals of the original Pacific Regional Audit Initiative.

This third phase now sees PASAI maturing as an organization. In 2015, the Secretariat was

restructured to align with our Strategic Plan (2014–2024), which guides our work to support

our members. We also have now established an extensive Monitoring Evaluation and

Reporting (MER) framework to enable us to evaluate the effectiveness of our work so that

we can ensure we are meeting our strategic objectives.

PASAI will continue to play an important role in the capacity development and

professionalization of our member SAIs during this next phase of its existence. PASAI‘s

affiliation with INTOSAI and its related organizations has provided access to a wider pool of

knowledge, technical expertise and resource materials that we use in our regional programs.

We also leverage resources and knowledge through partnerships with INTOSAI

organizations such as IDI and the Capacity Building Committee, with other regional working

groups under the INTOSAI umbrella (in particular AFROSAI-E) and with regional

organizations in the Pacific such as the Pacific Financial Technical Assistance Centre and

the University of the South Pacific.

This paper discusses how PASAI has supported the professionalization of its member SAIs.

The concept of professionalization has been strongly embraced by Pacific SAIs, both

through their regional cooperation activities and individually.

The paper also discusses how Pacific SAIs have implemented the key principles and

initiatives in the unique context of the Pacific and how they have used the support of PASAI

as the regional working group to do that. The paper then considers the key role of regional

working groups in the professionalization process, as well considering international elements

of professionalization for INTOSAI.

2 Known until 2009 as the South Pacific Association of Supreme Audit Institutions, or SPASAI.

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Local: professionalization of SAIs and staff

The professionalization of individual SAIs is expected to include all of the key aspects of the

operation of a SAI that contribute to the SAI being seen as both suitably independent and

objective and producing quality work. …Professionalization of SAIs implies professionalization

of both SAIs as organizations and the individuals who carry out work for or on behalf of SAIs.

(INCOSAI XXII — Theme II Professionalization, Theme Information Paper 2016)

These statements are as true for small and developing SAIs as they are for larger and more

developed SAIs. Institutional development of the organization is as much a part of the

maturing process of a SAI as the need to develop the capacity and capability of doing the

auditing work. Both elements go hand-in-hand.

Despite efforts towards harmonizing standards for adoption by INTOSAI members, there are

other country-specific factors that can impact SAIs‘ ability to achieve higher levels of

professionalism. The degree of professionalism of a SAI varies depending on location, staff

professional affiliations, the level of development within the country, the availability of

structured education programs, a country‘s financial stability, competition from private sector

audit firms, and the existence of institutions that offer certification.

This issue of size relates to the small number of staff to carry out auditing activities; the low

numbers of staff with tertiary qualifications or qualified chartered accountants, particularly to

act as SAI Heads or members of staff; small and limited organizational structures; lack of

other professional structures in-country, such as a functioning accounting profession; and

the lack of effective and reliable internet services.

Limited financial independence and operational autonomy (in terms of Principle 8 of the

Mexico Declaration on SAI Independence) is a further factor inhibiting many Pacific SAIs to

perform their mandates effectively and professionally. Many SAIs in the Pacific have to

operate under outdated legislation, which tends to treat them, for purposes of financing and

operations, as an organ of the executive government.

However, the principles of ISSAI-12 and the introduction of the pilot version of SAI PMF

have been key developments for the Pacific region, together with PASAI‘s various strategic

initiatives contributing to the process of professionalization.

The Pacific experience with ISSAI-12

The principles of ISSAI-12 and the introduction of the pilot version of SAI PMF are key

developments that have, in PASAI‘s view, contributed to the development of SAIs as

professional organizations:

The publication of ISSAI-12 was a key milestone for the ISSAI framework. The

standard provides a context within which a SAI can model itself as a professional

organization in an institutional sense, as an auditing body, and in the way it interacts

with its auditees, the legislature, and other stakeholders and citizens.

The draft SAI PMF has provided a tool for SAIs to measure their performance over

time and highlight areas where improvement is required. It has been found to be a

valuable tool that can determine the level of professionalism of a SAI against the

characteristics promoted by ISSAI-12.

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Within this broad approach, a SAI can develop a pathway to full implementation of the ISSAI

framework. If successful, full ISSAI implementation will result in an organization and people

that are ‗professionalized‘, not just in the types of audit activity that the SAI undertakes

(using ISSAIs levels 3 and 4) but also in the institutional sense (applying ISSAIs levels 1 and

2). The strong link between ISSAI-12 and the SAI PMF means that there is a ready

mechanism to identify what is needed to achieve this standard following the completion of an

assessment of performance.

Pacific SAIs have embraced ISSAI-12, although giving full effect to the standard and its key

principles remains a significant challenge. For example, PASAI‘s 2015 Accountability and

Transparency report found:

All of the SAIs surveyed have a code of ethics to govern their behaviour. The quality

of the codes was found to vary, as was their implementation throughout the

organization. However, the majority of SAIs surveyed reported the existence of

internal processes to ensure staff compliance with ethical standards in their work.

In relation to communication with citizens, many Pacific SAIs now have websites,

although the report found that there is a continuing need to strengthen

communication systems to be more proactive in engaging with citizens and providing

information about their reports and activities.

While financial independence and operational autonomy continue to be a significant

area of concern, the great majority of SAIs have taken steps to make themselves

accountable for the use of their resources (for example through annual reports).

There is a growing trend to use contracted auditors to perform audit functions. In the

northern Pacific jurisdictions (in particular, those which form part of or are affiliated to

the US), all financial auditing activity is contracted out to private accounting firms. In

southern Pacific jurisdictions‘ contracting out is also a growing practice. While, in one

sense, contracting out audits lessens the ability of a small SAI to develop its own

professionalized workforce, there are benefits through the SAI‘s association and

working relationship with the private firm and its professionally qualified personnel.

The Pacific experience with the pilot version of SAI PMF

The launch of IDI‘s pilot version of the SAI PMF in 2013 provided a significant platform for

Pacific SAIs to develop their awareness of ISSAI-12 and its key principles, and to factor

them into ongoing capacity development.

A Pacific-based training program on the SAI PMF was facilitated for 18 SAIs in 2014. With

the benefit of the resulting awareness of the framework, a number of SAIs began

undertaking self-assessment activity. Some of these used the information gained to involve

staff in a series of strategic planning workshops and (in some cases for the first time)

develop an organizational strategic plan. Although typically relatively high level, this type of

self-assessment activity provides a starting point for discussions about the ISSAI-12

principles and how they can help identify strategic objectives and outcomes to guide the

SAI‘s activities.

In providing feedback to the IDI on the pilot version of the SAI PMF, the key message from

PASAI was that the SAI PMF is a way for SAIs to measure their progress in both institutional

and auditing terms. However, the small size of many of PASAI‘s members was seen as an

impediment to using the full framework. PASAI advocated for a scaled-down version of the

framework as a useful next step.

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As a result, PASAI has been working with IDI, with funding support from the Australian Aid

Program, to develop a ‗lite‘ version of the SAI PMF that can be used by smaller or less

developed SAIs. The SAI PMF lite version was completed in early 2016, and is now being

piloted across the region. It provides an opportunity to assess the viability of the scaled-

down version for applicability to small SAIs more broadly across the INTOSAI community.

This pilot project will also provide critical information to assist PASAI target its resources

once the strengths and weakness of the SAIs are identified, including for the ongoing

development of professionalization.

Initial piloting of the ‗lite‘ version by a number of southern Pacific SAIs (with the support of

IDI and PASAI) has been very encouraging and bodes well for the ongoing development of

professionalism in the Pacific region‘s SAIs.

Professionalization of Pacific SAIs

All PASAI‘s members actively participate in our regional activities. The level of participation

is a significant achievement in itself, developed over many years through PASAI‘s activities

and cooperation between its members. The close-knit nature of PASAI as a regional

organization has enabled its members to draw heavily on its support for their

professionalization initiatives.

PASAI‘s various strategic initiatives have been strong contributors to this process of

professionalization. These initiatives have included:

supporting SAIs to develop their strategic plans with internationally referenced

performance measures (eg. American Samoa, Cook Islands and Palau)

providing shared manuals and guidelines for use in SAIs‘ auditing work, and

facilitating the uptake and use of computerized auditing tools

supporting programs of cooperative performance audits (on a region-wide basis)

and cooperative financial audits (involving targeted SAIs on a sub-regional basis)

improving communication and relationships between member SAIs and the Public

Accounts Committees of their legislatures

encouraging twinning arrangements between PASAI member SAIs and members of

the Australasian Council of Auditors-General

researching and reporting regularly on accountability and transparency reports that

assess and promote ethical behaviour in the public or civil service

Professionalization of the staff of Pacific SAIs

The professional development of staff of Pacific SAIs has been a gradual process and

progress has varied. The process is usually driven by the standards set by the SAI itself but

is also highly dependent on the motivation of individual staff.

PASAI has assessed the degree of professionalism of staff within Pacific SAIs with reference

to the following conditions:

entry criteria for new recruits

availability of in-house training and professional development programs for staff

membership of local or international professional accountancy organizations

compliance with professional standards, an established code of ethics and human

resource practices

office support and arrangements to help staff achieve professional certification

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the level of financial and organizational independence of the SAI

Table 1 shows the numbers of staff across PASAI‘s member SAIs with formal qualifications

from academic institutions and staff who are members of a professional organization. Most

SAIs have more than 50% of staff with formal academic qualifications, such as an

undergraduate degree or postgraduate degree. The membership requirements and structure

of each professional organization determines eligibility for membership and some

organizations have different categories of membership. Therefore the information in Table 1

is only an indication of SAI capacity and capability.

Table 1: Summary of SAI Staff Qualifications

Number of PASAI members Current SAIs Capacity

Staff with formal qualification Staff who are members of

Professional Organizations

21 (excluding Australia, New Zealand and Australian States)

556 440 79% 224 40%

Source: Survey of SAIs, April 2016

Only eleven PASAI members operate in countries with a professional accounting

organization. The limited number of local professional accounting organizations in the Pacific

has made it challenging for staff to obtain membership to professional accounting bodies.

Some SAIs assist their staff to attain membership of professional organizations. For example,

the SAIs of the Cook Islands and Tonga are both Approved Training Employers with

Chartered Accountants Australia and New Zealand. Staff from these SAIs can meet the

practical experience requirements of that institution to become full members. Having the

approved trainer status also tends to attract highly competent graduates to the SAI who want

to work towards their professional membership, and assists in retaining staff who can inspire

and raise the professional aspirations of other staff.

Sixteen senior auditors from the SAI of Samoa, including the Head of SAI, are members of

the Association of Certified Fraud Examiners (ACFE) in the US. Staff of US-affiliated SAIs

such as those of Guam, the Commonwealth of the Northern Marianas, the Federated States

of Micronesia (FSM) National and the FSM States of Chuuk and Yap are also members of

the ACFE as well as professional organizations such as the American Institute of Certified

Public Accountants, the Institute of Internal Auditors and the Association of Government

Accountants.

Key summary points

Institutional development of SAIs as organizations is important.

The principles of ISSAI-12 and the introduction of the SAI PMF have been key

drivers of developments for PASAI.

Pacific SAIs have embraced ISSAI-12, although giving full effect to the standard and

its key principles remains a significant challenge.

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The introduction of the SAI PMF allows SAIs to measure their performance and

identify areas where improvements in institutional-level professionalization are

required.

The professional development of staff in Pacific SAIs has been gradual and progress

is varied.

Country-specific factors such as the absence of a professional accounting

organization can impact SAIs‘ ability to achieve higher levels of professionalism.

Regional: the role of INTOSAI’s regional working groups in professionalization

PASAI believes the regional level is where real gains and impacts in professionalization can

be made. PASAI does not have the resources and experience to travel the path to increased

professionalization alone. PASAI considers that INTOSAI‘s regional working groups should

position themselves as preferred providers of professionalization programs for their

members. Leveraging information and resources between regional working groups can

speed up the professionalization process.

The Pacific Regional Audit Initiative was largely funded by the Asian Development Bank

(ADB) and the Australian and New Zealand Aid Programs. In addition, IDI funded the

position of Capacity Building Advisor for PASAI. This position provided an invaluable link

between the resources and guidance of IDI and the standards and programs being

developed in the global arena. The role enabled leadership of these programs and also

coordination and assessment of results and identification of areas of future need.

Developing and expanding this concept of a linkage between INTOSAI and individual SAIs,

PASAI sees the role of INTOSAI‘s regional working groups as vital — taking the resources

and guidance of IDI, linking them to the standards and programs developed in the global

arena and applying them to local initiatives and programs.

The developing SAIs of the PASAI region have limited ability to fund capacity development.

In many cases, the funding provided by their governments is inadequate to even complete

the audits included within the SAI‘s mandate. As a result, the SAIs of the region cannot fund

the operations and activities of the PASAI Secretariat. With contributions from global and

regional development partners, the focus of PASAI‘s activities during its early operational

period was on building a strong resource base accessible to all SAIs in the region. Manuals

and guidance materials were developed along with a four tier auditor training program.

These materials were all developed drawing on best practice from global partners and

developed SAIs in the region as well as with heavy reliance on the guidance and leadership

from IDI to ensure that the programs of PASAI reflect the global goals for auditors in the

public sector.

For example, AFROSAI-E agreed to its financial audit manual being adopted by PASAI for

use by members. The two regional bodies agreed through a memorandum of understanding

to jointly work on future updates in which will add PASAI-specific examples and templates to

the already established suite of guidance material. This manual was particularly useful for

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PASAI as, in addition to a standard audit methodology, it contains a ‗small audit‘ approach

which is applicable for many financial audits in the Pacific region. The AFROSAI-E manual

was itself developed through an earlier inter-region/global support initiative. This sharing of

the manual is an excellent example of effective and efficient use of development partner

funding, but also collaboration between INTOSAI regions.

Because some regional working groups are more developed and better-resourced than

others, staff exchanges or study tours between groups could assist to develop the staff of

regional secretariats. It would also be useful to enhance the capacity and professionalization

of the regional working groups themselves.

Much of the professionalization activity in respect of individual SAIs has also benefited from

regional initiatives. PASAI has introduced programs such as Tier training, the Sub-regional

Audit Support program, cooperative regional audits, workshops on international accounting

standards and staff exchanges.

PASAI’s projects with regional impact and advantages

Sub-regional Audit Support program

The Sub-regional Audit Support program (known as the SAS program) is one of PASAI‘s

regionalism success stories. The program was designed to support some of the smaller and

most vulnerable SAIs that were facing similar challenges with human resource capacity and

recognised weaknesses in their audit methodologies and systems. It was funded by the ADB

from 2009 to 2016 and benefited the SAIs of Kiribati, Nauru, Solomon Islands and Tuvalu.

For each round of the program, an audit team was established comprised of secondees from

each of the participating SAIs, supported by ADB-funded consultants. The audit team spent

six to eight weeks in each of the participating countries conducting financial audits, training

SAI staff and improving knowledge sharing. Some key achievements of the program were

development of secondees, audit completion, value-added recommendations and

relationship building.

The SAS program concluded in March 2016. PASAI‘s Governing Board noted that the

capacity of staff within the participating nations had improved to such an extent as a result of

the program that further regionally driven work with these SAIs could be ‗mainstreamed‘ into

PASAI‘s programs in the future.

Cooperative performance audits

Cooperative audits have also played an important role in building staff capability in the

region, especially for performance auditing — a type of auditing that was new to some

Pacific SAIs.

With support from IDI and the ADB as well as the Australian and New Zealand aid programs,

PASAI has facilitated a series of cooperative performance audits on environmental topics —

solid waste management, access to safe drinking water, managing sustainable fisheries and

climate change adaptation and disaster risk reduction. Environmental issues are extremely

relevant to Pacific countries and these audits have resulted in significant findings and

effective remedial actions being taken by governments in the region.

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The model of undertaking cooperative regional audits has also been effective in increasing

performance audit capacity in individual SAIs. Developing a regional report by bringing

together the findings of the individual country audits is an effective way to advocate for

region-wide solutions and to place pressure on jurisdictions where environmental issues are

receiving less attention. Outside the environmental sphere, cooperative audits have also

been completed on foreign aid funded projects and on public debt.

Workshops for regional organizations

Workshops on international accounting standards have been conducted in collaboration with

other regional organizations and institutions such as the Pacific Financial Technical

Assistance Centre and the University of the South Pacific. In November 2015, government

accountants working in ministries of finance and public auditors in the SAIs were invited to a

workshop on strengthening public financial management through accounting and auditing

reforms. Recognizing the crucial roles that accountants and auditors play in strengthening

PFM systems within their respective countries, the workshop focused on:

understanding of the roles of accountants and auditors in light of challenges,

growing demands and risks in public financial management

improving skills in interpreting public sector accounting standards, as well as the

requirements, costs and other implications for government accounting and auditing

systems

strengthening the partnership between accountants and auditors in planning and

implementing reforms

Twinning and other assistance

Many of the region‘s SAIs have also benefited from bilateral assistance, either from the

region‘s donor governments or from twinning and other cooperation arrangements with other

SAIs. Indeed, such cooperation has increased in recent years from solely ‗north-south‘

cooperation to a mix of ‗north-south‘ and ‗south-south‘ initiatives. One particular initiative in

2015, a twinning arrangement involving the sharing of staff between the SAIs of Fiji Islands

and Kiribati, was undertaken with assistance from the United Nations Development Program

and proved to be highly successful. Attaching staff from the performance audit section of the

Kiribati SAI with SAI Fiji provided an opportunity for staff to learn in a different environment,

widening their perspective on the issues involved in planning, conducting and managing a

performance audit. The on-the-job training highlighted the practical issues and challenges

that can be encountered when conducting a performance audit.

The highlight of the twinning arrangement was that the SAI of Kiribati subsequently

completed its first draft performance audit report, a significant achievement given that the

twinning arrangement was only four weeks.

Tier trainings

PASAI‘s tier training is structured according to the level of responsibilities of auditors. The

content of the training includes:

Tier 1: Fundamentals of Government Auditing

Tier 2: Intermediate Government Auditing Skills

Tier 3: Supervisory Roles in Government Auditing

Tier 4: Managing Government Audits

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Creating sustainable foundations within secretariats

The secretariats of regional working groups need to be resourced with competent leadership.

Staff should be dedicated and competent and recruited through open and transparent

processes. Secretariats should be empowered to operate within an approved organizational

structure, supported by agreed charters and robust financial arrangements. A well-designed,

needs-driven regional strategic plan, approved within the governance structure and

supported by all member SAIs should guide the operations of a secretariat.

PASAI‘s approach to these challenges has been as follows:

In designing and maintaining its strategic plans, PASAI conducts regular needs

assessments and communicates with heads of SAIs to ensure its programs align with

SAIs‘ needs as well as PASAI‘s mandate (as described in its Charter).

The strategic plan is supported by the outcome-based MER framework, which is

designed to assess the effectiveness of activities conducted annually, as well as the

performance of the Secretariat.

The MER framework is aligned with PASAI‘s funding agreements with its major

development partners, enabling seamless reporting to those partners and in PASAI‘s

annual report, which describes its achievements and progress on its capacity building

activities.

These are key tools that ensure the performance of the Secretariat is effective in responding

to the needs of SAIs and development partners and to measure progress of our member

SAIs, including in meeting their individual auditing targets. All reports on results and

performance of the Secretariat are published and made available to all stakeholders.

There are other ways collaboration between regions can be leveraged to the advantage of

professionalization of both SAIs and their staff:

Regional secretariats could establish a main contact to maintain dialogue with other

regions to improve awareness of programs and products developed by other regions

allowing collaboration on initiatives of common interest.

Regional secretariats could maintain a database of the information that is needed by

INTOSAI for various reasons. If this information is maintained and regularly updated,

it could help to reduce duplication of effort when providing the same information to

various organizations.

Regional secretariats could conduct regular forums (annual, biennial, or triennial) to

discuss key regional issues of relevance to INTOSAI or its committees and sub-

committees.

The INTOSAI Journal could encourage regions to provide regular updates to be

published to prompt collaboration among regions in programs of common interest.

Key summary points

The regional level is where real gains and impacts in professionalization can be

made.

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Regional working groups can provide a vital link between INTOSAI and individual

SAIs.

Regional working groups should position themselves as preferred providers of

professionalization programs.

Much of the professionalization activity in respect of individual SAIs has also

benefited from regional initiatives.

Leveraging information and resources between regional working groups can also

speed up the professionalization of SAIs.

Sharing ideas could work towards improving the capacity and professionalization of

the regional working groups themselves.

Global: PASAI under the umbrella of INTOSAI

There is a strong desire to learn and develop professional skills within the staff of the SAIs of

the Pacific; however, there is also a high proportion of staff that do not have professional

qualifications. And while PASAI has embraced the challenge of moving to applying

internationally recognised auditing standards, an ongoing gap in the international framework

is an auditor certification process.

Proposed steps for the INTOSAI auditor certification program

To create an increasingly prominent INTOSAI, members need to have recognised and

transferable skills. This can best be achieved if all members of INTOSAI are certified through

the same professional program.

This is significantly impacted by the fact that most countries in the Pacific do not have an

accounting body in place to which SAI staff could become members. There are two

exceptions: SAIs who are recognized as ―Approved Training Employers‖ (ATE) of the New

Zealand Institute of Chartered Accountants3 and SAIs who operate in countries where an

accounting association has been established. For the remaining developing SAIs in region, it

is difficult for a staff member to become qualified due to the lack of local educational

opportunities, professional or tertiary study is mostly undertaken in New Zealand, Australia,

Fiji or the US. Maintaining the necessary continuing professional development requirements

post-qualification is also difficult.

For small SAIs whether from the PASAI region or elsewhere, it is essential that INTOSAI

plays a lead role in any accreditation and certification process. In PASAI‘s view, it is critical

that a certification or accreditation program is supported by a sufficiently high number of

participants to ensure international credibility and also be recognized by academic

institutions and private sector accounting and auditing organizations. Any certification

process must contribute to career paths and reputation of SAI staff.

An accreditation and certification program should not be restricted to core public sector

auditing competencies, but allow public sector auditors to develop a broad skill base for

managing all aspects of auditing and to create capabilities for operating an effective and

efficient SAI with a robust understanding of public sector systems and issues.

3 Now Chartered Accountants Australia and New Zealand.

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PASAI agrees with the proposed steps for the auditor certification program detailed as

Option C in Professional development in INTOSAI — a white paper (2014).

Option C — Global profession, local solutions (with piloting)

INTOSAI defines a competency framework and syllabus for professional development under

the oversight and after the approval of the INTOSAI Governing Board and a possible future

permanent committee for professional matters. The IDI, which is INTOSAI‘s implementing

body, pilots a certification program for professional development in partnership with INTOSAI

regions. SAIs and other professional bodies.

Based on the lessons learned from the pilot, INTOSAI enhances its own certification

programme delivered through the IDI, and offers it on a regular basis to individuals from SAIs.

INTOSAI also sets up an accreditation mechanism for accrediting INTOSAI regions and sub-

regions, individual SAIs and other professional bodies as accredited certification providers. A

support mechanism is also set up to advise individual SAIs and regions in setting up their own

professional development programmes. SAIs will be required to provide the necessary

commitment for recognising a professional qualification received through a certification

programme at an INTOSAI level. Under this option, INTOSAI could either actively seek such

providers based on the demand for certification or set up a mechanism for interested

providers to apply and for the processing of such applications.

This option would ensure any certification program can be tailored to public sector auditing

and is based on ISSAIs. It would also mean that INTOSAI takes full ownership of the

program. This would be a major development by INTOSAI that can improve wider

recognition of INTOSAI as a professional organization and also enhance the professional

perception of SAIs internationally.

Continuing use of ISSAIs in the Pacific

In 2014, the INTOSAI Professional Standards Committee evaluated and made

recommendations to improve INTOSAI‘s standard-setting process. PASAI agreed with the

challenges identified in this evaluation, which re-emphasizes the importance of ensuring that

ISSAIs receive wider international recognition and gain acceptance as the preferred

standards for public sector auditing, in the same way IPSAS standards are now widely

accepted for public sector accounting.

With the introduction of ISSAIs and the assumption that these are the appropriate standards

that public sector auditors should use and comply with, it is important that INTOSAI provides

a mechanism for its members to ensure compliance. The different national governance

models within which SAIs operate play a key role in determining which auditing standards

SAIs can adopt and how they can use them. Compliance with ISSAIs has been a challenge

for SAIs whose legislative requirements do not include reference to ISSAIs, or where the

standards require translation into languages other than the official INTOSAI languages. It is

important for INTOSAI to continue providing guidance on options for ensuring compliance

with ISSAIs and making resources available where possible (for example through the

INTOSAI Donor Initiative).

Fourteen of PASAI‘s member SAIs signed a statement of commitment in December 2012 to

implement the ISSAIs, which has provided an opportunity for staff to learn about these

international auditing standards and participate in capacity development activities on ISSAI

implementation (such as IDI‘s 3i program).

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Ensuring INTOSAI operates to international governance practices

Quality assurance reviews are important to ensure SAIs are working in accordance with

prescribed or international governance practices. INTOSAI could be subject to performance

standards and systematic independent reviews to ensure quality and their professional

status is maintained.

The SAI PMF is a mechanism that can be used to review SAIs‘ performance against the

ISSAIs. Perhaps a similar framework could be developed to measure the effectiveness of

INTOSAI and regional working groups in achieving their strategic objectives in accordance

with international governance practices.

Key summary points

INTOSAI members need to have recognised and transferable skills.

It is essential that INTOSAI plays a lead role in an accreditation and certification

process.

A certification or accreditation program must be supported by a sufficiently high

number of participants to ensure international credibility.

It must also be recognized by academic institutions and private sector accounting

and auditing organizations.

INTOSAI should take full ownership of any certification or accreditation program. It is important for INTOSAI to provide guidance on approaches for ensuring

compliance with ISSAIs recognising the different operating models of SAIs.

INTOSAI could be subject to performance standards and systematic independent

reviews to ensure quality and their professional status is maintained.

Conclusion

In the Pacific our ultimate goal is to address institutional weakness undermining

transparency, accountability, equity and efficiency in the management and use of public

resources. PASAI sees its role as one of INTOSAI‘s regional working groups as a vital link in

the chain — taking the resources and guidance of IDI, linking them to the standards and

programs developed in the global arena and applying them to Pacific-specific initiatives and

programs.

This paper discussed how PASAI has supported the professionalization of its member SAIs.

The concept of professionalization has been strongly embraced by Pacific SAIs, both

through their regional cooperation activities and individually.

Pacific SAIs have implemented the key principles and initiatives within the unique context of

the Pacific and have used the support of PASAI as the regional working group to do that.

PASAI sees regional working groups as a vital link to the professionalization process.

We also see INTOSAI leadership is critical. INTOSAI‘s influence, as the umbrella

organization of SAIs globally, can be enhanced through the commitment of its members to

become professionalized and to maintain that professionalism when undertaking auditing

functions. We also urge the INTOSAI community to commit to supporting the development of

a credible and viable auditor certification program.