SUPREME AUDIT INSTITUTION (SAI)

A supreme audit institution is an independent national-level institution which conducts audits of government activities.[1][2] Most supreme audit institutions are established in their country's constitution, and their mandate is further refined in national legislation. Supreme audit institutions play an important role in providing oversight and accountability in a country by monitoring the use of public funds and reviewing the quality and accuracy of government financial reporting. They also contribute to anti-corruption efforts. Depending on the country, a supreme audit institution may be called a court of audit (common in Europe and its former colonies), auditor-general (common in the Anglosphere) or the board of audit (in some Asian countries). Nearly every supreme audit institution in the world is a member of the International Organization of Supreme Audit Institutions, which works to establish and disseminate international standards and good practices.[ An independent and professional Supreme Audit Institution (SAI) is an important actor in a country’s accountability chain. It is a government entity whose external audit role is established by the constitution or supreme law-making body. SAIs are traditionally known for their oversight of public expenditure, which remains a core part of the audit portfolio. SAIs undertake: • financial audits to assess the reliability and accuracy of public entities’ financial reporting and, • compliance audits to assess a public entities’ compliance with its governing authorities. But the role of SAIs is evolving, as they are increasingly taking a broader, more comprehensive view on reliability, effectiveness, efficiency and economy of policies and programmes. SAIs have untapped potential to go beyond their traditional oversight role and contribute evidence for more informed policy-making. Features and Functions of Supreme Audit Institutions Supreme audit institutions are national agencies responsible for auditing government revenue and spending. Their legal mandates, reporting relationships, and effectiveness vary, reflecting different governance systems and government policies. But their primary purpose is to oversee the management of public funds and the quality and credibility of governments' reported financial data. In the past the World Bank and other donors often established parallel auditing systems for their projects, undermining developing countries' supreme audit institutions, on whose work they could not always rely. Equally problematic have been projects that encouraged performance auditing but ignored basic weaknesses in financial management. In recent years the Bank has tried to strengthen oversight agencies such as supreme audit institutions. This note is intended to help Bank staff appreciate the role and nature of these institutions, particularly in managing public spending, ensuring financial accountability, and strengthening public institutions. The role of supreme audit institutions in fighting corruption Legal and Organisational Models of Supreme Audit Institutions Query Could you provide an overview of the role and mandates of supreme audit institutions in combatting corruption? Are there general differences between countries historically influenced by Francophone systems and those influenced by Anglophones? Is there best practice for pro-actively involving audit institutions including supreme audit institutions (SAI) in the fight against corruption? Purpose Audit institutions are often overlooked when stakeholders consider preventing and addressing corruption. Caveat This Helpdesk Answer builds on a previous Helpdesk Answer published in 2008 on the role of supreme audit institutions in combatting corruption. Summary While the mandate of supreme audit institutions (SAIs) is not tackling corruption per se, their remit to oversee government revenue and expenditure gives them an important role to play in deterring and detecting public sector corruption. In fact, the nature of SAIs’ work from verifying public accounts, assessing regulatory compliance and ensuring the highest standards of financial integrity means they are well positioned to contribute to anti-corruption efforts alongside other bodies, such as law enforcement or anti-corruption agencies. While the evidence base is relatively thin, recent studies illustrate that where auditing is conducted professionally and independently of outside influences, the level of corruption can be reduced as public officials are less able to hide malfeasance behind financial misrepresentation.