November 2013: Enhancing Accountability: “Advancing Public Participation in the Audit Process in Nepal”
As a Supreme Audit Institution, the Office of the Auditor General of Nepal (OAGN) occupies a pre-eminent position in the overall financial management and accountability framework of Nepal. An effective audit institution helps ensure financial discipline, compliance with authorities, and reliable financial reporting in the public sector. It also aids public administration by analyzing the causes of financial irregularities and mismanagement and provides recommendations to ensure better use of resources and reduce risks such as fraud, inefficiency, and waste.
The World Bank-funded Institutional Strengthening of the Office of the Auditor General of Nepal (SOAGN) Project, currently being implemented by Cowater and its local partner, is working to enhance the quality of financial statement audits; upgrade OAG’s capacity to conduct performance audits; and improve the impact of audits through technical support to the Public Accounts Committee Secretariat. Under the first component, enhancing the quality of financial statement audits, Cowater is introducing a risk-based audit approach aligned with the International Standards for Supreme Audit Institutions. Cowater will also introduce computer assisted audit techniques and electronic working papers software as well as deliver training to OAGN staff on the applications of these computer-based audit tools. The activities under the project’s second component will enhance the capacity of the OAGN to conduct performance audits by providing intensive on-the-job training based on international auditing standards.
The objective of the third component is to enhance the impact of OAGN’s audits and its relationship with the Public Accounts Committee (PAC) and its stakeholders, which will be achieved by enhancing the capacity of the PAC secretariat and implementing software to track audit recommendations. This will include developing a communication strategy for OAGN to increase public awareness on the work of the office and the results of the audits.
Auditing Scenario in Nepal
In view of the rapidly changing audit environment in which it operates, the OAGN is continually modernizing its audit practices and methodologies, introducing new auditing techniques, and upgrading the professional capacities of its staff, enabling it to discharge its constitutional and legal mandate efficiently and effectively. Today, SAIs around the world are shifting from the traditional paradigms of auditing, to auditing methodologies that are based on professional standards, and that make use of information technology.
One of the chief concerns of the OAGN is the general under-appreciation of the role of the audit service in public governance. There exists a serious lack of awareness both in government circles and amongst the public regarding how an effective SAI can contribute to improving financial management and reducing fraud, waste, and abuse in the public sector. A SAI cannot function in isolation. Public audit is but a component of a larger accountability framework. In order for an SAI to be effective, there must be a demand for accountability. A case therefore exists for creating wider public awareness and appreciation of the role of audit amongst stakeholders, in particular, the engagement of CSOs, media and SAI staff.
Enhancing Accountability: “Advancing Public Participation in the Audit Process in Nepal”
Last month the Office of the Auditor General of Nepal (OAGN) met with civil society organizations (CSOs) to initiate discussions on the challenges and opportunities associated with the introduction of various participatory audit mechanisms. Through a focus group workshop entitled “Advancing Public Participation in the Audit Process in Nepal” organized by the Program for Accountability in Nepal (PRAN), the World Bank Nepal Country Office, and the World Bank Institute, the OAGN was able to initiate participation from stakeholders to improve audit performance. The one and a half-day program included over 60 participants from civil society organizations (CSOs), media, OAG staff, World Bank representatives, and international experts.
Amitabh Mukhopadhyaya, one of Cowater’s team members on the SOAGN Project, attended the “Advancing Public Participation in the Audit Process in Nepal” workshop to support the OAGN in facilitating discussions on “Cultivating the Partnership: Structure, Role and Timeline”; focusing on priority areas for partnerships, and articulating specific challenges and opportunities that can be addressed in the next 6 months.
Through the workshop, Mr. Mukhopadhyaya assisted in the development of an approach paper on engaging CSOs in the dissemination of audit recommendations and gaining their participation in performance audits. This links closely with Cowater’s SOAGN Project, which includes the development of a communication strategy, as this workshop will provide Cowater with qualitative information on how to maintain open and effective channels of communications with stakeholders including audit entities, CSOs, media, NGOs, professional organizations, academic institutions, parliamentary committees, and others.