Author Topic: Value-for-money audits of public investment projects - is it ever too soon?  (Read 333 times)

petagny

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There seems to be general agreement that SAIs need to get to grips with their basic functions before embarking on performance audits. But what about performance audits of public investment projects?

In many countries where I'm working, it's not so much shortage of skills in cost-benefit analysis and other less sophisticated techniques that's holding back the adoption of a more systematic assessment of the value for money from public investment proposals: although capacities are clearly an issue, they can always be bought in, and frequently are when it comes to donor-financed projects. The biggest constraint is lack of demand from decision-makers for whom value for money isn't even on the radar screen.

Could a few well targetted performance audits of some notable white elephants (and maybe some of the more obvious successes) help kick-start the development of a value-for-money culture in the administration. Or is this just wishful thinking? Certainly, the spending ministries that initiated the white elephants in the first place are not going to be rushing to establish an ex-post evaluation process that will expose their wasteful ways. Look at Croatia's recent motorway investment programme, for example: it's crying out for some independent analysis and lesson-learning.

As far as the SAI is concerned, these ad hoc initiatives could also be a starting point for developing internal capacities in performance audit.

Why start with public investment and not another area of expenditure? Firstly, although investment might be a relatively small part of the total budget, it will usually be a significant share of the expenditure over which the government has most discretion. Secondly, the intervention logic should be easier to identify than for other areas of expenditure, making it a sensible entry point for beginners.


 

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