Thanks to Petagny for bringing my attention to progress in Rwanda PI-28. I am delighted to hear that this is the case.
Following up on Stone's comments, there is an interesting difference between the nature of the information placed before a UK PAC and a PAC in Bangladesh or Pakistan (and perhaps in India too, although I do not have direct experience there). The process in the latter countries involves a series of iterations between Auditor General staff and staff from offices being audited which broadly involves the identification of any rules or procedures that have not been observed, these being brought to the attention of officers in the agency concerned, resolution of some of them (e.g. rectification of administrative errors in accounting / reporting, recoveries of funds ill-spent etc.), a reporting of the same to Auditor General staff, response from the auditor, further resolution of outstanding issues by officers from the agency being audited and so on. What remains after this process of ‘distillation’ is what is reported to the PAC.
Whilst Pakistan in particular, and Bangladesh also, have begun to address systemic issues in the work of their respective Auditor General offices, the process described above reflects the still-prevailing legacy of the control orientation of PFM in both systems. Auditors check transactions and activities associated with them. They check whether the rules have been followed. What the PAC sees are the unresolved instances where rules and procedures have not been followed (serious or otherwise). Hence the importance of recent efforts in Pakistan, for example, of dealing with as many observations as possible at pre PAC stage to ensure that the PAC is asked to scrutinise a manageable volume of observations and, of course, focuses mainly on major issues (with the presumption that less serious issues are likely to be more easily addressed earlier on) and the additional value added in Bangladesh associated with more intense and timely PAC scrutiny causing audit observations to be addressed before being ‘distilled’ into an audit report.
The control orientation, however, means that resolution of audit observations prior to their inclusion in a report placed before the PAC can often mean that the information content of those observations (in terms of what they tell us about systemic weakness) is lost. Thus, in Bangladesh for example, if the audit for a particular ministry produces ‘x’ audit observations (serious or otherwise), all of which are resolved before the time for their inclusion in a report to be placed before a PAC, this effectively means that there is no information placed before the PAC (or otherwise made available more widely in government or to the general public). Hence the absence of audit reports for the Ministry of Primary and Mass Education on the Auditor General website in Bangladesh, for example. Systemic weaknesses are also not being picked up through internal audit, as this is also control-oriented (where ‘internal auditors’ have been appointed), with ‘internal audit’ largely being regarded as the first stage (pre-audit) of a more general internal control process, of which external audit is the second stage (post-audit) – reflected in PEFA ‘D’s for both countries for PI-21.
To bring this back to where we started, public (PAC) scrutiny, manifestly, makes a big difference. Retaining and using the systemic information embedded within control-oriented reporting (pre-audit or post-audit) would make public scrutiny still more effective.
