By Esther Lameko-Poutoa, Chief Executive, PASAI

The recent Forum Economic Ministers Meeting held in Vanuatu indicated a solidarity stance to advance economic recovery and resilience while supporting the ‘2050 Strategy for the Blue Pacific Continent’. The 2050 Strategy endorses thematic areas which range from leadership to climate change to connectivity through technology.

Simultaneously, there was also the consistent request for more support from development partners. Governments need more money. And where there is public money, there is accountability. The pandemic has exposed the vulnerabilities of the fragile economies of the Pacific region. Forum Economic Ministers themselves called for the acceleration of public financial management (PFM) system reforms to, “strengthen immediate economic recovery and fiscal capacities to cope with shocks.”[1] This acknowledges that better accountability by executive governments is needed.

In this context, it’s increasingly important auditors general and public auditors work together with the Legislature to hold executive governments to account and improve PFM.

We at PASAI are committed to the capacity development of supreme audit institutions (SAIs) and working with stakeholders to progress accountability.

Timely financial reporting

About 80 per cent of the financial statements of government of countries in the Pacific region were audited on time pre-COVID. Since the emergence of the pandemic, the governments of some countries have not prioritised financial reporting.[2] These reporting delays continue to be a significant setback to economic recovery. 

Governments are obligated to show how they are managing the public purse and should prioritise such reporting. It’s about building trust in government and the public sector. These financial statements of government must be externally audited. Doing so adds credibility to the financial statements. It creates opportunities to strengthen internal controls, improve financial systems, set high standards for services, and lift performance management, timely reporting and decision making. It's about building integrity in processes and embedding it in the values in the long term.

In short, creating robust financial management systems leads to a more trusted public service.  

Communication with citizens

It’s important for government audit offices to not only produce and submit audit reports to the Legislature, but also to release them to the public. This matters because the public has a right to know and understand how public money is being spent and to question it.

The public is an ally to SAIs to hold governments to account. SAIs must produce audit reports that are easy to read and understand, and preferably in multiple languages, if needed. SAIs’ reports should be timely and on projects and areas of high interest to citizens. Equitable access to information about the public sector is vital.

Audit independence and scrutiny by the Legislature

To ensure impartiality, government audit offices must have functional and organisational independence from the executive governments, which are the public entities they audit. This matters because without independence, these watchdogs won’t be able to effectively review and evaluate government spending. They must have the authority to audit and report on public spending objectively and without fear of retribution. Protection against outside influence is necessary.

The Legislature should be an ally of the SAIs, a relevant partner in the oversight of the Executive Government. It is ideal when they share a mutual interest in regularly reminding government entities of policies, regulations and timely reporting to the Legislature. The Legislature should prioritise the scrutiny of these audited financial statements of government and not obstruct SAIs from making  recommendations available to the public.

Timely financial reporting, communication with citizens, audit independence and scrutiny by the Legislature all contribute to promoting government accountability.

References

[1] 2022 Forum Economic Ministers Meeting 11–12 August 2022, Outcomes

[2] PASAI – October update of the Financial Statements of Government audits