INCOSAI XXII. PASAI Regional Paper. Theme II: Professionalization

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1 INCOSAI XXII PASAI Regional Paper Theme II: Professionalization

2 Contents Summary... 3 Pacific Association of Supreme Audit Institutions... 5 Local: professionalization of SAIs and staff... 7 Regional: the role of INTOSAI s regional working groups in professionalization Global: PASAI under the umbrella of INTOSAI Conclusion P a g e

3 Summary Professionalization within the public auditing community is not easily defined. It can include independence, standard setting, capability building, certification, and professional development. It can also take place at multiple levels: globally, regionally, at the SAI-level, and at the level of the individual. In the PASAI region, we have participated in professionalization efforts at all four levels. We have come to see that professionalization is not static but occurs on a continuum. We are also very aware that professionalization must be context- specific. PASAI s members include some of the smallest and most remote nations on earth. Public auditing in the Pacific region has advanced substantially; however, sustaining these improvements is difficult in smaller countries because auditing in tight-knit social and cultural environments involves significant pressures. Within this environment, it is vital that SAIs develop and adhere to the highest standards of professionalism. At the individual level, staff of Pacific SAIs have worked to achieve formal qualifications and membership of professional auditing institutions. These efforts required determination and commitment to improve the use of public sector resources and, in turn, the lives of their fellow citizens. Institutional development of the organization is as much a part of the maturing process of a SAI as is the need to develop the capacity and capability of those doing the auditing work. Both elements go hand-in-hand. At the SAI-level, there has been a substantial increase in professionalization in the PASAI region since the establishment of the PASAI Secretariat in The efforts of individual staff have been reinforced with capacity development activities from PASAI. The level of participation from our members is a significant achievement in itself, developed over many years. The activities undertaken have contributed to improving SAIs capability to both deliver their mandates and enhance their level of competency and professionalism. The close-knit nature of PASAI as a regional organization has enabled its members to draw heavily on its support. PASAI believes the regional level is where real gains and impacts in professionalization can be made. PASAI does not have the resources and experience to travel the path to increased professionalization alone. We have benefited substantially from the support of major development partners in the Pacific, in particular the Asian Development Bank and the Australian and New Zealand aid programs. Leveraging information and resources between regional working groups can also speed up the professionalization process by making effective and efficient use of existing resources between INTOSAI regions. We also leverage resources and knowledge through partnerships with INTOSAI organizations such as INTOSAI Development Initiative (IDI) and the Capacity Building Committee, and with regional organizations in the Pacific such as the Pacific Financial Technical Assistance Centre and the University of the South Pacific. In PASAI s view, regional working groups should position themselves as preferred providers of professionalization programs to members. Professionalization is an ongoing process that can be helped by compliance with professional standards. INTOSAI s influence, as the umbrella organization of SAIs globally, is enhanced through the commitment of its members to become professionalized and to 3 P a g e

4 maintain that professionalism when undertaking auditing functions. The PASAI region is committed to moving towards applying recognised international standards and values the support of all global partners to lead and guide developing country members along this development path. We also urge the INTOSAI community to commit to supporting the development of a credible and viable auditor certification program. We see this as a significant need in the PASAI region where many SAI staff do not have academic qualifications and most our member countries do not have professional accounting bodies. Establishing such a program is generally beyond the capability and capacity of small island states. Therefore, INTOSAI leadership is critical. In the Pacific our ultimate goal is to address institutional weakness undermining transparency, accountability, equity and efficiency in the management and use of public resources. PASAI sees its role as one of INTOSAI s regional working groups as a vital link in the chain taking the resources and guidance of IDI and others, linking them to the standards and programs developed in the global arena, and applying them to Pacific-specific initiatives and programs. 4 P a g e

5 Pacific Association of Supreme Audit Institutions The Pacific region is home to many small island nations separated by vast tracts of ocean. The region has a total population of around 39 million people with a total gross domestic product of around US$1,396 billion in nominal terms. Australia, Papua New Guinea and New Zealand comprise 94% of the total population figure, and Australia and New Zealand comprise 98% of the gross domestic product. Eighteen of the 23 countries of the Pacific region rank in the 50 countries with the lowest populations in the world. Culturally rich, geographically dispersed, and widely diverse with a multitude of ethnicities, the Pacific region is grouped according to three distinct areas: Micronesia, to the north/northwest; Melanesia to the south; and Polynesia to the east. A combination of size, remoteness, and environmental fragility severely constrains most of these small island countries international competitiveness and growth potential. The region is among the most vulnerable to external shocks and exposed to natural disasters. PASAI has 28 members. Our members operate under three different systems of national governance: most Micronesian nations use the US Congressional system; the Polynesian and Melanesian nations use adaptations of the Westminster system; and New Caledonia and French Polynesia are territories of France. The SAIs and state or territorial audit offices in the Congressional and Westminster systems are responsible to their legislatures, whereas the French territories operate under the judicial model. Map of Pacific Islands and the three island groups For convenience, this paper will use the term SAI to describe all members, irrespective of their actual status as such. 1 1 The term SAI normally refers to a national auditing institution. 5 P a g e

6 Papua New Guinea is PASAI s largest developing SAI with 143 staff and Chuuk State of the Federated States of Micronesia is the smallest with 3 staff. PASAI s Secretariat office is located in Auckland, New Zealand with a staff of five, headed by a Chief Executive with ongoing oversight by a Secretary-General, who currently is the Auditor General of New Zealand. PASAI is an international body operating under a Charter with its Congress as the supreme body (comprising all member SAIs) and a Governing Board appointed by the Congress. This structure was the culmination of several years of work recognizing the need to have a more formalized and well-resourced regional working group in order to achieve the underlying goal of more effective public sector auditing in the Pacific region. PASAI is currently moving into its third phase as an organization. Although the PASAI community had met prior to the formal commencement of PASAI, PASAI as a recognized regional working group of INTOSAI can be traced back to In 2009, the start of PASAI s second phase as an organization, the Secretariat was formed under a new Charter which also established a Governing Board in addition to the Congress of all members. From was a period of gearing up professionally. PASAI s work was undertaken under an initiative called the Pacific Regional Audit Initiative. A review of PASAI s work under this initiative in 2013 determined that, while PASAI was becoming a successful and respected regional body, it required further development and support from development partners for it to successfully achieve the goals of the original Pacific Regional Audit Initiative. This third phase now sees PASAI maturing as an organization. In 2015, the Secretariat was restructured to align with our Strategic Plan ( ), which guides our work to support our members. We also have now established an extensive Monitoring Evaluation and Reporting (MER) framework to enable us to evaluate the effectiveness of our work so that we can ensure we are meeting our strategic objectives. PASAI will continue to play an important role in the capacity development and professionalization of our member SAIs during this next phase of its existence. PASAI s affiliation with INTOSAI and its related organizations has provided access to a wider pool of knowledge, technical expertise and resource materials that we use in our regional programs. We also leverage resources and knowledge through partnerships with INTOSAI organizations such as IDI and the Capacity Building Committee, with other regional working groups under the INTOSAI umbrella (in particular AFROSAI-E) and with regional organizations in the Pacific such as the Pacific Financial Technical Assistance Centre and the University of the South Pacific. This paper discusses how PASAI has supported the professionalization of its member SAIs. The concept of professionalization has been strongly embraced by Pacific SAIs, both through their regional cooperation activities and individually. The paper also discusses how Pacific SAIs have implemented the key principles and initiatives in the unique context of the Pacific and how they have used the support of PASAI as the regional working group to do that. The paper then considers the key role of regional working groups in the professionalization process, as well considering international elements of professionalization for INTOSAI. 2 Known until 2009 as the South Pacific Association of Supreme Audit Institutions, or SPASAI. 6 P a g e

7 Local: professionalization of SAIs and staff The professionalization of individual SAIs is expected to include all of the key aspects of the operation of a SAI that contribute to the SAI being seen as both suitably independent and objective and producing quality work. Professionalization of SAIs implies professionalization of both SAIs as organizations and the individuals who carry out work for or on behalf of SAIs. (INCOSAI XXII Theme II Professionalization, Theme Information Paper 2016) These statements are as true for small and developing SAIs as they are for larger and more developed SAIs. Institutional development of the organization is as much a part of the maturing process of a SAI as the need to develop the capacity and capability of doing the auditing work. Both elements go hand-in-hand. Despite efforts towards harmonizing standards for adoption by INTOSAI members, there are other country-specific factors that can impact SAIs ability to achieve higher levels of professionalism. The degree of professionalism of a SAI varies depending on location, staff professional affiliations, the level of development within the country, the availability of structured education programs, a country s financial stability, competition from private sector audit firms, and the existence of institutions that offer certification. This issue of size relates to the small number of staff to carry out auditing activities; the low numbers of staff with tertiary qualifications or qualified chartered accountants, particularly to act as SAI Heads or members of staff; small and limited organizational structures; lack of other professional structures in-country, such as a functioning accounting profession; and the lack of effective and reliable internet services. Limited financial independence and operational autonomy (in terms of Principle 8 of the Mexico Declaration on SAI Independence) is a further factor inhibiting many Pacific SAIs to perform their mandates effectively and professionally. Many SAIs in the Pacific have to operate under outdated legislation, which tends to treat them, for purposes of financing and operations, as an organ of the executive government. However, the principles of ISSAI-12 and the introduction of the pilot version of SAI PMF have been key developments for the Pacific region, together with PASAI s various strategic initiatives contributing to the process of professionalization. The Pacific experience with ISSAI-12 The principles of ISSAI-12 and the introduction of the pilot version of SAI PMF are key developments that have, in PASAI s view, contributed to the development of SAIs as professional organizations: The publication of ISSAI-12 was a key milestone for the ISSAI framework. The standard provides a context within which a SAI can model itself as a professional organization in an institutional sense, as an auditing body, and in the way it interacts with its auditees, the legislature, and other stakeholders and citizens. The draft SAI PMF has provided a tool for SAIs to measure their performance over time and highlight areas where improvement is required. It has been found to be a valuable tool that can determine the level of professionalism of a SAI against the characteristics promoted by ISSAI P a g e

8 Within this broad approach, a SAI can develop a pathway to full implementation of the ISSAI framework. If successful, full ISSAI implementation will result in an organization and people that are professionalized, not just in the types of audit activity that the SAI undertakes (using ISSAIs levels 3 and 4) but also in the institutional sense (applying ISSAIs levels 1 and 2). The strong link between ISSAI-12 and the SAI PMF means that there is a ready mechanism to identify what is needed to achieve this standard following the completion of an assessment of performance. Pacific SAIs have embraced ISSAI-12, although giving full effect to the standard and its key principles remains a significant challenge. For example, PASAI s 2015 Accountability and Transparency report found: All of the SAIs surveyed have a code of ethics to govern their behaviour. The quality of the codes was found to vary, as was their implementation throughout the organization. However, the majority of SAIs surveyed reported the existence of internal processes to ensure staff compliance with ethical standards in their work. In relation to communication with citizens, many Pacific SAIs now have websites, although the report found that there is a continuing need to strengthen communication systems to be more proactive in engaging with citizens and providing information about their reports and activities. While financial independence and operational autonomy continue to be a significant area of concern, the great majority of SAIs have taken steps to make themselves accountable for the use of their resources (for example through annual reports). There is a growing trend to use contracted auditors to perform audit functions. In the northern Pacific jurisdictions (in particular, those which form part of or are affiliated to the US), all financial auditing activity is contracted out to private accounting firms. In southern Pacific jurisdictions contracting out is also a growing practice. While, in one sense, contracting out audits lessens the ability of a small SAI to develop its own professionalized workforce, there are benefits through the SAI s association and working relationship with the private firm and its professionally qualified personnel. The Pacific experience with the pilot version of SAI PMF The launch of IDI s pilot version of the SAI PMF in 2013 provided a significant platform for Pacific SAIs to develop their awareness of ISSAI-12 and its key principles, and to factor them into ongoing capacity development. A Pacific-based training program on the SAI PMF was facilitated for 18 SAIs in With the benefit of the resulting awareness of the framework, a number of SAIs began undertaking self-assessment activity. Some of these used the information gained to involve staff in a series of strategic planning workshops and (in some cases for the first time) develop an organizational strategic plan. Although typically relatively high level, this type of self-assessment activity provides a starting point for discussions about the ISSAI-12 principles and how they can help identify strategic objectives and outcomes to guide the SAI s activities. In providing feedback to the IDI on the pilot version of the SAI PMF, the key message from PASAI was that the SAI PMF is a way for SAIs to measure their progress in both institutional and auditing terms. However, the small size of many of PASAI s members was seen as an impediment to using the full framework. PASAI advocated for a scaled-down version of the framework as a useful next step. 8 P a g e

9 As a result, PASAI has been working with IDI, with funding support from the Australian Aid Program, to develop a lite version of the SAI PMF that can be used by smaller or less developed SAIs. The SAI PMF lite version was completed in early 2016, and is now being piloted across the region. It provides an opportunity to assess the viability of the scaleddown version for applicability to small SAIs more broadly across the INTOSAI community. This pilot project will also provide critical information to assist PASAI target its resources once the strengths and weakness of the SAIs are identified, including for the ongoing development of professionalization. Initial piloting of the lite version by a number of southern Pacific SAIs (with the support of IDI and PASAI) has been very encouraging and bodes well for the ongoing development of professionalism in the Pacific region s SAIs. Professionalization of Pacific SAIs All PASAI s members actively participate in our regional activities. The level of participation is a significant achievement in itself, developed over many years through PASAI s activities and cooperation between its members. The close-knit nature of PASAI as a regional organization has enabled its members to draw heavily on its support for their professionalization initiatives. PASAI s various strategic initiatives have been strong contributors to this process of professionalization. These initiatives have included: supporting SAIs to develop their strategic plans with internationally referenced performance measures (eg. American Samoa, Cook Islands and Palau) providing shared manuals and guidelines for use in SAIs auditing work, and facilitating the uptake and use of computerized auditing tools supporting programs of cooperative performance audits (on a region-wide basis) and cooperative financial audits (involving targeted SAIs on a sub-regional basis) improving communication and relationships between member SAIs and the Public Accounts Committees of their legislatures encouraging twinning arrangements between PASAI member SAIs and members of the Australasian Council of Auditors-General researching and reporting regularly on accountability and transparency reports that assess and promote ethical behaviour in the public or civil service Professionalization of the staff of Pacific SAIs The professional development of staff of Pacific SAIs has been a gradual process and progress has varied. The process is usually driven by the standards set by the SAI itself but is also highly dependent on the motivation of individual staff. PASAI has assessed the degree of professionalism of staff within Pacific SAIs with reference to the following conditions: entry criteria for new recruits availability of in-house training and professional development programs for staff membership of local or international professional accountancy organizations compliance with professional standards, an established code of ethics and human resource practices office support and arrangements to help staff achieve professional certification 9 P a g e

10 the level of financial and organizational independence of the SAI Table 1 shows the numbers of staff across PASAI s member SAIs with formal qualifications from academic institutions and staff who are members of a professional organization. Most SAIs have more than 50% of staff with formal academic qualifications, such as an undergraduate degree or postgraduate degree. The membership requirements and structure of each professional organization determines eligibility for membership and some organizations have different categories of membership. Therefore the information in Table 1 is only an indication of SAI capacity and capability. Table 1: Summary of SAI Staff Qualifications Number of PASAI members 21 (excluding Australia, New Zealand and Australian States) Source: Survey of SAIs, April 2016 Current SAIs Capacity Staff with formal qualification Staff who are members of Professional Organizations % % Only eleven PASAI members operate in countries with a professional accounting organization. The limited number of local professional accounting organizations in the Pacific has made it challenging for staff to obtain membership to professional accounting bodies. Some SAIs assist their staff to attain membership of professional organizations. For example, the SAIs of the Cook Islands and Tonga are both Approved Training Employers with Chartered Accountants Australia and New Zealand. Staff from these SAIs can meet the practical experience requirements of that institution to become full members. Having the approved trainer status also tends to attract highly competent graduates to the SAI who want to work towards their professional membership, and assists in retaining staff who can inspire and raise the professional aspirations of other staff. Sixteen senior auditors from the SAI of Samoa, including the Head of SAI, are members of the Association of Certified Fraud Examiners (ACFE) in the US. Staff of US-affiliated SAIs such as those of Guam, the Commonwealth of the Northern Marianas, the Federated States of Micronesia (FSM) National and the FSM States of Chuuk and Yap are also members of the ACFE as well as professional organizations such as the American Institute of Certified Public Accountants, the Institute of Internal Auditors and the Association of Government Accountants. Key summary points Institutional development of SAIs as organizations is important. The principles of ISSAI-12 and the introduction of the SAI PMF have been key drivers of developments for PASAI. Pacific SAIs have embraced ISSAI-12, although giving full effect to the standard and its key principles remains a significant challenge. 10 P a g e

11 The introduction of the SAI PMF allows SAIs to measure their performance and identify areas where improvements in institutional-level professionalization are required. The professional development of staff in Pacific SAIs has been gradual and progress is varied. Country-specific factors such as the absence of a professional accounting organization can impact SAIs ability to achieve higher levels of professionalism. Regional: the role of INTOSAI s regional working groups in professionalization PASAI believes the regional level is where real gains and impacts in professionalization can be made. PASAI does not have the resources and experience to travel the path to increased professionalization alone. PASAI considers that INTOSAI s regional working groups should position themselves as preferred providers of professionalization programs for their members. Leveraging information and resources between regional working groups can speed up the professionalization process. The Pacific Regional Audit Initiative was largely funded by the Asian Development Bank (ADB) and the Australian and New Zealand Aid Programs. In addition, IDI funded the position of Capacity Building Advisor for PASAI. This position provided an invaluable link between the resources and guidance of IDI and the standards and programs being developed in the global arena. The role enabled leadership of these programs and also coordination and assessment of results and identification of areas of future need. Developing and expanding this concept of a linkage between INTOSAI and individual SAIs, PASAI sees the role of INTOSAI s regional working groups as vital taking the resources and guidance of IDI, linking them to the standards and programs developed in the global arena and applying them to local initiatives and programs. The developing SAIs of the PASAI region have limited ability to fund capacity development. In many cases, the funding provided by their governments is inadequate to even complete the audits included within the SAI s mandate. As a result, the SAIs of the region cannot fund the operations and activities of the PASAI Secretariat. With contributions from global and regional development partners, the focus of PASAI s activities during its early operational period was on building a strong resource base accessible to all SAIs in the region. Manuals and guidance materials were developed along with a four tier auditor training program. These materials were all developed drawing on best practice from global partners and developed SAIs in the region as well as with heavy reliance on the guidance and leadership from IDI to ensure that the programs of PASAI reflect the global goals for auditors in the public sector. For example, AFROSAI-E agreed to its financial audit manual being adopted by PASAI for use by members. The two regional bodies agreed through a memorandum of understanding to jointly work on future updates in which will add PASAI-specific examples and templates to the already established suite of guidance material. This manual was particularly useful for 11 P a g e

12 PASAI as, in addition to a standard audit methodology, it contains a small audit approach which is applicable for many financial audits in the Pacific region. The AFROSAI-E manual was itself developed through an earlier inter-region/global support initiative. This sharing of the manual is an excellent example of effective and efficient use of development partner funding, but also collaboration between INTOSAI regions. Because some regional working groups are more developed and better-resourced than others, staff exchanges or study tours between groups could assist to develop the staff of regional secretariats. It would also be useful to enhance the capacity and professionalization of the regional working groups themselves. Much of the professionalization activity in respect of individual SAIs has also benefited from regional initiatives. PASAI has introduced programs such as Tier training, the Sub-regional Audit Support program, cooperative regional audits, workshops on international accounting standards and staff exchanges. PASAI s projects with regional impact and advantages Sub-regional Audit Support program The Sub-regional Audit Support program (known as the SAS program) is one of PASAI s regionalism success stories. The program was designed to support some of the smaller and most vulnerable SAIs that were facing similar challenges with human resource capacity and recognised weaknesses in their audit methodologies and systems. It was funded by the ADB from 2009 to 2016 and benefited the SAIs of Kiribati, Nauru, Solomon Islands and Tuvalu. For each round of the program, an audit team was established comprised of secondees from each of the participating SAIs, supported by ADB-funded consultants. The audit team spent six to eight weeks in each of the participating countries conducting financial audits, training SAI staff and improving knowledge sharing. Some key achievements of the program were development of secondees, audit completion, value-added recommendations and relationship building. The SAS program concluded in March PASAI s Governing Board noted that the capacity of staff within the participating nations had improved to such an extent as a result of the program that further regionally driven work with these SAIs could be mainstreamed into PASAI s programs in the future. Cooperative performance audits Cooperative audits have also played an important role in building staff capability in the region, especially for performance auditing a type of auditing that was new to some Pacific SAIs. With support from IDI and the ADB as well as the Australian and New Zealand aid programs, PASAI has facilitated a series of cooperative performance audits on environmental topics solid waste management, access to safe drinking water, managing sustainable fisheries and climate change adaptation and disaster risk reduction. Environmental issues are extremely relevant to Pacific countries and these audits have resulted in significant findings and effective remedial actions being taken by governments in the region. 12 P a g e

13 The model of undertaking cooperative regional audits has also been effective in increasing performance audit capacity in individual SAIs. Developing a regional report by bringing together the findings of the individual country audits is an effective way to advocate for region-wide solutions and to place pressure on jurisdictions where environmental issues are receiving less attention. Outside the environmental sphere, cooperative audits have also been completed on foreign aid funded projects and on public debt. Workshops for regional organizations Workshops on international accounting standards have been conducted in collaboration with other regional organizations and institutions such as the Pacific Financial Technical Assistance Centre and the University of the South Pacific. In November 2015, government accountants working in ministries of finance and public auditors in the SAIs were invited to a workshop on strengthening public financial management through accounting and auditing reforms. Recognizing the crucial roles that accountants and auditors play in strengthening PFM systems within their respective countries, the workshop focused on: understanding of the roles of accountants and auditors in light of challenges, growing demands and risks in public financial management improving skills in interpreting public sector accounting standards, as well as the requirements, costs and other implications for government accounting and auditing systems strengthening the partnership between accountants and auditors in planning and implementing reforms Twinning and other assistance Many of the region s SAIs have also benefited from bilateral assistance, either from the region s donor governments or from twinning and other cooperation arrangements with other SAIs. Indeed, such cooperation has increased in recent years from solely north-south cooperation to a mix of north-south and south-south initiatives. One particular initiative in 2015, a twinning arrangement involving the sharing of staff between the SAIs of Fiji Islands and Kiribati, was undertaken with assistance from the United Nations Development Program and proved to be highly successful. Attaching staff from the performance audit section of the Kiribati SAI with SAI Fiji provided an opportunity for staff to learn in a different environment, widening their perspective on the issues involved in planning, conducting and managing a performance audit. The on-the-job training highlighted the practical issues and challenges that can be encountered when conducting a performance audit. The highlight of the twinning arrangement was that the SAI of Kiribati subsequently completed its first draft performance audit report, a significant achievement given that the twinning arrangement was only four weeks. Tier trainings PASAI s tier training is structured according to the level of responsibilities of auditors. The content of the training includes: Tier 1: Fundamentals of Government Auditing Tier 2: Intermediate Government Auditing Skills Tier 3: Supervisory Roles in Government Auditing Tier 4: Managing Government Audits 13 P a g e

14 Creating sustainable foundations within secretariats The secretariats of regional working groups need to be resourced with competent leadership. Staff should be dedicated and competent and recruited through open and transparent processes. Secretariats should be empowered to operate within an approved organizational structure, supported by agreed charters and robust financial arrangements. A well-designed, needs-driven regional strategic plan, approved within the governance structure and supported by all member SAIs should guide the operations of a secretariat. PASAI s approach to these challenges has been as follows: In designing and maintaining its strategic plans, PASAI conducts regular needs assessments and communicates with heads of SAIs to ensure its programs align with SAIs needs as well as PASAI s mandate (as described in its Charter). The strategic plan is supported by the outcome-based MER framework, which is designed to assess the effectiveness of activities conducted annually, as well as the performance of the Secretariat. The MER framework is aligned with PASAI s funding agreements with its major development partners, enabling seamless reporting to those partners and in PASAI s annual report, which describes its achievements and progress on its capacity building activities. These are key tools that ensure the performance of the Secretariat is effective in responding to the needs of SAIs and development partners and to measure progress of our member SAIs, including in meeting their individual auditing targets. All reports on results and performance of the Secretariat are published and made available to all stakeholders. There are other ways collaboration between regions can be leveraged to the advantage of professionalization of both SAIs and their staff: Regional secretariats could establish a main contact to maintain dialogue with other regions to improve awareness of programs and products developed by other regions allowing collaboration on initiatives of common interest. Regional secretariats could maintain a database of the information that is needed by INTOSAI for various reasons. If this information is maintained and regularly updated, it could help to reduce duplication of effort when providing the same information to various organizations. Regional secretariats could conduct regular forums (annual, biennial, or triennial) to discuss key regional issues of relevance to INTOSAI or its committees and subcommittees. The INTOSAI Journal could encourage regions to provide regular updates to be published to prompt collaboration among regions in programs of common interest. Key summary points The regional level is where real gains and impacts in professionalization can be made. 14 P a g e

15 Regional working groups can provide a vital link between INTOSAI and individual SAIs. Regional working groups should position themselves as preferred providers of professionalization programs. Much of the professionalization activity in respect of individual SAIs has also benefited from regional initiatives. Leveraging information and resources between regional working groups can also speed up the professionalization of SAIs. Sharing ideas could work towards improving the capacity and professionalization of the regional working groups themselves. Global: PASAI under the umbrella of INTOSAI There is a strong desire to learn and develop professional skills within the staff of the SAIs of the Pacific; however, there is also a high proportion of staff that do not have professional qualifications. And while PASAI has embraced the challenge of moving to applying internationally recognised auditing standards, an ongoing gap in the international framework is an auditor certification process. Proposed steps for the INTOSAI auditor certification program To create an increasingly prominent INTOSAI, members need to have recognised and transferable skills. This can best be achieved if all members of INTOSAI are certified through the same professional program. This is significantly impacted by the fact that most countries in the Pacific do not have an accounting body in place to which SAI staff could become members. There are two exceptions: SAIs who are recognized as Approved Training Employers (ATE) of the New Zealand Institute of Chartered Accountants 3 and SAIs who operate in countries where an accounting association has been established. For the remaining developing SAIs in region, it is difficult for a staff member to become qualified due to the lack of local educational opportunities, professional or tertiary study is mostly undertaken in New Zealand, Australia, Fiji or the US. Maintaining the necessary continuing professional development requirements post-qualification is also difficult. For small SAIs whether from the PASAI region or elsewhere, it is essential that INTOSAI plays a lead role in any accreditation and certification process. In PASAI s view, it is critical that a certification or accreditation program is supported by a sufficiently high number of participants to ensure international credibility and also be recognized by academic institutions and private sector accounting and auditing organizations. Any certification process must contribute to career paths and reputation of SAI staff. An accreditation and certification program should not be restricted to core public sector auditing competencies, but allow public sector auditors to develop a broad skill base for managing all aspects of auditing and to create capabilities for operating an effective and efficient SAI with a robust understanding of public sector systems and issues. 3 Now Chartered Accountants Australia and New Zealand. 15 P a g e

16 PASAI agrees with the proposed steps for the auditor certification program detailed as Option C in Professional development in INTOSAI a white paper (2014). Option C Global profession, local solutions (with piloting) INTOSAI defines a competency framework and syllabus for professional development under the oversight and after the approval of the INTOSAI Governing Board and a possible future permanent committee for professional matters. The IDI, which is INTOSAI s implementing body, pilots a certification program for professional development in partnership with INTOSAI regions. SAIs and other professional bodies. Based on the lessons learned from the pilot, INTOSAI enhances its own certification programme delivered through the IDI, and offers it on a regular basis to individuals from SAIs. INTOSAI also sets up an accreditation mechanism for accrediting INTOSAI regions and subregions, individual SAIs and other professional bodies as accredited certification providers. A support mechanism is also set up to advise individual SAIs and regions in setting up their own professional development programmes. SAIs will be required to provide the necessary commitment for recognising a professional qualification received through a certification programme at an INTOSAI level. Under this option, INTOSAI could either actively seek such providers based on the demand for certification or set up a mechanism for interested providers to apply and for the processing of such applications. This option would ensure any certification program can be tailored to public sector auditing and is based on ISSAIs. It would also mean that INTOSAI takes full ownership of the program. This would be a major development by INTOSAI that can improve wider recognition of INTOSAI as a professional organization and also enhance the professional perception of SAIs internationally. Continuing use of ISSAIs in the Pacific In 2014, the INTOSAI Professional Standards Committee evaluated and made recommendations to improve INTOSAI s standard-setting process. PASAI agreed with the challenges identified in this evaluation, which re-emphasizes the importance of ensuring that ISSAIs receive wider international recognition and gain acceptance as the preferred standards for public sector auditing, in the same way IPSAS standards are now widely accepted for public sector accounting. With the introduction of ISSAIs and the assumption that these are the appropriate standards that public sector auditors should use and comply with, it is important that INTOSAI provides a mechanism for its members to ensure compliance. The different national governance models within which SAIs operate play a key role in determining which auditing standards SAIs can adopt and how they can use them. Compliance with ISSAIs has been a challenge for SAIs whose legislative requirements do not include reference to ISSAIs, or where the standards require translation into languages other than the official INTOSAI languages. It is important for INTOSAI to continue providing guidance on options for ensuring compliance with ISSAIs and making resources available where possible (for example through the INTOSAI Donor Initiative). Fourteen of PASAI s member SAIs signed a statement of commitment in December 2012 to implement the ISSAIs, which has provided an opportunity for staff to learn about these international auditing standards and participate in capacity development activities on ISSAI implementation (such as IDI s 3i program). 16 P a g e

17 Ensuring INTOSAI operates to international governance practices Quality assurance reviews are important to ensure SAIs are working in accordance with prescribed or international governance practices. INTOSAI could be subject to performance standards and systematic independent reviews to ensure quality and their professional status is maintained. The SAI PMF is a mechanism that can be used to review SAIs performance against the ISSAIs. Perhaps a similar framework could be developed to measure the effectiveness of INTOSAI and regional working groups in achieving their strategic objectives in accordance with international governance practices. Key summary points INTOSAI members need to have recognised and transferable skills. It is essential that INTOSAI plays a lead role in an accreditation and certification process. A certification or accreditation program must be supported by a sufficiently high number of participants to ensure international credibility. It must also be recognized by academic institutions and private sector accounting and auditing organizations. INTOSAI should take full ownership of any certification or accreditation program. It is important for INTOSAI to provide guidance on approaches for ensuring compliance with ISSAIs recognising the different operating models of SAIs. INTOSAI could be subject to performance standards and systematic independent reviews to ensure quality and their professional status is maintained. Conclusion In the Pacific our ultimate goal is to address institutional weakness undermining transparency, accountability, equity and efficiency in the management and use of public resources. PASAI sees its role as one of INTOSAI s regional working groups as a vital link in the chain taking the resources and guidance of IDI, linking them to the standards and programs developed in the global arena and applying them to Pacific-specific initiatives and programs. This paper discussed how PASAI has supported the professionalization of its member SAIs. The concept of professionalization has been strongly embraced by Pacific SAIs, both through their regional cooperation activities and individually. Pacific SAIs have implemented the key principles and initiatives within the unique context of the Pacific and have used the support of PASAI as the regional working group to do that. PASAI sees regional working groups as a vital link to the professionalization process. We also see INTOSAI leadership is critical. INTOSAI s influence, as the umbrella organization of SAIs globally, can be enhanced through the commitment of its members to become professionalized and to maintain that professionalism when undertaking auditing functions. We also urge the INTOSAI community to commit to supporting the development of a credible and viable auditor certification program. 17 P a g e