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INTOSAI Working Group on the Audit of Privatisation,
Economic Regulation and Public Private Partnerships



INTOSAI Working Group on the Audit of Privatisation

The Twelfth Meeting  Brasilia, 12 – 14 September 2005

Overview note by the Chairman

The Working Group’s remit

  1. The Working Group was set up in 1993 with the following terms of reference:
  2. At XVIII INCOSAI in Budapest in October 2004 a five year INTOSAI Strategic Plan for 2005-2010 was approved by the Congress. The plan proposes four main strategic goals for INTOSAI:
  3. For each of Goals 1-3 the Strategic Plan also calls for the appointment of a Goal Liaison from amongst the members of the INTOSAI Governing Board. At their extraordinary meeting in Budapest in March 2005 the Governing Board elected the Supreme Audit Institution of India to the position for Goal 3. The role of the Goal Liaison is to facilitate communication and awareness within and among strategic goal areas and across regional working groups and to help establish stronger links between the Governing Board and the various committees, working groups and task forces. Earlier this year, in my role as Chairman of the Working Group I responded to a preliminary request from India for information about the Working Group’s activities and ideas about how better and more effective knowledge sharing can be facilitated. A copy of my letter is available on the website of the Privatisation Working Group. I know that Members of the Working Group will be keen to contribute as the work towards achieving the Goal develops and I will keep members informed about how they can be involved.
  4. At XVIII INCOSAI it was agreed that in the period leading up to XIX INCOSAI in 2007, the Working Group should focus its efforts on:

    5. The purpose of this note

  5. This note introduces the agenda for the 12th meeting and the papers attached for discussion at the meeting, contributed by members of the Working Group.
  6. The meeting will cover the following main areas:

    7. Experiences in the audit of privatisation

  7. The first part of the meeting will be given over to presentations by Bulgaria and Morocco.


    8. The Bulgarian experience in the audit of Concessions (Ms. Dileta Kassabova, Principal Auditor, Bulgarian National Audit Office)
  8. This presentation looks at the difficulties faced by the Bulgarian National Audit Office in the audit of concessions and examines the strategy adopted to overcome these difficulties. The outcomes and effectiveness of the audit are analysed with the conclusion that the auditors have acted as a catalyst for change with improvements being implemented across the whole system of concession granting activities.


    9. The Moroccan Experience of Privatisation (Mr. Ahmed El Midaoui, President, Cour des Comptes of Morocco)
  9. Morocco joined the Working Group earlier this year taking our membership to 40 SAIs. Their paper explains the privatisation process in Morocco over the past decade. It focuses on the legal framework for privatisation, the results of the privatisation process between 1993 and 2003, the impacts of privatisation and the role of the Cour des Comptes.

    10. Experiences in the audit of economic regulation

  10. The next part of the programme is based on two presentations by Brazil on economic regulation.


    11. TCU’s regulation oversight experience and INTOSAI guidelines for economic regulation (Mr. Luciano dos Santos Danni, Auditor, TCU)

    How TCU oversees road concession regulation in Brazil (Mr. Adalberto Santos de Vasconcelos, Transport Fiscalization Director, TCU)
  11. Our Brazilian hosts have extensive experience of auditing economic regulation. Luciano dos Santos Danni will discuss the Intosai guidelines for economic regulation in the light of TCU’s regulation oversight experience. Alalberto Santos de Vasconcelos will focus on TCU’s experience in the road sector.

    12. Experience in the audit of public private partnerships

  12. This is to be followed by presentations on PPPs by Norway, the UK and Hungary.


    13. Public Private Partnerships: Norwegian Challenges (Ms.Kjersti Morland Semlitsch, Senior Audit Advisor, Norwegian Office of the Auditor General)
  13. Ms. Semlitsch will discuss Norway’s recent PPP programme and the main challenges faced by the Norwegian Office of the Auditor General when carrying out audits on PPP; these include the high level of resources and skills needed to undertake the audits and the current lack of official guidance on PPPs in Norway. The paper draws on examples from the PPP road construction projects and hospital trusts.


    14. New Approaches to Assessing the Value for Money of PPP Programmes (Ms.Patricia Leahy, Director of Partnerships, UK National Audit Office)
  14. This paper sets out a new approach currently being developed by the UK National Audit Office towards measuring the Value for Money of PPP programmes. It explains why a revised approach is timely and focuses on the concepts behind the new assessment tool. The tool is designed to give a more rounded evaluation of Value for Money, with increased focus on the operational phases of projects as well as on the deal itself. The paper also looks at how the approach can be used in practice.


    15. Hungarian Experiences related to Projects Implemented with the Co-operation of the Private Sector (Mr. Gusztáv Báger, Director of the State Audit Office Research and Development Institute and Mr. Zsigmond Bihary, Director General of the Directorate of Auditing the Central Level of Public Finances, Hungarian State Audit Office)
  15. This presentation looks some of the principles of Public Private Partnerships and the role of Government in implementing successful PPP programmes. The paper focuses on the audit work of the State Audit Office in this area and the methodologies used. Audit case studies including construction of the Budapest Sports Hall and the construction of the new National Theatre are used to illustrate the presentation.

    16. Technical Case Studies and the concept of a Dictionary of Privatisation Terms

  16. The Secretariat of the Working Group will then initiate a discussion by Working Group members of the first three drafts in the privatisation series of technical case studies and a proposed dictionary of privatisation terms.


    17. Presentation of technical case studies (Ms Patricia Leahy, Director of Partnerships and Mr. Oliver Lodge, Audit Principal, UK National Audit Office)
  17. The remit to develop this new type of output in addition to existing guidelines, was approved at XVIII INCOSAI. The first three draft case studies cover the themes of valuation, marketing a trade sale and the socio-economic and environmental effects of privatisation. There will then be an opportunity for delegates to consider whether their SAI would like to help develop the analysis further and whether they can contribute specific country examples to the case studies. A template for SAIs to submit their specific country examples to the Secretariat is included in the document pack and will be available electronically on the website. Potential topics for further case examples will also be considered.


    18. Proposed dictionary of privatisation terms
  18. A proposal from the Accounts Chamber of Russian Federation that the Working Group might benefit from the production of a dictionary of privatisation terms will then be considered. A draft outline of the structure and content of such a document will be presented and discussed.

    19. Next Steps for the Working Group
     

    Future Activities of the Working Group (Discussion, all members)
  19. Members may like to consider the implications of the new INTOSAI Strategic Plan and in particular of Goal 3 to the future work of the Working Group.
  20. We will also update members on progress in how the Working Group is meeting its remit to assist the IDI with training and capacity building in privatisation and associated subjects.
  21. Members may like to consider how the Working Group can meet its ongoing remit to do joint studies with two or more SAIs doing joint reports on selected features of each other’s programmes.


    22. Break Out Groups and Feedback Sessions (Discussion, all Members)
  22. Following the successful use of break out groups at the 11th meeting, delegates will be invited to join one of three facilitated discussion groups. The groups will cover the key themes of the meeting and it is suggested that delegates join the group of most relevance to the ongoing work of their SAI. The groups will discuss the presentations around their key theme, exchange experiences in the audit of this area and consider how to take forward the work of the Working Group in the area. The groups will be asked to give feedback on their discussions to the Working Group as a whole for the benefit of all participants.


    23. Conclusions from the meeting and the venue of the 2006 annual meeting
  23. The Chairman will draw conclusions on the 12th meeting and agree any next steps with delegates. The UK Secretariat of the Working Group has approached some of you about the possibility of hosting the 2006 annual meeting, but at present we do not have an agreed venue. We would like to encourage any SAI interested in hosting the 13th meeting to make their interest known to the UK delegation. We will be happy to answer any questions SAIs may have about what is involved in hosting a meeting.
Twelfth Meeting Index