INTOSAI Working Group on the Audit of Privatisation
Letter from the Chairman to the Comptroller & Auditor General of India on the Working Groups contribution to Goal 3 of the INTOSAI Strategic Plan 2005-2010
Vijayendra N. Kaul
Comptroller & Auditor General of India
10 Bahadur Shah Zafar Marg
New Delhi- 110 002
INDIA
June 2005
INTOSAI Working Group on the Audit of Privatisation – Goal 3
Thank you for your letter of 25 April 2005. I am very happy, as Chair of the Working Group on the Audit of Privatisation, to contribute to the SAI of India’s proposed consultation for taking forward Goal 3 of the INTOSAI Strategic Plan 2005-2010.
In response to the specific requests in your letter, I have set out below details of the Working Group’s activities and outputs and also some views and suggestions as to how we could build upon existing practices, facilitate better communication and awareness among our members and generate useful best practices to achieve the objectives of the goal.
Activities and Outputs
As you will know the Working Group held its inaugural meeting in 1993 and membership of the Group currently numbers 40 SAIs. In October 2004, I presented a report to XVIII INCOSAI in Budapest, about the activities and outputs of the Working Group. A copy of this report is enclosed (Enclosure 1). This report sets out the Working Group’s remit approved by INCOSAI in 2001 and the work and achievements of the Working Group over its first decade. To mark ten years of the Working Group we published an additional paper for XVIII INCOSAI entitled “Privatisation: ten years on”. A copy of this paper is also enclosed (Enclosure 2). This paper reflects on the changing remit of the Working Group – looking beyond privatisation at the related subjects of economic regulation and public/private partnerships. The report to INCOSAI also provides details of how the Working Group have been using and developing audit guidelines and how we have been exchanging information.
Our most recent output was the publication in August 2004 of a set of guidelines on Best Practice for the Audit of Risk in Public/Private Partnerships. These guidelines were approved and adopted by XVIII INCOSAI. Given that the Working Group has now produced four sets of guidelines and in recognition of the value of comparison between countries in applying the guidelines, the Working Group is now developing a series of technical case studies across the areas of privatisation, economic regulation and public/private partnerships. Since October 2004, we have developed three privatisation case studies; on valuation methods, the socio-economic impacts of privatisation and marketing a trade sale. We intend to present these case studies at our 2005 annual meeting.
In addition to developing these technical case studies, the Working Group will continue to adjust guidelines in the light of experience; carry out more training through IDI; and to do joint studies with two or more SAIs doing joint reports on selected features of each others programmes.
The 12th annual meeting will take place in Brasilia on 13th and 14th September 2005. The meeting will be followed by an International Denationalisation Conference hosted by the SAI of Brazil. In addition to inviting the Working Group’s 40 member SAIs to the annual meeting, we also propose to invite Portuguese speaking SAIs and OLACEFS members to participate. All Working Group members will also be invited to the Conference.
In pursuit of our work remit from XVIII INCOSAI, the work programme in Brasilia will include:
- Presentations on experiences in the audit of privatisations, economic regulation and public/private partnerships, with particular reference to the themes of Government handling of failed privatisations and the new role of the SAI in both regulation oversight and public/private partnerships;
- “Break-out” sessions for delegates to discuss these three key themes and feed back to the Working Group; and
- Discussion around the first technical case studies which the Working Group is developing to supplement our four sets of published guidelines.
Achieving Goal 3
In the light of recent experiences as Chair of the Working Group, I have a number of suggestions for how we can work towards achieving Goal 3.
- The Working Group has identified that although members found sets of guidelines very useful in their audit work, there are differences between SAIs and sometimes difficulties in applying guidelines in specific country circumstances. The technical case studies which we are now developing are designed to provide pragmatic and practical advice on topics which are of particular interest to members. The technical case studies draw heavily on country examples and on comparison between the varying experiences of SAIs. We think that developing new products which disseminate best practice would be of use more widely within INTOSAI.
- At our last annual meeting in Sofia in June 2004, the Working Group experimented with a “break-out session”. In small groups, delegates engaged in informal discussions about particular technical topics. Each group then provided feedback to the Working Group in a plenary session on what had been discussed in their groups. This format proved very successful and encouraged some lively debate. We therefore propose to continue this practice at future meetings and think that other INTOSAI Working Groups and Committees might consider using similar non-traditional formats in their meetings to facilitate better discussion around technical matters.
- The Working Group has recently undertaken some work to redesign our
website (www.nao.org.uk/INTOSAI/wgap/home.htm). This was with the intention of
making the website more user friendly for members and other interested
parties. We conducted an online survey of members to gather their views on how
the website could be improved and what information they would like to be
included. We have also been considering the possibility of setting up an
on-line discussion forum to facilitate communication between members on
technical or training issues. At present we have identified some practical
difficulties with this approach, but in theory discussion forums would be a
useful way of communicating.
As we develop these initiatives to make better use of information technology to support the operation of the Working Group, we are conscious of the need for consistency of presentation and, where appropriate, practice within the broader INTOSAI framework. We also recognise that it would be helpful to benefit from the experience of the other INTOSAI Working Groups and Committees in the use of information technology. This is an area where I would very much welcome any advice or guidance that you may be able to give in your capacity as Goal Liaison. - The Secretariat of the Working Group sees an increasing volume of requests for assistance on technical matters. One idea we are exploring is to develop a series of Frequently Asked Questions which are readily available as a way of speeding up dissemination of information. These could be posted on the website and would address the common requests for information that we regularly deal with. All Working Groups and Committees could consider whether there is benefit to developing technical Frequently Asked Questions which are widely available to those who may have an interest in the subject area.
- There may be untapped benefit in Working Groups engaging in partnerships
with academic/research institutions. From our own perspective we would be
interested in drawing upon the work on privatisation of the World Bank and the
OECD. We are currently exploring possibilities for how we could work more
closely with these organisations. Similar partnerships might be considered
appropriate by other INTOSAI Groups and Committees.
- We also think it would be extremely useful for members of the different Working Groups, Committees and Regional Groups to receive regular updates about what is happening more widely within INTOSAI. Perhaps each of the Working Groups, Committees and Regional Groups could be encouraged to produce a regular, but brief position paper setting out recent developments and events. These papers could be circulated to Chairs of the Groups and disseminated more widely to members to encourage better communication and awareness of INTOSAI activities.
Of course, these are just a few ideas in which you may be interested, and I would be delighted to take part in the ongoing consultation about how we can best achieve Goal 3.
JOHN BOURN
Comptroller and Auditor General