Performance Audit Subcommittee (PAS)
Progress Report October-2013/October-2014
Intosai Governing Board Meeting
November 6-7, 2014
1. PAS membership
In 2014, the SAI of Georgia became a PAS member.
The Performance Auditing Subcommittee is currently made up of 23 SAIs:
1. SAI of Brazil (Chair)
2. SAI of Austria
3. SAI of Australia
4. SAI of Canada
5. SAI of Denmark
6. SAI of France
7. SAI of Georgia
8. SAI of Guyana
9. SAI of Hungary
10. SAI of India
11. SAI of Iran
12. SAI of Kiribati
13. SAI of Mexico
14. SAI of the Netherlands
15. SAI of Norway
16. SAI of Saudi Arabia
17. SAI of Slovenia
18. SAI of South Africa
19. SAI of Sweden
20. SAI of Tunisia
21. SAI of the United Kingdom
22. SAI of the USA
23. European Court of Auditors
2. Review of level 4 of ISSAI framework
Since the previous Governing Board Meeting, PAS members were devoted to the ISSAI level 4 review. Based on a project approved by the PSC Steering Committee, PAS began working in 2013 on two fronts: development of a new ISSAI 3000 and restructure of performance audit level 4. For these tasks, two subgroups were formed.
The first one was constituted by the SAIs of Canada (leader) and the SAIs of Austria, Norway and UK). Through frequent discussion of the whole PAS through PAS Community of Practice, and counting on varied inputs from members, the group developed a first draft of ISSAI 3000, which was analyzed and debated on PAS 7th Meeting in April 2014 (item 5 below).
The second group was made up of the SAIs of Netherlands (leader) and the SAIs of Denmark, Norway and Brazil. They were in charge of preparing a concept of a new structure and organization for the performance audit guidelines. Now, the review of level 4 has come to the phase in which PAS will work on new guidelines (3100 series). Each ISSAI will focus on a performance audit aspect or area. According to decisions made during the 7th PAS Meeting (item 5 below), the new ISSAI 3100 will contain central concepts for performance auditing, while ISSAI 3200 will be about planning, conducting and reporting. Up till now, PAS has planned the development of these two guidelines only.
As we will explain ahead (item 5), PAS is now working on a second draft of ISSAI 3000 and preparing the first versions of ISSAI 3100 and 3200.
3. CAS-FAS-PAS Cooperation
Since the end of 2013, FAS, CAS and PAS have been working together aiming at improving their actions and results. The need for joint work was detected when the subcommittees began to work on revision of the level 4 ISSAIs. At this stage, a series of issues were raised with respect to the revision that led the members to understand that: (i) they should agree on some points in order to ensure a minimum level of consistency between the format and the content of the level 4 standards with respect to the three types of audit; e (ii) it would be necessary to have some kind of guidance by the PSC regarding the key issues.
On April 2, the three subcommittees met in Copenhagen to discuss the main themes of their cooperation and prepare joint proposals to be presented to the PSC. They found that there was a need for additional guidance on drafting conventions and proposed the inclusion of guidelines in the PSC document called “INTOSAI drafting conventions for auditing guidelines”. PAS and CAS presented this to the PSC, since the financial auditing guidelines do not fit into the proposed format, but follows the ISA format determined by IFAC. During the PSC Steering Committee meeting of May 2014, the proposal was approved and a new section was included in the abovementioned document (item 6 below).
4. Participation in the PSC leadership meeting
The leadership meeting was held in Copenhagen, on April 2-4, 2014. The main theme was the evaluation of INTOSAI standard-setting activities. The representatives of the PSC Chair and the Subcommittees’ Chairs discussed the main results of the survey carried out by the PSC Secretariat to gather contributions from PSC members and main stakeholders with regard to the review of the present INTOSAI standard-setting system.
PAS, CAS and FAS used the opportunity to hand to the PSC Chair their “Common discussion paper”, where they developed the main themes they were working on together and proposed that the document were elaborated into a discussion paper at the 11th PSC steering committee meeting.
5. 7th PAS Meeting
Besides representatives from member SAIs, observers from the Institute of Internal Auditors – IIA, the IDI and the SAI of Poland participated in the Meeting.
On April 7 to 9, 2014, the 7th PAS Meeting was held in Amsterdam, hosted by the Institute of Internal Auditors IIA-Netherlands.
The Meeting agenda focused on four main topics: the draft of ISSAI 3000; the structure of level 4 of the ISSAI framework; the new project proposal for reviewing the level 4 ISSAIs; and the self-evaluation of the PAS standard setting function.
Before addressing the first topic, the Meeting facilitator, Dagomar Lima (SAI of Brazil), informed the participants about the CAS-FAS-PAS Cooperation and about the PSC Leadership Meeting (items 3 and 4). Norbert Weinrichter (SAI of Austria), in turn, shared information and his impressions about the XXI Incosai, held in Beijing in October of 2013.
The Meeting participants worked on the existing draft of the new ISSAI 3000, prepared by the PAS subgroup constituted by the SAIs of Canada, Austria, Norway and United Kingdom. They discussed the draft and deliberated on the format of the new ISSAI. PAS members decided that ISSAI 3000 would elaborate a bit more on ISSAI 300, present additional requirements and give some details on the extra requirements. To work on a new draft of ISSAI 3000, the standard for performance audit, another group was formed: SAIs of Brazil, USA, Austria and India. The group is in charge of adapting the draft standard to the amended drafting conventions (item ) and write explanations.
The discussion of the second topic – the structure of level 4 – was led by Frank den Broek (SAI of Netherlands). He is the chair of the PAS subgroup in charge of proposing a new structure and organization for performance audit level 4. In addition to Netherlands, the group was made up of the SAIs of Denmark, Norway and the PAS Secretariat (Brazil). During this discussion, the new level 4 guidelines were also focused.
The new level 4 guidelines will be based on ISSAI 100, ISSAI 300 and the existing performance audit material (ISSAIs 3000, 3100 and its annex, five PAS practical documents, comments sent to the exposure draft of ISSAI 300). During the Meeting, PAS members decided to form three new subgroups to work on the new guidelines. The subgroups will be the following:
ü SAIs of Norway and Netherlands will work on new concepts to be included in the future ISSAI 3100;
ü SAIs of Canada and Hungary will review existing material to be included in the future ISSAI 3100;
ü SAIs of Sweden and Denmark will work on performance auditing process (planning, execution and reporting), theme of the future ISSAI 3200.
6. Participation in the 11th PSC Steering Committee Meeting
Together with FAS and CAS, the PAS presented to the PSC Steering Committee, during its Meeting in May of 2014, in Manama, a common collaboration plan stressing the need for increased coordination among the subcommittees and setting initiatives in this regard. The Subcommittees also submitted to Steering Committee a proposal for alteration of the “Drafting conventions”, the document that provides guidance on drafting INTOSAI's professional standards. The Subcommittees proposed that the document include additional guidance in order to ensure consistency in the presentation of the auditing requirements and clarify that the verb “shall” and “should” should be used only in connection with the auditing requirements, not in the narrative explanatory sections.
The proposal for amending the Drafting Conventions was approved by the PSC Steering Committee.
Dagomar Lima, representing the SAI of Brazil (PAS Chair), presented the Subcommittee Work Plan and commented about some aspects of the performance audit level 4 review. He highlighted that the main point for the PAS regarding level 4 review was to ensure alignment with the new fundamental auditing principles contained in ISSAIs 100 and 300.
PAS also submitted to the PSC Steering Committee amendments to the PAS Project Review of level 4 Project (item 2) and the amended project proposal was approved.
7. PAS contribution to the 3i Program
PAS proceeded with the support that has been offered to the 3i Program since 2012. Dagomar Lima e Maria Lúcia de Oliveira, auditors from the SAI of Brazil nominated by the PAS to this end, participated in different activities promoted by the IDI, 3i Program manager.
In October of 2013, in Bangkok, Thailand, Maria Lúcia de Oliveira participated in a workshop to prepare Asosai and Pasai facilitators in ISSAI implementation. In November of 2013, in Arusah, Tanzania, Dagomar Lima took part of another workshop aimed also at preparing facilitators in ISSAI implementation, but for auditors from the Eurosai and Afrosai-E. In these events, both auditors took part as training participants and as experts in performance auditing.
From April 10 to 16, 2014, in Oslo, Norway, a seminar for reviewing the 3i Program products took place. The e-courses and the ISSAI Compliance Assessment Tool (iCAT) were analyzed and revised. The review was decided after the iCAT and the e-courses were put into practice during the first 3i Program and took into consideration the approval of new ISSAIs 100 to 400. Both Dagomar Lima and Maria Lúcia de Oliveira participated in the review process.
Auditor Maria Lúcia Oliveira also participated, as a performance audit expert, in a meeting promoted by the IDI to review materials and redesign of e-courses with focus on the 3i Program implementation within the Olacefs Region. It took place in August of 2014, in Lima, Peru.
Presently, she is mentoring an on-line course that began on September 24 and will last till December 12, 2014.