Audit of disaster preparedness:
Guidance for Supreme Audit Institutions
May2012
Preamble
I. The INTOSAI Working Group on Accountability for and the Audit of Disaster-related Aid (AADA) was established by the XIXth INCOSAI in Mexico in 2007 as a successor to the INTOSAI Tsunami Task Force. Building on the knowledge and experience of this Task Force, the Working Group has developed audit guidance for SAIs as well as a tool for harmonized reporting of disaster-related aid.
II. Disasters of the magnitude of the 2004 Indian Ocean Tsunami, which triggered the establishment of the INTOSAI Task Force, fortunately do not happen often. However, many disasters occur every year, and the toll in terms of loss of human life, human suffering and physical, social and economic damage is rising. This is partly caused by greater exposure and vulnerability due to population growth and the increase in the occurrence of certain types of disasters as a result of climate change. A welcome consequence of the recognition of these developments is the focus by governments on reducing the risk of disasters and on reducing their potential impact. The Working Group aims to contribute to this by providing guidance for SAIs not only on the audit of disaster-related aid, but also on auditing disaster-preparedness. In carrying out well-defined audits of the disaster-preparedness of government, SAIs can stimulate effective policies aimed at reducing risks of disasters and mitigating their impact.
III. The Working Group observed the pressing need to improve the traceability of aid following the occurrence of a disaster. Notable features of post-disaster activity include large amounts of resources flooding into disaster-affected areas, which may be in poor countries with weak or newly damaged institutions and infra-structure and frequently pre-existing power imbalances. Aid may be disbursed by a number of different actors with varying levels of experience and in situations where the pressure to deliver aid rapidly to individuals in great need may lead to the circumvention of normal procedures. Lack of coordination and inattention to accountability and reporting of disaster-related aid can render the establishment of the audit trail by auditors difficult. The Working Group has sought to help SAIs improve their audits of disaster-related aid, which can give rise to recommendations on how to improve in the eventuality of future disasters.
IV. In preparing guidance on the audit of disaster-related aid, the Working Group considered the interests of the victims of disasters to be of primary importance. SAIs can play an important a role here in verifying that victims receive aid, in reassuring donors and potential donors that aid is used efficiently and effectively, and that waste and improper use of aid is prevented as much as possible.
V. Disaster management is the term often used to describe the systematic process of using administrative decisions, organizational assets and operational skills and capacities of the society and communities to implement policies and strategies to lessen the impact of natural hazards and related environmental or technological disasters. Thus, disaster management encompasses disaster preparedness through preventive and mitigating measures, emergency response, including relief and early rehabilitation measures, and post-disaster rehabilitation and reconstruction. SAIs audit the whole of the disaster management cycle and report on the quality of the management of each phase, making recommendations with a view to reducing the risk and impact of potential future disasters.
VI. The four sets of guidance in this series of ISSAIs are closely related and appropriately cross referenced. The focus of the guidance is on disaster-related aid. For guidance on general audit methodology and procedures, SAIs should refer to first, second and third level ISSAIs, especially those on financial audit, performance audit and compliance audit.
VII. The Turkish SAI led the preparation of guidelines for auditing disaster-preparedness. In addition to direct assistance from the SAIs of Austria and Kenya, the SAI of Turkey also received data from a number of INTOSAI members for a survey it carried out. The SAI of Turkey also organized a parallel audit in order to collect relevant input for the guidelines. The SAIs of Azerbaijan, Chile, India, Indonesia, the Netherlands, Pakistan, the Philippines, Romania, Ukraine and Turkey participated in this parallel audit.
VIII. The Indonesian SAI developed the guidelines for the audit of disaster-related aid, with direct assistance on one of the subtopics from the SAI of Peru. The SAI of Indonesia carried out two surveys and a parallel audit to gather data to feed into this guidance. Like the ISSAI on auditing disaster-preparedness, this ISSAI takes the disaster management cycle as a point of departure, but focuses on the different phases and activities carried out in response to disasters, from emergency relief through to rehabilitation and reconstruction. Although the title refers to disaster-related aid, the guidelines are considered useful for auditing any type of humanitarian aid.
IX. The Working Group considered disaster-related aid to be at especially high risk of fraudulent and corrupt activity, given the nature of the expenditure and the circumstances surrounding disasters. The European Court of Auditors has prepared guidance for auditors to take account of the increased risk of fraud and corruption in the emergency phase of disaster-related aid. This guidance expands on ISSAI 1240 in broadening the scope to consider the risk of corruption as well as of fraud. It focuses on that phase, following disasters, when procedures and controls might not function as they may normally be expected to do. To assist auditors, the guidance outlines risks and red flags of which auditors should be aware and provides advice on how to adapt audit procedures accordingly.
X. Recent developments in disaster management have led to the use of new tools, such as Global Information Systems. The SAI of the Netherlands has developed guidance on the use of GIS when auditing disaster-related aid with the support of external experts in this field. In addition to providing guidance on how to use geospatial information for auditing disaster-related aid, this ISSAI provides a comprehensive introduction of geospatial information and may therefore also be useful for SAIs conducting audits in other areas not related to disasters or disaster-related aid.
XI. In presenting this series of ISSAIs the Working Group aims to inform and enrich the audit by SAIs of disaster-related aid. Whilst it reflects current best practice, INTOSAI members should use the guidance as is appropriate and adapt it as required by specific conditions and mandates. The guidance should be considered as a first step towards documenting best practice and advice and requires early updating in the light of further experience.
XII. SAIs involved in auditing disaster-related aid have suffered consistently from the near impossibility of establishing a reliable and complete audit trail due to the lack of accountability and transparency which often result from the urgency and complexity which often reign in post-disaster situations and because of the failure to properly prepare for disasters. The Working Group therefore went further than establishing guidance for the audit of disaster-related aid. It also developed a tool to allow disaster-related aid to be reported on in a standardised and harmonised format by all actors. In addition, it has canvassed support for the implementation of this reporting format on a global scale. More information about this tool, the “Integrated Financial Accountability Framework (IFAF)” is available in the Final report of the Working Group to the XXIst INCOSAI in 2013.
XIII. The INTOSAI Working Group on Accountability for and the Audit of Disaster-related Aid wishes to express its appreciation for the contributions made by INTOSAI members, especially those which replied to the surveys, those which contributed to the Guidelines, and those which participated in the parallel audits. The Working Group is also grateful for the valuable contributions made by others, such as the Special Representative of the UN Secretary-General for Disaster Risk Reduction (UN ISDR), the Under Secretary-General of the UN Office for Internal Oversight Services, the Director General of the European Commission, the xxxxxx (Transparency International?; both for developing and improving the guidelines and for their input during meetings of the Working Group.
Audit of disaster preparedness
Table of contents
Part 1: Disaster and disaster management
1. Background
2. Purpose and structure of the Guidelines
3. A Conceptual Framework for Disaster Preparedness
Definitions of Disaster
Types of Hazard
Scope of Disaster Preparedness
Disaster Management Cycle
4. Parliament and Government
5. Disaster Management Laws, Plans and Information
Disaster Management Law
National Disaster Plans
Sub- Plans
Geographical Information Systems (GIS)
Risk Assessment-Prediction with GIS
Planning with GIS
Part 2: Audit of disaster preparedness
6. Introduction
The experience of SAIs in auditing disaster preparedness
7. Audit Mandate of SAIs
8. What are the challenges that SAIs face?
9. Cooperation among SAIs
10. Types of Audit
11. Principles for auditing disaster preparedness
12. Assessment of the Audit Environment
13. Planning and carrying out an audit study
Audit Approach/ Scope
Audit Objectives
Audit Methodology
Audit Criteria
Audit Findings and Recommendations
Part 3: Audit program for disaster preparedness
14. Audit Program
Identification of the disaster characteristics
Specifying and understanding the national strategy and action plans
Identification of the framework and organization of the authorities involved
Assessment of the adequacy of coordination
Assessment of disaster management tools and early warning systems
Assessment of emergency exercises and training/public awareness
Assessment of disaster funds and grants administration
Assessment of the adequacy of making urban areas resilient and reducing urban risk
Urban planning/Building development plans and their implementation
Reinforcement and reconstruction activities/urban transformation
ANNEXES
ANNEX 1: SAIs which participated in the WG AADA survey and the parallel audit
ANNEX 2: An example for governance structure - Canada
ANNEX 3: Geographical Information Systems (GIS)
ANNEX 4: A case for understanding the organization and framework of authorities preparing for disaster
ANNEX 5: Audit Objectives - examples concerning disaster preparedness
ANNEX 6: Audit Criteria - examples concerning disaster preparedness
ANNEX 7 Audit Recommendations - examples concerning disaster preparedness
Glossary
Bibliography
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Part 1: Disaster preparedness
1. Background
1.1 The occurrence and impact of disasters has dramatically increased over the last few decades, owing to social, demographic, political, environmental and climatic factors. The degree of vulnerability and exposure, leading to larger losses, has also increased considerably caused by the growth of urban development and population density in exposed areas. The increasing uncertainty of weather patterns due to climate change are additional reasons for the occurrence of major disasters.
1.2 These developments have led to changes in international policies concerning disasters over the past decade. Previous policies resulted in the concentration of resources on post-disaster relief and reconstruction activities. In recent years the international community has moved towards new policy objectives which reflect the desire to reduce risks prior to the occurrence of a disaster. The Yokohama (1994) and Kobe (2005) Conferences and the Hyogo Framework for Action (HFA) have set new objectives and criteria to reduce disaster risk. These are monitored by the UNISDR[1] (2010), which has established the Global Platform for disaster risk reduction and proposed the formation of National Platforms, comprising not only the relevant official bodies but also NGOs and Universities. The goal of these actions is to make the world less vulnerable to disasters.
1.3 Some disaster risk factors increase the impact of disasters and challenge the capacity of federal and provincial/territorial governments, and sometimes the international community, to manage emergencies. These risk factors include increased urbanization, critical infrastructure dependencies and interdependencies, terrorism, climate variability and change, animal and human health diseases, and the increased mobility of people and goods around the world. Risk reduction or mitigation policies call for new approaches, new methods and expertise: identifying various types of risk at different levels, making projections of likely consequences, and also a capacity for devising methods to avoid, reduce and share risks. Disaster preparedness thus requires developments in management approach and, accordingly, the approach to audit by SAIs.
2. Purpose and structure of the Guidelines
2.1 The purpose of this guidance is to assist SAIs in the audit of the disaster preparedness of governments. Where governments have not yet accepted the importance of disaster preparedness policies and plans, the guidance can assist SAIs in making recommendations on this fact. Where governments have policies related to disaster preparedness/risk reduction and the principle has been accepted, the following document provides practical guidance based on exchanges of experience between SAIs. SAIs are well placed to identify the key activities necessary to implement the new policies required under the Hyogo Framework for Action. This means that in addition to providing assistance to SAIs, this guidance supports governments and communities in improving mechanisms, procedures, and institutions so as to reduce the risk of exposure of communities and assets to disasters.
2.2 Another objective of the guidance is to encourage SAIs and their auditees to take a more active role in preventing the potentially disastrous impact of natural events. Issues faced are as follows:
· The need to convince government that investing in disaster preparedness may be a more efficient and effective use of resources than paying the bill for disaster response. This lack of awareness arises because the added value of investing in disaster preparedness can only be assessed if and when a disaster actually happens (and when it is in fact too late). Preparedness costs, but its benefits may never occur (or will only do in many years’ time) or may not be clearly visible.
· The need for awareness on the part of SAIs of the role they have to play in prevailing upon governments to invest in disaster preparedness. Failure of SAIs to recognize this is exacerbated by the tendency to look at ex-post events (after disasters occur) and to use public expenditure as the basis for selecting audit topics: if governments do not invest in disaster preparedness, SAIs will not audit it.
· The complexity of assessing the quality of disaster risk assessment, disaster mitigation and disaster prevention: this requires using other types of information (for instance geographical information, information about the probability of events, etc.) and information from sources other than those normally used in audits (such as information from more specialist agencies, universities, international bodies). Examples from SAIs that have experience in tackling this complexity can be very helpful for other SAIs.