54 – 2 – SUPREME AUDIT INSTITUTIONS’ INPUT INTO POLICY FORMULATION
9/10 Of peer SAIs have looked at:
The adequacy of budgetary planning processes, including: facilitating the alignment between budgeting and strategic objectives; ensuring reliability and quality of tools that underlie the budget; managing public debt; assessing long-term sustainability; guiding the multi-annual process of resource allocation.
Nine out of ten peer SAIs have looked at the adequacy of the budgetary planning process and the characteristics needed for its reliability. For example, the SAI of Portugal considers the adequacy of the budgetary planning process as part of its annual Opinion on the General State Account. Additional examples below highlight other ways in which SAIs are assessing the adequacy of the budget and its characteristics: Examples of SAI work in this area include:
The Auditor General of South Africa (AGSA) is mandated to undertake an annual Budgetary and Strategic Review. Although this activity is formally considered as a financial and compliance audit, it also incorporates a broader assessment of predetermined objectives laid out in the budget. Specifically, AGSA reviews the relevance and measurability of pre-determined objectives and the measurability of targets to help ministries understand shortcomings in their planning. The Auditor General presents findings to relevant parliamentary committees (case study Box 2.8).
Korea’s BAI conducted a performance audit on budget system reforms in 2008. Beginning in 2003, the Korean government introduced four major budget system reforms, including: National Fiscal Management Planning, Top-down Budget System, Self-Assessment System of Financial Programme, and Digital Budget and Accounting System. The changes aimed to streamline financial management and to cope with a decrease in tax revenues and a rapid increase in demand on spending, including for welfare. BAI conducted a performance audit on budget system reforms early on in order to support their establishment. The audit found that the medium-term (five year) fiscal plan (The National Financial Management Plan) did not fully reflect ministries’ work plans, did not have the international budget classification system, and did not have an effective check-and-balance system to prevent ministries from formulating medium-term plans without consultations with the budget authority.3
The openness and transparency of budget documents (Table 2.2, key element C) and inclusive budgetary debate (Table 2.2, key element D) The OECD believes that an effective legislature is a key ingredient for establishing and maintaining fiscal discipline, and also provides a necessary link with civil society and fosters accountability of the executive. Today’s legislatures scrutinise and authorise revenues and expenditures and ensure that the national budget is properly implemented. This is done through a variety of ways, including committee reviews, plenary debates, and parliamentary questions and interpellations. There is a great variation in legislative influence over the budget in OECD countries, as demonstrated by a legislature’s amendment powers. In order to engage meaningfully in the budget process, rather than simply serving as a rubber stamp, legislatures require reliable, unbiased information and strong analytical SUPREME AUDIT INSTITUTIONS AND GOOD GOVERNANCE: OVERSIGHT, INSIGHT AND FORESIGHT © OECD 2016
