3.1. Key elements of co-ordinating and communicating

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Chapter 3

Supreme Audit Institutions’ input into policy implementation

This chapter looks at the role of supreme audit institutions (SAIs) in supporting policy implementation and its key functions: co-ordination and communication, budget execution, implementation and enforcement of regulatory policy and the exercise of internal controls and risk management. In this stage of the policy cycle, SAIs are active in carrying out traditional activities, such as audits of budgetary processes or compliance with policies. This chapter explores opportunities and limitations for SAIs to integrate value-for-money criteria into such activities. The discussion is supported by examples from SAIs that have developed initiatives and products in this area that cut across both sectors and line entities. This chapter explains how SAIs can offer a unique overarching perspective in support of policy implementation to help decision makers spot trends and understand trade-offs.

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Policy implementation in the public sector is the operationalisation of policies through delivery of programmes and services. Policy implementation can be difficult as there may be a disconnect between those who formulate the policy and those designated to carry it out, even if they are from within the same ministry. Multiple actors mean that it can be a challenge for government wide plans, and accompanying guidelines or requirements, to be consistently integrated into individual entities. Generating efficiency across the whole of government can be hindered by variances in capacity and resources and a lack of communication. In the past five years, OECD countries have seen an increase in cross-governmental initiatives, which require greater coherence in the processes used to deliver the policy goals.

Policy implementation requires extensive communication and consultation between the relevant parties, as well as co-ordination with other government actors, to avoid the duplication of effort or redundancies. Implementation of the budget should coincide with the implementation of effective internal controls. Implementation requires a certain level of trust and support from inside government and from the public. This can be bolstered by openness, accountability and transparency (OECD, 2015a).

It is key for governments to ensure a balance between central co-ordination and the autonomy of ministries. Barriers erected to protect ministry autonomy (in some cases also the barriers to communication and co-ordination) must not hinder the government’s ability to be flexible in maximising resources where needed most (i.e. for the greatest benefit). With the effective implementation of controls and regulations, governments should be confident that risk is adequately managed, controls are applied, and regulations are measured and balanced (i.e. in-year reporting is reliable and can be used to check, in real time, the pulse of government initiatives, their success or failures, or value-formoney.)

Key Function 5: Co-ordinating and communicating

Effective horizontal (across government) and vertical (within entities) communication and co-ordination are required for the development of coherent policies and programmes that aim to achieve the government vision. Effective communication and co-ordination mean that clear information on programmes and services is communicated to citizens. They also allow various actors to work together to develop and deliver policies and programmes, which is particularly important where cross-government initiatives are being implemented. Cross-ministerial initiatives in OECD member countries increased between 2008 and 2012 for 59%, decreased for 3% and remained stable for 38% (OECD, 2014a). Table 3.1 draws on internationally accepted principles to summarise the key elements of what horizontal and vertical communication and co-ordination look like in a strategic and open state.

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Table 3.1. Key elements of co-ordinating and communicating

Stage of the policy cycle

Policy implementation Key functions of a strategic and open state

Co-ordinating and communicating

A. Communication and co-ordination around the government vision or programme. B. Co-ordination bodies monitor the dissemination and implementation of government programmes/strategies (e.g. through specific units in the centre of government) in order to:

- Verify that the long-term vision is harmonised with other strategic/key policy documents (fiscal plans, growth strategies, etc.), and is reflected in departmental/entity work plans. - Specify follow-up and cross-departmental roles in actions approved in cabinet decisions.

- Facilitate co-operation between ministries at the senior level. C. Communication and co-ordination around specific sectors, frameworks or crossgovernmental initiatives (e.g. budgetary governance for internal control and for regulatory governance or appointed leaders of a cross-governmental programme): - There are mechanisms that work to identify overlaps and gaps between actors.

- There are mechanisms for sharing information for efficiency and to overcome asymmetries of information. - There is a common understanding of risks to entities involved in crossgovernmental initiatives, and of the capacity of each involved entity to manage those risks. - Mechanisms exist to share information related to risks within and across entities, including direct reporting lines for high-risk cases. D. Communication with citizens on policy development and programme and service implementation is clear. E. Transparency and openness mechanisms are effective (i.e. access to information requests are dealt with in a timely manner).

Implementing the budget

Implementing and enforcing regulatory policy

Establishing processes for risk management and internal control

Sources: OECD (2015b), OECD Public Governance Reviews: Estonia and Finland: Fostering Strategic Capacity across Governments and Digital Services across Borders, OECD Public Governance Reviews, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264229334-en. OECD (2014b), Principles for Public Administration, SIGMA, OECD Publishing, Paris, www.sigmaweb.org/ publications/Principles-Public-Administration-Overview-Nov2014.pdf. ANAO (2014), “Successful Implementation of policy Initiatives”, Better Practice Guides, Australian National Audit Office, Canberra, www.anao.gov.au/~/media/Files/Better%20Practice%20Guides/2014%2020 15/ANAO%20-%20BPG%20Policy%20Implementation.pdf.

SAIs have not traditionally been active in assessing elements of co-ordination and communication, however, there are many instances covered below where the SAI has been able to provide insight and foresight on communication and co-ordination in practice.

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SAI activities that assess and support:

Communication and co-ordination around the government vision (Table 3.1, key element A) and the dissemination of the government programme (Table 3.1, key element B)

An OECD study on centres of government (CoG) found that the CoG is fully responsible for policy co-ordination 70% of the time, and shares this responsibility 30% of the time (OECD, 2014a). The aim for CoGs is to ensure coherence in the way that government manages policy horizontally across its departments and agencies. There are often divergent policy tensions within governments, for example, sectoral interests of line ministries may conflict with the budget ministry seeking to control outlays. In all countries, important trade-offs between diverging interests usually have to be made at the highest level, and the centre of government helps to facilitate this arbitrage. Inconsistent policies can lead to a higher risk of duplication, inefficient spending, a lower quality of service, contradictory objectives and targets and, ultimately, a reduced capacity to govern. The task of the centre is to balance the ideal of coherence against the reality of political and practical limits. While CoGs have a critical role in this endeavour, collective commitment to achieving broader goals also means that ministries and senior public officials must work to ensure coherence in policies and programmes.

Monitoring of spending by departments has primarily been the responsibility of departments themselves, who are required to track their own spending for accountancy and reporting purposes. However, the centre of government is playing an increasingly direct role in following the implementation of the policies and ensuring good co-ordination, particularly for the increasing number of cross-disciplinary policy initiatives. The OECD survey found that the number of cross-departmental policy initiatives has increased in most countries. The CoG is involved in several ways: promoting the co-ordination of activities directly included in the government’s plan, facilitating co-operation between ministries at the senior level (minister, state secretary, director), supporting the work of specialised co-ordination bodies established to cover a particular policy field (economic advisory bodies) and specifying the follow-up and cross-departmental roles involved for actions approved by cabinet.

A key issue for the CoG regards the ability to set agendas and work with other government institutions. This often involves applying rules in the name of the head of government. The survey indicates that most CoG officials consider that they exert only a moderate degree of influence over ministries to promote co-ordination (18 countries, moderate influence; 9, high influence; and 3, low influence) (OECD, 2014a).

The need for the CoG to provide accurate information to the political level on implementation progress assumes some mastery of spending and results information across a large range of policy areas. While most departments have large units to track spending, this is a relatively new task for the CoG and the resources available are limited. However, central functions have made some progress related to digital governance.

Despite this progress with digital governance, CoGs have problems when: the flow of information becomes too great and transaction costs are larger than the benefit to policymakers; there is a knowledge asymmetry between large teams in departments who provide the data and the non-specialist teams in the centre who try to process this data; and the information delivered may not be entirely objective as departments know that their performance, and possibly resources, will be judged on the basis of this information.

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