LA CONTRALORIA GENERAL DE LA REPUBLICA DE CHILEElevando la agilidad estratégica y la confianza al interior del estado

An OECD Public Integrity Review

Mario Marcel, Director AdjuntoGobernanza Pública y Desarrollo Territorial, OECD

Santiago de Chile, 10 diciembre, 2013

Leveraging strategic agility and trust within government The OECD and examples of work The context of the review The findings of the review Preliminary recommendations

Contents of the presentation

The OECD• Space for international governmental co-operation since establishment in 1961• 34 member countries, over 2500 staff based in the Secretariat, over 250

publications per year Work on governance

• Policy dialogue through networks of policymakers (Public Governance Committee); Data (Government at a Glance 2013); Analytical work (OECD agenda on trust); specialized networks and reviews (Integrity); International Standards (ethics, whistleblowing, public procurement); Country in-depth studies (Public Governance Reviews in 12 countries since 2010), partnerships with international organisations and networs

• Current undertaking - “Supreme Audit Institutions and Good Governance”- led by Brazil with 12 peer SAIs: Canada, Chile, the European Court of Auditors, France, Mexico, Netherlands, Norway, Poland, Portugal, South Africa, South Korea, United States of America

• ‘Citizen’s Engagement and Supreme Audit Institutions’ under the Development Co-operation Directorate

Collaboration with international bodies• INTOSAI; developing key national indicators of social and economic development

strategy and societal progress and on a Performance Measurement Framework • INCOSAI observer

Introduction to OECD

• The review aimed to• Provide guidance to the CGR on how they can support good

governance through their audit work• Contribute to the discourse on trends in SAI work• To provide guidance for all SAIs

• The importance of the review• The post-crisis environment shows a decline of trust in

government and the need for the strategic agility to respond to new challenges

• The environment provides opportunities and pressures for SAIs to demonstrate relevance and impact

• Opportunity for SAIs to help restore public trust in government by strengthening the link between their work and whole-of-government issues

Introduction to the Review

• The review involved a specific methodology / approach• Over 1 year of research and stakeholder engagement• New research: 13 peer surveys with 60+ questions on SAIs’ mandates, practices and procedures

to benchmark those of the CGR • Existing literature:

OECD surveys, databases and publications, including “Recommendations on Regulatory Policy and Governance” and “Best Practices on Budget Transparency”

International guidelines including INTOSAI’s “Guidance for Good Governance” and ISSAI’s “Principles for Transparency and Accountability” among others

• The review relied on the support of many• Close collaboration with officials of the CGR and support from the Government of Chile• Senior officials from SAIs in Australia, Belgium, Brazil, Costa Rica, Denmark, the European Court

of Auditors , Israel, Korea, Mexico, Peru, Portugal, South Africa and Spain.• Representatives from Chile’s Legislature, the Judiciary, civil society, media, business and

academia

• The product• Report featuring context, assessment, recommendations• 32 boxes, mostly with examples of good practice, 51 recommendations• Final version in Spanish in February • Dissemination across member countries, OECD networks, available to general public

The Review methodology

• Chile is an emerging country that is undergoing a process of deep change

• The mandates, functions, organization and delivery methods of the public sector are changing accordingly

• Two key challenges:• Strategic agility• Build trust

• Change in the public sector and society creates new risks and challenges for the audit function• Emerging risks: outsourcing, asset management• Challenges: managing change and flexibility, empowered citizens

• A necessary response: provide insights and foresights of emerging risks and good practice

Context and approach of the review

• From the early 1990s:• Larger public sector in terms of spending and employment• Stronger democratic institutions: active role of congress, elected officials at

municipal and regional level, regulation of political financing• New government functions: environment, gender equity, manage trade and tax

treaties, long-term care, international money laundering• More diverse public sector: subnational institutions, public services, autonomous

bodies• Leveraged public sector: substantial functions decentralized, outsourced or under

long-term service contracts (PPPs)• Rule-based fiscal policy, active ALM operations, fiscal statistics• Massive introduction of ICTs into government: transactions with citizens,

connectivity, databases, shared services• Diversification of public service, new categories and rules; conflict, negotiations,

agreements• Transparency and access to information: reduction of reserved expenses,

transparency requirements on public officials, publication of data, access to information, documents

Change in the Chilean public sector

• Emerging challenges for the public sector:• Demographic transition• Gender equity• Urban development• Further decentralisation• Rights-based policies• International regulatory cooperation• Further openess standards and practice• Regulation of conflicts of interest

And many more to come

The essential barometer: trust in institutions

Areas of Analysis Findings

Overview of the CGR Work of CGR is underlined by its high level of organisational and administrative independence, respect and positive reputation

Role in supporting strategic agility and trust in government

CGR undertakes some functions that fall under the Executive in peer countries, balance , focus and use of current undertakings needs to adjust to evolution of public management and value-for-money

Fostering strategic agility in the CGR

Issued first Code of Conduct in July 2013, but does not have multi-year workforce planning or a human resources competencies framework as most peer SAIs do

Stakeholder Engagement In the past 6 years CGR has undertaken a number of initiatives to improve engagement with stakeholders, but engagement is still limited with some key actors, like the Legislature

Processes for prioritising assignments and ensuring quality of work

CGR’s audit planning is underlined by a prioritisation process, including a matrix of relative importance and risk indicators for audit engagementsSeveral units have been established by the Comptroller general to ensure quality control

Enhancing transparency and performance

CGR has been active in ensuring quality and a leader in integrating transparency in its work; practices are largely in line with INTOSAI “Principles for Transparency and Accountability”

CGR is seeking to enhance its own performance framework and to develop a general framework for evaluation with peer SAIs

Preview: areas of analysis and findings

• Reassess current products, and introduce new ones that are linked to whole-of-government issues, to support the government in addressing new challenges• Integrating the automation of the CGR’s ex ante audit assignments with

government management ICT systems• Further utilising exemptions to the CGR’s ex ante audit assignments to incentivise

sustained improvement in management and internal control in public entities• Proactively support efforts to consolidate an independent, capable and efficient

system of internal control in the Chilean public sector• Reallocating capacity to undertake ex post audits of decision-making systems,

regulatory management practices and internal control in individual entities and across government.

• Auditing the reliability of annual financial statements of public entities, linking the process to the annual budget cycle

• Auditing the reliability of non-financial performance information together with the audit of annual financial statements

• Auditing whole-of-government issues that are key for the government to become more strategically agile

• Deliver value-added products, presenting findings from ex post audit work in new ways to further engage those changed with governance

Preliminary recommendations

• Enhancing strategic agility within the CGR will help to ensure it has the capacity to provide these foresights and insights• Foster strategic sensitivity of emerging trends and risks affecting public governance

and changing societal expectations as input into the CGR’s strategic planning and institutional modernisation

• introduce multi-year workforce planning to consolidate recent workforce restructuring d align workforce skills and competencies with current and future needs of the institution

• Use competency management to align human resource management to support the institution’s goals and enhance responsiveness to changes within the public administration

• Utilise traditional human resource management practices (e.g. recruitment, training and promotion) to support the development of competencies and encourage internal horizontal co-operation

• Align performance assessment at all levels within the institution to the goals contained in the strategic and human resource plans ; ensure greater consistency between recruitment, development and rewards.

Preliminary recommendations

• Leverage stakeholder engagement to increase and demonstrate the role of the CGR in supporting good governance• Enhance engagement with auditees in order to develop a constructive working

relationship• Enhance co-ordination and co-operation with internal audit in order to support

effective and efficient audit work• Broadening the communication strategy to define audiences and how they access

information on audit activities and findings• Focusing specific attention to the Congress, its commissions as well as• the country’s municipal councils• Exploring measures to overcome barriers and constraints facing core stakeholders’

understanding and access to information• Consult and facilitate participation with stakeholders other than auditees and

internal audit, including by consulting stakeholders throughout the audit cycle, including the design of audit criteria and the evaluation of audit reports and – engaging key executive authorities in discussions about the main challenges facing good public governance.

Preliminary recommendations

• Strengthening processes to prioritise assignments and consolidating existing quality control systems can help to ensure relevance and quality

• Further enhance impact through ongoing transparency and performance measurement initiatives

Preliminary recommendations

• The CGR has an indisputable reputation for its institutional independence and leadership in transparency

• This review is a tool that highlights CGR’s unprecedented opportunity to support government in addressing new challenges by• Building on its “reform from within” and current initiatives• Continuing to invest in high value-added products • Continuing to engage strategically with auditees and non-auditees

• This is the second integrity review of an SAI this year- a useful tool for other SAIs to benchmark their work

• Encourage all SAIs to continue assessing their role and potential impact in supporting good governance

Conclusions