SAIs’ Response to COVID-19

R.Jayaprakash

The Covid-19 pandemic has posed unprecedented challenges to the world community. The global economy is experiencing an unprecedented recession which puts severe pressure on resources like men, money and materials in combating the effects of the pandemic. The national Governments have adopted a multi-pronged strategy of emergency procurement of medical and relief goods, vaccination and economic relief packages to the affected people. The situation warrants prioritizing the public expenditure and implementing various relief measures in the most efficient manner, minimising waste.

Role of SAIs and Stakeholders’ Expectations

SAIs are independent institutions which enjoy a very crucial role in governance by critically examining public finance and providing timely guidance to the national Governments on good governance. SAIs have the mandate to give assurance on the economy, efficiency and effectiveness of various government initiatives. Being the watchdogs of public finance, the role of SAIs becomes extremely relevant at the time of crisis. The public at large, want to know whether they are getting the best from their Government; the donors want to know whether the money is spent wisely for the intended purpose, the Parliament wants to know whether the various remedial measures and revival packages are implemented effectively ensuring value for money and minimizing fraud and corruption.

The reactions of people and various international organizations indicate a growing audit expectation gap for SAIs during this Covid-19 pandemic. SAI Columbia received more than one thousand citizens’ reports on irregularities on covid-19 related spending. World Bank Group, in one of its series of just-in-time governance and institutions responses to COVID-19, elaborates the expectations from SAIs during the rime of the crisis and post-crisis period. The role of Supreme Audit Institutions (SAIs) is recognized “as crucial to supporting the government response mechanisms through maintaining public financial management discipline and ensuring transparency and accountability” (COVICD-19 Role of Supreme Audit Institutions in Governments’ Response to Covid-19 released in June 2020)

It is the time for SAIs to “demonstrate their ongoing relevance to citizens, parliament and other stakeholders” which is a key objective of INTOSAI-P-12 -“The Value and Benefits of Supreme Audit Institutions-making a difference to the lives of citizens”.

INTOSAI Initiatives

The audit community has acknowledged their crucial role and the International Organization of Supreme Audit Institutions (INTOSAI) has initiated times actions to guide its members in meeting the stakeholders’ expectations. The INTOSAI Development Initiative (IDI) provided practical guidance on what, when- and how to audit during COVID-19 and other relevant technical resources for member SAIs through its COVID-19 web page (https://www.idi.no/en/covid-19/). INTOSAI’s Policy, Finance, and Administration  Committee (PFAC) has recently launched a dedicated website sharing relevant audit reports and best practices, training and remote work tools, and developing lessons learned to help prevent future pandemics (www.intosaicovid19.org).

The member SAIs are guided by the following four International Standards of Supreme Audit Institutions (ISSAIs) in disaster related audits:

·        ISSAI 5520 on “Audit of Disaster-related Aid”

·   ISSAI 5510 on the audit of the pre- Governance & Institutions Response to the COVID-19 Pandemic

·        ISSAI 5520 on post-disaster stages

·        ISSAI 5530 on the specific risks of fraud and corruption associated with disaster-related aid

·       ISSAI 5540 presents geospatial information as a tool for auditing the pre- and post-disaster stages

Collaborative Efforts

There are also collaborative efforts on the part of INTOSAI and some of its members. INTOSAI, under the auspices of the PFAC, established a short-term initiative led by Government Accountability Office, USA (GAO) in cooperation with the PFAC Chair, Dr.Hussam Alangari, President of Saudi Arabia's General Auditing Bureau. The Initiative aims to help in maintaining operational continuity across INTOSAI and individual SAIs; and Sharing audit-related information and training tools. The Initiative is also developing a lessons learned document for external partners, such as the United Nations and World Health Organization. The Office of the Comptroller General of the Republic of Peru has launched the “International Observatory of Government and Supreme Audit Institution (SAI) Initiatives in relation to COVID-19” website in August 2020. The observatory, designed to share comparative experiences and knowledge on COVID-19 Pandemic oversight work, was developed in collaboration with the Accounts Chamber of the Russian Federation (Accounts Chamber), INTOSAI and Chair of INTOSAI’s Supervisory Committee on Emerging Issue (sobservatorioefs.contraloria.gob.pe.)

There are also collaborative efforts by SAIs at regional levels which include webinars, capacity building, sharing of lessons learned and collaborative audits on Covid-19 related topics.

 SAI’s Response to COVID-19 Audit

The level of response of SAIs depend on many factors like the constitutional mandate, human resource, IT infrastructure and IT skills, functional independence and commitment to the core values of audit. For example, only very few SAIs have the mandate to sanction expenditure (NAO UK) or conduct pre-audit. But many SAIs- big and small- have rose to the occasion and doing their best to remain relevant in the times of crisis, by discharging their constitutional obligations as financial watchdogs.

 SAIs’ responses can be classified as follows:

(i)  Safety and Health of Staff: Minimizing the health hazard of audit personnel by creating awareness, rescheduling attendance in office, work from home, social distancing in workplace, exploiting the possibility of remote auditing etc.

(ii) Review and Revision of Annual Audit Plan:  Prioritising audit of Covid-19 related areas like, Government preparedness, public procurement of medicines, medical equipment, healthcare, food, anti-corruption measures, social benefit schemes, vaccine development and distribution, budgetary spending, disaster management. Etc. Some SAIs are evaluating the Covid-19 related government measures and their impact on the achievement of SDGs (not only goal 3 that is related to health, but also to other SDGs that are affected by the pandemic.

(iii) Communicating with Stakeholders: Inviting suggestions from stakeholders, publishing guidelines/audit reports on COVID related topics, conducting webinars, sharing lessons learnt with the help of blogs, webinars and podcasts.  Many SAIs have launched Covid-19 web pages to share their articles, guidelines, audit reports, program implementation status etc. with the stakeholders.

SAIs which have the mandate are in proactive mode by issuing directives reminding the executing government agencies on the need to comply with the rules and procedures, warning on risks and how to mitigate the same, carrying out pre-audit, concurrent/real-time audit to assist the implementing agencies in improving their efforts.

 

The communications made by SAIs of New Zealand (COVID-19: Important governance matters to consider — Office of the Auditor-General New Zealand (oag.parliament.nz) and Sierra Leone (ASSL PUBLIC NOTICE ON USE OF PUBLIC FUNDS AN EMERGENCY SITUATION – Audit Service Sierra Leone (ASSL) – Office of the Auditor General) are examples of SAI’s initiatives in its advisory role. The Auditor General of South Africa has appeared on TV to emphasize the role of the SAI and offer support to government.

 SAIs’ Response: Examples

1.   USA: Government Accountability Office (GAO)

The CARES Act, the Covid response legislation, requires GAO to continually monitor and submit bi-monthly report on the nation's preparedness for, response to, and recovery from, the pandemic. GAO has already examined majority of the $3.1 trillion emergency assistance and submitted recommendations to the Government. GAO is supporting the US Congress by preparing briefings, sharing best practices, reviewing draft legislations in Covid-19 related areas.

So far GAO has presented 38 reports on Covid-19 related topics, some of which are given below:

1.      US Postal Services: Performance and Financial Changes Since the Onset of COVID-19 Pandemic

2.      COVID 19 Loans

3.      Emergency Financial Aid For College Students Under the CARES Act

4.      Role of HHS in Emergency Return of US Citizens During COVID-19

5.      Efforts to Increase Vaccine Availability and Perspectives in Initial Implementation

6.      Global Health Security: USAID and CDC Funding Activities

7.      DoD Depot Maintenance During COVID 19

8.      Biomedical Research: Information on Federal Contributions to Remdesiver

9.      Sustained Federal Action in Second Year of COVID 19

10.   Drug Safety: FDA’s Future Inspection Plans Need to Address Issues Presented by COVID 19 Backlog

11.   COVID-19 Pandemic: Preliminary Observations on Efforts toward and Factors Affecting the Aviation Industry's Recovery

12.   Commuter Rail: Information on Benefits and Funding Challenges for Service in Less Urbanized Communities

13.   COVID-19:Urgent Actions Needed to Better Ensure an Effective Federal Response

14.   VA Health Care: Community Living Centers Were Commonly Cited for Infection Control Deficiencies Prior to the COVID-19 Pandemic

15.   Operation Warp Speed: Accelerated COVID-19 Vaccine Development Status and Efforts to Address Manufacturing Challenges

16.   Medicaid in Times of Crisis

17.   Covid-19:Key Insights from GAO's Oversight of the Federal Public Health Response

GAO has also examined the ‘Operation Wrap Speed Program’ which allocated $10 billion for vaccine development and production. GAO has analysed the readiness of each of the 6 companies engaged tin development and production of vaccine.  and manufacture vaccine GAO has GAO has launched dashboard with a vaccine tracker for the stakeholders ((https://ows.gaoinnovations.gov/vaccine-tracker)

2.       UK : National Audit Office (NAO)

The National Audit Office (NAO), UK has already completed audit of many important programs of UK Government’s response to Covid-19 and offered expert insight to ensure that appropriate lessons are learned for the future. The areas of audit included Government’s preparedness for the pandemic, the spending on the direct health response, and the measures aimed at protecting businesses and individuals from the economic impact.

NAO has also launched a web page on COVID-19 Cost Tracker, an interactive tool providing money allocated and spent on the various Government measures in connection with Covid-19. The aim of the tracker is to increase transparency, and promote scrutiny and parliamentary accountability for government spending (https://www.nao.org.uk/covid-19/cost-tracker/).

 NAO has so far presented following 18 report on Covid-19 related topics:

1.      Initial learning from the government’s response to the COVID-19 pandemic

2.      Investigation into government funding to charities during the COVID-19 pandemic

3.      Support for children’s education during the early stages of the Covid-19 pandemic

4.      Investigation into the Culture Recovery Fund

5.      Local government finance in the pandemic

6.      Protecting and supporting the clinically extremely vulnerable during lockdown

7.      Investigation into the housing of rough sleepers during the COVID-19 pandemic

8.      Investigation into preparations for potential COVID-19 vaccines

9.      The government’s approach to test and trace in England – interim report

10.   Investigation into the free school meals voucher scheme

11.   Investigation into government procurement during the COVID-19 pandemic

12.   The supply of personal protective equipment (PPE) during the COVID-19 pandemic

13.   Implementing employment support schemes in response to the COVID-19 pandemic

14.   Investigation into the Bounce Back Loan Scheme

15.   Investigation into how government increased the number of ventilators available to the NHS in response to COVID-19

16.   Guide for Audit and Risk Committees on Financial Reporting and Management during COVID-19

17.   Readying the NHS and adult social care in England for COVID-19

18.   Overview of the UK government’s response to the COVID-19 pandemic

 Five major audits are in progress as on date.

 3.   Australia: Australian National Audit Office (ANAO)

ANAO has evolved a multi-year strategy for performance audits focusing on the effective, efficient, economical and ethical delivery of the Australian Government’s response to the COVID-19 pandemic. As per the strategy Covid-19 related audits are planned in phased manner.

 Phase 1 Audit

    1.      Services Australia COVID-19 Measures and Enterprise Risk Management

2.   The Australian Taxation Office’s Management of Risks Related to the Rapid Implementation of COVID-19 Economic Response Measures

3.      Management of the Australian Public Service’s Workforce Response to COVID-19

4.      Procurements to Increase the National Medical Stockpile

5.      COVID-19 Procurements and Deployments of the National Medical Stockpile

 Phase 2 Audits

    1.      International Travel Restrictions during COVID-19 (in progress)

2.      Human Biosecurity Practices for International Air Travel during COVID-19 (in progress)

3.      Administration of the JobKeeper Scheme (in progress)

4.  Overseas Crisis Management and Response: The Effectiveness of the Department of Foreign Affairs and Trade’s Management of the Return of Overseas Australians in Response to the COVID-19 Pandemic (in progress)

5.      National COVID-19 Commission (potential)

6.      Support to the Aviation Sector (potential)

7.      Debt Management (potential)

8.      Prioritizing Mental Health and Preventive Health (potential)

9.      COVID Safe app (potential)

 Phase 3 Audit

 In the post pandemic period, ANAO will review the outcomes of the Australian Government’s COVID-19 response which involves a post-pandemic assessment of the achievement of outcomes of the COVID-19 measures, recovery plans and programs, identification and dissemination of lessons learnt, and the readiness of government systems and processes to respond to future crises.

 SAI Australia is also conducting monthly review of Advance To Finance Minister (AFM) and reporting to Parliament. (AFM is a provision in the annual Appropriation Acts which enables the Minister for Finance to provide additional urgently needed appropriation to agencies for expenditure in the current year. The April 2020 edition of ANAO audit insights, “Rapid Implementation of Australian Government Initiatives,” highlights key messages from Auditor General reports that examined the rapid implementation of government initiatives.

The ANAO has also created a page on its website outlining COVID-19 related work: http://www.anao.gov.au/work-program/covid-19.

 4.   China:  National Audit Office of the People’s Republic of China (CNAO)

CNAO set up a a Special Audit Leading Group, with Auditor General as the team leader, and established the Leading Group Office (hereinafter referred to as the “Special Office”) as “front-line headquarters”.

CNAO issued a working plan for special audit on public spending on Covid-19 prevention and control. CNAO mobilized 20,000 auditors and conducted a special audit of the funds and donations in response to the pandemic prevention and control, resolutely combined remote big data audit and site verification on key areas, identified problems and urged rectification in a timely manner.

The audit objectives were:

·        to promote a regulated management, efficient use and transparency of the funds and material for the pandemic prevention and control,

·   to ensure the provision of essential medical supplies and daily necessities during spread of the pandemic, and

·       to facilitate the smooth and efficient control and treatment of COVID-19.

 The audit scope included:

· the implementation of relevant central government policies and decisions for the pandemic prevention and control;

·     the implementation of policies on tax and fee cuts, fiscal subsidized and preferential loans;

·  the general situation, appropriation and use of funds earmarked for the pandemic prevention and control arranged by the central and local finance departments at various levels;

·      the overall situation, distribution and use of public donations.

 The CNAO made an audit work report to the Standing Committee of National People’s Congress on June 18, 2020 and the audit findings were shared with the public.

The Special Office was set up in the Department of Social Security Audit of the CNAO, and all business departments, regional offices, out-posted offices in ministries and local audit institutions are under the coordination of this special office to carry out the audit. Moreover, the Special Office formulated work procedures, clarified its duties and each team, standardized formulation, distribution and reporting processes of audit dynamics, special reports and other information, established the mechanism of weekly meeting, ten-days report and monthly report, made prompt communication on the audit plans and progress, clarified on the audit standards to make sure the audit tasks were conducted in an efficient and orderly manner.

5.   Brazil: Federal Court of Auditors (Tribunal De Contas Da Uniao- TCU)

SAI Brazil has prioritized audit of Covid-19 related public spending and measures taken by the Government. The SAI and the Brazilian office of Transparency International have published the guide “Recommendations on ensuring the transparency of actions in emergency situations in response to COVID-19,” designed for federal, regional and municipal civil servants for averting corruption on their part during the crisis. The SAI has created special groups to monitor different areas of mining industry. Their central aim is to interact with regulatory authorities for developing working methods and models amid the crisis caused by the pandemic.

SAI Brazil has already presented 10 audit reports on Covid-19 related topics.

(i)     Actions related to basic education in response to Covid-19

(ii)   Actions taken by Ministry of Health on the battle against covid-19 crisis

(iii) Actions taken by the central bank of Brazil to mitigate economic-financial effects of covid-19

(iv)  Emergency aid for protection of people under vulnerable conditions

(v)   Emergency program for preservation of jobs and income

(vi)  Fiscal impacts on the measures taken in the fight against Covid-19

(vii)  Governance of the Central Government during fight against Covid-19

(viii) Management of Social Security Benefits

(ix)  Measures adopted by Federal Tax Administration in fight against Covid-19

(x)   Measures adopted by BNDES to reduce economic damage caused by Covid-19

(https://portal.tcu.gov.br/en_us/biblioteca-digital/report-on-government-policies-and-programs-ruled-cases-repp-2020.htm)

 6.   Peru: Office of the Comptroller General of the Republic of Peru (CGR)

Since the start of the pandemic emergency situation, the SAI has published 2733 reports of national and regional audits and approved public procurement for a total amount of 7.72 billion soles (2.26 billion USD).

O/o The CGR created the Emergency Management Group led by its Comptroller General, designing and implementing different strategies such as the "Mega Control Operation - Health Emergency 2020", through which it sets up control actions to the activities of public entities such as regional and local governments, hospitals, national police, among others.

A permanent audit team has been created in the health sector which has been supervising and issuing control reports on the procurement of rapid tests for the detection of Covid19, conditions and equipment of hospitals, purchases of materials, among others.

CGR is verifying the process of procurement and distribution of basic need products. In addition, it is ascertaining the legality of the actions undertaken within the framework of the law for the payment of subsidies to vulnerable populations.

CGR has launched the "Platform for Transparency in Public Management in the Covid-19 Health Emergency", a tool for local governments throughout the country to register online the procurement process, the execution of the contract for the registration and delivery of basic family baskets (basic need products) to vulnerable populations, contributing to the efficient performance of these processes and guaranteeing the timely use of public funds. In addition, the CGR audits on site the deliveries of the aforementioned baskets in various regions of the country.

The SAI and regional audit bodies initiated a simultaneous national inspection of police stations verifying existence of personal protection equipment, their use and storage procedures and other measures to prevent the spread of COVID-19. Based on citizens’ complaints, the SAI initiated the inspection of compliance with sanitary rules by municipal authorities regarding the distribution of the equipment for personal protection of workers involved in street cleaning.

Special teams of auditors are carrying out concurrent control activities related to receiving, storing, conserving, distributing, and administering vaccines, with the aim of alerting public managers of concerns requiring immediate mitigation. As part of this operation, which spans multiple institutions and sectors, SAI Peru has monitored the arrival of vaccines at warehouses and the administration of vaccines at selected sites.

SAI Peru has deployed more than 500 auditors nationwide to help ensure that the COVID-19 vaccination process is timely, safe, and effective.

The SAI of Peru has launched a portal Monitoring Control and Openness during the pandemic, publishing aggregated information and individual reports on audits conducted during the state of emergency.http://bit.ly/SAIPeruConcurrentControl.

7.   Columbia: O/o The Comptroller General of the Republic

The SAI audited almost 38000 contracts signed by authorities of all levels between March 10 and April 5, including more than 7700 that imply the use of emergency funds. Based on the audit findings, SAI Columbia has issued warnings to 26 local governments and 67 mayors on alleged cost overruns and ambiguities in contracts. Based on the evidence provided by the SAI, 8 municipalities had to renegotiate their contracts which led to the reduction of overall contract price by 5,7 billion pesos (1,53 million USD).

 The SAI has initiated application of fiscal responsibility measures to the governor of the Arauca department and other regional executives for the amount of 1605 billion pesos (262,2 million USD) due to violations during products’ procurement and distribution. The same violations gave way to another 27 preliminary investigations against some national government bodies as well as regional and local authorities.

 Having evaluated the distribution of loans to agricultural companies and food producers, the SAI noted that 90% of the aid is designated for large agriculture producers thus failing to contribute to preserving employment in the sector. The SAI audited the distribution of 75000 food baskets and payments of social benefits by the Cali administration. The SAI analyzed the data bases of the Agriculture Financing Fund and found that the funding is received by major producers rather than by small and medium businesses.

 8.   Portugal: Tribunal De Contras

SAI Portugal reviewed and adjusted its annual audit plan 2020 shifting the focus of its work towards COVID-19- related aspects. SAI has identified 27 topics for audit. Audit Reports on government response to Covid-19 by the public health sector and on the budget execution and Covid-19’s impact on it have already been presented.

The SAI plans to evaluate measures and procedures adopted to ensure quick response to an emergency, transparency, integrity and accountability; to conduct research aimed at identifying the main high risks areas; to carry out performance audit in key sectors such as healthcare and social security, without interfering with the auditees’ activities aimed at combating COVID-19. Audit also looks in to the fraud control and prevention system in utilization of European funds.

At the level of Local Administration, 4 actions related to the pandemic COVID-19 are planned for this year: COVID measures and their financial impact on the municipalities of Mainland Portugal, contracts signed by Local Government entities, under the exceptional regime, monitoring of contracts exempt from prior inspection and the COVID-19 pandemic in the 2020 municipal accounts.

Some of the reports presented by SAI Portugal are:

1.  Monitoring of Contracts Covered by Exception Scheme Expected in Law No. 1-A / 2020, including exempt Inspection Preview

2. Impact of the measures adopted under the COVID-19 entities in the Mainland Local Administration

3.     Monitoring of Contracts Covered by the Exception Regime Provided for in Law No. 1-A / 2020, including those exempt from Prior Inspection

4.      Audit of the Operational Program to Support People deprived

5.      COVID-19 - Measures and reporting in the first 3 months - Monitoring of budget execution

6.      COVID Report 19 - Impact on activity and access to the NHS

7.   Monitoring Report on Budget Execution - COVID-19 Measurements and Reporting in the first three months

8.   Monitoring Report of the Covered Contracts Exception regime provided for in Law No. 1-A / 2020, including the Exempt Inspection Preview

9.      Report on Risks in the use of public funds in emergency management (COVID-19)

The Covid-19 related documents are available in the following web page:

https://www.tcontas.pt/pt-pt/Pages/COVID-19.aspx

9.   Canada: O/o The Auditor General of Canada

On April 28, 2020, SAI Canada informed the House of Commons about prioritizing COVID-19 audit work and the audit of the Investing in Canada plan. SAI is conducting audit on the government’s measures related to health and safety protection, support to individuals and businesses, and other liquidity support and capital relief. We have also included elements of emergency preparedness and early-response actions. 

The office has also undertaken audit of three major areas as per the request of the House of Commons:

·        Investing in Canada plan of the government,

·        special warrants that could be issued under the Financial Administration Act,

·        COVID-19 emergency response taken by the government.

 SAI Canada gas so far presented following audit reports on Covid-19 related topics:

i)                 Pandemic Preparedness and Response

ii)               Canada Emergency Response Benefits

iii)             Canada Emergency Wage Subsidy

 

Following audits are in progress:

i)                 Audit on Canada’s Food System

ii)               14-Days Isolation for Foreign Workers

iii)             Pandemic Support to Indigenous Communities

iv)              Procurement of Protective Equipment & Medical Devices

v)               Support For Business from the Regional Relief & Recovery Fund  

https://www.oag-bvg.gc.ca/internet/English/parl_fs_e_43705.html

 10.   Chile: Comptroller General of the Republic of Chile

SAI Chile decided to adopt a strategic approach to audit which included (i) use of IT-instruments (ii) use of open data resources (iii) promote inclusiveness, and (iv) build remote auditing capacity. SAI has collected details of all Covid-19 related public procurement, adapted their Audit Plans for 2020 and 2021 prioritizing Covid 19 related areas. SAI has launched a new web page to share with public, its audit activities in Covid 19 related areas. It gives details of all the audit exercise carried out by SAI Chile on Covid 19 related areas. (https://www.contraloria.cl/web/cgr/covid19)

 11.    New Zealand: Controller and Auditor General

Suspended large part of planned audit and deployed its manpower s to monitor Federal Council measures in response to the pandemic, particularly those supporting businesses, compensation for loss of earnings, unemployment insurance, as well as cultural and sports communities. SAI Swiss has already examined and reported on the pandemic-related public spending of 72 billion Swiss Franc.The audit also included rapid spot checks prior to expenditures, and the SFAO launched a special data analysis effort to detect potential frauds and communicate them to the proper authorities.

(i)     Management of Wage Subsidy Scheme

(ii)   Preparations for Nation-wide Rollout of Covid-19 Vaccine

(iii) Monthly Updates on the Government’s Covid-19 expenditure

(iv)  Ministry of Health: Management of Personal Protective Equipment

(v)   Our Intentions: Looking at the Central Response to Covid-19

https://oag.parliament.nz/

 Conclusion 

SAIs at large, have responded well to the new challenges posed by the pandemic. The responses ranged from proactive audits, real-time audit, post audit, issue of guidance to the Government agencies, sharing of audit findings with all stakeholders, collaborative efforts in capacity building and knowledge sharing etc. The write up has been prepared on the basis of information available in the public domain in the form of blogs, guidance notes, articles, study reports and SAI audit reports. Surprisingly SAI India is conspicuous by its absence in the public domain and hence not covered in the write up.