The Development of environmental auditing within INTOSAI

The description is based on the results of three surveys of INTOSAI members, conducted in 1994, 1997, and 2000 by the INTOSAI Working Group on Environmental Auditing. The survey results have been published in working group papers available on the Internet at www.environmental-auditing.org. The working group is grateful to all SAIs that responded to the questionnaires.

Environmental Policy

For an audit institution, government policy is the starting point-if no policy has been formulated, there is not much to audit. The Working Group on Environmental Auditing's surveys indicated rapid growth in environmental plans and programs of governments, particularly from 1993 through 1996. By 1999, most countries had established some form of environmental policy.

The content of environmental policy and the way it is formulated varies greatly from country to country. In many countries, policy could be formulated much more clearly, as governments may not always identify the instruments to be used, targets to be met in specified years, or the way achievements will be monitored and reported. The risk of unclear policy is that responsible entities may not become sufficiently engaged. Appropriate authorities are responsible for clear policy formulation and the availability and the quality of information. SAIs can make these points goals of their audits, and in so doing, encourage their governments to improve accountability and the clarity of their policies.

Local, regional, or provincial governments and other public and private entities are often involved in environmental policy along with the national government. For SAIs, this means that environmental audits might include several public authorities as audit subjects, making the audits more complex. In these cases, relevant subjects to audit include a clear division of tasks, cooperation between those involved, and coordination by the national government.

SAI Mandates

The working group found that nearly all SAIs have general mandates that can be applied to all sectors of government, including the environmental sector. In addition, some SAIs have specific mandates for environmental auditing, which give them extra responsibilities in this area. For example, in Canada, a Commissioner for the Environment and Sustainable Development has been appointed.

The content of the mandates varies among SAIs, particularly with regard to the types of audits they are required to do and the types of authorities covered by their mandates (national versus local or public versus private). Most SAIs are entitled to do regularity or financial audits (94 percent), and a growing number of SAIs also do performance audits (84 percent). Some SAIs are authorized to do "ex ante" or "a priori" audits (34 percent). SAIs can also have an advisory or assisting role in the national government. Some SAIs, however, have a problem in that their mandates do not give them access to all public entities involved in environmental policy.

SAI's Environmental Audit Activities

SAIs are increasingly active in the field of environmental audits. Especially during the period from 1993 through 1996, the working group identified a strong quantitative growth in environmental activities-both in the number of SAIs active in this field and in the level of activities the SAIs carried out. The SAIs have allocated larger portions of their audit resources to this type of work and published more environmental audit reports.

From 1996 through 1999, the quantity of environmental audit work stabilized, and the working group noticed a shift from regularity to performance audits, which can be interpreted as qualitative growth. In 1999, 57 percent of the SAIs were performing environmental audits.

Since 1997, few of the environmental audits have been solely regularity audits -most are performance audits or a combination of regularity and performance audits. Performance auditing covers all kinds of audits related to the "3 Es": economy, efficiency, and effectiveness. Audits on the implementation of environmental programs and compliance with national environmental laws and regulations have been the type of audits conducted most frequently. Environmental audits cover a wide range of issues. During the last survey, the most popular issues were internal environmental management by public authorities or departments, fresh water, waste, and nature and recreation.

International Accords and Cooperation Between SAIs

Environmental problems related to climate change, ocean pollution, and the depletion of the ozone layer are global in nature. In addition, regional problems like the water quality in major rivers and the sustainable use of fish stocks often cross national borders. Therefore, many countries seek international cooperation to solve environmental problems, resulting in a growing number of international agreements on environmental issues. Because national governments are responsible for implementing the international obligations in their national policy programs and legislation, SAIs often play a role in auditing their governments' compliance with international obligations and commitments.

The INTOSAI Working Group on Environmental Auditing wants to encourage environmental audits and has provided guidelines on the audit process and the selection of international accords. The working group has done this not only because the audits themselves might be useful, but also because these audits provide excellent possibilities for cooperation and exchange of information on common issues and specific audit topics.

The majority of SAIs that responded to the last questionnaire indicated that they were interested in cooperation with other SAIs on audits of international environmental accords in the near future. A growing number of SAIs already have experience cooperating on environmental audits and/or audits of environmental agreements. For example, eight SAIs around the Baltic Sea have performed joint or coordinated audits on marine pollution, eight other European SAIs have performed such audits on pollution of the sea by ships, and three Scandinavian SAIs have performed them on the OSPAR Convention. Other joint or coordinated audits have been performed on fresh water rivers by four SAIs along the Danube and by Colombia and Venezuela on the River Tachira Project. Other forms of international cooperation include the exchange of information and audit methods, cooperation on audit work on a shared subject, or joint training courses and seminars. Recently, regional working groups on environmental auditing were established in several parts of the world. These groups will provide a good platform for continuing and enhancing the cooperation between SAIs at regional level in the near future.

Guidance on environmental auditing is available in various INTOSAI languages at www.environmental-auditing.org and on the CD-ROM "Environmental Auditing at Work," which can be ordered from the Netherlands Court of Audit (e-mail: environmental.auditing@rekenkamer.nl or website: www.rekenkamer.nl).

Available INTOSAI Guidance: "How SAIs may co-operate on the audit of international environmental accords" (1998); "Standards and Guidelines on Environmental Auditing" (2001); and Working Group Paper "The Audit of International Environmental Accords" (2001).