Future challenges: Reflections after 10-years as Auditor General of Canada

As I take my leave after 10 years as Auditor General of Canada, I wanted to use this opportunity to identify some of the challenges facing our office-and,

Challenges we have identified for our Office include the following:

* rapidly changing information technology requiring new skills and new tools for auditors;

* recruitment, retention and development of human resources in audit offices;

* changing demands on the auditing profession as globalization becomes a reality;

* appropriate funding for audit offices; and

* the impact of new delivery arrangements on the audit and accountability of government.

I want to expand a little on the last point.

For many years, governments used traditional means to deliver services and programs: namely, direct delivery through government ministries, departments and agencies. For the most part, accountability structures matched these traditional government structures, as did audit office mandates. As a consequence, accountability reports to legislatures and audit coverage by SAIs provided quite complete coverage of the activities of government and hence of the expenditures and authorities provided to governments by their legislative bodies.

Over the last 10 to 15 years, however, many governments, including Canada's, have moved away from the more traditional forms of delivery and established a wide array of alternative approaches. These include delivery through contracting out to the private sector, delivery through arm's-length entities, and delivery in collaboration with other levels of government or non-governmental entities.

These types of public sector reform are widespread now in many countries. Many believe that they have resulted or will result in more effective and efficient delivery of services to citizens. SAIs in many countries have carried out audit work related to these new delivery arrangements. However, what I and others have observed is that these changes in public sector structures are not always matched by corresponding changes in accountability structures and in the mandates of SAIs.

These non-governmental and other entities are doing what, until recently, had been done by government bodies that were subject to government accountability practices and structures and fell under the SAI's mandate. Public moneys and authorities are still being used in the public interest to serve some public purpose. It seems to me that there is no reason why legislative oversight should cease or be significantly curtailed just because of a change in the form of government delivery used. Yet in Canada, and in a number of other jurisdictions I have visited-especially where SAI mandates do not include some form of "follow the dollar"-SAIs are seeing their ability to help legislatures scrutinize these new arrangements reduced because the scope of their audit activity is limited to traditional forms of service delivery. At the same time, traditional forms of reporting to legislatures do not apply to many of these new arrangements. All of this is not necessarily the intent of public management reforms, but it is a clear result of them.

Mandates of SAIs and accountability structures always seem to be topics of discussion, and are issues in constant need of attention even in well-established national audit offices. SAI mandates are important: they directly impact on our ability to serve our legislatures. Over the past 10 years, we have seen some attempts by governments to reduce or limit the mandates of several SAIs. These attempts are well-known and have been monitored with great interest by INTOSAI members. But there is another, more insidious, danger facing SAIs in many countries. Their mandates are being reduced or limited not by direct action but, indeed, by inaction-by failing to update mandates as the forms of government evolve. Governments have changed the way they deliver services, moving service delivery farther away from direct scrutiny by legislatures; SAI mandates often have not kept pace. Furthermore, effective new structures for accountability often have not been introduced to ensure adequate legislative scrutiny.

There is a need, I believe, to find the ways and means to adapt the mandates of SAIs and accountability structures to new forms of government. There are no doubt a number of ways this could be done. The recent Sharman review of the arrangements in the United Kingdom for the audit and accountability of government in the 21st century is one such attempt to deal with this problem.

We in the SAI community can well recognize direct challenges to the scope of our mandates. We need to be equally aware of the less direct threats, especially where traditional accountability structures that support legislative scrutiny are also threatened. Otherwise, we will be unable to carry out our duties to assist legislatures in their scrutiny of public moneys and authorities.

Let me close by saying that I have found my involvement with INTOSAI to be personally and professionally rewarding. My colleagues and I have derived much satisfaction from the work we have done and the contributions we have made to INTOSAI and its various activities. I want to wish INTOSAI continued success in the future. I am sure that the organization will only continue to prosper and be even more useful to its members over the coming years.