What is Auditing?
Auditing, as part of financial and legislative oversight, is crucial for good governance of the security sector. Auditing is the process of reviewing, monitoring and evaluating security sector spending. Auditing is, fundamentally, a function carried out by independent audit institutions, with democratic institutions, executive and government bodies conducting audits on statutory and other bases. Civil society organisations can also perform audits and contribute to policy debates relevant to other stakeholders including parliament. In terms of evaluating policy and practice, civil society and parliament play a vital oversight role when it comes to evaluating the performance, budgeting and spending of the security sector itself.
From the budgeting phase to the acquisition and performance phases, financial oversight encompasses all the stages of security sector spending. This process includes the evaluation of budget’s adequacy, monitoring how public money is being spent and evaluating the outcomes of that spending in relation to the initially set objectives. Legislative oversight aims to ensure that all public expenditure and finances comply with the laws that govern public funds. Cases of corruption and mismanagement are reported to the Judiciary.
How does it work?
Auditing can be based on the review of annual reports, accounts and other evidence provided by the security sector itself as part of the regular democratic process. Auditing can also include spontaneous visits and investigations. Apart from limited restrictions to protect the identities of certain sources of information and the details of some highly sensitive operations, the Auditor-General should have access to all the information required in order to perform his/her oversight duties. Transparency is a prerequisite for effective oversight and auditing of the security sector.
The aim of auditing is to detect and prevent corruption and malpractice, ensure accountability, provide a base for recommendations, encourage improvement and contribute to security sector efficiency. In other words, auditing ensures the proper use of public funds.
Who is involved?
In most countries, a National Audit Office is established by constitutional law as an institution that is independent from the executive, legislative and judicial branches. The national audit office should be appointed by the parliament and have a clear term of office. There should be legal and practical tools and resources at the disposal of the auditors that enable them to perform their work effectively. They should have the authority to report on any matter of expenditure. Parliaments should ensure that there are judicial sanctions in place for cases of corruption and mismanagement of public funds.
Tasks performed by the Audit Offices include:
- Auditing financial statements of all government departments and executive agencies
- Developing budget outlooks, analysing budget proposals, validating cost estimates, and presenting alternative budget options
- Analysing financial aspects of policies and programmes
- Handling complaints and whistle-blowing
- Assisting departments to improve their financial management
- Raising awareness on best practices
Audit Offices should perform these tasks according to the following basic principles:
- Value for money
In order to perform their tasks effectively, Audit Offices should:
- Report to the parliamentary accounts committee, which should be different from the budget committee
- Have access to classified information
- Have multi-disciplinary capacities with expertise in the security sector, defence management, and the technical, financial, and legal aspects.
DCAF, Inter-Parliamentary Union (2003), Parliamentary Oversight of the Security Sector.
DCAF, NATO (2010), Building Integrity and Reducing Corruption in Defence: A Compendium of Best Practices
DCAF, UNDP (2008), Public Oversight of the Security Sector. A Handbook for Civil Society Organisations.
Hans Born, Ian Leigh (2005), Making Intelligence Accountable: Legal Standards and Practice for Oversight of Intelligence Agencies.
OSCE (2016), Handbook on Combating Corruption.
OSCE (2016), Security Sector Governance and Reform Guidelines for OSCE staff.
 Hans Born, Ian Leigh (2005), Making Intelligence Accountable: Legal Standards and Practice for Oversight of Intelligence Agencies.
 DCAF, NATO (2010), Building Integrity and Reducing Corruption in Defence: A Compendium of Best Practices.
 DCAF, Inter-Parliamentary Union (2003), Parliamentary Oversight of the Security Sector.
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