News & Academic Article.
Playing Advisory Role in the Public Sector Auditing:
Lesson Learned from Local Government Auditing in Thailand
Nowadays, the role of supreme audit institution is broader not only audit mandates but also covered non-audit activities. Another key message of 2019 Moscow Declaration represents the importance of non-audit activities, which related to add value and benefits for external stakeholders. Especially, SAI could play the advisory role to strengthen the public financial management. The outputs of non-audit activities could reflect by non-audit products like research studies, measures, assessment tools, and innovative products.
Since 2018 the modern state audit act of Thailand has been improved to give the SAI mandate for improving public sector auditing through advisory role and non-audit activities. Likewise, SAI Thailand plays the main role to promote the fiscal and financial discipline for audit entities.
In 2020 SAI Thailand initiated the non-audit product known as Fiscal and Financial Discipline Assessment (FFDA), which SAI Thailand reviewed the keeping fiscal and financial discipline of audit entities. For the first year, we started to assess more than 2,500 local governments in Thailand.
Auditor General Prajuck Boonyoung explained that the FFDA is the audit innovation to raise awareness of fiscal and financial discipline. Meanwhile, Deputy Auditor General Monthien Charoenpol, who initiated this idea, viewed that SAI Thailand could play advisory role for local governments by using FFDA.
The FFDA used the self assessment system, which all local governments log in the self assessment online template prepared by SAI Thailand. The questionnaires are designed by SAI Thailand. The calculation score is weighted both other assessment index and self assessment index. The full score is 100, which SAI Thailand categorizes for five levels, which could represent the current situation of keeping fiscal and financial discipline. The fiscal and financial discipline covered (a) the local government payments, (b) local government revenue collection, (c) public procurement of local government, and (d) local government internal control and accounting system.
After self assessment, SAI Thailand collected and analyzed data. We categorized and ranked local governments based on keeping fiscal and financial discipline. We set up five ranges by coloring symbol as data visualization and user friendly. If the local government got the FFDA score during 95-100, that means, this audit entity could keep fiscal and financial discipline as the best practice. We give the blue color as the top zone.
On the contrary, if the local government got the score below 50, that means, this audit entity had the problem with keeping fiscal and financial discipline. It was in the concerned area represented by red zone.
For the preliminary result, we found that the average score was during 70-84 interpreted by keeping fiscal and financial discipline under the general standard. This zone could be represented by yellow. However, no local government could get the top zone or picking the blue-chip. Interestingly, almost ten percent of local governments were in the watch out zone (50-69) as orange zone and red zone.
The FFDA supports local governments to keep and recognize the importance of fiscal and financial discipline. SAI Thailand published the FFDA report to show the overview situation of fiscal and financial discipline of local governments. The report is the non-audit product, which assisted playing advisory role of SAI Thailand.
Prepared by
Dr. Sutthi Suntharanurak
Director of International Affairs Office
State Audit Office of the Kingdom of Thailand
For further information, please contact
sutthisun@gmail.com
8 Jun, 2022