Swedish National Audit Office (Swedish NAO) has been in cooperation with the SAIs in the Joint Working Group for Audit Activities (JWGAA) since 2013. The JWGAA includes the SAIs of Albania, Bosnia and Herzegovina, North Macedonia, Serbia, Kosovo, Montenegro, and Türkiye. The current focus decision applies as of May 2020. Continued cooperation is being prepared in connection with the SAIs’ network preparing a new activity plan in which the Swedish NAO will decide on which development areas we are prepared to support.
The overall objective of the cooperation is to increase the impact of the audit and for SAIs to strengthen their organisations and skills in order to conduct audits in accordance with international standards. An external evaluation shows that the cooperation between the Swedish NAO and the JWGAA has contributed to increased knowledge and developed skills among SAIs in the region.
The main focus of the cooperation between the Swedish NAO and the SAIs in JWGAA covers:
- report writing and plain language
- quality control
- performance audit.
The Swedish NAO has been cooperating with JWGAA since 2013 and since 2016 the Swedish NAO is co-chair of the working group, together with the Romanian SAI. The focus and prioritisation of the operations are decided by the Presidents’ Network, which consists of the Auditors General. Networking and collaboration have an intrinsic value, as well as meeting at different organisational levels and discussing common issues. Within the framework of the JWGAA, the Swedish NAO contributes with project management and expert assistance. The Swedish NAO has also conducted training courses in audit methodology, plain language and parallel audits. Swedish parliamentarians, together with our staff, have participated in meetings and talks with their respective counterparts in the region to discuss the role of parliaments in accountability and practical issues regarding the reception and handling of performance audit reports.
The JWGAA is a working group of the EU Contact Committee set up in 2002 with the aim of promoting cooperation between the Supreme Audit Institutions of the Member States and their counterparts in candidate and potential candidate countries. The European Court of Auditors (ECA) is a full member of the working group and plays a key role. The ECA offers administrative support and advice and is a neutral actor in an occasionally polarised and politicised debate. In addition, the ECA offers experts to participate in the implementation of activities when they have the opportunity.
In the Western Balkans, this means that SAIs are at different levels of development with employees and managers with varying experience and skills. They also have varying legal frameworks.
The SAI’s Degree of Independence
The World Bank’s SAI Independence Index is an index of SAIs’ independence. The index is designed using a ten-point scale where 0 is low and 10 is high. The index for the region in 2021 was in the interval 8.0–9.5. The SAIs of Albania, Bosnia, Montenegro and Serbia were in the interval 8.0–8.5, which places them in the category “substantial independence”. The SAIs of Kosovo and Türkiye were in the range 9.0–9.5, placing them in the category “high independence”.
In winter 2021–2022, an external review was carried out based on document studies, surveys and interviews with people involved in JGWAA and the Swedish NAO. The evaluation shows that the cooperation between the Swedish NAO and the JWGAA has contributed to increased knowledge and developed skills among SAIs in the region. There have been improvements in the form of upgraded manuals and processes. The Swedish NAO’s initiatives have been of high quality. They have contributed both to the results and to an active and open dialogue climate between the participants. The active involvement of several SAIs has in turn led to an exchange of experience and the creation of new networks.
As an important success factor, the evaluation identifies the Swedish NAO’s regular communication with participating SAIs. Experts from the Swedish NAO have contributed to the training activities being characterised by openness and a non-judgemental atmosphere. Another important success factor is our understanding of the regional context. This is partly due to the fact that the Swedish NAO has an employee in the region, which contributes to increased understanding and removes obstacles such as language barriers. Despite the politically sensitive situation, many activities have been successfully completed in the framework of this cooperation.
In addition to the COVID-19 pandemic, some challenges in cooperation have been varied levels of maturity and skills among SAIs, as well as language barriers. This has resulted in some difficulties for us in adapting training materials and designing initiatives to suit everyone. The geopolitical situation also requires some caution in cooperation.
According to the evaluation, the greatest progress has been in financial audit. The cooperation has helped participants from the region gain more knowledge about risk analysis. As a result, some SAIs have developed their risk analyses to be more well-structured than before. Survey responses show that the participants believe that they now have a greater understanding of risk assessment and risk analysis as a result of the Swedish NAO’s workshops.
The evaluation also shows that our support has contributed to an increased knowledge of the difference between financial and compliance audits among participants. The interviewees in the evaluation indicate that the financial audit reports are of higher quality than before. The participants themselves state that they have gained more knowledge of how to write concise and readable reports.
In 2019, the Swedish NAO completed the final part of a series of financial audit workshops where we followed the audit process from start to finish. The Swedish NAO’s experts have here developed a new, more practical approach to achieving better results and learning by moving from traditional lectures to interactively working with audit based on perceived risk. With the help of fictitious government agency accounts, with intentional misstatements, the participants assessed the internal control of the agency based on the respective SAI’s own methodology and risk perception. Finally, they took decisions on how the findings affected the scope and focus of the audit. This approach increased learning and understanding of their own approach to financial audit and learning was broadened when the different participants compared their different methods and outcomes.
It can be inferred from the evaluation that all SAIs have strengthened their performance auditing skills. For example, there are more performance auditors with basic training now than before. Experts from the Swedish NAO have developed a training programme based on AFROSAI-E’s three module course and modified it to a digital format and adapted to the region. The programme mixes theoretical lectures and practical exercises. In addition, the participants have also concurrently participated in their national audits coached by our experts from pre-study to final report. By involving experts from AFROSAI-E, there has also been an exchange of experience between the Swedish NAO’s regional cooperation in the Western Balkans and AFROSAI-E. In survey responses, participants state that they are very satisfied with the training programme in performance audit and give an average score of 9.4 out of a total of 10 points.
According to the evaluation, the cooperation has contributed to the auditors developing a greater understanding of the methodology and the process of performance audit. Participants also emphasise that they have increased their knowledge of international standards. They have also strengthened their skills in how to conduct an audit and gained greater awareness of the difference between performance audit and other forms of audit. Interviewed participants believe that their development is largely a result of the support and guidance given by the Swedish NAO’s experts. They also highlight that the exchange of experience and discussions with other SAIs has been fruitful.
However, the evaluation highlights that the cooperation has not achieved all the results planned and that the results differ slightly between the different SAIs. The main reason for this is the different levels of maturity and needs of SAIs.
The evaluation shows that the three participating SAIs in this respect (Kosovo, Montenegro and Bosnia and Herzegovina) have developed a greater knowledge of quality assurance and quality control. This is because the Swedish NAO has organised workshops with the aim of increasing understanding of quality assurance. Interviewed participants state that the Swedish NAO’s training in quality assurance and quality control has contributed to a broader strategic perspective of the role of SAIs. The cooperation has also contributed to an increased awareness of the difference between quality assurance and quality control.
According to the evaluation, the cooperation has also contributed to improving the reliability of quality controls through clearer processes. For example, through our support, quality control has become a mandatory part of the performance audit process of the Kosovo SAI. However, quality control is still under development and there is still work to be done to establish clear processes. Bosnia and Herzegovina and the Montenegrin SAI have been inspired and started a dialogue on how to strengthen quality work.
The evaluation also highlights that the Swedish NAO’s support has contributed to enhanced cooperation between SAIs in the region. The Swedish NAO’s efforts, with a focus on creating an open discussion climate, have contributed to the active participation of employees from the region. This, in turn, has led to the creation of new networks and greater exchanges of experience among members in the region. According to the participants, the Swedish NAO’s workshops have made it possible to compare methods and assignments with other SAIs. Most participants report in interviews that they see great benefits from this exchange of knowledge and experience.
The evaluation highlights that the Swedish NAO’s support for these regional networks has been of great importance for the participating SAIs. This is also confirmed by the participants who argue that although SAIs have different mandates, the network is used as a forum to exchange knowledge, but also to discuss common challenges that remain in terms of moving closer to EU membership.
Costs of the Swedish NAO's cooperation that are charged to international development cooperation.
Source: Swedish National Audit Office Annual Reports for 2019, 2020 and 2021 and budget for 2022.
Brief Facts about the JWGAA region
The Western Balkans are characterised both by a common cultural and historical heritage and by highly complex and sensitive relations between the countries. There are positive tendencies in developments in the region, but also continued challenges, which complicate and delay development processes. Regional cooperation is an important part of the continued peace process, in which the relation to the EU and its institutions also plays an important role. Closer relations with the EU require harmonisation and reforms that thus constitute a common driver of development in the region. Several of the countries are affected by widespread corruption and the work of reform is complicated by a polarised political environment with shrinking democratic space and challenges for both the media and civil society. Increasing external influence and extensive disinformation also hamper democratic development in the region. According to the Transparency International 2021 Corruption Index, the Western Balkan countries Albania and Bosnia rank 110, Serbia ranks 96, North Macedonia and Kosovo rank 87, and Montenegro ranks 64 out of a total of 180 countries. Türkiye ranks 96. Citizens’ confidence in public institutions and those in power is low, partly because of the link between economic and political power.
The rate of poverty is high in many of the countries and a large informal economy hinders development. The COVID-19 pandemic has exacerbated the situation, including increased unemployment, which is expected to lead to increased emigration of young and educated people from the region.
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