The Swedish National Audit Office (Swedish NAO) has a well-established cooperation and has in various forms partnered with the SAI of Kosovo, the National Audit Office of Kosovo since 2011. The current cooperation agreement was entered into in December 2020 and runs until December 2023.
The purpose of the cooperation is to strengthen the SAI’s ability to carry out audits in line with international standards. The focus lies on developing the audit process, achieving higher quality of reports and better communication with external stakeholders. The evaluation shows clear results in terms of improvements in internal processes and skills development in performance audit and the SAI’s strategic planning and leadership development.
The main focus of the cooperation between the Swedish NAO and the SAI of Kosovo covers:
- performance audit
- management and follow-up
- quality control and quality assurance systems
- leadership development
- international engagement.
The Swedish NAO’s cooperation with the SAI of Kosovo began in 2011. The support has been delivered in several phases with partly different orientations, but it has always included support for the building-up and professionalisation of performance audit. The latest project phase 2017–2020 was the first to address the entire organisation. The support consisted of development efforts to performance audit, compliance audit, financial audit, HR, communication, leadership and management issues such as strategic planning.
The SAI of Kosovo is a member of INTOSAI and EUROSAI. The SAI’s mandate as an independent authority is defined in the constitution and in the law on audit. In practice, however, independence is limited by the fact that the finance ministry has a strong influence over the SAI’s budget. Nor is the SAI independent in terms of recruiting and setting conditions for staff who are not auditors.
The SAI is committed to amending the law on audit in order to strengthen its independence and the immunity of the Auditor General, and to be able to prioritise which agencies are to be audited annually in the financial audit.
In recent years, the SAI has developed a good relationship with parliament, the speaker and the committees. Due to the COVID-19 pandemic with mobility constraints and staff shortages, the SAI has had limited possibilities to conduct audits in accordance with its mandate.
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. Kosovo’s 2021 index was in the range 9.0–9.5, placing the SAI in the category of “high independence”.
In early 2022, the cooperation for 2017–2020 was evaluated externally. The following assessment of results is mainly based on this evaluation.
The cooperation has contributed to the development and modernisation of the SAI of Kosovo, which is now working more in line with international standards. The main results have been in performance audit and strategic planning.
The evaluation shows that the Swedish NAO’s support has contributed to a more well-functioning process within performance audit. An update of the audit manual has established a clear process that has been accepted among the auditors, according to interviewed employees at the SAI of Kosovo. Together with the Swedish NAO, the SAI of Kosovo has established a certification system within performance audit. Since the introduction of the system in 2019, 18 auditors have been certified through training and subsequent tests, while also participating in an audit from planning to final report. According to the interviewed employees, this has led to increased self-confidence among the certified auditors and greater ability to work independently.
According to the evaluation, managers’ professional competence in controlling and supporting the audits through the audit process has increased. During the cooperation project, the managers have participated in the Swedish NAO’s training programmes, which has helped to strengthen their role as reviewers and supervisors for audits. This, in turn, has increased the SAI’s awareness of quality control and led the SAI to decide on mandatory quality control for all performance audits. However, quality control is still at the development stage and the process of carrying out quality control differs between managers, leading to varying quality of performance audit reports.
However, performance audit reports have generally become more readable and there is a greater awareness among managers and auditors about the benefits of more analytical and readable reports. Cooperation with the Swedish NAO has contributed to this change. The improvements are partly due to the fact that employees at the SAI have learned how to use more normative and open questions that in turn give a greater depth of analysis. Employees interviewed say that the reports have generally become more structured, but that there is room for further improvement.
The results were also confirmed in the SAI report International Integration of the NAO, published in 2020. This shows that the Swedish NAO’s support has contributed to sustainable results and that this is the largest development project carried out at the SAI.
According to the evaluation, the cooperation between the SAI of Kosovo and the Swedish NAO has contributed to a significant improvement in strategic planning. For example, our support has resulted in the SAI now having the capacity to independently develop strategic plans. Our support has meant that they now have the capacity to produce strategic plans without support. Among other things, the SAI has focused on performance audit and audits of state-owned companies.
The evaluation also shows that the Swedish NAO’s support has contributed to the development of the audit plan. It is now more structured and the SAI has set up a working group to work on it. However, further development of both the plan and the process is required to reach international standards. There is also still a lack of a clear link between the audit plan and the strategic plan.
According to the evaluation, the cooperation has contributed to strengthening the leadership role at different levels. The top managers at the SAI state that they have gained new perspectives and become better at communicating and providing feedback. In this way, the team spirit has been strengthened and the relationship between employees and top managers has improved. Like the top managers, middle managers have become stronger leaders and they have gained more knowledge of specific leadership tools. Middle managers are more responsive to their employees. Employees interviewed also believe that middle managers have gained greater self-awareness and become more open to development and better at leading their teams. One of the top managers believes that middle managers see to a greater extent what should be prioritised in the workplace and how the teams should work to achieve desired results.
The Swedish NAO’s support has contributed to some improvement when it comes to completing assignments on time. This is mainly due to a better audit process but also to a clearer and more developed leadership including managers’ coordination and communication. The project only managed one activity for the team leaders, though another one was planned. Interviewed experts at the Swedish NAO believe that the SAI has prioritised other development efforts and therefore they are not able to develop all planned leadership areas.
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 Kosovo
Kosovo declared independence in 2008. Parliament’s work has been disrupted over the years by expressions of no-confidence from the opposition and riots.
Kosovo is a parliamentary republic where parliament is elected in general elections, but the state is unstable, with political turbulence and weak institutions. There are a large number of political parties and the opposition seems relatively free, although they are subjected to pressures.
Organised crime is a major problem in the country. Corruption is widespread and contributes to low confidence in the government. According to the Transparency International 2021 Corruption Index, Kosovo ranks 87 out of a total of 180 countries, which is a slight improvement on 2019. Relations with Serbia are poor, while as the nationalist currents are strong.
Corruption, war in the late 1990s and mismanagement make Kosovo one of the poorest countries in Europe. Unemployment is high, and the informal economy is considered to be extensive. Drug trafficking, cigarette smuggling, prostitution and human trafficking have developed in the shadow of war. Kosovo has a large trade deficit and its economy is completely dependent on the outside world.
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