State Audit Ofﬁce of Georgia · 2020-01-13 · The transformation of the SAO (formerly, Chamber...

State Audit Office of Georgia

2014 - 2017 StrategicDevelopment Plan

October, 2014(Updated 2015, November)

www.sao.ge

State Audit Office

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Introduction

The strategic plan of State Audit Office (SAO) describes our proposed goals and objectives for supporting the Parliament and nation for fiscal years 2014 through 2017 considering the key issues and major changes faced by the public sector. Over the period of this strategic plan, we seek to:

� Maximize the impact of our audit work; � Enhance our role to foster continuous improvement in the management of public resources; � Establish the SAO as a model organization with highly qualified staff, modern management systems

and processes that together will underpin the high quality, timeliness and reliability of the SAO work.

In order to increase transparency and accountability the SAO plans to improve the quality of audit reports and also introduce the key performance indicators (KPI) to enable measuring and monitoring of the performance in the process of achieving the set strategic goals. Since the system of KPIs elaborated by the SAO is a pilot version, target indicators shall be determined in the upcoming years after having assessed the baseline indicators.

The given strategic development plan has been developed based on the consultations with the Parliament, inter-national donors andpartner organizations and other relevant stakeholders.

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State Audit Office

Introduction






� Maximize the impact of our audit work;� Enhance our role to foster continuous improvement in the management of public resources;� Establish the SAO as a model organization with highly qualified staff, modern management systems and processes that together will underpin the high quality, timeliness and reliability of the SAO work.

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State Audit Office

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Introduction






State Audit Office

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Accomplishments over the period of 2010-2012

The strategic plan of the SAO for 2010-20121 was focused on:

� The internal organizational development; � The transformation of the SAO (formerly, Chamber of Control of Georgia) into a Supreme Audit Insti-

tution compliant with the international standards; � Enhancing professional capacity of the organization.

Within the framework of the noted development plan, the State Audit Office (formerly, Chamber of Control of Georgia) carried out significant steps toward improving the legal framework and reinforcing compliance of the SAO audit work with the international standards. Namely:

ÂWith respect to audit work, financial audit methodology fully compliant with International Standards on Auditing and relevant guidelines for public sector auditing was developed and endorsed in 2010. This was followed by staff training and three pilot financial audits carried out according to the newly intro-duced financial audit methodology in 2011.

Â In 2011, with the support of Swedish National Audit Office and German Society for International Co-operation (GIZ) performance audit methodology was developed by the State Audit Office. In this regard, the staff training and a pilot performance audit was also carried out.

Â In addition, 2011 was distinguished by the significant amendments to the Law on State Audit Office of Georgia. Through the abovementioned changes, all the fundamental principles of the SAI independence stipulated by the Mexico Declaration on SAI Independence (ISSAI 10) of the International Organization of Supreme Audit Institutions (INTOSAI) were fully reflected into the legislative framework underpinning the SAO work.

Â Furthermore, aiming at ensuring the quality of the audit work, quality assurance system conformable to the international standards and practices was developed and introduced in 2012. The system intends to obtain a reasonable assurance that the SAO audit work is carried out in accordance with the relevant professional standards, regulatory and legislative framework.

Â In 2012, Public Audit Institute was established as an independent agency within the State Audit Office. The mission of the Institute is to deliver consulting and audit services to the public sector, provide profes-sional certification programs for auditors in public sector and reinforce knowledge and experience sharing in different fields related to the public finance management of.

1See the strategy for the development of the Chamber of Control of Georgia for 2010-2012 in the following link: sao.ge/files/chvens shesaxeb/ccg-strate-

gia-2010-2012%20GEO.pdf

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The SAO Role and Mandate

The State Audit Office provides independent assurance to the Parliament that public resources are used effi-ciently and effectively in accordance with the relevant legislative requirements and interests of the taxpayers. Through reporting to the Parliament on the operations of public entities, the SAO fosters the accountability of the government to the Parliament and the public.

Based on its audit work, the SAO provides the government with the recommendations intended to point out to the opportunities for improvement in managing public finances, particularly in delivering public value and improving financial reporting. Furthermore, the SAO provides recommendations to the Parliament of Georgia and executive branch on legislative acts related to the state programs, public finance management reform pro-cess and other relevant issues.

In addition, as an important player into the implementation process of the national anticorruption policy, the State Audit Office facilitates the establishment of corruption-free public management system.

As established by the existing legislative framework, the audit mandate of the State Audit Office covers theoperations of the central government, local self-governing entities, autonomous republics, State-owned Enter-prises (SOEs), Legal Entities of Public Law (LEPLs) and other public institutions, whose activities are dealing with usage/management of budget funds or assets of State, Autonomous Republics or Local Self-Governments. It is noteworthy, that according to legislative amendments in 2011, the statutory obligations of the SAO includ-ed the new function of monitoring the financing of political parties.

State Audit Office

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� The internal organizational development;� The transformation of the SAO (formerly, Chamber of Control of Georgia) into a Supreme Audit Insti-tution compliant with the international standards;� Enhancing professional capacity of the organization.

ÂWith respect to audit work, financial audit methodology fully compliant with International Standards on Auditing and relevant guidelines for public sector auditing was developed and endorsed in 2010. This was followed by staff training and three pilot financial audits carried out according to the newly intro-duced financial audit methodology in 2011.Â In 2011, with the support of Swedish National Audit Office and German Society for International Co-operation (GIZ) performance audit methodology was developed by the State Audit Office. In this regard, the staff training and a pilot performance audit was also carried out.Â In addition, 2011 was distinguished by the significant amendments to the Law on State Audit Office of Georgia. Through the abovementioned changes, all the fundamental principles of the SAI independence stipulated by the Mexico Declaration on SAI Independence (ISSAI 10) of the International Organization of Supreme Audit Institutions (INTOSAI) were fully reflected into the legislative framework underpinningthe SAO work.Â Furthermore, aiming at ensuring the quality of the audit work, quality assurance system conformable to the international standards and practices was developed and introduced in 2012. The system intends to obtain a reasonable assurance that the SAO audit work is carried out in accordance with the relevant professional standards, regulatory and legislative framework.Â In 2012, Public Audit Institute was established as an independent agency within the State Audit Office. The mission of the Institute is to deliver consulting and audit services to the public sector, provide profes-sional certification programs for auditors in public sector and reinforce knowledge and experience sharing in different fields related to the public finance management of.


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State Audit Office

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Introduction






State Audit Office

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gia-2010-2012%20GEO.pdf

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State Audit Office

The SAO Role and Mandate

The State Audit Office provides independent assurance to the Parliament that public resources are used effi-ciently and effectively in accordance with the relevant legislative requirements and interests of the taxpayers. Through reporting to the Parliament on the operations of public entities, the SAO fosters the accountability of the government to the Parliament and the public.

Based on its audit work, the SAO provides the government with the recommendations intended to point out to the opportunities for improvement in managing public finances, particularly in delivering public value and improving financial reporting. Furthermore, the SAO provides recommendations to the Parliament of Georgia and executive branch on legislative acts related to the state programs, public finance management reform pro-cess and other relevant issues.

In addition, as an important player into the implementation process of the national anticorruption policy, the State Audit Office facilitates the establishment of corruption-free public management system.

As established by the existing legislative framework, the audit mandate of the State Audit Office covers theoperations of the central government, local self-governing entities, autonomous republics, State-owned Enter-prises (SOEs), Legal Entities of Public Law (LEPLs) and other public institutions, whose activities are dealing with usage/management of budget funds or assets of State, Autonomous Republics or Local Self-Governments. It is noteworthy, that according to legislative amendments in 2011, the statutory obligations of the SAO includ-ed the new function of monitoring the financing of political parties.

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Introduction






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State Audit Office

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Challenges Related to External Environment

Legislative limits established to ensure fiscal discipline and government’s commitment to the gradual fiscal consolidation underscores the need of targeted and effective use of budgetary resources, increasing our role in supporting effective use of limited financial resources by the government.

Ongoing reform process in the public finance management (PFM) system aimed to strengthening the ac-countability and reliability of the state budget constitutes one of the major challenges for the SAO audit work. Our objective is to assist the government to successfully fulfill its obligation to fully introduce the International Public Sector Accounting Standards by 2020 that forms one of the main elements of the reform process.

Furthermore, ongoing steps toward the introduction of results-oriented (program) budgeting in public sector entails enhanced focus on the outcomes of the used budgetary resources along with the compliance with the existing legislation and true and fair financial reporting. The noted shift in the public finance management system increases importance of our work toward performance auditing and requires sub-stantial enhancement of the institution’s professional capacity.

In addition, government’s commitment to the introduction of electronic management systems - the elec-tronic payment processing systems for the spending agencies, electronic management systems for the public debt and loans, electronic databases for the management of social benefits etc. represents important challenge to the SAO audit work. In response to the noted changes in the management of public resourc-es, the SAO intends to introduce and develop IT auditing within the framework of its audit work.

Challenges related to the SAO Institutional Capacity

The main challenge to the SAO audit work is to increase budget coverage through its audit work. This implies raising consolidated state budget coverage in percentage terms as well as expanding sectorial cov-erage by the SAO’s audit work. This will support the improvement of the SAO’s systemic vision and will focus audit work on areas and issues of high importance.

One of the main goals the SAO’s work is to provide recommendations in order to improve and prevent deficiencies identified by its audit work. In this regard, enhancing the quality of the SAO recommenda-tions and increasing the implementation rate by the audit entities constitute the key challenge the SAO intends to address in the upcoming years.

Another important issue the SAO considers in the process of building and enhancing the SAO institu-tional capacity is improvement of efficiency and effectiveness of management processes. This requires introduction of information management systems as well as tools recommended by the international best practice that will result in improved outcomes with the available resources and continuous improvement of the quality of our work.

State Audit Office

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The SAO Mission

State Audit Office’s mission is to support continuous improvement in delivering public services and enhance legality, effectiveness and accountability in the use of public resources.

Our aim is to support the parliament in overseeing the activities of the government, as well as to strengthen accountability and transparency of the public sector and to ensure efficient and effective management of public finances.

Core Values

Core values given below are reflected in every aspect of our work:

� Objectivity – The work of the SAO is based upon the principles of transparency, fairness, accuracy, timeliness and political neutrality which in turn provides high level of credibility.

� Independence - The work of the SAO, as an independent expert in the process of parliamentary su-pervision over the executive branch, is guided by the principles of impartiality and objectivity.

� Publicity – The SAO conducts its activities openly and publicly except for the cases prescribed by the law. We ensure the accessibility of public information to the public and other relevant stakeholders.

� Professionalism - The work of our employees conforms to the ethical and professional standards. We ensure continuous professional development of our staff by providing opportunities for them to acquire new knowledge, enhance skills and broaden competencies. The latter underpins the high quality of the SAO work as well as its compliance with the international standards.

Existing Challenges

The SAO strategy is driven by the key issues and major changes faced by the public sector. Existing trends and ongoing reform process in public sector poses a significant challenge to the work of the State Audit Office as well as that of the legislative and executive branches of government and put further emphasis on our role in this process.

� Objectivity – The work of the SAO is based upon the principles of transparency, fairness, accuracy, timeliness and political neutrality which in turn provides high level of credibility.� Independence - The work of the SAO, as an independent expert in the process of parliamentary su-pervision over the executive branch, is guided by the principles of impartiality and objectivity. � Publicity – The SAO conducts its activities openly and publicly except for the cases prescribed by the law. We ensure the accessibility of public information to the public and other relevant stakeholders.� Professionalism - The work of our employees conforms to the ethical and professional standards. We ensure continuous professional development of our staff by providing opportunities for them to acquire new knowledge, enhance skills and broaden competencies. The latter underpins the high quality of the SAO work as well as its compliance with the international standards.

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State Audit Office

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Introduction






State Audit Office

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gia-2010-2012%20GEO.pdf

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State Audit Office

Challenges Related to External Environment

Legislative limits established to ensure fiscal discipline and government’s commitment to the gradual fiscal consolidation underscores the need of targeted and effective use of budgetary resources, increasing our role in supporting effective use of limited financial resources by the government.

Ongoing reform process in the public finance management (PFM) system aimed to strengthening the ac-countability and reliability of the state budget constitutes one of the major challenges for the SAO audit work. Our objective is to assist the government to successfully fulfill its obligation to fully introduce the International Public Sector Accounting Standards by 2020 that forms one of the main elements of the reform process.

Furthermore, ongoing steps toward the introduction of results-oriented (program) budgeting in public sector entails enhanced focus on the outcomes of the used budgetary resources along with the compliance with the existing legislation and true and fair financial reporting. The noted shift in the public finance management system increases importance of our work toward performance auditing and requires sub-stantial enhancement of the institution’s professional capacity.

In addition, government’s commitment to the introduction of electronic management systems - the elec-tronic payment processing systems for the spending agencies, electronic management systems for the public debt and loans, electronic databases for the management of social benefits etc. represents important challenge to the SAO audit work. In response to the noted changes in the management of public resourc-es, the SAO intends to introduce and develop IT auditing within the framework of its audit work.

Challenges related to the SAO Institutional Capacity

The main challenge to the SAO audit work is to increase budget coverage through its audit work. This implies raising consolidated state budget coverage in percentage terms as well as expanding sectorial cov-erage by the SAO’s audit work. This will support the improvement of the SAO’s systemic vision and will focus audit work on areas and issues of high importance.

One of the main goals the SAO’s work is to provide recommendations in order to improve and prevent deficiencies identified by its audit work. In this regard, enhancing the quality of the SAO recommenda-tions and increasing the implementation rate by the audit entities constitute the key challenge the SAO intends to address in the upcoming years.

Another important issue the SAO considers in the process of building and enhancing the SAO institu-tional capacity is improvement of efficiency and effectiveness of management processes. This requires introduction of information management systems as well as tools recommended by the international best practice that will result in improved outcomes with the available resources and continuous improvement of the quality of our work.

State Audit Office

www.sao.ge

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The SAO Mission

State Audit Office’s mission is to support continuous improvement in delivering public services and enhance legality, effectiveness and accountability in the use of public resources.

Our aim is to support the parliament in overseeing the activities of the government, as well as to strengthen accountability and transparency of the public sector and to ensure efficient and effective management of public finances.

Core Values

Core values given below are reflected in every aspect of our work:

� Objectivity – The work of the SAO is based upon the principles of transparency, fairness, accuracy, timeliness and political neutrality which in turn provides high level of credibility.

� Independence - The work of the SAO, as an independent expert in the process of parliamentary su-pervision over the executive branch, is guided by the principles of impartiality and objectivity.

� Publicity – The SAO conducts its activities openly and publicly except for the cases prescribed by the law. We ensure the accessibility of public information to the public and other relevant stakeholders.

� Professionalism - The work of our employees conforms to the ethical and professional standards. We ensure continuous professional development of our staff by providing opportunities for them to acquire new knowledge, enhance skills and broaden competencies. The latter underpins the high quality of the SAO work as well as its compliance with the international standards.

Existing Challenges

The SAO strategy is driven by the key issues and major changes faced by the public sector. Existing trends and ongoing reform process in public sector poses a significant challenge to the work of the State Audit Office as well as that of the legislative and executive branches of government and put further emphasis on our role in this process.

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State Audit Office

www.sao.ge

With regards to the management of the human resources, the essential component to the success of the SAO audit work is its ability to recruit and retain qualified professional staff and to ensure continuous professional development and appropriate working environment for its employees. Furthermore, human resource management policy should take into account the need to ensure the appropriate ratio between the SAO professional and administrative staff.

Considering that the State Audit Office is accountable to the parliament and public, improvement of its reputation and raising the trustworthiness of its work constitutes an important aspect of the SAO work. Addressing these aspects require enhancing public awareness of our work as well as facilitating effective communication with key stakeholders.

In light of the noted challenges that provide the context for our work while taking into account existing resourc-es and development opportunities, the State Audit Office has established four strategic goals for 2014-2017. The gradual implementation thereof and institutional building in line with international standards will enhance the role of the SAO in the process of improvement of public financial management system.

Our strategic goals are:

Support government reforms aimed at improving govern-ment accountability

3 421Support the parlia-mentary oversight over the government through our audit work

Promote transparency and accountability in political party financing

Enhance the insti-tutional capacity of the SAO to foster the quality of our work

Support government reforms aimed at improving govern-ment accountability

3 421Support the parlia-mentary oversight over the government through our audit work


Enhance the insti-tutional capacity of the SAO to foster the quality of our work

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Strategic Goals and Objectives

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1.3. Enhance impact of IT Audit The SAO plans to introduce and enhance Information Technology audit. This type of audit provides a reasonable assurance that information systems and control mechanisms ensure:

� Security of information assets; � Integrity, accuracy and reliability of data; � The SAO under the financial support of the World Bank, intends to: � Create and develop methodological basis of IT audit; � Attract and recruit IT auditors and support their professional development; � Create and develop comprehensive technological and infrastructural base for IT audit; � increase the number of IT audits; � enhance cooperation with state and international organizations in the process of introducing and

developing innovations; � support the development of the SAO’s organizational capacities through the introduction of IT inno-

vations.

The introduction of IT audit direction will contribute to SAO’s audit work by identification significant

control deficiencies with minimum available resources. Introduction of IT audit will also enable the SAO

to increase the impact of the financial, compliance and performance audits. Therefore, it will contribute

to the improvement of the public financial management of the country by issuing relevant recommen-

dations.

1.4. Audit of Donor-Funded ProjectsDonor fund audit ensures the compliance of the funds allocated by the donors with their requirements and objectives.

Through the introduction of donor fund audit, the SAO will ensure both the financial statement audit of projects in compliance with international standards and the evaluation of projects in accordance with current legislation and regulations of Georgia as well.

The SAO, within the scope of donor fund audits aims to:1. Save the resources allocated for the external audit of donor-funded projects and redirect the funds to the state budget;2. Identify corrupt transactions and other illegal actions and raise the awareness of the public and relevant stakeholders in this regard;3. Increase the reputation and reliability of the SAO – the State Audit Office continues striving for sustainable development which is also expressed in the introduction of this new type of au-dit. In this regard, the Office is planning to recruit qualified staff, advance their competencies and share relevant standards and better practices to the public.

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Strategic Goal 1

Support the parliamentary oversight over the government through our au-dit work

Considering the areas of high public interest, within the scope of its mandate SAO intends to address a number of priority areas2 through its audit work, namely:

� Financial activities of local self-government entities � State property registration and management � Support the development of law-enforcement bodies � Support the development of state defense system � Infrastructural programs and activities � Support for education and science � Healthcare and social welfare system � Support for agriculture � Support for efficient public administration and public finance management reform � Cultural and sports program management

Objectives:

1.1. Enhance impact of the SAO financial/compliance audit workThe State Audit Office by means of strengthened institutional capacity intends to cover at least 85%3 of the state budget for 2017. At the same time, the SAO plans to expand the sectorial coverage of its audit work that implies coverage of all areas with significant impact on public finance management (with the budgetary appropriations constituting a significant share of the state budget) and/or those characterized by high level of risks4.

1.2. Enhance impact of Performance Audit Through enhancing the role of performance audit in audit work, the SAO intends to contribute to im-provements in efficiency and effectiveness of public spending. The State Audit Office aims to gradually increase the share of performance audits in its audit work, in particular, target share in audit work will reach10% by 2016.

� Financial activities of local self-government entities� State property registration and management � Support the development of law-enforcement bodies� Support the development of state defense system � Infrastructural programs and activities � Support for education and science � Healthcare and social welfare system � Support for agriculture � Support for efficient public administration and public finance management reform� Cultural and sports program management

2 These priorities are revised every 2 years.

3 The target number is determined within the Performance Management Framework prepared by the INTOSAI as one of the best targets for covering the state budget by audit work.4 Large sum of state funds, unaudited fields in recent years, high public interest, results of the evaluation of main directions of organizations’ management, recommendation follow-up, important

management problems identified by external parties, ongoing reforms or changes within the spending entity/program.

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1.3. Enhance impact of IT Audit The SAO plans to introduce and enhance Information Technology audit. This type of audit provides a reasonable assurance that information systems and control mechanisms ensure:

� Security of information assets; � Integrity, accuracy and reliability of data; � The SAO under the financial support of the World Bank, intends to: � Create and develop methodological basis of IT audit; � Attract and recruit IT auditors and support their professional development; � Create and develop comprehensive technological and infrastructural base for IT audit; � increase the number of IT audits; � enhance cooperation with state and international organizations in the process of introducing and

developing innovations; � support the development of the SAO’s organizational capacities through the introduction of IT inno-

vations.

The introduction of IT audit direction will contribute to SAO’s audit work by identification significant

control deficiencies with minimum available resources. Introduction of IT audit will also enable the SAO

to increase the impact of the financial, compliance and performance audits. Therefore, it will contribute

to the improvement of the public financial management of the country by issuing relevant recommen-

dations.

1.4. Audit of Donor-Funded ProjectsDonor fund audit ensures the compliance of the funds allocated by the donors with their requirements and objectives.

Through the introduction of donor fund audit, the SAO will ensure both the financial statement audit of projects in compliance with international standards and the evaluation of projects in accordance with current legislation and regulations of Georgia as well.

The SAO, within the scope of donor fund audits aims to:1. Save the resources allocated for the external audit of donor-funded projects and redirect the funds to the state budget;2. Identify corrupt transactions and other illegal actions and raise the awareness of the public and relevant stakeholders in this regard;3. Increase the reputation and reliability of the SAO – the State Audit Office continues striving for sustainable development which is also expressed in the introduction of this new type of au-dit. In this regard, the Office is planning to recruit qualified staff, advance their competencies and share relevant standards and better practices to the public.

� Security of information assets;� Integrity, accuracy and reliability of data;� The SAO under the financial support of the World Bank, intends to:� Create and develop methodological basis of IT audit;� Attract and recruit IT auditors and support their professional development;� Create and develop comprehensive technological and infrastructural base for IT audit;� increase the number of IT audits;� enhance cooperation with state and international organizations in the process of introducing and developing innovations;� support the development of the SAO’s organizational capacities through the introduction of IT inno-vations.

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Strategic Goal 1

Support the parliamentary oversight over the government through our au-dit work

Considering the areas of high public interest, within the scope of its mandate SAO intends to address a number of priority areas2 through its audit work, namely:

� Financial activities of local self-government entities � State property registration and management � Support the development of law-enforcement bodies � Support the development of state defense system � Infrastructural programs and activities � Support for education and science � Healthcare and social welfare system � Support for agriculture � Support for efficient public administration and public finance management reform � Cultural and sports program management

Objectives:

1.1. Enhance impact of the SAO financial/compliance audit workThe State Audit Office by means of strengthened institutional capacity intends to cover at least 85%3 of the state budget for 2017. At the same time, the SAO plans to expand the sectorial coverage of its audit work that implies coverage of all areas with significant impact on public finance management (with the budgetary appropriations constituting a significant share of the state budget) and/or those characterized by high level of risks4.

1.2. Enhance impact of Performance Audit Through enhancing the role of performance audit in audit work, the SAO intends to contribute to im-provements in efficiency and effectiveness of public spending. The State Audit Office aims to gradually increase the share of performance audits in its audit work, in particular, target share in audit work will reach10% by 2016.

2 These priorities are revised every 2 years.

3 The target number is determined within the Performance Management Framework prepared by the INTOSAI as one of the best targets for covering the state budget by audit work.4 Large sum of state funds, unaudited fields in recent years, high public interest, results of the evaluation of main directions of organizations’ management, recommendation follow-up, important

management problems identified by external parties, ongoing reforms or changes within the spending entity/program.

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Strategic objective Key Performance Indicator

1.5. Enhance benefits of the SAO recommendations

¾ Changes undertaken by the government enti-ties aimed at improvement of public governance as a result of the SAO’s recommendations;

¾ Number of recommendations issued during a year;

¾ Number of recommendations implemented during a year;

¾ Annual summary report prepared for the Par-liament and the public;

¾ Share of audit reports containing recommen-dations;

¾ Recommendation implementation ratio.

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1.5. Continuous enhancement of the quality of the SAO statutory reporting on the State Budget

Continuous improvement of the quality of the SAO reports on state budget will help to enhance the SAO role in PFM system and provide the Parliament with information on all significant and systemic deficien-cies with vital importance for efficient and effective use of public resources and delivering public value.


The SAO strives to facilitate/support positive changes in the public administration with its recommen-dations issued as a result of its audit work, and increase the benefit for the state by implementing these changes.In this regard, the State Audit Office intends to enhance the quality of recommendations and increase the involvement of the Parliament in the process while encouraging timely and proper actions by as well. Besides, this will enhance the SAO’s accountability to the key stakeholders by developing and reporting comprehensive information on the improvements made in response to our recommendations.


1.1. Enhance impact of the SAO financial/compliance audit work

¾ Coverage of the state budget by the SAO financial / compliance audit work in percentage terms;

¾ Financial/non-financial results through the SAO financial/compliance audit work.

1.2. Enhance impact of the SAO Performance Audit work

¾ Financial/non-financial benefits brought about by performance audit to the country;

¾ The share of performance audits conducted during a year to the total number of audits (%);

¾ Coverage of at least of 6 sectors/topics by per-formance audits;

1.3. Enhance impact of the SAO IT Audit work

¾ Number of IT audits during a year; ¾ Financial/non-financial benefits brought about

by IT audits to the country; ¾ Development and introduction of IT audit

methodology.


¾ Number of identified systemic deficiencies and relevant recommendations reflected in the SAOs statutory reports on the state budget;

¾ Changes carried out as a result of recommen-dations set out in the SAO’s statutory reports on the state budget.

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¾ Changes undertaken by the government enti-ties aimed at improvement of public governance as a result of the SAO’s recommendations;

¾ Number of recommendations issued during a year;

¾ Number of recommendations implemented during a year;

¾ Annual summary report prepared for the Par-liament and the public;

¾ Share of audit reports containing recommen-dations;

¾ Recommendation implementation ratio.

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Continuous improvement of the quality of the SAO reports on state budget will help to enhance the SAO role in PFM system and provide the Parliament with information on all significant and systemic deficien-cies with vital importance for efficient and effective use of public resources and delivering public value.


The SAO strives to facilitate/support positive changes in the public administration with its recommen-dations issued as a result of its audit work, and increase the benefit for the state by implementing these changes.In this regard, the State Audit Office intends to enhance the quality of recommendations and increase the involvement of the Parliament in the process while encouraging timely and proper actions by as well. Besides, this will enhance the SAO’s accountability to the key stakeholders by developing and reporting comprehensive information on the improvements made in response to our recommendations.


1.1. Enhance impact of the SAO financial/compliance audit work

¾ Coverage of the state budget by the SAO financial / compliance audit work in percentage terms;

¾ Financial/non-financial results through the SAO financial/compliance audit work.

1.2. Enhance impact of the SAO Performance Audit work

¾ Financial/non-financial benefits brought about by performance audit to the country;

¾ The share of performance audits conducted during a year to the total number of audits (%);

¾ Coverage of at least of 6 sectors/topics by per-formance audits;

1.3. Enhance impact of the SAO IT Audit work

¾ Number of IT audits during a year; ¾ Financial/non-financial benefits brought about

by IT audits to the country; ¾ Development and introduction of IT audit

methodology.


¾ Number of identified systemic deficiencies and relevant recommendations reflected in the SAOs statutory reports on the state budget;

¾ Changes carried out as a result of recommen-dations set out in the SAO’s statutory reports on the state budget.

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2.1. Provide expert opinions on legislative initiatives related to public finance management and budgeting

¾ Number of expert opinions related to public finance management and budgeting;

¾ Changes toward improvement of public management carried out as a result of SAO legal opinions.

2.2. Assist the government in building capacity for effective management of public finances

¾ The SAO contribution/participation in activ-ities and projects related to public finance manage-ment and budgeting;

¾ Research Publications (the best practice man-uals, research, publications related to public finance management and budgeting);

¾ Seminars/trainings related to public finance management and budgeting;

¾ Introduction and timely updates of the rating system assessing the full cycle of budgeting for spending agencies.

2.3. Provide professional assistance to law enforce-ment agencies within the framework of the country’s anti-corruption strategy

¾ Number of activities carried out with the col-laboration of law enforcement agencies within the framework of country’s anti-corruption strategy;

¾ Benefits bring about as a result of collabora-tion with law enforcement agencies.

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Strategic Goal 2

Support government reforms aimed at improving government account-ability

Objectives:

2.1. Provide expert opinions on legislative initiatives related to public finance management and bud-getingThe objective, while taking into account the ongoing reforms, implies assisting Parliament in improving the leg-islative base regulating relevant issues and forming an effective framework for the public financial management system.


The SAO intends to participate actively in public finance-related activities, projects and a number of profession-al councils (Public Finance Management Reform Coordinating Council, Public Sector Accounting Standards Board, National Anti-corruption Council). In order to achieve this objective, the SAO’s work will be focused on a number of key areas related to internal audit, program budgeting, risk management and internal control, state

property management and sharing best practices to the public entities. Within the scope of this objective the SAO intends to organize trainings and prepare publications/best practice guidelines pointing to best practice and opportunities for improvement, particularly in delivering public value and improving financial management in public sector.

In addition, the SAO plans to introduce the rating system assessing the full cycle of budgetary process for the spending agencies. Through the introduction of the rating system SAO intends to evaluate the comprehen-siveness of budgeting processes for each of the spending agency and identify existing gaps, thus, ensuring re-sults-oriented and effective management of public resources as well as providing incentives for spending agen-cies to implement the SAO recommendations.

2.3. Provide professional assistance to law enforcement agencies within the framework of the country’s anti-corruption strategy

The State Audit Office intends to provide relevant professional assistance to the law enforcement agencies as needed. Furthermore, the SAO aims to take into account the recommendations and opinions provided by the Council of Europe Group of States against Corruption (GRECO) thus upholding transparency and accountability in public sector.

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2.1. Provide expert opinions on legislative initiatives related to public finance management and budgeting

¾ Number of expert opinions related to public finance management and budgeting;

¾ Changes toward improvement of public management carried out as a result of SAO legal opinions.


¾ The SAO contribution/participation in activ-ities and projects related to public finance manage-ment and budgeting;

¾ Research Publications (the best practice man-uals, research, publications related to public finance management and budgeting);

¾ Seminars/trainings related to public finance management and budgeting;

¾ Introduction and timely updates of the rating system assessing the full cycle of budgeting for spending agencies.

2.3. Provide professional assistance to law enforce-ment agencies within the framework of the country’s anti-corruption strategy

¾ Number of activities carried out with the col-laboration of law enforcement agencies within the framework of country’s anti-corruption strategy;

¾ Benefits bring about as a result of collabora-tion with law enforcement agencies.

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Strategic Goal 2

Support government reforms aimed at improving government account-ability

Objectives:

2.1. Provide expert opinions on legislative initiatives related to public finance management and bud-getingThe objective, while taking into account the ongoing reforms, implies assisting Parliament in improving the leg-islative base regulating relevant issues and forming an effective framework for the public financial management system.


The SAO intends to participate actively in public finance-related activities, projects and a number of profession-al councils (Public Finance Management Reform Coordinating Council, Public Sector Accounting Standards Board, National Anti-corruption Council). In order to achieve this objective, the SAO’s work will be focused on a number of key areas related to internal audit, program budgeting, risk management and internal control, state

property management and sharing best practices to the public entities. Within the scope of this objective the SAO intends to organize trainings and prepare publications/best practice guidelines pointing to best practice and opportunities for improvement, particularly in delivering public value and improving financial management in public sector.

In addition, the SAO plans to introduce the rating system assessing the full cycle of budgetary process for the spending agencies. Through the introduction of the rating system SAO intends to evaluate the comprehen-siveness of budgeting processes for each of the spending agency and identify existing gaps, thus, ensuring re-sults-oriented and effective management of public resources as well as providing incentives for spending agen-cies to implement the SAO recommendations.

2.3. Provide professional assistance to law enforcement agencies within the framework of the country’s anti-corruption strategy

The State Audit Office intends to provide relevant professional assistance to the law enforcement agencies as needed. Furthermore, the SAO aims to take into account the recommendations and opinions provided by the Council of Europe Group of States against Corruption (GRECO) thus upholding transparency and accountability in public sector.

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3.1. Publicity and transparency of the political party financing

¾ Financial reports of political parties publicized by using different means:

Â Published on the webpage; Â Published by media; Â Submitted to the relevant stakeholders.

3.2. Ensuring compliance of the political party finan-cial reporting with the relevant legislation

¾ Activities carried out with the involvement of political parties to ensure the ensure compliance of their financial reporting with the relevant legisla-tion.

3.3. Involvement of independent experts and po-litically neutral parties in the monitoring process of political party financing

¾ Activities carried out with the involvement of independent experts and politically impartial parties and relevant reports.

3.4. 3.4. Preparation of analytical-evaluation report ¾ Preparation of analytical-evaluation report

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Strategic Goal 3


Objectives:

3.1.Publicity and transparency of the political party financing

3.2. Ensuring compliance of the political party financial reporting with the relevant legislation

3.3. 3.3. Involvement of independent experts and politically neutral parties in the monitoring process of political party financing

Within the scope of the abovementioned strategic objectives the SAO intends to promote transparency and en-sure raising public awareness in political party financing. At the same time, the SAO intends to ensure compli-ance of the financial reporting with the relevant legislative framework. Through enhancing the involvement of independent experts and impartial sides the SAO expects to further improve the monitoring process of political party financing.

3.4. Preparation of analytical-evaluation report

The SAO prepares and submits an analytical-evaluation report (in Georgian and English languages) to the Parlia-ment, to the Ministry of Finance and to the EU Delegation. This document will assess the degree of compliance of the SAO’s activities with principle 3 of INTOSAI (Independence, Objectivity and Impartiality). Special atten-tion will be drawn to the issues related to the financing of political parties and the monitoring thereof, improving the quality of SAO work, and the issues related to the accountability to the Parliament and citizens.

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State Audit Office

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3.1. Publicity and transparency of the political party financing

¾ Financial reports of political parties publicized by using different means:

Â Published on the webpage; Â Published by media; Â Submitted to the relevant stakeholders.

3.2. Ensuring compliance of the political party finan-cial reporting with the relevant legislation

¾ Activities carried out with the involvement of political parties to ensure the ensure compliance of their financial reporting with the relevant legisla-tion.

3.3. Involvement of independent experts and po-litically neutral parties in the monitoring process of political party financing

¾ Activities carried out with the involvement of independent experts and politically impartial parties and relevant reports.

3.4. 3.4. Preparation of analytical-evaluation report ¾ Preparation of analytical-evaluation report

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Strategic Goal 3


Objectives:

3.1.Publicity and transparency of the political party financing

3.2. Ensuring compliance of the political party financial reporting with the relevant legislation

3.3. 3.3. Involvement of independent experts and politically neutral parties in the monitoring process of political party financing

Within the scope of the abovementioned strategic objectives the SAO intends to promote transparency and en-sure raising public awareness in political party financing. At the same time, the SAO intends to ensure compli-ance of the financial reporting with the relevant legislative framework. Through enhancing the involvement of independent experts and impartial sides the SAO expects to further improve the monitoring process of political party financing.

3.4. Preparation of analytical-evaluation report

The SAO prepares and submits an analytical-evaluation report (in Georgian and English languages) to the Parlia-ment, to the Ministry of Finance and to the EU Delegation. This document will assess the degree of compliance of the SAO’s activities with principle 3 of INTOSAI (Independence, Objectivity and Impartiality). Special atten-tion will be drawn to the issues related to the financing of political parties and the monitoring thereof, improving the quality of SAO work, and the issues related to the accountability to the Parliament and citizens.

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4.2. Enforce quality assurance system consistent with international audit standards and best-practices

The SAO intends to introduce the quality assurance system aimed at assessment and monitoring the quality of the audit work based on the ranking system of audit reports according to the specifically defined scale. The rank-ing system will enable the SAO to monitor the dynamics of the quality of draft audit reports.

Furthermore, aiming at continuous improvement of the quality of our audit work, the SAO has decided to devel-op quality control and quality assurance policies and procedures for performance audit as well.

Quality Assurance Department aims to prepare periodic reports of Audit Quality Review in which the activity will be assessed institutionally in the fields of competencies defined by the international standards of the quality control, on its basis it will be enable to organize activities of uniform practice in audit activity and monitoring on the implementation of the given recommendations.

4.3. Enhancing ethical environment

Ethical standards are clearly and explicitly established at the State Audit Office. Code of Ethics covering stan-dards of ethical conduct and core values of activities represents a vivid example of this. Besides, the Ethics Com-mission is set up which is responsible for the close monitoring over the preservation of the ethical values by the employees.Implementation of ethical standards and values in everyday activities is vital in order to:

1. Enhance ethical environment due to specificity and significance of audit work;2. Enhancing the role of the SAO in the anti-corruption strategy of the country.

The SAO is planning to develop additional mechanisms to enhance ethical environment. In particular, accord-ing to international practice, the Office is planning to develop and introduce an electronic portal which enables employees to declare professional values of their work. This tool will enable each and every employee to express their willingness annually to guide their work in accordance with the values of the Office.

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Strategic Goal 4

Enhance the institutional capacity of the SAO to foster the quality of our work

Objectives:

4.1. Make SAO an employer of choice and improve SAO’s ability to attract, develop and retain a qual-ified and professional workforce

Considering that successful human resource management policy is crucial for the SAO to successfully fulfill its statutory obligations, within the scope of this objective, the SAO outlined several directions, namely:

Â Introduction of transparent and impartial employee performance appraisal system; Â Needs assessment aimed at identification of main gaps in staff qualifications and skills, knowledge of

financial management, program evaluation, and IT auditing; Â Development and implementation of the strategy for continuous professional development for en-

try-level staff; Â Development and implementation of the strategy for continuous professional development of the em-

ployees; Â Enhancement of the communication with universities and other educational institutions with the pur-

pose to attract qualified staff; Â Development and implementation of employee viewpoint survey that will underpin further steps to-

ward improvement of the organizational effectiveness and human resource management.

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4.2. Enforce quality assurance system consistent with international audit standards and best-practices

The SAO intends to introduce the quality assurance system aimed at assessment and monitoring the quality of the audit work based on the ranking system of audit reports according to the specifically defined scale. The rank-ing system will enable the SAO to monitor the dynamics of the quality of draft audit reports.

Furthermore, aiming at continuous improvement of the quality of our audit work, the SAO has decided to devel-op quality control and quality assurance policies and procedures for performance audit as well.

Quality Assurance Department aims to prepare periodic reports of Audit Quality Review in which the activity will be assessed institutionally in the fields of competencies defined by the international standards of the quality control, on its basis it will be enable to organize activities of uniform practice in audit activity and monitoring on the implementation of the given recommendations.

4.3. Enhancing ethical environment

Ethical standards are clearly and explicitly established at the State Audit Office. Code of Ethics covering stan-dards of ethical conduct and core values of activities represents a vivid example of this. Besides, the Ethics Com-mission is set up which is responsible for the close monitoring over the preservation of the ethical values by the employees.Implementation of ethical standards and values in everyday activities is vital in order to:


The SAO is planning to develop additional mechanisms to enhance ethical environment. In particular, accord-ing to international practice, the Office is planning to develop and introduce an electronic portal which enables employees to declare professional values of their work. This tool will enable each and every employee to express their willingness annually to guide their work in accordance with the values of the Office.


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Strategic Goal 4

Enhance the institutional capacity of the SAO to foster the quality of our work

Objectives:

4.1. Make SAO an employer of choice and improve SAO’s ability to attract, develop and retain a qual-ified and professional workforce

Considering that successful human resource management policy is crucial for the SAO to successfully fulfill its statutory obligations, within the scope of this objective, the SAO outlined several directions, namely:

Â Introduction of transparent and impartial employee performance appraisal system; Â Needs assessment aimed at identification of main gaps in staff qualifications and skills, knowledge of

financial management, program evaluation, and IT auditing; Â Development and implementation of the strategy for continuous professional development for en-

try-level staff; Â Development and implementation of the strategy for continuous professional development of the em-

ployees; Â Enhancement of the communication with universities and other educational institutions with the pur-

pose to attract qualified staff; Â Development and implementation of employee viewpoint survey that will underpin further steps to-

ward improvement of the organizational effectiveness and human resource management.

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I am courteous with colleagues and others. I refrain from any kind of discrimination and respect the rights, freedom and dignity of others. With my activities and attitudes I:

Â Enhance mutual trust between the colleagues. I avoid stirring up of personal or other conflicts; Â Render professional support to the colleagues when necessary; Â Refrain from intervening into the activities of the colleague; Â Do not mislead the colleague; Â I point my colleagues to their mistakes in a tactful manner; Â Act according to the principles and norms necessary for establishing collegial, professional, solidary

and sound working environment; and Â Contribute to the establishment of sound working environment.

4.4. Enhance communication with all the relevant stakeholders including parliament, media, civil society and others to improve the SAO reputation and ensure the reliability of its work

Regular communication with the Parliament and its provision with audit work results and recommendations are critical to performing our role. SAO’s goal is to improve communication with Parliament by using best practice and leading supreme audit institutions’ experience.

The SAO aims to build the relations with auditees built on mutual understanding and trust. To foster stakehold-er relationships, we will be implementing a communication strategy that will include, among other things, a set of protocols for working with audited agencies.

One of the main stakeholders of the SAO is the public. In order to increase public awareness and involvement thereof in the audit activities, the Office plans to develop and introduce additional mechanisms in practice. In this regard, the State Audit Office intends to involve the public in the following areas of audit activities:

� Audit planning; � Improvement of mutual communication on audit results.

The SAO will ensure involvement of the citizens at the audit planning stage. An electronic portal “Plan With Us” launched on our official web-page aims to engage civil society in audit planning by offering suggestions, comments and complaints

In addition, the SAO intends to develop a portal for the fight against corruption aimed at prevention of potential fraud and corruption in the public sector. This tool allows citizens to report allegations of fraud, abuse, waste and mismanagement of public funds.

Furthermore, In addition to using these audit planning tools, individuals, NGOs, and academics are given the opportunity to submit their work, proposals or ideas regarding cost-saving approaches, best practices in program management or evaluation, improving performance issues in government agencies, or ways to strengthen leg-islation environment. In addition, the Office will use different tools (web-page, conferences and meetings) to ensure the improvement of the accessibility of information on the implementation of audit results and recom-mendations to the public.

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1. IntegrityI declare being loyal to the idea of equity. I fulfill my duties and obligations with honesty and conscientious-ness. My activities do not damage the reputation of my and the SAO’s work. 2. Independence and ObjectivityI am independent and objective during the implementation of my rights and duties. I immediately report to my supervisor on such circumstances that damage my independence or create a threat for it. I refrain from any activity that may cast any doubt to my independence or have an impact on my official work. I fulfil my rights and duties impartially. 3. Political NeutralityI disclaim membership of any political union and defend the reputation of the State Audit Office as a politically neutral institution. I retain my independence and carry out activities impartially regardless my political views. 4. No Conflict of InterestI am fully in compliance with the Law of Georgia “on the Conflict of Interests and Corruption in the Public Service” and the general rules of conduct under the Law of Georgia “on Public Service” under the circumstanc-es of conflict of interests and/or with a view to avoiding corruption-related violations. I avoid any circum-stances negatively affecting the implementation of my duties or which may be perceived as having an impact and may cast doubt to my integrity, independence and objectivity. Also, I report to my direct supervisor about any existing or potential conflict of interest. 5. Professional Secret ProtectionI do not reveal information which was accessible during the implementation of my duties, except for the cases where the disclosure of information is linked to implementation of duties prescribed by Georgian legislation. I do not make audit results public prior to the preparation of the relevant document summarizing the audit re-sults. Also, I disclaim using the information gained during the implementation of duties for personal purposes. 6. ResponsibilityI carry out the activities in accordance with Georgian legislation and in accordance with the general rules of conduct prescribed for public services. I fulfil all the requirements related to me and my position. I am always well-organized during the implementation of duties. 7. ProfessionalismI am competent and responsible for the quality of my work. I do not undertake any work I do not possess relevant knowledge and qualification for. I advise the supervisor about the lack of relevant competencies and qualification while discussing a specific issue. I constantly strive to improve my competencies and professional skills and raise qualification.8. Communication Ethics

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gia-2010-2012%20GEO.pdf

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I am courteous with colleagues and others. I refrain from any kind of discrimination and respect the rights, freedom and dignity of others. With my activities and attitudes I:

Â Enhance mutual trust between the colleagues. I avoid stirring up of personal or other conflicts; Â Render professional support to the colleagues when necessary; Â Refrain from intervening into the activities of the colleague; Â Do not mislead the colleague; Â I point my colleagues to their mistakes in a tactful manner; Â Act according to the principles and norms necessary for establishing collegial, professional, solidary

and sound working environment; and Â Contribute to the establishment of sound working environment.

4.4. Enhance communication with all the relevant stakeholders including parliament, media, civil society and others to improve the SAO reputation and ensure the reliability of its work

Regular communication with the Parliament and its provision with audit work results and recommendations are critical to performing our role. SAO’s goal is to improve communication with Parliament by using best practice and leading supreme audit institutions’ experience.

The SAO aims to build the relations with auditees built on mutual understanding and trust. To foster stakehold-er relationships, we will be implementing a communication strategy that will include, among other things, a set of protocols for working with audited agencies.

One of the main stakeholders of the SAO is the public. In order to increase public awareness and involvement thereof in the audit activities, the Office plans to develop and introduce additional mechanisms in practice. In this regard, the State Audit Office intends to involve the public in the following areas of audit activities:

� Audit planning; � Improvement of mutual communication on audit results.

The SAO will ensure involvement of the citizens at the audit planning stage. An electronic portal “Plan With Us” launched on our official web-page aims to engage civil society in audit planning by offering suggestions, comments and complaints

In addition, the SAO intends to develop a portal for the fight against corruption aimed at prevention of potential fraud and corruption in the public sector. This tool allows citizens to report allegations of fraud, abuse, waste and mismanagement of public funds.

Furthermore, In addition to using these audit planning tools, individuals, NGOs, and academics are given the opportunity to submit their work, proposals or ideas regarding cost-saving approaches, best practices in program management or evaluation, improving performance issues in government agencies, or ways to strengthen leg-islation environment. In addition, the Office will use different tools (web-page, conferences and meetings) to ensure the improvement of the accessibility of information on the implementation of audit results and recom-mendations to the public.

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1. IntegrityI declare being loyal to the idea of equity. I fulfill my duties and obligations with honesty and conscientious-ness. My activities do not damage the reputation of my and the SAO’s work. 2. Independence and ObjectivityI am independent and objective during the implementation of my rights and duties. I immediately report to my supervisor on such circumstances that damage my independence or create a threat for it. I refrain from any activity that may cast any doubt to my independence or have an impact on my official work. I fulfil my rights and duties impartially. 3. Political NeutralityI disclaim membership of any political union and defend the reputation of the State Audit Office as a politically neutral institution. I retain my independence and carry out activities impartially regardless my political views. 4. No Conflict of InterestI am fully in compliance with the Law of Georgia “on the Conflict of Interests and Corruption in the Public Service” and the general rules of conduct under the Law of Georgia “on Public Service” under the circumstanc-es of conflict of interests and/or with a view to avoiding corruption-related violations. I avoid any circum-stances negatively affecting the implementation of my duties or which may be perceived as having an impact and may cast doubt to my integrity, independence and objectivity. Also, I report to my direct supervisor about any existing or potential conflict of interest. 5. Professional Secret ProtectionI do not reveal information which was accessible during the implementation of my duties, except for the cases where the disclosure of information is linked to implementation of duties prescribed by Georgian legislation. I do not make audit results public prior to the preparation of the relevant document summarizing the audit re-sults. Also, I disclaim using the information gained during the implementation of duties for personal purposes. 6. ResponsibilityI carry out the activities in accordance with Georgian legislation and in accordance with the general rules of conduct prescribed for public services. I fulfil all the requirements related to me and my position. I am always well-organized during the implementation of duties. 7. ProfessionalismI am competent and responsible for the quality of my work. I do not undertake any work I do not possess relevant knowledge and qualification for. I advise the supervisor about the lack of relevant competencies and qualification while discussing a specific issue. I constantly strive to improve my competencies and professional skills and raise qualification.8. Communication Ethics

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4.7. Improvement of management system and processes to raise effectiveness and productivity of our work

For the growth of the effectiveness of the audit process there are important information management systems that SAO aims to develop, including: Introduction of audit management software (AMS) - SAO works on the development and adoption of audit management system that will integrate relevant experiences of international audit firms (Big Four) and other Supreme Audit Institutions in this direction. Introduction of the aforementioned system will enable SAO to:

Â Document all stages of the performed work within the scope of specific audits as well as define the authorization levels;

Â Integrate different audit approaches for specific topics; Â Develop software instruments for the management, evaluation and oversight for the whole audit

work; Â Support adoption of systemic view to the audit process, that entails completion of all relevant audit

procedures in a comprehensive and coherent manner; Also, Â improve existing quality control system and assure electronic filing of produced audit reports in line

with the respective international standards.

Integration of fraud detection computer program (CAAT) into IT audit process– Through this program IT au-ditors will be able to test internal controls and prepare analytical reviews of data. CAAT will enable auditors to work with especially large databases, sorting financial and non-financial transactions according to the special criteria and identify elements containing fraud.

Development and introduction of the system for the follow-up of recommendations– SAO aims to develop and introduce recommendation follow-up monitoring system with a view to:

¾ Enhance the role of the Parliament in this process; ¾ Improve the quality of recommendations; ¾ Improve the implementation rate of the recommendations issued by the SAO; ¾ Increase the benefit of the SAO.

The Parliament and auditees are integrated within this system.

Furthermore, the design of recommendation follow-up system enables the interactive communication of the stakeholders. The system provides online statistics and analytical data for the Parliament and other interest-ed stakeholders. This system allows users to find detailed information about recommendation implementation process, including, actions taken by the audited entities, financial costs and benefits of the implemented recom-

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4.5. Strengthening relationship with international partner organizations

SAO seeks to foster relationship with supreme audit institution’s international and regional organizations (INTO-SAI, EUROSAI, ASOSAI), other developed countries’ corresponding institutions and strategic partners – Swed-ish National Audit Office (SNAO) and German Society for International Cooperation (GIZ). The key element of our capacity building is our participation as a member of the international auditing community, through the International Organization of Supreme Audit Institutions (INTOSAI) and its regional organizations, as well as bilateral relations with individual SAIs. Through these relationships, we expect to stay abreast of best practices and provide training to our staff in audit tools and methodologies.

Herewith, the SAO aims to raise its contribution in to work by participating in international joint projects, working groups and committees, the member of which the SAO is (Goal 1. Professional Standards – 1.1. Profes-sional Standards Committee (PSC); 1.2. Compliance Audit Subcommittee; 1.3. Internal Control Standards Sub-committee; Goal 2. Capacity Building – 3.1. INTOSAI Development Initiative (IDI); Goal 3. Knowledge Sharing – 3.1.Working Group on Environmental Auditing; 3.2. Working Group on Programme Evaluation).

4.6. Strengthening institutional capacities by participation in the TWINNING program

The TWINNING program, in the context of preparation of EU enlargement, implies cooperation with the EU candidate countries with a view to strengthening administrative and institutional capacities and harmonization with European legislation.TWINNING program at the State Audit Office implies establishing multiannual tight mutual cooperation with the supreme audit institutions of Germany and Poland with a view to sharing professional knowledge and ex-perience. The TWINNING contract was endorsed in March 2014 with the implementation period of 2014-2016 (during 24 months). TWINNING program implies:

� Improvement of corporate management of the State Audit Office; � Enhancement of quality of audit work; � Enhancement of professional capacities of employees.

The resident TWINNING adviser will be hosted by the State Audit Office during the full project period to coor-dinate the successful implementation of the project on site.

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4.7. Improvement of management system and processes to raise effectiveness and productivity of our work

For the growth of the effectiveness of the audit process there are important information management systems that SAO aims to develop, including: Introduction of audit management software (AMS) - SAO works on the development and adoption of audit management system that will integrate relevant experiences of international audit firms (Big Four) and other Supreme Audit Institutions in this direction. Introduction of the aforementioned system will enable SAO to:

Â Document all stages of the performed work within the scope of specific audits as well as define the authorization levels;

Â Integrate different audit approaches for specific topics; Â Develop software instruments for the management, evaluation and oversight for the whole audit

work; Â Support adoption of systemic view to the audit process, that entails completion of all relevant audit

procedures in a comprehensive and coherent manner; Also, Â improve existing quality control system and assure electronic filing of produced audit reports in line

with the respective international standards.

Integration of fraud detection computer program (CAAT) into IT audit process– Through this program IT au-ditors will be able to test internal controls and prepare analytical reviews of data. CAAT will enable auditors to work with especially large databases, sorting financial and non-financial transactions according to the special criteria and identify elements containing fraud.

Development and introduction of the system for the follow-up of recommendations– SAO aims to develop and introduce recommendation follow-up monitoring system with a view to:

¾ Enhance the role of the Parliament in this process; ¾ Improve the quality of recommendations; ¾ Improve the implementation rate of the recommendations issued by the SAO; ¾ Increase the benefit of the SAO.

The Parliament and auditees are integrated within this system.

Furthermore, the design of recommendation follow-up system enables the interactive communication of the stakeholders. The system provides online statistics and analytical data for the Parliament and other interest-ed stakeholders. This system allows users to find detailed information about recommendation implementation process, including, actions taken by the audited entities, financial costs and benefits of the implemented recom-

¾ Enhance the role of the Parliament in this process;¾ Improve the quality of recommendations;¾ Improve the implementation rate of the recommendations issued by the SAO;¾ Increase the benefit of the SAO.

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4.5. Strengthening relationship with international partner organizations

SAO seeks to foster relationship with supreme audit institution’s international and regional organizations (INTO-SAI, EUROSAI, ASOSAI), other developed countries’ corresponding institutions and strategic partners – Swed-ish National Audit Office (SNAO) and German Society for International Cooperation (GIZ). The key element of our capacity building is our participation as a member of the international auditing community, through the International Organization of Supreme Audit Institutions (INTOSAI) and its regional organizations, as well as bilateral relations with individual SAIs. Through these relationships, we expect to stay abreast of best practices and provide training to our staff in audit tools and methodologies.

Herewith, the SAO aims to raise its contribution in to work by participating in international joint projects, working groups and committees, the member of which the SAO is (Goal 1. Professional Standards – 1.1. Profes-sional Standards Committee (PSC); 1.2. Compliance Audit Subcommittee; 1.3. Internal Control Standards Sub-committee; Goal 2. Capacity Building – 3.1. INTOSAI Development Initiative (IDI); Goal 3. Knowledge Sharing – 3.1.Working Group on Environmental Auditing; 3.2. Working Group on Programme Evaluation).

4.6. Strengthening institutional capacities by participation in the TWINNING program

The TWINNING program, in the context of preparation of EU enlargement, implies cooperation with the EU candidate countries with a view to strengthening administrative and institutional capacities and harmonization with European legislation.TWINNING program at the State Audit Office implies establishing multiannual tight mutual cooperation with the supreme audit institutions of Germany and Poland with a view to sharing professional knowledge and ex-perience. The TWINNING contract was endorsed in March 2014 with the implementation period of 2014-2016 (during 24 months). TWINNING program implies:

� Improvement of corporate management of the State Audit Office; � Enhancement of quality of audit work; � Enhancement of professional capacities of employees.

The resident TWINNING adviser will be hosted by the State Audit Office during the full project period to coor-dinate the successful implementation of the project on site.

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� Support constant improvement of the quality of audit work.Furthermore, with a view to enhance productivity and efficiency of the work, the SAO plans to:

Develop Compliance Audit Methodology - The SAO aims to develop a Compliance Audit Methodology based on international standards.Update and Implement internal communication strategy – this implies introduction of effective system of information exchange and internal communication which will promote the effective and timely exchange of work related information in the organization.

4.8. Formation of SAO as a model organization in public finance management

In order to promote developments in public finance management, continuous professional and institutional development of state audit office is essential. In process of formation as model organization in managing public finance, state audit office aims to:

Improvement of internal audit function to meet international standards - Implementation of this strategic goal provides reasonable assurance, that organizational resources are managed in accordance with principles of econ-omy, efficiency and effectiveness. At the same time, this will enable the SAO to become a model organization in this respect in the public sector, which is particularly important taking in consideration the ongoing reforms.

Improvement of budgeting and reporting of the organization - Regarding the introduction of the result oriented budgeting in the public sector, the refinement of the budgeting and reporting and establishment of the SAO as a model organization in this field is especially important.

Implementation of strategic planning and performance measurement system –the assessment system of the work of state audit office will allow management to regularly assess economy, efficiency and effectiveness of SAO’s work against pre-defined objectives and key performance indicators. Introduction and effective functioning of such system serves to improve accountability of structural entities of the institution, early detection of potential risks, effective use of resources and improvement of effectiveness of work by improving quality of management awareness.

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mendations. In order to facilitate this process, the SAO aims to develop a methodology for the recommendation follow-up system.

Introduction of electronic system for the registration, classification and reporting of audit results - the SAO intends to introduce an audit electronic card for audit registration, classification and reporting. An audit card will enable sorting of irregularities identified during audit period into – financial or nonfinancial – deficiencies.

An audit electronic card will enable documenting and the progress monitoring of the whole audit process which in turn will facilitate accumulation of institutional knowledge related to audits. In particular, an electronic sys-tem will include registration of all audits under audit plan and will reflect the detailed information concerning the progress of each audit including:

� Audit progress; � Quality assurance; � Information about the submission of audit reports to law-enforcement agencies; � Audit results; � Monitoring of recommendation implementation.

Implementation of Working Time Registration System (WTRS)– through this system it is registered number of hours worked by the auditors. Exact working hours contribute to the planning process of an annual, as well as of each audit. The system will allow comparison of spent and planned of actual hours during the audit process. The management and accounting system will contribute to a more rational use of employees’ work time, increase productivity, to improve the planning process taking into account the available resources, optimal distribution of tasks and business process improvement. With the help of this system that auditors work would be accounted. The exact accounting of the time worked by auditors will assist the process of annual planning and individual audits. The system will enable comparison between the real and planned time spent during the audit work. Time management and accounting system will promote more rational use of staff working time, increase in produc-tivity, and improvement of planning processes by taking into consideration existing resources, and the optimal distribution of tasks and refinement of working processes.

Improvement of audit planning - one of the goals of the SAO is to effectively allocate available resources through the improvement of audit planning process. Through improving risk-based audit planning model, determining the coefficient of complexity of auditee and the implementation of the relevant methodology into practice, the SAO ensures transparent and objective audit planning process.The main advantages of risk-based audit planning are as follow:

� Improvement of audit work by taking into account the ongoing changes and the existing risks within the public finance management system;

� Distribution of restricted human, time and financial resources of the SAO to examine high-risk prone areas;

the progress of each audit including:


the progress of each audit including:

� Monitoring of recommendation implementation.

The main advantages of risk-based audit planning are as follow:

� Improvement of audit work by taking into account the ongoing changes and the existing risks within the public finance management system;� Distribution of restricted human, time and financial resources of the SAO to examine high-risk prone areas;

The main advantages of risk-based audit planning are as follow:

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� Support constant improvement of the quality of audit work.Furthermore, with a view to enhance productivity and efficiency of the work, the SAO plans to:

Develop Compliance Audit Methodology - The SAO aims to develop a Compliance Audit Methodology based on international standards.Update and Implement internal communication strategy – this implies introduction of effective system of information exchange and internal communication which will promote the effective and timely exchange of work related information in the organization.

4.8. Formation of SAO as a model organization in public finance management

In order to promote developments in public finance management, continuous professional and institutional development of state audit office is essential. In process of formation as model organization in managing public finance, state audit office aims to:

Improvement of internal audit function to meet international standards - Implementation of this strategic goal provides reasonable assurance, that organizational resources are managed in accordance with principles of econ-omy, efficiency and effectiveness. At the same time, this will enable the SAO to become a model organization in this respect in the public sector, which is particularly important taking in consideration the ongoing reforms.

Improvement of budgeting and reporting of the organization - Regarding the introduction of the result oriented budgeting in the public sector, the refinement of the budgeting and reporting and establishment of the SAO as a model organization in this field is especially important.

Implementation of strategic planning and performance measurement system –the assessment system of the work of state audit office will allow management to regularly assess economy, efficiency and effectiveness of SAO’s work against pre-defined objectives and key performance indicators. Introduction and effective functioning of such system serves to improve accountability of structural entities of the institution, early detection of potential risks, effective use of resources and improvement of effectiveness of work by improving quality of management awareness.

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mendations. In order to facilitate this process, the SAO aims to develop a methodology for the recommendation follow-up system.

Introduction of electronic system for the registration, classification and reporting of audit results - the SAO intends to introduce an audit electronic card for audit registration, classification and reporting. An audit card will enable sorting of irregularities identified during audit period into – financial or nonfinancial – deficiencies.

An audit electronic card will enable documenting and the progress monitoring of the whole audit process which in turn will facilitate accumulation of institutional knowledge related to audits. In particular, an electronic sys-tem will include registration of all audits under audit plan and will reflect the detailed information concerning the progress of each audit including:


Implementation of Working Time Registration System (WTRS)– through this system it is registered number of hours worked by the auditors. Exact working hours contribute to the planning process of an annual, as well as of each audit. The system will allow comparison of spent and planned of actual hours during the audit process. The management and accounting system will contribute to a more rational use of employees’ work time, increase productivity, to improve the planning process taking into account the available resources, optimal distribution of tasks and business process improvement. With the help of this system that auditors work would be accounted. The exact accounting of the time worked by auditors will assist the process of annual planning and individual audits. The system will enable comparison between the real and planned time spent during the audit work. Time management and accounting system will promote more rational use of staff working time, increase in produc-tivity, and improvement of planning processes by taking into consideration existing resources, and the optimal distribution of tasks and refinement of working processes.

Improvement of audit planning - one of the goals of the SAO is to effectively allocate available resources through the improvement of audit planning process. Through improving risk-based audit planning model, determining the coefficient of complexity of auditee and the implementation of the relevant methodology into practice, the SAO ensures transparent and objective audit planning process.The main advantages of risk-based audit planning are as follow:

� Improvement of audit work by taking into account the ongoing changes and the existing risks within the public finance management system;

� Distribution of restricted human, time and financial resources of the SAO to examine high-risk prone areas;

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4.3 Enhance ethical environment � Develop and introduce electronic portal for the declaration of ethical values;

4.4 Enhance communication with all the rele-vant stakeholders including parliament, media, civil society and others to improve the SAO rep-utation and ensure the reliability of its work

� Number of parliamentary hearings at which SAO is invited to present the results of its work;

� Number of cases when SAO reports/ legal opin-ions are cited in parliamentary deliberations;

� Level of satisfaction of parliamentarians (com-mittee chairmen) and other stakeholders with the overall quality, timeliness and selected issues of SAO products and services;

� Timeliness of audit reports publishing on web-site;

� Number of audit reports sent to parliament; � Number of visitors on official web-site ; � Number of downloads of annual report from

official web-site; � Number of briefings/interviews (annual rate); � Introduction of web portal – “Plan With Us”; � Public involvement in selection of audit themes

(number of visitors); � Introduction of web portal – “Fight Against

Corruption”; � Number of meetings with citizens, NGOs and

representatives of academic society and media.

4.5 Strengthening relationship with interna-tional partner organizations

� Participation in INTOSAI conferences/working groups;

� SAO’s contribution in INTOSAI conferences/working groups;

4.6 Strengthening institutional capacities through the participation in the TWINNING program

� Reaching targets determined by the program agreement for each activity (see annex 1)

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4.1 Make SAO an employer of choice and im-prove SAO’s ability to attract, develop and retain a qualified and professional workforce

� Human resources management: Â Ratio of audit and non-audit staff; Â Annual time devoted to the employees’ learning

and development ( h/man); Â Employee participation in in-house/external

trainings/seminars/conferences; Â Engagements with universities to raise awareness

of SAI and number of activities made in order to at-tract qualified staff;

Â Ratio of the certified auditors in the total number of auditors; � Employee assessment of SAO’s work: // Employ-

ee feedback indicators : Â Employee satisfaction with working conditions//

Employee overall satisfaction level Â Percentage of SAO employees who think that the

existing performance assessment and pay system en-courages high efficiency and better performance in employees

Â employee assessment of internal/external train-ings’/seminars’ effectiveness //Percentage of SAO staff who think that participation in on-the-job/ex-ternal trainings contributed to their professional de-velopment;

Â Employee assessment of their direct manager and high level management governance effectiveness. // Percentage of SAO staff who are satisfied with the leadership of the direct supervisors and higher-level management

4.2 Enforce quality assurance system consistent with international audit standards and best-prac-tices

� Quality of the SAI audit services Â Ratio of Quality Assurance Department re-

viewed reports to the total number of reports issued during the year;

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4.3 Enhance ethical environment � Develop and introduce electronic portal for the declaration of ethical values;

4.4 Enhance communication with all the rele-vant stakeholders including parliament, media, civil society and others to improve the SAO rep-utation and ensure the reliability of its work

� Number of parliamentary hearings at which SAO is invited to present the results of its work;

� Number of cases when SAO reports/ legal opin-ions are cited in parliamentary deliberations;

� Level of satisfaction of parliamentarians (com-mittee chairmen) and other stakeholders with the overall quality, timeliness and selected issues of SAO products and services;

� Timeliness of audit reports publishing on web-site;

� Number of audit reports sent to parliament; � Number of visitors on official web-site ; � Number of downloads of annual report from

official web-site; � Number of briefings/interviews (annual rate); � Introduction of web portal – “Plan With Us”; � Public involvement in selection of audit themes

(number of visitors); � Introduction of web portal – “Fight Against

Corruption”; � Number of meetings with citizens, NGOs and

representatives of academic society and media.

4.5 Strengthening relationship with interna-tional partner organizations

� Participation in INTOSAI conferences/working groups;

� SAO’s contribution in INTOSAI conferences/working groups;

4.6 Strengthening institutional capacities through the participation in the TWINNING program

� Reaching targets determined by the program agreement for each activity (see annex 1)

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4.1 Make SAO an employer of choice and im-prove SAO’s ability to attract, develop and retain a qualified and professional workforce

� Human resources management: Â Ratio of audit and non-audit staff; Â Annual time devoted to the employees’ learning

and development ( h/man); Â Employee participation in in-house/external

trainings/seminars/conferences; Â Engagements with universities to raise awareness

of SAI and number of activities made in order to at-tract qualified staff;

Â Ratio of the certified auditors in the total number of auditors; � Employee assessment of SAO’s work: // Employ-

ee feedback indicators : Â Employee satisfaction with working conditions//

Employee overall satisfaction level Â Percentage of SAO employees who think that the

existing performance assessment and pay system en-courages high efficiency and better performance in employees

Â employee assessment of internal/external train-ings’/seminars’ effectiveness //Percentage of SAO staff who think that participation in on-the-job/ex-ternal trainings contributed to their professional de-velopment;

Â Employee assessment of their direct manager and high level management governance effectiveness. // Percentage of SAO staff who are satisfied with the leadership of the direct supervisors and higher-level management

4.2 Enforce quality assurance system consistent with international audit standards and best-prac-tices

� Quality of the SAI audit services Â Ratio of Quality Assurance Department re-

viewed reports to the total number of reports issued during the year;

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4.7 Improvement of management system and processes to raise effectiveness and productivity of our work

� Introduction of audit management software: � Integration of fraud detection computer program

(CAAT) into IT audit process ; � Upgrade and maintain of Recommendation Fol-

low-up Monitoring system: Â The percentage of audit reports containing rec-

ommendations Â The percentage of recommendations implement-

ed by audited entities � Introduction of electronic system for the regis-

tration, classification and reporting of audit results; � Implementation of Working Time Registration

System (WTRS); � Improvement of risk-based audit planning; � Justified, objective and representative selection

of auditees/topics; � Elaboration of Compliance Audit Methodology

according to ISSAIs; � Introduction of audit report instructions; � Establishment of e-library; � Update and Implementation of internal commu-

nication strategy;

4.8 Formation of SAO as a model organization in public finance management

� Improvement of internal audit function to meet international standards;

� Improvement budgeting and reporting of the organization;

� Implementation of strategic planning and per-formance measurement system;

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State Audit Ofﬁce of Georgia · 2020-01-13 · The transformation of the SAO (formerly, Chamber...

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