Chile`s Supreme Audit Institution - Contraloría General de la República

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OECD Public Governance Reviews
Chile’s Supreme Audit Institution
Enhancing Strategic Agility and Public Trust
Contents
Executive summary
Assessment and recommendations
Chapter 1. Chile’s supreme audit institution
Chapter 2. Supporting strategic agility and rebuilding trust in government
Chapter 3. Fostering strategic agility in Chile’s Office of the Comptroller General
Chapter 4. Engaging Chile’s supreme audit institution’s stakeholders throughout the audit cycle
Chapter 5. The Chilean Comptroller General Office’s work in prioritising and ensuring quality of individual audits
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Consult this publication on line at http://dx.doi.org/10.1787/9789264207561-en.
Chile’s Supreme Audit Institution
Chapter 6. Enhancing the transparency and performance of Chile’s supreme audit institution
Chile’s Supreme Audit
Institution
Chile's Supreme
Audit Institution
ENHANCING STRATEGIC AGILITY
AND PUBLIC TRUST
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Please cite this publication as:
OECD (2014), Chile's Supreme Audit Institution: Enhancing Strategic Agility and Public Trust, OECD Public
Governance Reviews, OECD Publishing.
http://dx.doi.org/10.1787/9789264207561-en
ISBN 978-92-64-20687-8 (print)
ISBN 978-92-64-20756-1 (PDF)
Series: OECD Public Governance Reviews
ISSN 2219-0406 (print)
ISSN 2219-0414 (online)
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Photo credits: Cover © The Comptroller General of the Republic of Chile, by Osvaldo Cristian Rudloff Pulgar.
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FOREWORD – 3
Foreword
Governments need to rebuild trust in public institutions in light of the governance
failures that contributed to the financial crisis and against a background of continuing
economic and social uncertainty. Restoring trust in the ability of governments to regulate
markets, manage public finances and deliver the services that citizens expect is a key
element of a return to sustainable and inclusive growth.
Supreme Audit Institutions (SAI) are evolving to meet the challenges and
opportunities presented by the current policy environment. This requires that SAIs take an
introspective review of their institutions’ own capabilities and performance, in view of
broader public sector modernisation and reforms. This OECD review demonstrates how a
leading SAI can continue to be a relevant source of objective and credible information
and a model institution for accountability and independence in a complex policy
environment.
The Comptroller General of the Republic of Chile (CGR) is at the forefront of this
evolution and has undertaken ambitious initiatives for institutional strengthening,
capacity development, transparency and citizen participation. The CGR has introduced
strategic planning, restructured its workforce and become an exemplary institution with
respect to transparency within the Chilean public sector. The CGR recognises its crucial
role in contributing to good public governance, and has undertaken this review to build on
the momentum – to support ongoing initiatives and to maximise the positive impact of its
work.
The CGR has the opportunity to further strengthen its solid reputation to position itself
as a leader – providing objective and credible information that is widely recognised as
useful for addressing challenges to good public governance. This review recommends
that the CGR reassess its audit functions within its constitutional mandate, to ensure that
its work provides added value in accordance with its current strategic directions. To meet
the goals outlined in the CGR’s 2013-2015 strategic plan and beyond, including
enhancing the ability to respond to changes in the environment in which it works, the
CGR would benefit from further developing its strategic foresight and operational agility.
The CGR would similarly benefit from leveraging engagement with stakeholders across
the entire audit cycle to ensure quality of its audit processes and outputs. This would
foster a better understanding of the functioning, importance and relevance of the CGR
work to a wider audience.
This review, and its associated recommendations, was made possible through close
collaboration with the CGR and consultation with stakeholders from the Legislature, the
Executive, the business community and civil society. The analysis considers existing
international guidance and incorporates the expertise and support of 12 peer SAIs in both
OECD member and non-member countries. This review provides in-depth guidance on
how to further leverage the potential of all SAIs to proactively and effectively contribute
CHILE’S SUPREME AUDIT INSTITUTION: ENHANCING STRATEGIC AGILITY AND PUBLIC TRUST © OECD 2014
4 – FOREWORD
to the design, implementation and evaluation of better policies, for better governance, for
better lives.
This review was undertaken by the OECD’s Public Governance and Territorial
Development Directorate, which is a leading international source of policy solutions,
data, expertise and good practice for governments and other stakeholders seeking to
strengthen public policymaking in the face of unprecedented economic, social and fiscal
pressures. This review will inform the development of the Directorate’s state-of-the-art
comparative framework on SAIs and good governance. It contributes to the OECD’s
broader effort to strengthen public governance and rebuild trust, which are important
elements of the Organisation’s “New Approaches to Economic Challenges” initiative.
Yves Leterme
Deputy Secretary-General
ACKNOWLEDGEMENTS – 5
Acknowledgements
This Review was prepared by the Public Sector Integrity Division of the Public
Governance and Territorial Development Directorate.
Under the direction and editorial oversight of Paloma Baena Olabe and Mario Marcel,
the report was prepared by James Sheppard with contributions from Jorge Mario Vasquez
and Alison McMeekin. Jennifer Allain, Bonifacio Agapin and Sarah Michelson helped to
prepare the document for publication.
Valuable input was provided by senior officials from supreme audit institutions
(SAIs) from selected OECD and partner countries, including Australia, Brazil, Costa
Rica, Denmark, Israel, Italy, Korea, Mexico, Peru, Portugal, South Africa and Spain as
well as the European Court of Auditors. These officials participated in a survey to collect
information and data on their SAI’s organisation, mandate, practices and procedures
against which to benchmark those of the Office of the Comptroller General of the
Republic of Chile (CGR) and peer reviewed the assessment and recommendations in the
chapters of this report. Many also participated in policy dialogues on good practices held
on 8-9 July 2013 in Santiago, Chile.
The OECD also benefited from the opportunity to discuss the methodology of the
peer review with the International Organisation of Supreme Audit Institutions (INTOSAI)
Capacity Building Committee’s Sub-Committee 3 on Promoting Best Practices and
Quality Assurance through Voluntary Peer Reviews held on 13-14 June 2013 in
Bratislava, Slovak Republic.
This report has benefited from contributions from many officials in the CGR, the
government of Chile and representatives from civil society, the media, business and
academia, who were actively engaged throughout the various phases of the review.
Special thanks and recognition for invaluable support, collaboration and commitment
to the review process are extended to Ramiro Alfonso Mendoza Zúñiga (Comptroller
General of the Republic of Chile), Victoria Renée Narváez Alonso (General Secretary)
and Osvaldo Rudloff (Head of International Relations). In addition, thanks are extended
to the members of the steering and working committees set up by the CGR to engage with
the OECD and benchmark SAIs through the process, including Patricia Arriagada
Villouta (Deputy Comptroller General of the Republic of Chile), Ruth Israel López (CGR
Prosecutor), Victoria Renée Narváez Alonso (General Secretary), Patricio Barra Aeloiza
(Head of Accounting Analysis Division), Julio Pallavicini (Head of Legal Division),
Veronica Orrego (Regional Comptroller for Magallanes and Chilean Antartica) and
Rodrigo Vivallo (Head of the Technical Unit for External Control), Pablo Soto (Head of
Co-ordination and Studies Unit, Accounting Analysis Division), Mauricio Rojas
(Management Advisor, General Secretary Division), Erick Latorre (Senior Advisor,
General Comptroller Cabinet), Nicolas Cerda (Head of the Management Process Unit,
Legal Division) and Karla Fernandez (Co-ordinator of Management Process Unit,
General Secretary Division).
6 – ACKNOWLEDGEMENTS
From the legislative branch of the government of Chile, contributions were received
from a number of senators and deputies from various political parties, and independents.
From the executive branch of the government of Chile, contributions were received from
the Ministry of the Presidency of the Republic (Ministerio Secretaría General de la
Presidencia), the Ministry of Health (Ministerio de Salud), the Ministry of Education
(Ministerio de Educación), the Ministry of Cities and Urban Areas (Ministerio de
Vivienda y Urbanismo), the Subsecretariat of Telecommunications (Subsecretaría de
Telecomunicaciones), the Fiscal Analysis Unit (Unidad de Análisis Fiscal), the Ministry
of Interior’s Subsecetariat of Regional Development and Administration (Subsecretaría
de Desarrollo Regional y Administrativo), the Ministry of Interior’s National Civil
Service Directorate (Dirección Nacional del Servicio Civil), the Ministry of Public Works
(Ministerio de Obras Públicas), the Ministry of Finance’s Budget Directorate (Dirección
de Presupuestos, Ministerio de Hacienda), the Council of General Government Internal
Auditors (Consejo de Auditoría Interna General de Gobierno) and the Ministry of Justice
(Ministerio de Justica). From the judiciary, contributions were received from members of
the Supreme Court, the Constitutional Tribunal (Tribunal Constitucional), the State
Defence Council (Consejo de Defensa del Estado) and the the Public Prosecutor
(Fiscalía). The Council for Transparency (Consejo para la Transparencia) also provided
inputs in the review process.
TABLE OF CONTENTS – 7
Table of contents
Acronyms .......................................................................................................................................... 15
Executive summary.......................................................................................................................... 17
Assessment and recommendations ................................................................................................. 21
Chapter 1 Chile’s supreme audit institution ...................................................................................... 41
Introduction........................................................................................................................................ 42
Leadership and organisational structure ............................................................................................ 43
Mandate, mission and functions ........................................................................................................ 47
Independence ..................................................................................................................................... 73
Conclusions........................................................................................................................................ 80
Notes .................................................................................................................................................. 82
Annex 1.A1 Comptrollers-General of the Republic of Chile, 1927-2013 .......................................... 84
Annex 1.A2 Appointment, tenure and salaries of supreme audit institutions’ leadership in Chile
and selected countries ........................................................................................................................ 85
Annex 1.A3 Organisational independence of supreme audit institutions’ leadership in Chile and
selected countries ............................................................................................................................... 87
Annex 1.A4 Safeguards for the removal of supreme audit leadership in Chile and selected
countries ............................................................................................................................................. 88
References.......................................................................................................................................... 89
Chapter 2 Supporting strategic agility and rebuilding trust in government .................................. 93
Introduction........................................................................................................................................ 94
Modernisation of the state and its impact on the Office of the Comptroller General of the
Republic ............................................................................................................................................. 95
Leveraging ex ante control of legality and ex ante audit to incentivise good governance .............. 105
Focusing ex post audit on reliability of information ........................................................................ 120
Providing added value products and counsel ................................................................................... 130
Developing products that communicate good practice identified through audit assignments
as input into the development of management frameworks ............................................................ 135
Conclusions...................................................................................................................................... 138
Notes ................................................................................................................................................ 141
Annex 2.A1 Decrees and resolutions subject to toma de razón and those exempt from toma
de razón by the Office of the Comptroller General of the Republic ................................................ 144
Annex 2.A2 Public sector entity and consolidated government year-end reports in Chile and
selected countries ............................................................................................................................. 148
References........................................................................................................................................ 153
Chapter 3 Fostering strategic agility in Chile’s Office of the Comptroller General .................... 159
Introduction...................................................................................................................................... 160
Fostering strategic sensitivity of the evolving external environment and societal demands ........... 161
Enhancing operational agility in order to effectively respond to emerging issues and
expectations ..................................................................................................................................... 178
8 – TABLE OF CONTENTS
Conclusions...................................................................................................................................... 199
Annex 3.A1 Participation of the supreme audit institutions of Chile and selected countries in
INTOSAI bodies .............................................................................................................................. 201
Annex 3.A2 Office of the Comptroller General of the Republic’s human resource management
competencies.................................................................................................................................... 203
References........................................................................................................................................ 205
Chapter 4 Engaging Chile’s supreme audit institution’s stakeholders throughout the audit
cycle..................................................................................................................................................... 211
Introduction...................................................................................................................................... 212
Engaging auditees to develop a constructive working relationship ................................................. 213
Engaging with internal audit to support effective and efficient audit and non-audit assignments .. 221
Communicating with stakeholders other than auditees and internal audit ....................................... 229
Consulting and facilitating participation with stakeholders other than auditees and internal audit . 240
Conclusions...................................................................................................................................... 250
Notes ................................................................................................................................................ 253
References........................................................................................................................................ 255
Chapter 5 The Chilean Comptroller General Office’s work in prioritising and ensuring
the quality of individual audits......................................................................................................... 259
Introduction...................................................................................................................................... 260
Prioritising ex post audit engagements; audit programming and the audit process ......................... 260
Ensuring quality in ex post audit engagements ................................................................................ 275
Conclusions...................................................................................................................................... 291
Notes ................................................................................................................................................ 293
References........................................................................................................................................ 294
Chapter 6 Enhancing the transparency and performance of Chile’s supreme audit
institution ........................................................................................................................................... 295
Introduction...................................................................................................................................... 296
Increasing transparency of institutional responsibilities and assignments ....................................... 297
Measuring performance ................................................................................................................... 314
Conclusions...................................................................................................................................... 327
Notes ................................................................................................................................................ 333
Annex 6.A1 Examples of performance goals used by the Office of the Comptroller General
of the Republic ................................................................................................................................. 335
Annex 6.A2 Indicators reported in the annual report of the Office of the Comptroller General
of the Republic ................................................................................................................................. 341
References........................................................................................................................................ 348
Tables
Table 0.1.
Table 0.2.
Table 0.3.
Table 1.1.
Table 1.2.
The interaction between topics and recommendations made in this review ................ 22
Audit of government accounts by supreme audit institutions in Chile and selected
countries....................................................................................................................... 26
Multi-year workforce planning in supreme audit institutions in Chile and selected
countries....................................................................................................................... 32
Location of supreme audit institution within government in Chile and selected
countries....................................................................................................................... 43
Organisational model of supreme audit institutions in Chile and selected countries .. 44
Table 1.3.
Table 1.4.
Table 1.5.
Table 1.6.
Table 1.7.
Table 1.8.
Table 1.9.
Table 1.10.
Table 1.11.
Table 1.12.
Table 1.13.
Table 1.14.
Table 1.15.
Table 1.16.
Table 1.17.
Table 1.A1.
Table 1.A2.
Table 1.A3.
Table 1.A4.
Table 2.1.
Table 2.2.
Table 2.3.
Table 2.4.
Table 2.5.
Table 2.6.
Table 2.7.
Table 2.8.
Existence of supreme audit institution regional/state offices in Chile and selected
countries....................................................................................................................... 47
The Office of the Comptroller General of the Republic of Chile has a broad audit
scope ............................................................................................................................ 53
Ex ante audit assignments by supreme audit institutions in Chile and selected
countries....................................................................................................................... 55
Ex post audit assignments of supreme audit institutions in Chile and selected
countries....................................................................................................................... 58
Main categories of the Office of the Comptroller General of the Republic of
Chile’s ex post audits ................................................................................................... 59
Responsibility for setting public sector accounting standards in Chile and selected
countries....................................................................................................................... 62
Role of supreme audit institution in setting public sector accounting standards in
Chile and selected countries ........................................................................................ 63
Existence of judicial powers of supreme audit institutions in Chile and selected
countries....................................................................................................................... 65
Role of supreme audit institutions in co-ordinating public sector internal audit in
Institutions’ arrangements for internal audit within the public administration in
SAIs playing a formal role in national anti-corruption strategies in Chile and
selected countries ......................................................................................................... 71
Role of supreme audit institutions in the development and maintenance of public
officials’ private interest (income and asset) disclosures in Chile and selected
countries....................................................................................................................... 72
Role of supreme audit institution in auditing political financing in Chile and
selected countries ......................................................................................................... 73
Tenure of supreme audit institutions’ leadership in Chile and selected countries ....... 76
Budget flexibility of supreme audit institutions in Chile and selected countries......... 79
Comptrollers-General of the Republic of Chile, 1927-2013 ....................................... 84
Appointment, tenure and salaries of supreme audit institutions’ leadership in
Organisational independence of supreme audit institutions’ leadership in
Safeguards for the removal of supreme audit leadership in Chile and selected
countries....................................................................................................................... 87
Redesign of ex ante audit assignments in supreme audit institutions ........................ 101
Management Improvement Programme – maturity levels for internal audit
without Chile’s public entities 2001-2012 ................................................................. 116
Audit of regulatory management sytems by supreme audit institutions in
Chile and selected countries ...................................................................................... 118
Audit of government accounts by supreme audit institutions in Chile and
selected countries ....................................................................................................... 122
Summary of central government’s financial management reporting in Chile ........... 124
Performance auditing by the supreme audit institutions in Chile and selected
countries..................................................................................................................... 126
Good practice guidance by supreme audit institutions in Chile and selected
countries..................................................................................................................... 135
Preliminary recommendations matrix: Supporting strategic agility and
rebuilding trust in government................................................................................... 139
Table 2.A1.
Table 2.A2.1.
Table 2.A2.2.
Table 3.1.
Table 3.2.
Table 3.3.
Table 3.4.
Table 3.5.
Table 3.6.
Table 3.7.
Table 3.8.
Table 3.9.
Table 3.10.
Table 3.11.
Table 3.12.
Table 3.A1.1.
Table 3.A1.2.
Table 3.A2.
Table 4.1.
Table 4.2.
Table 4.3.
Table 4.4.
Table 4.5.
Table 4.6.
Table 4.7.
Table 4.8.
Table 4.9.
Decrees and resolutions subject to toma de razón and those exempt from
toma de razón by theOffice of the Comptroller General of the Republic.................. 142
Public entity level year-end reports in Chile and selected countries ......................... 146
Consolidated government year-end reports in Chile and selected countries ............. 148
Strategic sensitivity for supreme audit institutions to provide oversight, insight
and foresight .............................................................................................................. 162
Strategic planning by the supreme audit institutions of Chile and selected
countries..................................................................................................................... 165
The vision, mission and values of the Office of the Comptroller General of
the Republic ............................................................................................................... 167
Office of the Comptroller General of the Republic’s strategic objectives and
strategies .................................................................................................................... 171
Key elements of standard performance budgeting frameworks in central
government in Chile and selected countries (2012) ................................................... 176
Main criterion used to define the organisational structure of supreme audit
institutions in Chile and selected countries................................................................ 180
Office of the Comptroller General of the Republic’s employment categories
(escalafón) ................................................................................................................. 186
Budget flexibility of supreme audit institutions in Chile and selected countries....... 187
Multi-year workforce planning in supreme audit institutions in Chile and
Core human resource management competencies of supreme audit institutions
in Chile and selected countries .................................................................................. 192
Office of the Comptroller General of the Republic’s criteria for evaluating an
official’s performance ................................................................................................ 198
Preliminary recommendations matrix: Fostering strategic agility in the supreme
audit institution .......................................................................................................... 200
INTOSAI committees’ working groups and task forces............................................ 199
OLACEFS committees and commissions.................................................................. 200
Office of the Comptroller General of the Republic’s human resource
management competencies ........................................................................................ 201
Communication with auditees at the beginning of an audit engagement by the
supreme audit institution in Chile and selected counties ........................................... 215
Practices to support clarity of audit reporting used by supreme audit institutions
Existence of auditee strategies by the supreme audit institution in Chile and
Periodic engagement with senior officials to discuss issues of common concern
by the supreme audit institution in Chile and selected countries ............................... 221
Modes of co-ordination and co-operation between the supreme audit institution
and internal audit in Chile and selected countries ..................................................... 224
Role of supreme audit institutions in co-ordinating public sector internal audit
Institutions’ arrangements for internal audit within the public administration in
Chile and selected countries ...................................................................................... 226
Office of the Comptroller General of the Republic of Chile’s communication
plan targets ................................................................................................................. 232
Permanent committees within the Chilean Congress................................................. 234
Table 4.10.
Table 4.11.
Table 4.12.
Table 4.13.
Table 4.14.
Table 5.1.
Table 5.2.
Table 5.3.
Table 5.4.
Table 5.5.
Table 5.6.
Table 5.7.
Table 5.8.
Table 5.9.
Table 5.10.
Table 6.1.
Table 6.2.
Table 6.3.
Table 6.4.
Table 6.5.
Table 6.6.
Table 6.7.
Table 6.8.
Table 6.9.
Table 6.10.
Table 6.11.
Legal basis, composition and leadership of centralised and co-ordinating
(hierarchical) public financial oversight committees in Chile and selected
countries..................................................................................................................... 236
Twitter accounts of government and supreme audit institutions in Chile and
Executive authorities within the Chilean public administration responsible for
different management systems................................................................................... 247
Management Improvement Programme – maturity levels for internal audit
without Chile’s public entities 2001-2012 ................................................................. 249
Preliminary recommendations matrix: Engaging external stakeholders
throughout the audit cycle ......................................................................................... 251
Processes for prioritising ex-post audit engagements in Chile and selected
countries..................................................................................................................... 264
Office of the Comptroller General of the Republic of Chile’s Matrix of Relative
Importance – beginning 2013 audit year ................................................................... 266
Office of the Comptroller General of the Republic of Chile’s indicators for
assessing entities’ relative importance ....................................................................... 267
Office of the Comptroller General of the Republic of Chile’s audit planning risk
indicators ................................................................................................................... 268
Responsibilities for external audit engagements within the Office of the
Comptroller General of the Republic......................................................................... 271
Office of the Comptroller General of the Republic of Chile’s audit manuals and
guidance ..................................................................................................................... 278
Levels of Codes of Conduct adopted in Chile and across selected countries ............ 284
Code of Conduct Coverage in Chile and across selected countries ........................... 286
Monitoring processes and techniques to ensure that Quality Control systems are
relevant, adequate and operating effectively ............................................................. 290
Preliminary recommendations matrix: Prioritising and ensuring the quality of
individual audit engagements .................................................................................... 292
Communication with auditees at the beginning of an audit engagement by the
supreme audit institution in Chile and selected counties ........................................... 304
Office of the Comptroller General of the Republic of Chile’s communication
plan targets ................................................................................................................. 310
Practices to support clarity of audit reporting used by supreme audit institutions
Twitter accounts of government and supreme audit institutions in Chile and
Generic logical framework format ............................................................................. 316
Office of the Comptroller General of the Republic’s institutional goals and
performance agreements ............................................................................................ 318
Office of the Comptroller General of the Republic’s strategic objectives and
strategies .................................................................................................................... 319
Office of the Comptroller General of the Republic of Chile’s survey of auditees .... 321
Preliminary framework for measuring economic value of the Office of the
Comptroller General of the Republic of Chile........................................................... 324
Preliminary recommendations matrix: Improving transparency and
demonstrating impact................................................................................................. 328
Key performance indicators used by supreme audit institutions in Chile and
Table 6.A1.
Table 6.A2.1.
Table 6.A2.2.
Table 6.A2.3.
Table 6.A2.4.
Table 6.A2.5.
Examples of performance goals used by the Office of the Comptroller General
of the Republic........................................................................................................... 335
Legal function, years shown where data covers multiple years ................................. 341
Audit function, years shown where data covers multiple years ................................. 343
Accounting function, years shown where data covers multiple years ....................... 345
Judicial function, years shown where data covers multiple years ............................. 345
Human resource management, years shown where data covers multiple years ........ 346
Figures
Figure 1.1.
Figure 1.2.
Figure 1.3.
Figure 1.4.
Figure 1.5.
Figure 1.6.
Figure 2.1.
Figure 2.2.
Figure 2.3.
Figure 2.4.
Figure 2.5.
Figure 2.6.
Figure 2.7.
Figure 2.8.
Figure 3.1.
Figure 3.2.
Figure 3.3.
Figure 3.4.
Figure 3.5.
Figure 3.6.
Figure 3.7.
Figure 3.8.
Figure 3.9.
Figure 4.1.
Figure 4.2.
Organigram of the Office of the Comptroller General of the Republic of Chile ......... 46
Scope of oversight by the Office of the Comptoller General of the Republic of
Chile............................................................................................................................. 52
Ex ante control of legality conducted by the Office of the Comptroller General
of the Republic............................................................................................................. 56
Office of the Comptroller General of the Republic of Chile’s ex post audit
assignments .................................................................................................................. 59
Office of the Comptroller General of the Republic of Chile’s special
investigations ............................................................................................................... 61
Cases entering the Office of the Comptroller General of the Republic of Chile’s
Tribunal of Accounts ................................................................................................... 66
General government debt in Chile and selected countries ........................................... 96
Demographic change in Chile and selected countries ................................................. 97
Confidence in national (central) government in Chile and selected countries ............ 99
Outcome of toma de razón by the Office of the Comptroller General of the
Republic of Chile ....................................................................................................... 111
Public Administration Personnel Information and Control System (SIAPER)
developed by the Office of the Comptroller General of the Republic of Chile ......... 113
Chile’s timetable for budget preparation and reporting, approximation.................... 123
Time for the audited public entity and consolidated government year-end
reports to be made publicly available in Chile and selected countries ...................... 125
Performance budgeting in Chile and selected countries (2013) ................................ 127
Demographic projections for Chile............................................................................ 174
Delegation of human resource management practices in central government in
Chile and selected countries (2010) ........................................................................... 177
Formal and open consultation processes in regulatory decision making in Chile
and selected countries (2009) .................................................................................... 177
Overall regulatory impact assessment processes in Chile and selected
countries (2009) ......................................................................................................... 178
Organisation chart of the Office of the Comptroller General of the Republic of
Chile........................................................................................................................... 181
Office of the Comptroller General of the Republic total staffing .............................. 184
Office of the Comptroller General of the Republic workforce restructuring ............ 184
Educational backgrounds of officials of the Office of the Comptroller General
of the Republic........................................................................................................... 185
Office of the Comptroller General of the Republic’s budget appropriation .............. 187
Use of the Office of the Comptroller General of the Republic of Chile’s
internal audit portal .................................................................................................... 223
Attendance by the Comptroller General in the National Congress’ permanent
committees ................................................................................................................. 237
Figure 4.3.
Figure 4.4.
Figure 4.5.
Figure 4.6.
Figure 4.7.
Figure 4.8.
Figure 4.9.
Figure 4.10.
Figure 5.1.
Figure 5.2.
Figure 6.1.
Figure 6.2.
Figure 6.3.
Figure 6.4.
Figure 6.5.
Figure 6.6.
Figure 6.7.
Office of the Comptroller General of the Republic of Chile’s website traffic .......... 238
Twitter activity of supreme audit institutions in Chile and selected countries .......... 239
Internet access and broadband connections in OECD households in Chile and
Individuals using the Internet to obtain information from the public authorities’
websites in Chile and selected countries.................................................................... 241
Household Internet access by income in Chile and selected countries ...................... 242
Office of the Comptroller General of Chile’s processing of special investigations
requested by members of the Congress ..................................................................... 243
Office of the Comptroller General of the Republic of Chile’s special
investigations ............................................................................................................. 244
Complaints and audit suggestions received through the Office of the Comptroller
General of the Republic of Chile and Citizens’ Portal (Contraloría y Cuidadano) .. 244
The Office of the Comptroller General of the Republic of Chile’s 2013 annual
audit planning process ............................................................................................... 265
Stages of the Office of the Comptroller General of the Republic of Chile’s audit
engagements .............................................................................................................. 270
Office of the Comptroller General of the Republic of Chile’s institutional
website ....................................................................................................................... 302
Office of the Comptroller General of the Republic of Chile’s website traffic .......... 305
Index on access to information through public entity websites in Chile ................... 306
Twitter activity of supreme audit institutions in Chile and selected countries .......... 312
Internet access and broadband connections in OECD households in Chile and
Individuals using the Internet to obtain information from the public authorities’
websites in Chile and selected countries.................................................................... 314
Household Internet access by income in Chile and selected countries ...................... 314
ACRONYMS– 15
Acronyms
AGSA
Auditor General of South Africa
AIA
Integral random audit
Auditorías Integrales Aleatorias
ANAO
Australian National Audit Office
ATUS
Assistance to Users Office
BAI
Board of Audit and Inspection (Korea)
CAAT
Computer assisted audit techniques
CAIGG
Council of Government’s General Internal Auditors
Consejo de Auditoría Interna General de Gobierno
CGR
Comptroller General of the Republic
Contraloría General de la Republica
CLP
Chilean pesos
CODELCO
State Copper Company
Corporación Nacional del Cobre de Chile
CSO
Civil society organisation
DIMP
Unpredictable Demand
Demanda Imprevisible
DIPRES
Budget Department
Dirección de Presupuestos
DNSC
National Civil Service Directorate
Dirección Nacional del Servicio Civil
ECA
European Court of Auditors
HRM
Human resource management
ICT
Information and Communications Technology
INTOSAI
International Organisation for Supreme Audit Institutions
ISSAI
International Standards of Supreme Audit Institutions
MESICIC
Follow Up Mechanism to the Implementation of the Interamerican
Convention Against Corruption
NAO
National Audit Office (United Kingdom)
NICSP
International Public Sector Accounting Standards
Normas Internacionales de Contabilidad del Sector Público
OGP
Open Government Partnership
OLACEFS
Latin American Organisation of Supreme Audit Institution
16 – ACRONYMS
PET
TCU Strategic Plan (Brazil) Plano Estratégico do Tribunal
PFMA
Public Finance Management Act
PMET
Metropolitan Programmes
Programas Metropolitanos
PMG
Program for Management Improvement
PNAC
National audit programmes
Programas nacionales
PREG
Regional Programmes
Programas Regionales
PTMO
International Loan Programme
Préstamo Internacionale
PTRA
Transversal audit programmes
Programas transversales
PUCE
External Control Unit Priorities
Prioridades de Unidades de Control Externo
RIA
Regulatory impact assessment
SAI
Supreme audit institution
SEGPRES
Ministry of the General Secretariat to the President of the Republic
Ministerio Secretaría General de la Presidencia de Chile
SERVEL
Electoral Service
SIAPER
Public Administration Personnel Information and Control System
Sistema de Información y Control del Personal de la Administración
del Estado
SICA
Integrated System for Audit Control
Sistema Integrado para el Control de Auditorías
SICOGEN
National General Accounting System
Sistema de Contabilidad General de la Nación
SIGFE
State Financial Management Information System
Sistema de Información para la Gestión Financiera del Estado
SUBDERE
Ministry of Interior’s Subsecretariat for Regional Development
Subsecretaría de Desarrollo Regional y Administrativo
TCU
Federal Court of Accounts (Brazil)
TdR
Ex ante control of legality
Toma de razón
UTCE
External control technical units
UTM
Monthly Tax Unit (Unit of account, updated for inflation, used in
Chile for tax purposes)
Unidad Tributaria Mensual
EXECUTIVE SUMMARY – 17
Executive summary
Supreme audit institutions are a key part of the institutional framework of
democratic and accountable states. Their independent oversight role can support a
more strategic and forward-looking state by providing both insight and foresight of
current emerging risks affecting governance.
Enhancing strategic agility in government – its responsiveness and effectiveness in a
complex policy environment – and rebuilding trust in government places new demands
on and creates new opportunities for SAIs. They contribute to more strategic and
forward-looking states not only by promoting integrity and ensuring compliance with
rules and standards, but also by providing verification of the efficiency, economy and
effectiveness of public resource management. SAIs’ audit findings can serve as a valuable
evidence base for government accountability and as an input to decision-making
processes. Leveraging these opportunities requires SAIs to assess the added value and
alignment of their current products and processes, opening new ones for consideration.
These form the areas of analysis that guide the assessment and recommendations for the
Contraloría General de la República de Chile (CGR), the subject of this review.
Reassessing the value added of its current products, coupled with the
introduction of new value-added products that foster a stronger link with
whole-of-government issues, would help the CGR to better support a more strategic
and forward-looking state in Chile.
The broad scope of the CGR’s mandate enables the institution to examine issues at a
whole-of-government level, beyond individual programmes, entities or funds. The CGR’s
independence and operational flexibility allows the institution to review the continued
relevance of its existing assignments and explore new ones, as long as they remain within
its constitutional mandate.
Specifically, the review places attention on possible changes to the functional focus
on ex ante control of legality (toma de razón) and the concentration of ex post audit on
legal compliance. Reassessment efforts should take into account ongoing trends to
enhance internal control and institutionalise performance management in order to provide
incentives to further develop internal control, performance and accountability capacities
in public entities. In particular, the review suggests that the CGR:

Leverage ex ante control of legality to incentivise efforts by public administration
to enhance risk-based internal control within public entities and to develop good
management practices;

Orient its ex post audit assignments to assess the reliability of financial and
non-financial information reported by public entities; and

Further leverage knowledge from its existing and new audit assignments in order
to deliver additional value for the institution’s diverse stakeholders.
18 – EXECUTIVE SUMMARY
Enhancing strategic agility within the CGR will help to ensure its work remains
relevant to policy needs.
The extent to which SAIs can offer support to good governance depends, in part, on
the institution’s own strategic sensitivity and operational agility, whereby trends, risks
and expectations of citizens are incorporated into their strategies and regular working
methods. Building on the collective commitment that CGR demonstrated in its strategic
plan, the CGR could further enhance its capability to respond to contextual changes by
exploring current and future trends and risks, using the wealth of information it generates,
government data and consultation with stakeholders. This can foster a greater
understanding of future trends and plans for the modernisation within the government of
Chile. Operational agility allows allocation or reallocation of available human and
financial resources to enhance the capability of an SAI to respond to emerging priorities
while maintaining a high level of institutional independence. To this end, this review
suggests that the CGR introduce HRM tools to build a workforce with the necessary skills
required to meet the broader goals of the institution and to effectively respond to the
changing economic and social environment.
The CGR can leverage stakeholder engagement to increase and demonstrate the
importance of SAI work and its role in supporting good governance.
This review posits that past and future changes to strategic aims, and subsequently to
working methods and products, must coincide with strategic engagement to ensure that
reforms are relevant to governance issues and that stakeholders are made aware of its
usefulness. It is recommended that information exchange, consultation and participation
with stakeholders be entrenched in the audit cycle, including in the development of audit
programming and in discussions surrounding challenges to good governance. The CGR
has made efforts to engage stakeholders over the last six years through various inititatives
and mediums, yet it is still perceived as focusing mainly on detecting errors with
compliance and legality of acts. The CGR could broaden the scope of the information it
provides, the methods of delivering this information and the recipient audience. In
addition to sharing information, the CGR can co-operate, beyond the scope of audit work,
with public institutions (including the internal audit structure in Chile) to ensure
efficiency and effectiveness of its work while maintaining independence.
Strengthening processes to prioritise assignments and consolidating quality
control systems can help to ensure that audit work is relevant and of good quality
This review suggests that the CGR exercise strategic foresight to remain at the
forefront of understanding the trends affecting public entities to ensure that audit
assignments are relevant to policy needs. The CGR’s six-month comprehensive planning
process integrates the regional programmes, metropolitan programmes and External
Control Unit priorities for the forthcoming fiscal year. The CGR can use its expanding
approaches to stakeholder engagement to inform the planning process and to increase the
efficiency of audit execution where the terms of audit are clear to those involved.
Efficiency and quality can be further enhanced by consolidating quality control work that
is currently delegated by the Comptroller General to division heads, regional comptrollers
and various units created to this end. In tandem, the CGR could ensure that high standards
of conduct are present, by supporting the implementation of ethical guidelines that are
contained in the 2013 Code of Conduct.
EXECUTIVE SUMMARY – 19
The CGR can enhance and demonstrate its impact through existing
transparency and performance measurement initiatives.
The CGR has been a leader in Chile’s national government in integrating
transparency within its institution, using a variety of tools to share information about its
activities, including management processes. This review encourages the CGR to go
further in making information available about its audit processes, or trends and findings
to foster a better understanding of the importance of its work. The CGR is looking to
measure its own performance with regard to operations and assignments, which are
important planks in supporting transparency and accountability when used to inform
decision making, facilitate dialogue and support accountability to citizens. This review
recommends ways to enhance the CGR’s performance measurement moving forward,
ensuring that it is linked to the aims of
its strategic plan.
21 – ASSESSMENT AND RECOMMENDATIONS
Assessment and recommendations
Introduction
The CGR recognises its role as contributing to good public governance and has a
broad mandate to achieve this. The Constitution establishes the CGR as an autonomous
government body, which has a high level of organisational and administrative
independence. Within the public sector, the CGR is widely respected as a leader in
proactive transparency and is recognised as a prestigious institution in which to work.
The modernisation of the public sector in Chile and the changing political, economic
and social environment and subsequent changes in demands, have created an opportunity
to assess the value added by the different functions of the CGR. The CGR’s legal function
includes ex ante control of legality, or the toma de razón (TdR). This is a function that the
majority of benchmark SAIs in this study never had or no longer has. The CGR’s ex post
audit function focuses on compliance with regulations, with a limited focus on economy,
efficiency and effectiveness of government action. The CGR appears to interpret some of
its statutory functions in a restrictive manner (e.g. performance audit). While these
features make the CGR lag behind some recent innovations in public management in
Chile, the CGR has initiated a process of “reform from within”. A variety of reforms
include updating its processes around ICT and restructuring its workforce, for example.
These can be taken even further but, of course, deeper changes in the CGR’s mandates
would require legal reforms that would need broad political support.
The government of Chile is now investing in building capacity to increase its strategic
agility. Building strategic agility may necessitate the CGR to review and reassess its
functions and assignments, within its legislative mandate, to not only support strategic
agility within the government but also internally. The CGR’s own stratetgic agility will
ensure that its work continues to be a relevant and reliable source of information useful in
addressing challenges to sound public management. Supporting strategic agility within the
government, and within the CGR, is discussed in Chapters 2 and 3 respectively.
As a strategic objective, the CGR aims to build confidence in its work and to position
itself as a thought leader, and not simply an inspection service. As discussed in Chapter 4,
the CGR could consider changing the way in which it engages with its stakeholders;
including with the legislature to ensure awareness, understanding and use of its work, and
with central executive authorities to improve public management maturity models and
governance arrangements. In parallel, the CGR would need to invest in improving how it
prioritises and ensures the quality of its audit engagements in order to maintain relevance
and confidence in its work, as discussed in Chapter 5.
The interdependency of the recommendations made in this review is mapped in Table
0.1. At the strategic level, the CGR can better support good governance by adjusting its
different functions to enhance the value they add to public management, by leveraging
knowledge from its audit assignments and by enhancing its own strategic agility to
minimize the potential trade-offs between transparency and effectiveness in the public
sector. At the operational level, the CGR can work on engaging stakeholders, developing
new products and providing quality assurance to demonstrate to stakeholders the
relevance, importance and quality of its work. Ensuring that all CGR initiatives are
underscored by strong performance management and transparency is critical to
accountability, and is discussed in Chapter 6.
Table 0.1. The interaction between topics and recommendations made in this review
Externally
Internally
Chapter 2- the Role of CGR in Strategic
agility and rebuilding trust in government
• Utilise ex ante audit assignments to
enhance the maturity of risk-based internal
control within public entities and to develop
good management practices;
• Proactively support efforts to consolidate an
independent, capable and efficient system
of internal control in the Chilean public
sector;
• Utilise ex post audit assignments to
enhance responsibility over the use of
public resources and the reliability of
information in order to increase the use of
this information for accountability and
decision-making processes;
• Deliver value-added products, presenting
findings from ex post audit work in new
ways to further engage those charge with
governance.
Chapter 3- Strategic agility in CGR
• Foster strategic sensitivity of emerging
trends and risks affecting public
governance and changing societal
expectations as input into the CGR’s
strategic planning and institutional
modernisation;
• Develop operational agility by using
strategic human resource
management in order to effectively
respond to emerging governance
issues and changing societal
expectations.
Strategic
Level
Chapter 6- Enhancing transparency and performance
• Enhance transparency of the CGR’s responsibilities and
assignments to facilitate an understanding and use of CGR work;
• Enhance performance management to provide a more holistic
means of discussing and measuring the CGR’s performance
Chapter 4- Engaging stakeholders
• Enhance engagement with audited entities
in order to develop a constructive working
relationship;
• Enhance co-ordination and co-operation
with internal audit in order to support
effective and efficient audit work;
• Enhance communication with stakeholders
other than audited entities and internal
audit;
• Consult and facilitate participation with
stakeholders other than audited entities and
internal audit.
Chapter 5- Prioritisation and quality
• Prioritise ex post audit engagements
and invest in developing knowledge of
audited entities to ensure relevance of
audit priorities;
• Ensure that the terms of audit are
clearly established and communicated
to ensure understanding by auditors
and audited entities;
• Consolidate quality control and
monitoring processes for quality
assurance;
• Support the implementation of the
Code of Conduct to ensure conduct is
beyond reproach and promotes trust
and confidence.
Operational
Level
Strategic Level
A modern and effective SAI does not limit itself to auditing, and a purely
retrospective identification of deficiencies is insufficient for an SAI to support good
public governance – let alone to support strategic agility and rebuild trust in government.
Strategic agility has been recognised by OECD countries, including Chile, as an important
ASSESSMENT AND RECOMMENDATIONS – 23
way of supporting inclusive and sustainable development and rebuilding trust (OECD,
2013b). This encompasses the strategic sensitivity, resource flexibility and collective
commitment that enables the public sector to be responsive to and effective in a complex
policy environment with changing demands.
The current complex policy environment presents an opportunity for the CGR to
reassess its audit functions, within its legal mandate, to (i) seize the opportunity to support
the strategic agility of the state; and (ii) to ensure its own strategic agility so as to
effectively respond to the demands that past and current changes to the public sector place
on the CGR, and to anticipate and be prepared for changing societal demands moving
forward.
An SAI needs not limit itself to the one-time submission of an audit report to the
audited entity or to those charged with governance. For maximum effect, an SAI can use
audit findings as a resource to inform discussion and debate on good public governance
(UN/INTOSAI, 2013). Chapter 2 discusses various approaches that the CGR can take to
provide incentives to, to put the onus on, and to support government in fostering agility in
various ways. This includes, for example, through stronger risk management and internal
control, responsibility in information generation and using root cause analysis and reliable
information as inputs to decision making processes.
Chapter 3 suggests that the CGR can foster its own agility and responsiveness to
emerging trends and risks by building the capability to better understand current and
future trends in Chile and elsewhere for comparative purposes. Moreover, the CGR could
enhance its operational agility so as to redeploy resources in line with the demands
presented by these trends and risks.
Supporting strategic agility and rebuilding trust in government
Utilise ex ante audit assignments to enhance the maturity of risk-based internal
control within public entities and to foster good management practices
The INTOSAI “Lima Declaration of Guidelines on Auditing Precepts” defines ex ante
audit- or a priori or pre-audit – as a “before the fact” review of administrative or financial
activities. Generally speaking, administrative and financial acts may not be executed by
an administration until after the ex ante audit is completed and the SAI gives
authorisation. The Lima Declaration notes that ex ante audits can have an educational
effect and lead to positive changes in administrative functioning. However, it may have
the disadvantage of creating an excessive amount of work and blurring responsibilities.
The Lima Declaration is explicit that ex ante audit may be carried out by institutions
other than the SAI. The majority of benchmark SAIs in this study have never held the ex
ante function. Of the four benchmark SAIs that had an ex ante audit function around
1990, two have significantly reduced the scope of such audits since. Where ex ante
existed, there has been a shift towards ex post, with a greater focus on functioning of
internal controls and performance (Ruffner and Sevilla, 2004).
The CGR’s ex ante control of legality - the toma de razón (TdR) – has long been a
core element of the CGR’s portfolio with roots dating back to the 19 th century. It is still
seen by the CGR as an important control for the preservation of law. The CGR’s authority
to record and perform TdR administrative acts is established in the Constitution, but the
CGR Organic Law gives the institution much discretion over the process. The CGR may
exempt administrative acts other than those issued by the President of the Republic from
TdR.
Between 2008 and 2011, the CGR conducted, on average, approximately 275 000
TdR of administrative acts. The majority were approved, with a rejection rate of 5% for
administrative acts related to state personnel and 8% for administrative acts addressing
matters other than human resource management, public procurement or public debt
between 2008 and 2012. The CGR is required to notify the Ministry of the General
Secretariat of the Presidency (SEGPRES) of all administrative acts that have been
rejected. Formally, the SEGPRES channels this information to the relevant public entity
to be recorded in the official’s record so that appropriate disciplinary measures can be
taken where appropriate, but SEGPRES does not have a role in overseeing and guiding
these legal units. This raises concern over the ability to systematically address errors in
administrative acts, particularly since the CGR does not provide the administration with
structured information on recurring issues identified through the TdR process. Thus,
although the CGR reviews a broad number of administrative acts, there is no systematic
way to conclude what the recurring challenges are and what the root causes may be.
The broad application of TdR may undermine incentives for the heads of public
entities to strengthen their internal control frameworks as a key management system.
Heads of public entities and other public officials may choose to rely on the CGR to
review the legality of their administrative acts ex ante, rather than investing in the
development of strong, independent internal control mechanisms that could reliably fulfil
the purpose to respect and conform to Chile’s legal system. Alternatively, public entities
may pay excessive attention to the acts that will be subject to TdR, thereby duplicating
efforts and incurring an opportunity cost in the use of internal control units.
TdR may also create a substantial opportunity cost for the CGR to conduct other audit
assignments that could contribute further to strategic agility in the public administration.
The sheer number of administrative acts subject to TdR crowds out capacity within the
CGR to work on other ex post audit assignments. Moreover, the competencies necessary
for conducting TdR are different to those necessary for ex post audit assignments, creating
internal rigidities.
In recent years, CGR has taken a number of actions to enhance timeliness and
consistency in the way it conducts ex ante audit. Through its Public Administration
Personnel Information and Control System (SIAPER), the CGR’s automation has
contributed to improving internal management. For example, it has improved its
processing time for administrative acts related to human resources management, from an
average of 18.3 working days in 2010 to an average of 13.9 in 2011. These efforts can be
complemented by reassigning the ex ante function vis-a-vis: i) ongoing efforts to
modernise the public administration, including trends to enhance internal control and
institutionalise performance management; and ii) potential risks associated with a broad
application of the TdR. The CGR could consider:

Integrating the automation of the CGR’s ex ante audit assignments with
government management ICT systems in order to enhance internal control and
reduce administrative burden within government. In 2013, the CGR launched a
TdR module in SIAPER – SIAPER TRA – which will start operating with 20
public services in the first quarter of 2014 and, later, with allow for
interoperability with information systems from the judiciary, University of Chile,
the Ministry of Education, the Ministry of Foreign Affairs and the Civil Registry.
While SIAPER (and its related modules) was conceived to support integration of
data across systems, it primarily supports CGR work and not the public entities in
improving their management practices and related internal controls. To this end,
the CGR can take steps to further integrate SIAPER TRA with government ICT
systems, with the intention of enhancing internal control and reducing
administrative burden in addition to supporting a more timely and consistent ex
ante control of legality.

Further utilising exemptions to the CGR’s ex ante audit assignments in order to
incentivise sustained improvement in decision making and internal control within
individual public entities. The CGR Organic Law grants the Comptroller General
authority to exempt administrative acts related to matters considered “nonessential”. Only administrative acts issued by the President of the Republic may
not be exempt from TdR. All exemptions are regulated by CGR Resolution 1
600/2008, stipulating that exemptions are valid for a period of one year and that
public entities are permitted to request specific acts to be exempt from TdR.
However, due to a lack of communication in this regard and little incentive to
request exemption, no public entity has requested an exemption as permissible
under the 2008 Resolution. Exemptions could serve as a certification of a public
entity’s legal, budgetary, and human resource management controls and systems,
or to signal “graduation” from TdR. A “graduation” from the TdR provides
incentive to make improvements across the public administration. Similarly, a
sanction for neglecting internal control and return to TdR could help to ensure that
management is accountable for maintaining these controls. Using exemptions in
this way would require the CGR to establish clear criteria to be formulated for the
assessment of public entities’ management controls and systems.

Reallocating capacity to undertake ex post audits of decision-making systems,
regulatory management practices and internal control within public entities and
across the government. Redesigning ex ante audits would allow the CGR to invest
additional resources in new forms of ex post audit assignments – including
performance auditing and quality of regulatory management – that would shift the
onus onto managers to implement effective internal control and risk management
practices.
These initiatives can help the CGR to focus its audit assignments on the
well-functioning of government systems and to more systematically understand recurring
problems and associated root causes. In doing so, the CGR would shift more
responsibility onto, and provide incentives for, public managers to strengthen decision
making, internal control and the maturity of their management systems, thereby
supporting a more strategic and agile state.
Proactively support efforts to consolidate an independent, capable and efficient
system of internal control in the Chilean public sector
The consolidation of the TdR has responded, in part, to weaknesses in the overall
control system in Chile, including: i) the absence of independent administrative courts; ii)
the absence of a legal mandate for the function of internal audit/internal control; and iii)
concerns over the independence and professionalisation of internal audit units and legal
units. Yet Chile could converge further towards international standards in internal audit
and control in order to foster a stronger institutional control framework that can provide
better guidance and capacity for improving strategic agility.
The CGR can support efforts to modernise the public administration, including trends
to enhance internal control and institutionalise performance management, by realigning ex
ante audits as previously discussed. Additionally, the CGR could consider conducting
assessments of strengths and weaknesses, and of challenges and opportunities of existing
mechanisms, including internal control and legal units, and promoting policy discussion
to facilitate decision making. The CGR could provide guidance and support for the
professionalisation and capacity building of internal control, taking into account the
Institute of Internal Auditor’s International Standards for the Professional Practice of
Internal Auditing. Finally, the CGR could consider providing public entities with
structured information on recurring issues by type of administrative act or public entity
identified through the TdR process in order to identify ways of improving administrative
decision making.
Strategically utilise ex post audit assignments to enhance responsibility over the use
of public resources and the reliability of information generated and reported by public
entities to enhance the use of this information for accountability and decision-making
processes
International Standards of Supreme Audit Institutions (ISSAI) define three general
types of public sector auditing: financial, compliance and performance. The CGR’s
ex post audit assignments focus primarily on compliance with legal standards in order to
safeguard public funds and promote administrative integrity. While the ex post audit
assignments focus on identification of errors and deficiencies, they do not go so far as to
identify the root causes of those issues. Through these ex post audit assignments the CGR
seeks to assess public entities’ internal control, operations and the completeness of
financial records and supporting documentation.
The CGR does not audit the end of year financial statement of individual public
entities or the government more broadly.1 Rather, unlike most benchmark SAIs in this
study, the CGR consolidates the general government financial statements (Table 0.2).
Table 0.2. Audit of government accounts by supreme audit institutions
in Chile and selected countries
Year-end accounts of individual public
sector entities
Consolidated government yearend accounts
Australia
●
●
Brazil
●
●
Chile
o
o
Denmark
●
o
European Court of
Auditors
●
●
Israel
o
o
Italy
●
o
Korea
●
●
Mexico
●
●
Portugal
●
●
South Africa
●
●
Spain
●
●
Country
Notes: ● = Yes; o = No; .. = Missing data. Source: See Annex 2.A2.
The CGR does not formally conduct performance audits making it, again, an outlier
in comparison to benchmark SAIs. The CGR refers to the institution’s Organic Law that
states that it may not audit the “merit” of political or administrative decisions (Law
10 336, Art. 21b), and reports that evaluating the performance of the administration is the
exclusive responsibility of the Ministry of Finance’s Budget Directorate (DIPRES).
However, issues of the economy, efficiency and effectiveness (matters that INTOSAI
considers to be a part of performance audit) may be addressed in individual ex post
compliance audit assignments.
Efforts to support a more strategic and agile state will be maximised if ex ante
realignment is coupled with leveraging a variety of ex post controls to enhance
responsibility over, and the reliability of, information. To this end, the CGR could
consider:

Introducing an audit of the reliability of annual financial statements to increase
usability of government accounts, linking the process to the annual budget cycle.
A financial audit is an independent examination of the financial accounting and
reporting of public entities intended to support government accountability and
decision making. The purpose of an audit of financial statements is to enhance the
degree of confidence of intended users in the financial statements. The CGR does
not audit any element of the government’s financial reporting framework. Neither
the annual reports nor the comprehensive management reports issued by
individual public entities include financial statements. The CGR can help to
ensure that information used in accountability and decision making processes is
reliable, by introducing financial audits that are linked to the budget process. This
would require that the CGR audit end of year financial statements within 5 months
of the end of the fiscal year, to allow completion before public entities begin
preparing their annual budget proposals. The OECD’s “Best Practices for Budget
Transparency” suggest an average of 6 months, yet 60% of benchmark SAIs
conducting audits of end of year accounts successfully complete them in less.

Introducing an audit of the reliability of non-financial performance indicators that
underpin programme management and accountability. INTOSAI (2013c) defines
performance audit as an independent, objective and reliable examination of
whether government undertakings, programmes, systems, activities or
organisations are performing in accordance with the principles of economy,
efficiency and effectiveness and whether there is room for improvement. DIPRES
has an advanced system for evaluating government performance, which is
comprised of impact evaluations, programme evaluations and institutional
evaluations. With coverage increasing over time, DIPRES does no have the
responsibility nor the capacity to examine the quality of the information that
underpins these evaluations nor the 1 200 performance indicators that are defined
within the central administration. The comprehensive system is contingent on
reliable and timely non-financial performance information provided by individual
public entities. Internal audit units within these entities may provide reasonable
assurance of this information, but this is by no means guaranteed. Thus the CGR
could consider auditing the reliability of non-financial performance information.
This could focus on confirming its reliability, and is often considered an integral
part of the audit of the end of year reports/financial statements. In formulating
guidance, the CGR could take into account the Institute of Internal Auditor’s
International Standards for the Professional Practice of Internal Auditing.

Developing a programme of ex post audit assignments to address whole-ofgovernment issues linked to strategic agility. In recent years the CGR has been
changing its ex post compliance audit assignments to provide a more holistic
approach of public entities and government programmes. National audits,
established in 2008, focus on the same subject within a single central public entity
that has activities throughout the entire country. Transversal audits focus on the
same subject across a range of centralised and decentralised entities that share a
common hierarchical or financial dependence with the same central public entity.
A 2010 audit of compliance of municipal internal audit units with regulatory
requirements across all 345 municipalities not only identified legal requirements,
but included an analysis of improvement needs and recommendations to be taken
into account by the government and Congress. This type of comprehensive and
cross-cutting ex post audit could be replicated and expanded by examining other
whole-of-government issues linked to strategic agility. These may include the
maturity of risk engagement or the level of central government capacity to define
and measure benefits of entities, to link a strong evidence base to long-term
planning or to identify opportunities service and programme delivery integration.
Through these efforts the CGR can help to enhance the reliability of information
generated and reported by public entities as inputs into accountability and decision
making processes. CGR can help to focus the attention of the legislature and citizens on
the content and reliability of information that government actually produces, further
bolstering accountability mechanisms.
Deliver value-added products, presenting findings from ex post audit work in new
ways to further engage those charged with governance
Through its work, the CGR produces thousands of audits on an annual basis. A key
challenge that CGR faces is how to communicate audit findings in such a way that they
are elevated to the attention of government authorities, public officials and the general
public. CGR stakeholders within the executive and legislature, as well as representatives
of civil society and the media, find it difficult to articulate what main issues the CGR has
raised about specific public entities, government sectors and/or management functions.
The CGR has a limited set of instruments to communicate common findings, trends
and root causes drawn from individual audits. The CGR’s annual report does not provide
a combined analysis of its individual audit assignments, and in the few cases when such
analysis is performed it serves more as input into the institution’s annual audit planning
rather than to external communications or processes.
A number of recent developments within the CGR indicate that the institution may be
changing in this regard. The CGR has begun to produce value-added products drawing
upon legal and accounting functions, and creating summary reports in the areas of health
and education.
The CGR can accelerate its initiative to create new value added products by
capitalising on the opportunities presented by both the impetus to support a more strategic
and agile state and also by any changes to ex ante control of legality and ex post audit
programmes as suggested in this review.
The CGR could consider developing products that combine the findings of different
audit assignments and communicate a broader understanding of issues in specific public
entities, government sectors or management functions. Elevating recurring and systematic
challenges affecting public administration to the attention of public managers empowers
them to learn from within the public administration. Care could be taken to develop a
clear framework for the identification and analysis of trends and not simply an ad hoc
presentation of highlights from the previous year. In view of Web 2.0 technologies that
make information more accessible to all, the CGR could consider enabling components of
reports to be downloaded individually, or by stakeholders using the data to generate their
own reports. An example in this direction could be the implementation of web-based
system being considered by the CGR that shows observations pending action by audited
entity.
In 2011 the CGR began producing studies using accounting information. In 2013 the
CGR began to prepare summary reports of actions already taken and pending to address
audit observations by government sector. The CGR could consider coupling these new
approaches and products to deliver a holistic tool based on cross-cutting evidence. More
specifically, the CGR could consider complementing information from its different audit
assignments with its other knowledge bases, such as accounting analysis, with a combined
analysis of common findings, trends and root causes at a whole-of-government or sectoral
level and, further, with the status of actions by government to address past audit findings.
The CGR might also consider identifying and presenting combined findings in its annual
report, which is presented to the President of the Republic and the National Congress in
April every year.
Similarly important is to acknowledge good practice. The CGR could consider
developing products that communicate good practice identified through audit
assignments, as input into the development of management frameworks in the public
sector. Such an approach could help to recognise good practices within one public entity
and to promulgate them among other public entities as a basis for supporting mutual
learning. The CGR has begun to provide guidance on specific matters, though it has
focused on clarifying legal frameworks and on issues considered more complex and
challenging. As the guidance was based on the CGR’s legal function, the CGR can build
on these efforts by complementing them with findings of audit assignments. Further, the
CGR could use this information to provide expert opinion to refine the administration’s
management maturity models discussed earlier.
Fostering strategic agility in the CGR
The CGR’s own strategic agility is necessary not only to support operations within the
public sector but also to respond to the demands presented by past and current changes to
the public sector and, moreover, to anticipate and support future changes. This requires
that the CGR invests in becoming more sensitive to emerging trends and risks affecting
public governance and changing societal expectations and that they develop the
operational agility and redeploy resources to do so.
Foster sensitivity of emerging trends and risks affecting public governance and
changing societal expectations as input into the CGR’s strategic planning and
institutional modernisation
The CGR’s current strategic plan, spanning from 2013 to 2015, was the outcome of a
new strategic planning process. This supported a collective commitment – a third
component of strategic agility – to the modernisation of the institution and the
achievement of its future vision. In addition to the CGR, eight benchmark SAIs have
introduced strategic planning while four have yet to do so.
The CGR’s strategic planning puts attention on changes in the environment in which
it operates and its ability to respond to them. The formulation of the strategic plan placed
significant emphasis on building not only ownership of senior and middle management
(equipo directivo) but also broad participation of professionals (funcionarios). Yet the
process was largely informed by an assessment of internal capacity against international
good practices. Planning can be further strengthened if the CGR acquires a better
understanding of how the external environment impacts its operations in the medium and
long term. To this end the CGR could consider exploring current trends and risks
affecting public governance by using the information and data generated through its own
audit process. Recent reforms within the CGR also support the potential utilisation of this
information. This could include, for example, the CGR matrix of relative importance and
risk indicators used to prioritise annual audit planning, or the recording, monitoring and
follow up of audit observations identified through audit implementation.
Strategic sensitivity also requires an awareness and understanding of future plans for
the modernisation of government so that the CGR can seek to understand the expected
impact on the public sector and good governance. To foster this understanding, the CGR
could consider drawing upon the results of various horizon scanning activities, in which
the government of Chile is beginning to invest. Horizon scanning is a policy tool that
systematically gathers a broad range of information about trends and emerging issues in
the political, economic, social, technological or ecological environment. Horizon scanning
is part of a variety of so-called foresight activities that aim to develop the capabilities of
organisations to deal better with an uncertain and complex future (Habegger, 2009). The
CGR could also tap into a broad range of knowledge bases and sources of information
about trends and emerging issues that could affect the government in Chile. This could
include deepening political knowledge from the experience and analysis of political
parties; research and technical knowledge from universities, and research and technical
institutions; professional and practical knowledge from professional and managerial
communities; and knowledge about the general public obtained by engaging with citizens,
businesses and civil society organisations.
International norms can be a useful source of information for the CGR in comparing
government systems and approaches to addressing challenges to governance within those
systems. Moreover, the CGR could also consider how decision-making practices may
change if the government of Chile converges with international norms. This knowledge
could bring opportunities for new dialogue, through new interactions or through existing
channels including INTOSAI’s regional body, OLACEFS (Latin American Organisation
of Supreme Audit Institution), in which the CGR is an active member.
Use strategic human resource management in order to effectively respond to
emerging governance issues and changing societal expectations
Fostering operational agility is key to ensuring that the CGR can effectively respond
to emerging governance issues and changing societal expectations. Operational agility
involves the ability to make the most of existing resources, including redeployment of
resources as needed, and requires coherent adaptability to ensure that redeployment does
not generate internal vacuums, risks or inconsistencies in light of the different functions
performed by the organisation.
Operational agility is a product of SAI independence – specifically administrative
dimensions – and its human resource management practices. Administrative independence
requires that SAIs be provided with adequate means to fulfil their mandate and
accomplish their assignments, using their resources as they see fit (INTOSAI, 1977;
2010).
The Comptroller General has significant administrative independence to reallocate
resources in line with the institution’s changing needs. This has allowed the CGR to
undertake a reorganisation of a number of its central divisions, and to standardise the
structure of its regional offices to increase the performance, efficiency and timeliness of
its functions in recent years. Furthermore, it has allowed the CGR to restructure its
workforce to support institutional renewal and professionalization. These reforms have
reinforced the principles of merit and impartiality in recruitment, promotion and
performance management. It should be noted however, that the CGR falls under the same
human resource management legal framework and practices as the rest of the public
administration.
In order to enhance operational agility to emerging governance issues and changing
societal expectations, the CGR could consider introducing multi-year workforce planning
to strengthen and complement recent institutional reforms to restructure the workforce.
This is a trend among governments in OECD countries to ensure capacity for service
delivery while generating efficiency gains (Huerta Melchor, 2013; OECD, 2013b). As
shown in Table 0.3, 10 benchmark SAIs have multi-year workforce planning, making
Chile and Italy outliers. Coupling multi-year workforce planning with human resource
management (HRM) reforms would enable the CGR to identify gaps in knowledge and
skills required to address current and emerging issues. This would also permit the CGR
can come to systematically prepare itself to better redeploy resources as necessitated by
those issues and societal demands.
Table 0.3. Multi-year workforce planning in supreme audit institutions in Chile and selected countries
Country
Australia
Brazil
Chile
Costa Rica
Denmark
European
Court of
Auditors
Israel
Is forward-looking
planning in place to
ensure that the supreme
audit institution has an
adequate workforce to
deliver its mission and
achieve its vision?
Formal
Ad hoc None
and
regular
How many years
are covered by
the supreme
audit institution’s
workforce
planning?
2-3 years
●
4-5 years
●
●
●
●
x
..
2-3 years
2-3 years
●
2-3 years
●
Italy
Korea
●
x
4-5 years
●
Portugal
South Africa
Spain
2-3 years
●
●
4-5 years
3-5 years
●
What are the key aspects explicitly
considered by the supreme audit institution
when conducting workforce planning?
People-related investment choices and
associated strategies
Change in audit standards, efficiency
savings
x
Changes in institutional mandate, changes
in audit standards, possible efficiency
savings
Efficiency savings, reorganisation
Possibilities for outsourcing, efficiency
savings, staffing needs and turnover
Possibilities for outsourcing in the case of
information and communication technology
services only
x
Change of auditees, that is, the operation,
personnel, mission, work of the auditees;
change of society, public administration
and people’s expectations
Possibilities for outsourcing, efficiency
savings (e.g. e-government)
Changes in institutional mandate; changes
in audit standards; possibilities for
outsourcing; availability of skills
Staff turnover, changes in public
administration (and impact on audit work)
Notes: x = Not applicable; .. = data not available.
Source: Adapted from unpublished OECD Survey of Benchmark Supreme Audit Institutions 2013, responses to
Q. 35-37.
To enhance operational agility the CGR may also consider establishing a competency
framework for all officials in order to support the achievement of institutional goals. The
CGR can expand its focus beyond defining job descriptions to the competencies it wishes
its officials to develop. This could take into account the development of competencies that
foster greater horizontal co-operation across various units and regional offices and take
into account mobility- to give officials a wider, whole-of-government perspective on
governance challenges.
The CGR could consider utilising traditional HRM practices to support the
development of these competencies and to encourage internal horizontal co-operation. In
2013 the CGR’s Training Department issued a Training Needs Assessment survey to
collect information on the training needs of all officials. The CGR could use needs
assessments and traditional training as inputs into the development of competencies so
that they reflect the needs of the institution. Currently, recruitment and training decisions
are largely decentralised within each of its central units and regional offices. This makes it
challenging for effective implementation of an institution-wide workforce plan. Thus the
CGR could benefit from consolidating human resource management practices across the
institution and ensure greater complementarities between recruitment, career development
and compensation.
Moreover, the CGR can develop competencies with career advancement in mind,
building on their current exploration into how to build a more structured approach to
attracting and retaining employees. This medium and long term foresight is necessary to
ensure that employees meeting the newly required competencies are both attracted to the
position and see the value of remaining in the institution. Already, the CGR is recognised
as an attractive institution to work in given its opportunities for continuous professional
development and high remuneration relative to the public administration (e.g. World
Bank/Inter-American Development Bank, 2005; OAS, 2007). The CGR is further
exploring how to develop a more structured approach to a reward system that would
further enhance its ability to attract and retain employees.
To bolster the compensation system and, more generally, to develop the right
incentives such that agility can be realised, the CGR could consider aligning performance
assessment at all levels within the institution to the goals contained in the strategic and
human resource plans. Currently, there exists a disconnect between budget formulation
and the performance evaluation process. This causes disincentives to formulate more
ambitious goals because additional resources will not be made available. While no
individual bonuses exist, CGR divisions and regional offices rarely fail to achieve their
performance goals and, thus, their team bonus.
Operational Level
While the CGR’s mandate allows for the institution to examine issues at a whole-ofgovernment level, and the CGR’s strategic plan sees it evolving as a source of
independent, credible and objective information, there remains the perception that the
CGR’s audit work is primarily focused on inspection and investigation of compliance.
The CGR has made a concerted effort in the last 6 years to improve its engagement
with its variety of stakeholders, including internal control officials, auditees, the judiciary,
the media and citizens. Initiatives have been undertaken to standardise interactions and
acquire feedback on ways to improve the quality of audit engagements. Yet the CGR
needs to demonstrate the relevance and quality of its work to its stakeholders, to align
perceptions of its work with its strategic aims, and to foster stakeholders’ understanding
of CGR independent and objective source of information. At the operational level, the
CGR should continue to invest in improving the prioritisation and quality of audits, and
enhance engagement with stakeholders, in order to ensure the relevance, quality and
timeliness of its work, and to build confidence in it.
Engaging stakeholders throughout the audit cycle
Enhance engagement with auditees in order to develop a constructive working
relationship
Although the CGR has taken steps towards improving interactions with auditees,
feedback has shown that auditees still view the engagements as primarily focused on
inspection and investigation of compliance rather than as a source of independent and
objective information. This may be due, in part, to an insufficient amount of information
for the auditee to better understand the individual audit engagement, and to a lack of
engagement with auditees beyond the individual audit engagement.
The CGR can leverage engagement with auditees to help mitigate perceptions that the
CGR is only seeking to identify non-compliance and error, and to increase awareness and
understanding of- and confidence in - its working methods. Regarding the individual audit
engagement, the CGR could notify auditees in advance of the initiation of audit, as well as
to broaden the scope of information communicated with auditees in the beginning of the
audit. Furthermore, the CGR could formulate auditee strategies to broaden engagement
with auditees beyond the individual audit engagement itself. It is recommended that the
CGR engage auditees to formulate materials that clearly communicate the CGR’s
standards, processes and methods, and to review audit reporting guidance. The anticipated
impact is an increase in clarity and useability of audit reports for auditees, based on their
direct feedback, and to open up a productive dialogue on weaknesses in internal control
and other issues or risks surrounding good public governance generally.
Enhance co-ordination and co-operation with internal audit units in order to
support effective and efficient audit work
The CGR has sought to enhance the working practices of internal audit units, which
has been supported by the creation of an online Portal for Internal Audit Units (Portal
para las Unidades de Auditoría o Control Interno). However, the CGR’s guidance and
tools for the internal audit units overlap and sometimes differs from that provided by the
Council of Government’s General Internal Auditors (CAIGG). The CGR’s engagement
with internal audit units is constrained by concerns over the independence of internal
audit units.
Overlaps and constraints can either be attributed to, or compounded by, a number of
present challenges. The CGR does not share information on its annual audit programme
with audited entities’ internal audit units, or vice versa, as this is considered as sharing
privileged information. The CGR does not meet individually with audited entities’
internal audit units to develop a shared understanding of the public entity and the
programmes and funds that they audit. However, the CGR and audited entities’ internal
audit units do share audit reports with one another outside of individual audit
engagements.
The CGR could consider communicating information about annual audit programmes
with audited entities’ internal audit units, and other periodic information throughout the
calendar year. Information could also be shared during regular meetings with the internal
audit units to discuss issues that concern both parties. These efforts could be further
supported with procedures for sharing information more efficiently and systematically
including improved protocols to transmit audit reports. To address risks of conflicting
guidance for audited entities’ internal audit units from the CGR and CAIGG, the CGR
could develop common training programmes and training materials for audited entities’
internal audit units, in collaboration with the Council.
This knowledge-exchange would enable public sector auditors to enhance their mutual
ability to promote good governance and accountability while fostering a greater
understanding of the importance of internal control among management. A more informed
dialogue on mutual risks and relatable findings can also lead to more focused, and thus
efficient, audit engagements with more useful recommendations. Thus, in addition to
strengthening knowledge of public sector auditors and internal control in the public
sector, co-ordinated activity can additionally have a positive impact on respective audit
programmes.
Enhance communication with stakeholders other than auditees and internal audit
The CGR has demonstrated the importance of and its interest in engaging with
stakeholders other than internal control and audited entities. The CGR has sought to
strengthen institutional co-operation with the criminal justice system, signing
memorandums of agreement with the Supreme Court, the Constitutional Tribunal, the
Public Prosecutor and the State Defence Council. The CGR developed a communication
plan to strengthen corporate positioning among external audiences, and has established
new procedures for stakeholders to make complaints and audit suggestions online. The
CGR has placed a strong focus on engaging media and citizens online, through its website
and social media.
Many opportunities exist for the CGR to broaden its engagement with its stakeholders
without undermining its real or perceived level of independence and autonomy. The CGR
does not have a communication strategy that is linked the annual audit programme. The
CGR has not developed a clear and detailed understanding of the institution’s primary,
secondary and other audiences and what their interactions are with audit work and reports.
This might help to explain, in part, an unbalanced communications focus, geared more
towards communication activities with national media outlets and citizens and less on the
National Congress and Municipal councils. It is recommended that the CGR link its
communication strategy to annual audit programming, balancing the attention allotted to
different public entities. As part of a rebalance, it could place specific attention on how to
engage the Congress, its commissions and the country’s municipal councils.
As is the case in other benchmark countries in this study, emphasis has been placed on
communicating through website and social media accounts. The CGR could take specific
measures to overcome barriers and constraints that are presented by the country’s digital
divide, to allow primary, secondary and other stakeholders to access relevant information
and enhance their understanding of CGR work.
Facilitate participation with stakeholders other than auditees and internal audit
In addition to sharing information and enhancing clarity and frequency of
communication, the CGR could consider facilitating participation and consultation with
stakeholders other than auditees and internal audit. The CGR has sought to strengthen
institutional co-operation with the criminal justice system, has formulated guidelines to
improve timeliness of processing requests from Congress and has made great efforts to
engage citizens through social media.
The CGR has focused limited attention on co-operating with the legislature and central
executive authorities. The CGR has limited opportunities to engage key executive
authorities in discussions about main challenges facing good public governance and
management maturity models. Registration of audit complaints and audit topics is limited,
and there exists no systematic way to understand the challenges and risks affecting
audited entities, programmes and funds. To broaden CGR’s understanding of challenges
facing good governance and risks affecting audited entities, the CGR could consult
stakeholders while maintaining independence. This can be done throughout the audit
cycle, including during the design of audit criteria and the evaluation of audit reports.
Prioritising and ensuring the quality of individual audit engagements
Prioritise ex post audit engagements and invest in developing knowledge of audited
entities to ensure relevance of audit priorities
The CGR uses a comprehensive 6 month audit programming process to prioritise its
audit engagements for the following fiscal year. The final regional and metropolitan
programmes are derived from a weighting of a Matrix of Relative Importance and
Planning Units’ Risk Indicators. Individual audit engagements are guided by a
standardised process through planning, execution and closure. Audit planning of
individual engagements requires consolidation of information about the audited entities,
prepared by external control technical units – units that conduct individual ex post audits –
and external sources.
To ensure that audit priorities remain relevant to a whole-of-government approach, the
CGR could continue to invest in developing knowledge of audited entities and
programmes both during audit programming and throughout the audit process itself, in
accordance with INTOSAI’s “Fundamental Principles of Public Sector Auditing”. In
addition to engaging with audited entities, internal control and other stakeholders, the
CGR could request from audited entities specific information, such as organisational
charts and tenure of senior management.
To further ensure that audit priorities remain relevant to a whole-of-government
approach, the CGR could ensure that terms of audit – namely the objectives, methodology
and criteria for assessment - have been clearly established and communicated. Clear
establishment of terms of audit helps to ensure that auditors have a strong understanding
of the objectives, operations, regulatory environment, internal controls, systems and
business processes involved in the audit, as well as a knowledge of additional sources of
audit evidence. Communicating clearly established objectives, methodologies and
assessment criteria, would help auditees to better understand the purpose and process of
the audit, thereby serving as a basis for more efficient execution and quality control of it.
Ensure quality in ex post audit engagements
The CGR has taken steps to ensure quality both in the execution and output of audit
work. INTOSAI (2010) “Quality Control for SAIs” states that an SAI should establish
policies and prcoesures designed to provide it with reasonable assurance that the SAI,
including all personnel and any parties contracted to carry out work for the SAI, comply
with relevant ethics requirements”. The CGR published its first Code of Conduct in July
2013 in order to establish a framework to guide the behaviour of its officials. The CGR’s
Code of Conduct covers many of the fundamental ethical principles as outlined by
INTOSAI’s “Code of Ethics” (INTOSAI, 1998). Attention has yet to focus on supporting
the implementation of the code to ensure its integration into the daily conduct of CGR
officials. The CGR could support the implementation of the ethical guidelines through
training and inclusion in audit guidelines. Furthermore, it could evaluate this integration
by assisting the knowledge received by participants in the training and identifying ways to
improve it, moving forward.
The Comptroller General has established a number of units and divisions to support
quality assurance of audit and non-audit work. External control technical units, audit
follow-up units, management process units, the legal co-ordination and information
division and the General Secretariat divisions focusing on internal management form the
quality control system within the CGR. The CGR could consolidate and strengthen its
monitoring processes related to quality control to provide management with reasonable
assurance that the system and its related processes and procedures are relevant, adequate
and operating effectively. To this end, the CGR could expand surveying of stakeholders,
establish a peer review system focusing on quality of work, or strengthen complaint
channels. These can be useful sources of information to help identify weaknesses in audit
execution and output, and to identify areas of successful implementation of ethical and
quality standards, thereby supporting the work of the units and divisions.
Putting it all together: the cross-cutting supporting framework
INTOSAI (2010a) “Principles of Transparency and Accountability” state that SAIs
should manage their operations economically, efficiently, effectively and in accordance
with laws and regulations and report publicly on these matters (Principle 6). In so doing,
SAIs should: report publicly on these matters; assess and report on their operations and
performance in all areas, such as financial audit, compliance audit, jurisdictional
activities, performance audit, programme evaluation and conclusions regarding
government activities; measure and report on the efficiency and effectiveness with which
they use their funds; use performance indicators to assess the value of audit work for the
legislature, citizens and other stakeholders; and follow up on their public visibility,
outcomes and impact through external feedback (Principle 6).
The CGR is a leader in proactive transparency in the Chilean public sector. By
continuing to lead in this regard, the CGR can improve understanding of CGR work, and
demonstrate its value added to a strategic and agile state and the public at the macro level
and to auditees at a micro level. In doing so, the CGR reinforces accountability - a
prerequisite for operations of an independent SAI and for the implementation of other
changes discussed in this review.
Enhancing the transparency and performance of the CGR
Enhance the transparency of the CGR’s responsibilities and assignments
The government of Chile has increased transparency since the 1990s, to which the
CGR has been a supportive partner. The CGR is known as a leader in transparency in the
public sector, going beyond compliance with legal requirements and proactively using
various communication means to make information about its responsibilities and
operations accessible. These initiatives aim to focus especially on performance and impact
so as to enhance the CGR’s accountability.
To enhance transparency of the CGR’s responsibilities and assignments, the CGR may
consider:

Increasing the clarity of the CGR’s mandate as part of current efforts to amend
its organic law. The CGR makes information publicly available on its mandate,
mission and types of assignments. As the government of Chile explores a new
Organic Law, there is an opportunity to address confusion that may stem from
inconsistencies with other statutes, update the outdated organisational structure,
remove redundant sections and to reinforce independence and agility to react to
changes in the public sector.

Promoting the transparency of audit standards, processes and methods. While
the CGR makes available information on its mandate, mission and type of
assignments, it does not provide information on its audit standards and methods.
Increasing such information would facilitate an understanding of audit work by
auditees and citizens.

Developing products that combine the findings of different audit assignments and
communicating a broader understanding of government issues. The CGR does
not produce summaries of reports or of common findings, trends and root causes,
which could make it easier for various audiences to understand CGR work. This
potentially limits the CGR’s efforts to make information accessible. The CGR
could develop products that present the CGR’s common findings, trends and root
causes identified in audit engagements.

Leveraging its communication strategy to support active use of audit work,
defining audiences and identifying how they access this information. The CGR
does not have a communication strategy that could guide the understanding and
use of audit findings. Firstly, as discussed above and in Chapter 4, the CGR could
identify better its audiences to understand how their work is accessed, feeding
into its communication strategy. Moreover, the CGR can identify measurable
objectives and develop an appropriate communications mix to balance
accessibility through various mediums.

Undertaking specific measures to overcome barriers and constraints attributed to
the country’s digital divide. The CGR’s website is considered one of the most
transparent in the Chilean public sector. Yet the heavy reliance on its website and
on social media may bias access in a country with a digital divide across socioeconomic groups.
Enhance performance management of the CGR
INTOSAI (2010) “Principles of Transparency and Accountability” state that SAIs
should manage their operations economically, efficiently, and effectively and use external
advice to enhance the quality and credibility of their work. The CGR is taking steps to
enhance its performance framework, going beyond inputs, outputs and timeliness, to
incorporate quality and impact measures. The CGR is using internal performance
management tools to set internal goals resulting in rewards, soliciting input from
stakeholders through new methods and developing evaluation frameworks with peer
SAIs.
In order to enhance performance management, the CGR could consider:

Developing a logical framework to support the definition and measurement of the
CGR’s performance to feed into internal decision-making processes and other
internal reforms. A logical framework is a matrix that guides performance
management and is a core element of each public entity’s performance
management system in Chile. Yet, at present, the CGR does not use one in the
formulation to guide its performance management, despite adopting a number of
other performance budgeting tools used by public administrations. The CGR
performance management relies on performance goals and agreements between
the Comptroller General and the division heads and regional comptrollers. A
logical framework would be a useful tool to link concepts of outcomes, outputs,
processes and inputs as a basis for measuring performance.

Linking management practices to the institution’s strategic plan and budget
formulation to ensure adequate resources and avoid performance management
becoming a bureaucratic process. The formulation of the CGR’s annual budget
begins in April of each year and is concluded in September, while the
performance goals and agreements are formulated in September/October.
However, the two are unrelated. It is critical that the CGR aligns and integrates
operational plans and projects with the institution’s performance management
systems and its budgeting processes. If there is limited attention to setting
performance goals and agreements in accordance with available resources, they
may be unable to drive performance improvements. The performance bonus
attached to the achievement of performance goals can become an entitlement for
CGR officials. Broadening input from the CGR’s stakeholders as part of the
institution’s performance management framework. The CGR has recently begun
to solicit input from auditees regarding the quality and timeliness of completed
audit engagements, but it does not solicit input from other stakeholders such as
Congress, the media and academia, nor does it solicit feedback on other aspects
of the CGR’s activities. Soliciting feedback will help to enhance the quality and
usability of the CGR’s audit work.

Taking appropriate action so that efforts to measure the economic value of audit
and non-audit assignments do not become the primary driver of institutional
reforms. The CGR is contracting a study to assess the value and benefit of the
institution’s functions for the public administration and citizens. The objective of
the study is to measure the direct economic value of the CGR’s current oversight
functions and to evaluate the suitability of certain initiatives that the CGR could
implement in the future. It is critical that the current efforts to calculate the
economic value of the CGR’s audit and non-audit assignments are used as a
source, but not the primary driver of institutional reform. This allows for reforms
to take into account important contextual factors that are not directly linked to
economic value, including public sector innovations, changes in size of
government and new forms of service delivery.

Reporting publically on measures of cost-effectiveness, quality and timeliness of
outputs and impact. The annual report prepared each year by the Comptroller
General provides information on the number of outputs and inputs, but does not
include information on the cost of outputs, the quality and timeliness of outputs
or the impact of the CGR.
Notes
1
An exception are the financial audits of supply companies in isolated areas (EMAZA)
and of the loans facilitated to Chile by multilateral financial institutions, such as the
Inter-American Development Bank or the World Bank.
References
Habegger, B. (2009), “Horizon scanning in government: Concept, country experiences
and models for Switzerland”, Center for Security Studies, Zurich,
www.bevoelkerungsschutz.admin.ch.
Huerta Melchor, O. (2013), “The government workforce of the future: Innovation in
strategic workforce planning in OECD countries”, OECD Working Papers on Public
Governance,
No. 21,
OECD
Publishing,
Paris,
http://dx.doi.org/10.1787/5k487727gwvb-en.
INTOSAI (2010), “The Mexico Declaration on SAI Independence,” International
Standards of Supreme Audit Institutions, 10, INTOSAI Professional Standards
Committee, Copenhagen, www.issai.org/media(626,1033)/ISSAI_10_E.pdf.
INTOSAI (2010a), “Quality Control for SAIs”, International Standards of Supreme Audit
Institutions, 40, INTOSAI Professional Standards Committee, Copenhagen.
INTOSAI (1977), “The Lima Declaration of Guidelines on Auditing Precepts,”
International Standards of Supreme Audit Institutions, 1, INTOSAI Professional
Standards Committee, Copenhagen, www.issai.org/media(622,1033)/ISSAI_1_E.pdf.
INTOSAI (1998), “Code of Ethics”, International Standards of Supreme Audit
OECD (2013a), “Countries’ responses to the 2013 Accruals Questionnaire”, 13th Annual
OECD Public Sector Accruals Symposium, Paris, 7-8 March 2013.
OECD (2013b), “Ministerial Council Statement”, Meeting of the Council at Ministerial
Level, 29-30 May, C/MIN(2013)16/FINAL, OECD, Paris.
OECD (2011), “Contextual factors”, in Government at a Glance 2011, OECD Publishing,
Paris, http://dx.doi.org/10.1787/gov_glance-2011-74-en.
Ruffner, M. and J. Sevilla (2004), “Public sector modernisation: Modernising
accountability and control”, OECD Journal on Budgeting, Vol. 4/2, pp. 123-141,
OECD Publishing, Paris, http://dx.doi.org/10.1787/budget-v4-art11-en.
UN (United Nations)/INTOSAI (2013), “Audit and advisory by SAIs: Risks and
opportunities, as well as possibilities for engaging citizens”, Conclusions and
Recommendations of the 22nd UN/INTOSAI Symposium on Audit and Advisory by
SAIs: Risks and Opportunities, As Well As Possibilities for Citizen Engagement, 5-7
March, Vienna, Austria.
1. CHILE’S SUPREME AUDIT INSTITUTION – 41
Chapter 1
Chile’s supreme audit institution*
This chapter provides an overview of the Office of the Comptroller General of the
Republic (Contraloría General de la Republica, CGR) – Chile’s supreme audit institution
(SAI) – as a basis for understanding its role in enhancing good public governance. The
overview focuses on the CGR’s: i) position within government, leadership and
organisational structure; ii) mission, mandate and functions/oversight responsibilities;
and iii) organisational, functional and administrative independence. The analysis is
framed by various International Standards of Supreme Audit Institutions, including the
“Lima Declaration of Guidelines on Auditing Precepts” (ISSAI 1), the “Mexico
Declaration on Supreme Audit Institution Independence” (ISSAI 10) and the
“Fundamental Principles for Public Sector Auditing” (ISSAI 100). The analysis is
supported by comparative data from 13 benchmark SAIs collected through an OECD
survey specifically for this peer review, as well as other OECD and non-OECD
databases.
*
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli
authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights,
East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
42 – 1. CHILE’S SUPREME AUDIT INSTITUTION
Introduction
This chapter introduces the Office of the Comptroller General of the Republic
(Contraloría General de la Republica, CGR) – Chile’s supreme audit institution (SAI) –
as a basis for understanding its role in enhancing good public governance. SAIs are key
pillars of democratic governance and play a significant role in enhancing public sector
transparency, performance and accountability (INTOSAI, 2010a). SAIs can provide
reasonable assurance on the extent to which public resources are used legally and
responsibly, for their intended purpose, in an economic, efficient and effective manner.
SAIs’ work empowers the legislature and citizens to hold government accountable by
reducing information asymmetries – particularly important at a time when trust in public
authorities is weak and demands for open and inclusive policy formulation and
implementation are increasing. Moreover, SAIs can also support a more strategic and
forward-looking state by providing both insight and foresight of current emerging risks
affecting governance.
In introducing the CGR and its role in enhancing good public governance, this
chapter provides an overview of the institution’s:

position within government as well as leadership and organisational structure, as
a basis for understanding its governance arrangements;

mission, mandate and oversight responsibilities, as a basis for understanding how
it directly contributes to good governance;

organisational independence, as a basis for ensuring its oversight responsibilities
are conducted in an objective and impartial manner.
The overview of the CGR is framed by various International Standards of Supreme
Audit Institutions (ISSAI). The “Lima Declaration of Guidelines on Auditing Precepts”
defines the general types and scope of SAI assignments (INTOSAI, 1977). The “Lima
Declaration of Guidelines on Auditing Precepts” and the “Fundamental Principles for
Public Sector Auditing” distinguish between the types of audit assignments, i.e. ex ante
and ex post, as well as regularity and performance of the use of public funds
(INTOSAI, 1977; 2013). The “Lima Declaration of Guidelines on Auditing Precepts” and
the “Mexico Declaration on Supreme Audit Institution Independence” define the
elements of organisational, functional and administrative independence (INTOSAI, 1977;
2010b). The analysis is supported by comparative data from 13 benchmark SAIs. This
was collected through an OECD survey specifically for this peer review, as well as other
OECD and non-OECD databases.
This chapter builds upon different sources, including a review of Chile’s legal
framework, the CGR’s institutional documentation, and extensive interviews and
discussions with CGR and other public officials of Chile’s public sector. At the time of
preparing this chapter, the government of Chile signalled its intention to formulate a new
Organic Law for the CGR in order to support the institution’s modernisation.
The announcement was made in May 2012 as part of the President’s annual speech to
Congress that presents an account of the previous year and the government’s programme
for the forthcoming year. The analysis contained in this and the following chapters is
based on the current CGR Organic Law, not on the proposed bill.
While the review is performed against the current legal setting that frames the work
of the CGR, the assessment and recommendations are not necessarily constrained by it.
As with all OECD reviews, these are based on international standards, guidelines and
good practices, especially from OECD member countries. OECD reviews are performed
on the assumption that authorities are prepared to improve, restructure or reform policies
if there is evidence that justifies a change. It is indeed up to the national authorities to
judge whether the evidence and opinions provided in an OECD review are sound and
pertinent enough to justify a reform and there is no reason to assume that Chilean
authorities would proceed otherwise. The fact that the current administration is
considering a reform of the CGR Organic Law and that the CGR is regularly consulted by
the executive and parliamentary committees on new legislation that may impinge on its
responsibilities suggests that the legal framework of the CGR is not considered
immutable in Chile and that authorities are prepared to make improvements that may
involve changes in such framework.
Leadership and organisational structure
The Constitution (Art. 98) establishes the CGR as an autonomous government body,
and the institution is largely considered as a co-equal branch of government. The CGR’s
status as an autonomous government body has been recognised since 1943 (Box 1.1). As
a co-equal branch of government, the CGR sees itself as similar to the SAIs of Israel,
Italy, Portugal and South Africa – as well as the European Court of Auditors. The CGR is
not an office of the legislature, as is the case of the SAI of Brazil, Costa Rica, Denmark,
Mexico and Spain. Nor is the CGR part of the executive branch of government, such as is
the case of the SAI of Korea (Table 1.1). Although it is not part of the executive, the CGR
is subject to the Constitutional Organic Law 18 575 of General Bases of the
Administration and to the Public Financial Management Law (Legal Decree 1 263 of
1975).
Table 1.1. Location of supreme audit institution within government
Legislature
Neither
Executive
Other
Brazil, Costa Rica, Denmark, Mexico,
Spain
Chile, Israel, European Court
of Auditors, Italy, Portugal, South Africa
Korea
Australia
Notes: Australia: The Auditor‑General is an independent officer of the parliament and all audit reports are
tabled in the parliament. The Australian National Audit Office is an agency established by law to assist the
Auditor-General to perform his/her functions. Denmark: Until 1975 the state audit function was comprised of
four audit departments below the Ministry of Economic Affairs. Between 1975 and 1991, the National Audit
Office of Denmark operated within the executive branch; since then it has been a parliamentary control body
and hence part of the legislature. Israel: The State Comptroller is accountable only to the Israeli parliament, the
Knesset, and shall not be dependent upon the government; this provision has been interpreted to say that
principally the State Comptroller and Ombudsman are not part of any of the above branches, including the
legislature. Korea: The Constitution of the Republic of Korea establishes the Board of Audit and Inspection
under the direct jurisdiction of the President (Art. 97); the Board of Audit and Inspection Act states that the
Board of Audit and Inspection is established under the President but shall retain an independent status (Art. 2).
Portugal: The Court of Accounts is an independent, sovereign court, subject only to the law (1976 Constitution,
Arts. 202, 203 and 214; Law 98/97, Art. 24). It is the supreme audit institution in Portugal, with the satute of
Supreme Court, with the power to audit all the public resources and also the jurisdictional power to judge
financial responsibility. Spain: The Spanish Court of Accounts is answerable directly to the Cortes Generales,
i.e. the Spanish parliament (Court of Audit Organic Act – Organic Act 2/1982 – Art. 1.2).
Source: Adapted from unpublished OECD Survey of Benchmark Supreme Audit Institutions 2013, responses
to Q. 1.
The CGR is headed by a Comptroller General and the institution’s monocratic
leadership is similar to the SAIs of Australia, Costa Rica, Denmark, Israel, Mexico, Peru
and South Africa (Table 1.2). The Comptroller General is nominated by the President and
confirmed by the Senate, for an eight-year non-renewable term or until mandatory
retirement of 75 years of age (Constitution, Art. 98, as amended by Art. 144 of
Law 20 050). Senate confirmation of the Comptroller General appointment was first
introduced in 1964 by Law 10 336. The Constitution specifies the conditions for the
appointment, employment, removal and retirement of the Comptroller General. These
aspects of co-equal branch of government are discussed in the second part of this chapter
which discusses CGR independence.
Table 1.2. Organisational model of supreme audit institutions in Chile and selected countries
Monocratic
Collegiate
Australia, Chile, Costa Rica, Denmark, Israel,
Mexico, Peru, South Africa
Brazil, European Court of Auditors, Italy,
Korea, Portugal, Spain
Box 1.1. Institutional history of the Office of the Comptroller General
of the Republic of Chile
The CGR was created in March 1927 by Decree with Force of Law (Decreto con Fuerza de
Ley) 400-bis in order to “remedy the lack of organisation in the control of national income and
investment of public resources”. The CGR absorbed the functions of the Accounting General
Directorate (Dirección General de Contabilidad), the Tribunal of Accounts (Tribunal de
Cuentas), the Nation’s Asset General Inspectorate (Inspección General de Bienes de la Nación)
and – as a temporary measure – the Statistics General Directorate (Dirección General de
Estadísticas). The Accounting General Directorate was responsible for the preparation of
national accounts (what today would be referred as financial statements). The Tribunal of
Accounts was responsible for the ex ante control of legality of administrative acts and, from
1888, the judgment of accounts managed by the heads of fiscal entities. The Nation’s Asset
General Inspectorate, part of the Treasury, was responsible for safeguarding the proper use and
maintenance of state properties. The Statistics General Directorate supported the preparation of
national statistical data used in economic policy making. In 1932, however, the Statistics
General Directorate became an autonomous institution.
The creation of the CGR was part of a package of monetary, fiscal and administrative
reforms initiated in response to the economic challenges facing Chile after World War I.
This package of reforms was proposed by a team of economists from the United States –
commonly referred to as the Kemmerer Mission – at the request of the government of Chile. In
addition to suggesting the creation of the CGR, the Kemmerer Mission provided input into the
formulation of Chile’s Organic Budget Law (Ley Orgánica de Presupuestos), Central Bank Law
(Ley de Banco Central), General Banking Bill (Proyecto de la Ley General de Bancos) and
Customs Law (Decreto Ley de Aranceles Aduaneros). Beyond Chile, the Kemmerer Mission
also supported a process of state modernisation in other Latin American countries, such as
Bolivia, Colombia, Ecuador, Guatemala, Mexico and Peru, in order to support stable economic
policies for US investors (Lizana, 2005; Ruiz-Tagle, 2006).
Box 1.1. Institutional history of the Office of the Comptroller General
of the Republic of Chile (cont.)
Although the CGR was originally established by a Decree with Force of Law, it was
recognised in the Constitution of the Republic of Chile in 1943 following an amendment to the
1925 Constitution. This amendment, promulgated by Law 7 727 to reform the Constitution to
limit parliamentary initiative on public expenditure (reforma constitucional limita la iniciativa
parlamentaria en lo relativo a gastos publicos), recognised the CGR as an autonomous body
from the legislature, executive and judiciary. The position of the CGR as a co-equal branch of
government was retained in the 1980 Constitution of the Republic of Chile.
The first CGR Organic Law was promulgated by the Congress in 1952 and detailed the
functions, powers and management autonomy of the institution. This law was subsequently
replaced in 1964 by the current CGR Organic Law (Law 10 336 on the Organisation and Duties
of the Office of the Comptroller General of the Republic). Between 1953 and 1964, the CGR
Organic Law was amended several times, for example by the Decree with Force of
Law 338/1960 and Laws 10 343 and 14 832. Law 14 832 authorised the President of the
Republic to establish the text for the new CGR Organic Law (i.e. Law 10 336) taking into
account all of the reforms to the institution since 1953. A number of key differences between the
1953 and 1964 CGR Organic Laws include:

the granting of authority to the Comptroller General to close, merge and create
departments

the granting of authority to the Comptroller General to exempt one or more public
entities from its ex ante control of legality assignments

the requirement for the Comptroller General to give priority to processing complaints
received from the Chamber of Deputies.
At the time of writing this review, the government of Chile signalled its intention to
formulate a new CGR Organic Law in order to support the institution’s modernisation.
The announcement of this initiative was made in May 2012 as part of the President’s annual
speech to Congress that presents both an account of the government’s programme over the
previous year and the programme for the forthcoming year.
Source: Lizana, E. (2005), “La evolución de la función de control de la Contraloría General de la
República” [The evolution of the function of the Office of the Comptroller General of the Republic],
Revista de Derecho de la Pontificia Universidad Católica de Valparaíso, XXVI, Valparaíso, Chile,
pp. 19-30; CGR (1997), “Contraloría General de la República en el umbral del siglo XXI” [The Office of
the Comptroller General of the Republic in the XXI century], CGR, Santiago; and Ruiz-Tagle, P. (2006),
“Una Contraloría General de la República que sirva a todos los Chilenos” [An Office of the Comptroller
General of the Republic that serves all Chileans], Revista de Derecho Público, Vol. 70, Santiago.
The CGR’s decentralised structure with 14 regional offices, one in each of Chile’s
regions with the exception of Santiago (Figure 1.1), follows Chile’s three-tier government
system: 15 regions, 52 provinces and 345 municipalities (comunas). Each regional office
is headed by a regional comptroller who is appointed by the Comptroller General. The
CGR’s regional offices have responsibility for overseeing deconcentrated national
(central) government operations at a regional and municipal level, as well as overseeing
regional and municipal government programmes, entities and funds. The existence of SAI
regional offices in Chile is similar to the SAIs of Brazil, Peru, Portugal and South Africa
(Table 1.3). Chapter 3 discusses the organisational structure of the CGR in more detail,
specifically in relation to how it supports strategic agility.
The CGR Organic Law establishes that the Comptroller General must report annually
on the management of its budget and activities to the President as well as to both houses
of Congress. Each regional comptroller must also produce an annual report on its
operations for the regional executive (Law 10 336, Art. 143). In practice, the annual
reports of the Comptroller General and regional comptrollers are also presented to the
public. These annual reports are independent of other reports prepared and released by the
Comptroller General, and that may be brought to the attention of Congress, the media or
the general public as deemed appropriate (Law 10 336, Art. 6). The CGR’s annual
reporting to the Congress and the general public is in line with the INTOSAI (1977)
“Lima Declaration of Guidelines on Auditing Precepts” (Section 16). Chapter 4 discusses
the structures within the Congress with which the CGR interacts in more detail. Chapter 6
discusses the content of the CGR’s annual reporting in more detail, specifically in relation
to how it supports the CGR’s accountability.
Figure 1.1. Organigram of the Office of the Comptroller General of the Republic of Chile
Comptroller
General
Cabinet
- Access to Information Unit
- Internal Audit Unit
- Communications & PP.RR department
- Secretariat of External Control Units
- National Co-ordination Unit for Follow-Up
ICT Centre
Deputy
Comptroller
General
International
relations and
co-operation
Court of Accounts
Divisions
Accounting
Analysis
Legal
Administrative
Audit
State
Personnel
Management
Infrastructure
and
Regulation
Valparaíso
Bio Bío
Legal
Co-ordination
and
Information
Municipalities
Prosecutor
General
Secretariat
Regional comptrollers
Tarapacá
Arica y
Parincota
Atacama
Antofagasto
Coquimbo
Libertador
General
Bernardo
O´Higgins
Los Ríos
Maule
Aysén del
General
Carlos Ibañez
del Campo
La Araucanía
Magallanes y
Antártica
Chilena
Los Lagos
Source: Office of the Comptroller General of the Republic of Chile.
In recent years, the Office of the Comptroller General has undertaken a series of
ambitious initiatives to support the institution’s modernisation. These initiatives have
been focused around three axes: i) institutional strengthening; ii) fostering transparency
and integrity; and iii) citizen participation (Box 1.2). These initiatives have consolidated a
solid institutional foundation within the CGR, upon which the institution wishes to evolve
further as a key good governance contributor in the Chilean public administration.
Table 1.3. Existence of supreme audit institution regional/state offices
Country
Existence of supreme audit
institution regional/state
offices
Contextual information on the organisation of the state
State structure
Tiers of government
State/regional
Provincial
Local
Australia
No
Federal
6+2
x
717
Brazil
Yes (27)
Federal
26+1
x
5 564
Chile
Yes (14)
Unitary
15
53
345
Costa Rica
No
Unitary
7
81
473
Denmark
No
Unitary
5
x
98
Israel
No
Unitary
6
x
252
Italy
No
Unitary
20
103
8 101
Korea
No
Unitary
16
x
..
Mexico
No
Federal
31
x
2 438
Peru
Yes (18+4)
Unitary
25
195
1 833
Portugal
Yes (2)
Unitary
2
x
308
South Africa
Yes (9)
Federal
9
x
278
Spain
No
See note
17
50
8 111
Notes: x = Not applicable; .. = Missing data. The statistical data for Israel are supplied by and under the
responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the
status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of
international law. Federal states have a constitutionally delineated division of political authority between one
central and several regional or state autonomous governments. While unitary states often include multiple
levels of government (such as regional, provincial and local), these administrative divisions are not
constitutionally defined. Australia: 6 states and 2 territories. The Australian Constitution recognises two levels
of government: 565 local governing bodies operate under the 6 states and the Northern Territory. Each of
Australia’s six states and two territories has its own external auditor (i.e. Auditor-General’s Department of
South Australia, Audit Office of New South Wales, Australian Capital Territory Audit-General’s Office,
Northern Territory Auditor-General’s Office, Queensland Audit Office, Tasmanian Audit Office, Office of the
Auditor-General of Western Australia, Victorian Auditor-General’s Office). Brazil: 26 states and 1 Federal
District. The Federal Court of Accounts has offices in Brazil’s 26 states and the Federal District. These are in
addition to the 26 state Court of Accounts, one in each of the country’s states. Mexico: Entidades de
Fiscalización Superior Locales. In addition, there are 31 state local superior audit institutions. Peru: The Office
of the Comptroller General has 18 regional control offices and 4 regional co-ordination offices. South Africa:
At the local level there are 8 metropolitan municipalities, 44 district municipalities and 226 local
municipalities. Spain is a strongly decentralised state with 17 autonomous communities and 2 autonomous
cities. While there are no regional offices of the Tibunal de Cuentas, there are regional audit institutions in
Spain in several autonomous communities that have mandate to audit the economic-financial management of
the autonomic public sector, without prejudice of the competences and mandate of the SAI of Spain.
Source: OECD (2011), “Contextual factors”, in Government at a Glance 2011, OECD Publishing, Paris,
http://dx.doi.org/10.1787/gov_glance-2011-74-en.
Mandate, mission and functions
The “Lima Declaration of Guidelines on Auditing Precepts” states that the core
mandate of an SAI should be embodied in the Constitution, and details laid down in
specific legislation. Further, the Lima Declaration states that all public financial
operations, regardless of whether and how they are reflected in the national budget,
should be subject to audit by SAIs. Excluding parts of financial management from the
national budget shall not result in these parts being exempted from audit by the SAI
(INTOSAI, 1977, Section 18). Moreover, the Lima Declaration states that SAIs should
also audit commercial enterprises with public participation (INTOSAI, 1977, Section 23).
Box 1.2. Recent initiatives supporting the modernisation of the CGR
Initiatives to support institutional strengthening have included:

Introducing strategic planning as a tool to broaden attention beyond annual planning
activities and to create a collective commitment among its officials to the institution’s
mission, vision and values; the institution’s first strategic plan was launched in May 2013
and spans until 2015.

Introducing performance management mechanisms, including: i) collective goals and
performance assessment; and ii) individual performance agreements (convenios de
desempeno) between the heads of central divisions and regional offices with the
Comptroller General, to improve the efficiency and timeliness of processes and the
production of strategic outputs.

Improving the organisational climate, including promoting and facilitating staff
involvement in the definition of human resource management policies.

Standardising work procedures and products to create a culture of responsibility,
teamwork and quality control, supported by the issuance of new guidelines and manuals,
including for issues such as audit programming, determining samples for audit field work,
audit reporting and audit follow up (e.g. guidelines for Dictámenes and toma de razón).

Undertaking a project to strengthen performance management, with the purpose of
strengthening institutional systems and processes, including: i) creating a number of
dedicated units to support continual improvement and promote quality, including external
control technical units (to develop ex post audit guidelines and to co-ordinate certification
of officials); ii) audit follow-up units (to monitor the implementation of audit
observations); and iii) management process units (to examine management processes and
quality control of divisions and regional offices).

Creating a number of dedicated units to support continual improvement and promote
quality, including external control technical units (to develop ex post audit guidelines and
to co-ordinate certification of officials); audit follow-up units (to monitor the
implementation of audit observations) and management process units (to examine
management processes and quality control of divisions and regional offices).

Restructuring dramatically the institution’s workforce, informing on and facilitating early
retirement to staff meeting the required age and recruiting younger officials with more
diverse qualifications and experience. As a result of these initiatives, the average age of
CGR officials has declined, from 53.0 in 2007 to 40.7 in 2012.

Developing more timely and targeted training programmes for its officials, with an
emphasis on high-quality and measurable outcomes, and training certification being
considered in the internal hiring processes.

Consolidating the various information and communications technologies (ICT) systems
used by central divisions and regional offices: in 2007 the central divisions and regional
offices operated 136 different software applications, in 2013 the CGR used only 24.

Undertaking a major office remodelling of the institution’s headquarters and 14 regional
offices between 2008 and 2013 in order to improve the work environment and create a
feeling of professionalism among officials, and facilitating the public use of the
instalations (e.g. auditoriums are available free of charge for civil society).
Box 1.2. Recent initiatives supporting the modernisation of the CGR (cont.)
Initiatives to foster the institution’s transparency and probity efforts have included:

Publishing on the institution’s website, since 2007, the agenda of CGR authorities
(i.e. the Comptroller General, Deputy Comptroller General, division heads and regional
comptrollers); the agendas include information such as meetings and visits, among
others.

Publishing online through the institution’s website, since 2010, the CGR’s databases on
legal opinions (dictamenes) and audit reports and since 2012 its internal audit reports.

Redesigning, in 2012, the CGR’s website, including launching a dedicated CGR
Transparency (Contraloría Transparente) banner in order to enhance accessibility on
information regarding the institution’s functions, structure, human resources,
contracting, budgetary resources.

Launching the anti-corruption portal, with the goal of facilitating access to information
on investigations related to corruption and their results.

Launching the municipal scorecard report, implemented in 2012 and published on the
website, which consists of a monthly compliance status regarding the obligation of
municipalities to send their budget and accounting information to the CGR.1

Facilitating online consultation and follow up by citizens of their requirests and
administrative acts (Consulta Tramite en Línea).
Initiatives to increase citizen participation have included:

Formulating, in 2011, a plan to support the development of the CGR’s external
communication infrastructure, strengthening the Communications Unit, including
through the Internet and social media (e.g. Twitter, Facebook, YouTube).

Launching, in 2012, a CGR-Citizens Portal (Contraloría-Ciudadano) to enable
citizens to register complaints and make suggestions for audits through online forms
specially designed for this purpose. Over 1 400 complaints and audit suggestions were
made during the first 10 months.

Developing, in 2013, an innovative CGR-Citizens and Public Works Portal
(Contraloría-Ciudadano y Obra Pública) to support geo-referenced transparency of
central and municipal public works projects, together with key project information,
which should be launched in 2014.
Note: 1. In the first publication, of April 2012, 23% of all reports that, at that time, had to be sent to the
municipalities for the year 2012 were sent and processed by the CGR. In the fourth publication, of July, the
percentage of all reports that, at that time, had to be sent by the municipalities for 2012 and that were sent
and processed by the CGR had risen to 81.2%.
Source: Based on discussions with the CGR.
Article 87 of the Constitution establishes the CGR’s responsibilities as: i) overseeing
the legality of acts of the public administration; ii) overseeing the revenue received and
investment funded by the state treasury, municipalities and other statutory public entities;
iii) examining and judging the accounts of individuals entrusted with resources of public
entities under the oversight of the CGR; and iv) keeping the general government accounts
(contabilidad general de la nación). The CGR’s functions are subsequently detailed in
Law 10 336 on the Organisation and Duties of the Office of the Comptroller General of
the Republic (the “CGR Organic Law”). Other legislation on the state administration and
financial administration recognise the functions of the CGR in line with that defined in
the Constitution and the institution’s organic law.1
Building upon its legal mandate, the CGR has recently refined its mission, vision and
values through its strategic planning process for the period 2013-15. The CGR’s mission
is “to ensure legal compliance by the public administration through a collaborative
relationship with public entities and citizens, promoting the public good through efficient
institutional management to safeguard the integrity, transparency and correct use of
public resources”. The CGR’s vision is “to be an entity that delivers timely and
high-quality products and services for citizens and the state, generating trust in the proper
use of public resources and actively integrating its control processes in order to increase
the impact of the institution’s work”. The CGR’s values are now described as integrity,
collaboration, responsibility, autonomy and transparency. Chapter 3 discusses the process
of strategic planning within the CGR in more detail.
The CGR has a broad mandate covering both national and local executive authorities,
public companies (as per Law 10 336, Art. 16) but does not oversee the legislature,
judiciary or constitutionally autonomous entities (with the exception of municipalities).
The CGR subsequently describes on its website and other institutional materials that it
has four main functions:2

“legal”, including ex ante control of legality assignments and the interpretation of
administrative law to ensure the legality of administrative decision making

“audit”, including ex post audit assignments, inspection and special
investigations to provide assurance of the legality of administrative decision
making

“accounting”, including setting national public accounting standards and
consolidating the general government financial statements/accounts

”judicial”, including judging the civil responsibility of public officials in the case
of non-compliance with regulations related to the use of public funds and
supporting the investigation of criminal acts by public officials.
In addition, the CGR oversees the functioning of internal audit within the public
administration and contributes broadly to anti-corruption efforts, including through
horizontal collaboration with a number of autonomous bodies (e.g. public prosecutor’s
office, the judiciary and state defence council).3
Among these functions, two matters draw attention in the international comparison.
First, despite Chile’s public administration shift towards performance management, the
CGR’s audit function focuses on compliance rather than financial and performance audit
(i.e. focusing on the economy, efficiency and effectiveness of the public sector). This
focus is consistent with the CGR’s stated mission “to ensure legal compliance by the
public administration through a collaborative relationship with public entities and
citizens, promoting the public good through efficient institutional management in order to
safeguard the integrity, transparency and correct use of public resources”, but does not
respond to a clear legal or functional impediment to undertake performance audit.
Second, a number of these assignments make the CGR relatively distinct compared with
the benchmark SAIs. For example, as discussed below, the CGR conducts ex ante control
of the legality of a broad range of administrative or financial activities (toma de razón).
In addition, the CGR is responsible for setting public sector accounting standards and the
consolidation of whole-of-government accounts. The sections below will further address
these matters.
The CGR has a broad mandate covering both national and local executive
authorities, but does not oversee the legislature, judiciary or constitutionally
autonomous entities
The institutional scope of the CGR is comparable to all 13 benchmark SAIs
(Table 1.4). The CGR Organic Law states that the institution provides oversight of central
and decentralised entities and public enterprises (empresas del estado) (Law 10 336,
Art. 16).4 Centralised entities are created by law, have no legal personality and act
through the Fisco (i.e. the monetary expression of the state). Decentralised entities are
created by law and have their own legal standing. The CGR Organic Law enables the
institution to oversee businesses, societies and entities in which the state, public
companies, societies, or centralised or decentralised institutions have a majority or equal
share-holdings or representation. Oversight of these businesses, societies and entities may
include auditing the fulfilment of their missions, the regularity of operations and
responsibilities of its officials, as well as that which is necessary to prepare the
consolidated government financial statements.5 The CGR’s oversight of these businesses,
societies and entities is independent from that provided by various superintendents
(i.e. independent regulatory agencies) (Law 10 336, Art. 16).6
In practical terms, the CGR’s audit mandate covers 2 195 central government
entities – including ministries, central government agencies, public enterprises,
mixed-ownership enterprises and public universities – and 805 municipal entities spread
across 345 municipalities (CGR, 2013). State enterprises overseen by the CGR include
the Corporación de Fomento de la Producción (created by Law 6 640), Empresa Nacional
de Minería (Decree with Force of Law 153/1960) and the State Railway Company
(Empresa de los Ferrocarriles del Estado) (Decree with Force of Law 1/1993, art. 40).7,8
Although the CGR generally does not audit the State Copper Company (Corporación
Nacional del Cobre de Chile, CODELCO), it may do so under special circumstances
informing the President of the Republic about the reason for the decision and sharing the
audit report (Decree Law 1 349/1976, Art. 12). The CGR does not audit the State Bank
(Banco del Estado). Although the CGR audits the Armed Forces of Chile (Fuerzas
Armadas de Chile), not all its audit reports are publically available because they contain
materials that are categorised as secret or reserved under the Law 20 285 on Access to
Public Information (Art. 21.3), the Code of Military Justice (Código de Justicia Militar –
Decree 2 226 – Art. 436) and the Restricted Law on Copper (Ley Reservada del Cobre –
Law 13 196).
Unlike the majority of benchmark SAIs, the CGR does not have the authority to audit
the Congress, the judiciary or “constitutional autonomous bodies” such as the central
bank (Table 1.4).9 The Chamber of Deputies issues an unaudited report on budget
execution approximately 12 months after the end of the fiscal year. The Senate’s accounts
are independently audited by a private firm every two years, with the most recent audit
report for FY 2010 and 2011 released three months after the end of the fiscal year. The
judiciary’s annual financial statements are audited by an independent auditor within one
and a half months after the end of the fiscal year. The independent auditor’s reports of the
judiciary’s annual financial statements for FY 2007-11 are publically available online; as
of July 2013 the independent external audit report for FY 2012 was unavailable.10
However, the CGR has authority to audit bank accounts used by certain courts to receive
payments (e.g. bails, fines, deposit, guarantees, etc.) and pay back that money. The
central bank’s annual financial statements are audited by an independent auditor within
one month of the end of the fiscal year. The independent auditor’s reports of the central
bank’s annual financial statements for fiscal years 1998-2012 are publically available
online.11
The type of audit assignments conducted by the CGR varies by type of public entity,
as does the use of the ex ante toma de razón. Figure 1.2 illustrates this using the examples
of the Ministries of Finance, Interior and Public Safety, Health, Education, Labour and
Social Security (which the OECD interviewed and engaged in this peer review process).
The CGR’s audit assignments and ex ante toma de razón are discussed in following
sections of this chapter.
Figure 1.2. Scope of oversight by the Office of the Comptoller General
Selected government portfolios
Source: Based on discussions with the CGR.
Table 1.4. The Office of the Comptroller General of the Republic of Chile has a broad audit scope
Central
government
ministries,
agencies
Recipients
of public funds
(e.g. contractors)
Financial public
corporations
Non-financial
public
corporations
Social security
State government
budgetary
resources
Local government
budgetary
resources
Armed forces
Loans
Other
Australia
Brazil
Chile
Costa Rica
Denmark
Israel
Italy
Korea
Mexico
Peru
Portugal
Spain
South Africa
o
o
●
●
●
●
●
o
o
●
●
●
●
●
●
●
●
●
o
o
●
●
o
●
o
●
o
●
o
●
●
●
●
●
●
●
o
●
●
●
●
●
o
●
●
●
●
●
●
x
●
●
●
●
o
●
o
●
o
o
o
●
o
●
●
o
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
..
..
..
..
..
..
..
..
..
..
..
..
..
..
●
●
●
●
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●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
Legislature
Country
Judiciary
Audit scope of supreme audit institutions in Chile and selected countries
o
x
x
x
●
x
..
x
x
●
●
x
x
●
●
●
●
●
●
●
●
●
●
●
●
●
●
o
o
..
..
..
..
..
..
..
..
●
●
●
●
●
●
●
●
●
●
●
●
Notes: ● = Yes; o = No; x = Not applicable (unitary government); .. = Not available.
European Court of Auditors (ECA): Central government ministries and agencies refer to the European Commission and European Union agencies. The mandate of the ECA is
set out in Article 287 of the Treaty on the Functioning of the EU which stipulates that the ECA is responsible for examining the accounts of all revenue and expenditure of the
European Union. Israel: Audit of the legislature and judiciary is only administrative aspects. The State Comptroller Law [Consolidated Version], 1958, which provides a detailed
framework for the State Comptroller’s Office governance and activity, adds the following audited bodies: i) every person or body holding, otherwise than under contract, any
state property or managing or controlling any state property on behalf of the state; ii) every enterprise, institution, fund or other body in the management of which the
government has a share; iii) every person, enterprise, institution, fund or other body made subject to audit by law, by decision of the Knesset or by agreement between it and the
government; iv) every general employees’ organisation, and every enterprise, institution, fund or other body in the management of which such employees’ organisation has a
share, provided that the audit shall not be carried out on their activities as a trade union. No audit of such a body shall be conducted except and insofar as the Comptroller so
decides and subject to international conventions to which the state of Israel is party. Note that the application of this section is extremely rare.
The CGR legal function includes ex ante control of legality assignments
and the interpretation of administrative law to ensure the legality
of administrative decision making
The INTOSAI “Lima Declaration of Guidelines on Auditing Precepts” defines
ex ante audit – or a priori audit or pre-audit as it may be sometimes referred – as a
“before the fact” review of administrative or financial activities. Generally speaking,
administrative or financial activities may not be executed by the administration until after
the ex ante audit is completed and authorised. The Lima Declaration notes that ex ante
audit has the advantage of being able to prevent damage to the state before it occurs.
Nevertheless, the Lima Declaration notes that ex ante audit may have the disadvantage of
creating an excessive amount of work for the SAI and blurring responsibilities under
public law. The Lima Declaration is explicit that ex ante audit may be carried out by
institutions other than the SAI, or other audit institutions (INTOSAI, 1977, Section 2) and
that the conditions and requirements of each country should determine whether a supreme
audit institution carries out pre-audit.
Ex ante audit assignments are differentiated from SAI expert opinions, as is
recognised in the Lima Declaration (INTOSAI, 1977, Section 12). A matter subject to
ex ante audit must be transmitted to the SAI, the SAI must authorise (or reject) the matter
and the executive authority must subsequently abide by the SAI’s decision. In contrast, an
SAI is not obliged to respond to a matter brought before it for an expert opinion by an
executive authority or a legislative body, though an SAI may also provide an expert
opinion without a request. The executive authority or legislative body subsequently bears
sole responsibility for accepting or rejecting an SAI’s expert opinion. When issuing an
expert opinion, the SAIs should not anticipate future audit findings and the opinion must
not interfere with the effectiveness of its audit assignments (INTOSAI, 1977, Section 12).
In the case of Chile, the CGR issues expert legal opinions in the form of dictámenes.
CGR dictámenes may be issued ex oficio or upon request from state or private bodies,
members of Congress, public officials or individuals. However, in contrast with expert
opinions of SAIs, the CGR’s legal opinion or dictámen is binding and constitutes
administrative jurisprudence (jurisprudencia).
Ex ante control of legality – or toma de razón (TdR) as it is referred in Chile – is seen
by the CGR as a core element of its oversight responsibilities. Toma de razón is a
preventive, ex ante verification of the legality of certain administrative acts, exclusively
focused on legal complicance vis-à-vis the whole spectrum of the national and applicable
international legal framework (Constitution, international treaties, laws and regulations).
The CGR’s authority to subject administrative acts to TdR is established in the
Constitution (Art. 99). Some of this importance stems from the tradition of the TdR
within the administration, which spans back to the 19th century, and has led to the TdR
being a function deeply integrated into the Chilean administration (Cordero, 2006;
Santiso, 2006; Faundez, 2007, 2010). Moreover, the TdR can be associated with
legitimacy of administrative action and trust in government. At the same time, it is
important to note that this ex ante control of legality function does not exist in the
majority of benchmark SAIs (Table 1.5) while in the few where it is present, the scope is
limited, either functionally (e.g. Italy) or financially (e.g. Portugal). Chapter 2 analyses
the TdR function in more detail.
Table 1.5. Ex ante audit assignments by supreme audit institutions
Yes
No
Chile, Costa Rica, Italy, Portugal
Australia, Brazil, Denmark, European Court of Auditors,
Israel, Korea, Peru, Spain, South Africa
Notes: The INTOSAI “Lima Declaration of Guidelines on Auditing Precepts” defines ex ante audit – or
a priori audit or pre-audit, as it may be sometimes referred – as a “before the fact” type of review of
administrative or financial activities (INTOSAI, 1977, Section 2). Brazil: Concurrent audit assignment for
public concession and public-private partnerships. The Brazilian Federal Court of Accounts examines
administrative actions at five stages of the public concession and public-private partnerships procurement
process: i) project’s feasibility, including legal, economic and environmental issues; ii) the bid notice and draft
contract prior to their publication; iii) the legal, technical, economic and financial pre-qualification of bidders;
iv) the results of bid evaluation; and v) award and signature of the contract. Costa Rica: Approving budgets of
the decentralised public sector (66% of total public expenditure); solving objections to government contracting
posters, such as appeals of awards; authorising direct contracting procurement procedures. Italy: The Court of
Accounts has had an ex ante audit function since its establishment in 1862. Since 1994, under Law no. 20, the
ex ante audit has been limited to administrative acts (e.g. regulatory and planning acts, high-value public
contracts). More recently under Decree-Law 78/2009, the Court of Accounts’ regional chambers have been
entrusted with the ex ante audit on the civil protection ordinances issued by extraordinary commissioners and
delegated officers. Portugal: For acts and contracts above EUR 350 000.
to Q. 3.
CGR recording and TdR of administrative acts includes both those that have direct
budgetary consequences (e.g. state personnel, procurement, public debt, etc.) as well as
those related to general economic, social and environmental regulation. Administrative
acts related to state personnel management include those regulating civil servant
employment, remuneration, orders to return illegal remunerations, termination benefits
and the revision of pension benefits. Administrative acts related to public procurement
include calls for tender, prequalification, contract award and payment. Public debt may
only be taken on by the government after the CGR’s approval. This includes debt by the
Ministry of Finance (Ministerio de Hacienda), the State Treasury (Tesorería General de
la República), public universities, public enterprises and the Social Security Institute
(Instituto de Previsión Social) (Law 10 336, Art. 13). The review of economic, social and
environmental regulation includes urban planning, competition policy, trade policy, as
well as micro, small and medium enterprises, among others.
The CGR conducted an average of approximately 275 000 TdR of administrative acts
between 2008 and 2011: approximately 250 000 related to state personnel matters and
25 000 related to other matters (Figure 1.3). However, the CGR Organic Law gives the
institution much discretion over the TdR process and it may exempt administrative acts
other than those issued by the President of the Republic from TdR.
Chapter 2 discusses the CGR’s exemption of administrative acts from TdR in more
detail. However, it is important to note that, irrespective of whether an administrative act
is subject to TdR or not, all administrative acts must be processed by the CGR before
their publication in the Official Journal (Diario Oficial). In case of violation of these
provisions, the CGR has the authority to apply administrative sanctions against the
responsible official (Law 10 336, Art. 154).
Figure 1.3. Ex ante control of legality conducted by the Office
of the Comptroller General of the Republic
A. Administrative acts addressing matters other than human resource management subject to toma de razón
Decrees
Resolutions
Decrees regulating laws
Decrees with the force of law
30000
25000
20000
15000
10000
5000
100
0
2008
2008
2009
2010
2011
2012
B. Administrative acts addressing state personnel matters, total
Ex ante audit/toma de razon
Exempt from ex ante audit
1 000 000
800 000
600 000
400 000
200 000
0
2008
2009
2010
2011
2012
Note: The observed drop in TdR in 2010 can be attributed to the change of government (and the necessary
installation process with reduced administrative activity) and the effects of the 2010 earthquake in budget
execution.
Source: Adapted from CGR (2008, 2009, 2010, 2011, 2012, 2013), various Cuenta Pública Contraloria
General de la República [Annual Report of the Office of the Comptroller General of the Republic of Chile],
CGR, Santiago.
Depending on the nature of the document submitted for the TdR, the decision of the
CGR might be challenged in the ordinary courts within 30 days of taking effect, or before
the Constitutional Court at any point of the legislative process. The challenge of
administrative acts may be adjudicated previously or simultaneously in appellate courts
using the writ of protection (recurso de protección) or before the Constitutional Tribunal
under the writ of inapplicability for unconstitutionality (recurso de inaplicabilidad).
Matters in the ordinary courts may be appealed to the Supreme Court. Requests for the
Constitutional Tribunal to review administrative acts must come from legislators, rather
than individuals, either solicited by one of the chambers of Congress or one quarter of
congressional members. The Constitutional Tribunal is the court of last resort on
constitutional matters and no appeal may be made against its decisions, even by the
Supreme Court (Constitution, Art. 83).
In addition to the CGR, a number of other public sector entities within the executive
have responsibility for ensuring the legality of administrative decision making. The
Ministry of the General Secretariat to the President of the Republic (Ministerio Secretaría
General de la Presidencia de Chile, SEGPRES) provides legal advice to the President,
reviews bills proposed by the executive and reviews decrees issued by the President. The
latter takes place before the TdR by the CGR. Each public entity’s legal units (unidades
jurídicas) have a role in reviewing administrative acts from their respective entity before
they are subject to TdR. The Juridical-Legislative Division does not play a role in
overseeing and guiding the legal units of individual public entities.
The CGR’s ex post audit function focuses on compliance with regulations, with
a very limited focus on economy, efficiency and effectiveness of government
action
The CGR conducts ex post audits, inspections and special investigations to ensure
compliance with the law, the protection of public patrimony and respect for the principle
of administrative integrity. Through ex post audit assignments, the CGR may assess the
functioning of the internal control systems of public entities; monitor compliance with
legal provisions on state financial administration, particularly those relating to the
execution of public resources; examine individual transactions and the completeness of
financial records; validate the accuracy of supporting documents; and verify compliance
with government regulation and jurisprudence. Ex post audit assignments may result in
“observations” (observaciones) regarding non-compliance with laws or regulations
related to the use of public funds. Observations may result in an accounts trial (juicio de
cuentas) to remedy losses and damages caused to the state resulting from, for example,
calculation errors, improper determination of amounts payable and irrelevant payments.11
Observations may also trigger special investigations and administrative disciplinary
proceedings, as well as possible civil and criminal proceedings before ordinary courts.
The CGR does not audit the year-end accounts of individual public entities. This type
of financial audit, focused on the reliability, usability and confidence of government
reporting, can enhance the degree of confidence of intended users in the financial
statements and the reliability of government reporting insofar as it provides an
independent examination on whether the financial statements as a whole and the
information contained therein fairly present each entity’s financial position and the results
of its operations and cash flows (INTOSAI, 2013).
The CGR does not conduct ex post performance audit assignments, which makes it an
exception in relation to the benchmark SAIs (Table 1.6). This decision stems from the
fact that the CGR has traditionally associated performance audit with addressing issues of
the “merit” of political or administrative decisions, and thus with the limitation set out in
Article 21b of its Organic Law (Law 10 336).12
Table 1.6. Ex post audit assignments of supreme audit institutions
Country
Ex post audit
Regularity (financial and compliance)1
Performance audit2
Australia
●
●
Brazil
●
●
Chile3
●
o
Costa Rica
●
●
Denmark
●
●
●
●
Israel
●
●
Italy
●
●
Korea
●
●
Mexico
●
●
Peru
●
●
Portugal
●
●
Spain
●
●
South Africa
●
●
Notes: ● = Yes; o = No.
1. Regularity audit includes: i) attestation of financial accountability of accountable entities, involving
examination and evaluation of financial records and expression of opinions on financial statements;
ii) attestation of financial accountability of the government administration as a whole; iii) audit of financial
systems and transactions, including evaluation of compliance with applicable statutes and regulations; iv) audit
of internal control and internal audit functions; v) audit of the probity and propriety of administrative decisions
taken within the audited entity; and vi) reporting of any other matters arising from or relating to the audit that
the SAI considers should be disclosed. 2. Performance audit includes: i) audit of the economy of administrative
activities in accordance with sound administrative principles and practices, and management policies; ii) audit
of the efficiency of utilisation of human, financial and other resources, including examination of information
systems, performance measures and monitoring arrangements, and procedures followed by audited entities for
remedying identified deficiencies; and iii) audit of the effectiveness of performance in relation to the
achievement of the objectives of the audited entity, and audit of the actual impact of activities compared with
the intended impact. 3. The Office of the Comptroller General of the Republic of Chile reports that it does not
conduct performance audits drawing reference to the institution’s Organic Law that states that it may not audit
the “merit” of political or administrative decisions (Law 10 336, Art. 21b). However, the CGR reports that it
may examine issues of the economy, efficiency and effectiveness (or matters that INTOSAI considers to be a
part of performance audit) in its ex post compliance audit assignments.
The CGR categorises its ex post audit assignments into ten groups, the majority of
which focus on evaluating the administration’s compliance with laws and regulations
(Table 1.7). Integral random audits (auditoría integral aleatoria) were introduced in 2011
to examine the macro-processes of audited entities with the objective of obtaining a
general view about the entity’s operations. The origin of the name of these audits –
“random” – reflects the approach to the selection of the audits in 2011. However, since
2012, the audits have been selected based on a risk-based approach, using concepts of
materiality and risk. Integral random audits are broad in their scope and typically take six
to nine months to complete, in comparison with three months for other audits. As such,
each external control unit only conducts one integral random audit every year. i.e. one
such audit is conducted every year by each of the main external control units.
Table 1.7. Main categories of the Office of the Comptroller General
of the Republic of Chile’s ex post audits
Audit category
Subject matter
Transactional
Compliance of operations and transactions with laws, regulations and administrative law;
adequate calculations and registry, validity of supporting documents
State financial statements
Adherance of management of operations and cash flows to accounting principles and legal
compliance
Programme and project
The compliance with relevant laws, validity of documents and recording of transactions in
projects and programmes
Environmental compliance
The enforcement of environmental legislation, treaties, legislation and international
agreements by entities responsible for environmental compliance
International credit
Adherance of internationally funded projects to international auditing standards and
procedures; audit of cash flows, contract compliance, internal control evaluation
Internal control
Infrastructure investment
Strengths and weaknesses of the internal control system
The technical and administrative activities of entities responsible for public works;
coherence of public procurement process; proportionality and justification of any changes to
original objectives; legal and regulatory compliance
Accounting processes relate to contractual arragements with officials, remuneration and
benefits
Remuneration and personnel
management controls
IT systems
Verifies the opportunity, quality and reliability of the information maintained by public
entities; compliance with ICT relevant regulations
A comprehensive type of audit that encompases transactional, remuneration and personnel
management control and infrastructure audits, etc.
Integral audit
Source: Based on interviews with the CGR.
The CGR conducted, on average, 1 100 ex post audits annually between 2008 and
2012, peaking at approximately 1 550 in 2008 and declining to approximately 900 in
2012 (Figure 1.4A). In 2012, the CGR audited 747, or approximately 33.8% of all central
government public entities, and 449, or approximately 55.5% of all municipal entities
(Figure 1.4B-C). “Transactional” audits are by far the dominant audit assignment
conducted by the CGR, and account for 60% of all ex post audit assignments
(Figure 1.4D).
As a result of a process of continuous improvement, a number of changes were
introduced in 2010 to standardise ex post audit processes and guarantee standards of
quality. These included sample methodology, standard tests per audit type and the
incorporation of the Integrated System for Audit Control (Sistema Integrado para el
Control de Auditorías, SICA). A greater depth of the analysis was achieved, with an
overall increase of the number of hours per audit and an overall reduction of the total
number of ex post audits conducted.
Figure 1.4. Office of the Comptroller General of the Republic of Chile’s
ex post audit assignments
A. Number of audits (2007-12)
2 000
1 500
1 000
500
0
2007
2008
2009
2010
2011
2012
Figure 1.4. Office of the Comptroller General of the Republic of Chile’s
ex post audit assignments (cont.)
B. Central public entities audited (% coverage over total entities)
2007
2008
2009
2010
2011
2012
100
80
60
40
20
0
Ministries, Centralised Decentralised
Public
departments
services
services
enterprises
and regional
secretariats
Public
universities
Public
hospitals
Tribunals
Other central
entities
TOTAL
CENTRAL
C. Municipal public entities audited (% coverage over total entities)
2007
2008
2009
2010
2011
2012
100
80
60
40
20
0
Municipalities
Municipal
Municipal health
corporations and
departments
foundations
Municipal
education
departments
Cemeteries
Othermunicipal
entities
TOTAL
MUNICIPAL
Note: In 2010 there was a change in the criteria followed by the CGR vis-à-vis the coverage of municipal
audits, based on risk and relative importance criteria. As a result, the total number of entities was reduced from
9 063 in 2008 to 589 in 2010, and the percentage coverage as a result is higher.
D. Types of audits, 2012
Audits of transactions
Audits of international loans and grants
Audits of infrastructure investment
Audits of programmes and projects
Audit on remuneration and human resource management
Integral random audits (AIA)
Audits of environmental compliance
Other
Audits of information and communication technology
Note: The reference to tribunals refers to the CGR’s audits of the use of bank accounts by the courts to receive
payments (e.g. bails, fines, deposit, guarantees, etc.) and pay back that money as may be appropriate. The CGR
does not audit the judiciary.
CGR, Santiago.
The CGR may undertake special investigations to examine matters that have been
reported by citizens, public officials and members on Congress or officials of the CGR
themselves (Figure 1.5).
Figure 1.5. Office of the Comptroller General of the Republic of Chile’s special investigations
A. Total number
5 000
4 000
3 000
2 000
1 000
0
2007
2008
2009
2010
2011
2012
B. According to party initiating the special investigation
Congress
Other (executive authorities, citizens, internal CGR requests)
100%
80%
60%
2 063
3 799
528
502
792
2 802
40%
20%
233
266
0%
2007
2008
144
2009
156
101
2010
2011
164
2012
Note: As of 2010, the CGR differentiates between “low complexity investigations” coded as ARA and special
investigations, coded as INVE, for the purposes of proper monitoring of time and effort and quality control.
CGR, Santiago.
As part of its fiscalization role, the CGR may also undertake disciplinary action
(procedimientos disciplinarios) on the public entities subject to its control, in order to
establish facts and determine, if applicable, administrative responsibility of civil servants.
Displinary actions can be of two types: administrative matters and special procedures as
they relate to violations in the use of official vehicles (as regulated by Decree
Law 799/1974). Disciplinary procedures on administrative matters include, among others,
infringements of active and passive transparency requirements under the Transparency
and Public Access to Information Law (Law 20 285, Art. 49). The CGR’s administrative
disciplinary procedures for infringements of the Access to Information Law are based on
an agreement between the CGR and the Council for Transparency (Consejo para la
Transparencia). This council is a constitutionally autonomous body created by the
Transparency and Public Access to Information Law. The council is tasked with:
i) promoting the principle of transparency and expanding the right of access to public
information; ii) guaranteeing the right of access to public information by ensuring its
accessibility, enforceability and availability, and supervising the performance of the
duties on transparency; and iii) improving regulation of transparency and the right of
access to information. A key difference between administrative matters and disciplinary
procedures is that when instructing the latter, the CGR may directly impose sanctions.
The CGR’s accounting function includes setting public accounting standards
and preparing the consolidated general government accounts
The CGR is responsible for establishing public sector accounting standards for all
public entities. The CGR Organic Law establishes that the Comptroller General may
propose to the President of the Republic provisions that it considers necessary to establish
and standardise the accounting methods and procedures of public entities under its
oversight (Law 10 336, Art. 20). This is reaffirmed in the State Financial Administration
Organic Law (Decree Law 1 263/1975, Arts. 63-68). The arrangements for setting public
sector accounting standards in Chile is different compared with the benchmark countries
and many OECD countries (Tables 1.8 and 1.9). The majority of OECD countries locate
responsibility for setting public sector accounting standards in the central budget
authority or finance ministry. In a number of countries, however, the SAI participates in
an advisory body to the central budget authority or finance ministry on the accounting
standards (e.g. Denmark, European Court of Auditors, Portugal and South Africa) or
provides an opinion on the standards themselves (e.g. Costa Rica, Korea and Spain).
Indeed, the Lima Declaration notes that accounting standards should only be adopted
after agreement with the SAI (INTOSAI, 1977, Section 12).
Table 1.8. Responsibility for setting public sector accounting standards
Central budget
authority/finance
ministry
Central budget authority/
finance ministry with
recommendations of advisory
board
Independent board
appointed by central
budget authority/
finance ministry
Public-private sector
standards body
Other
Costa Rica, Italy,
Peru, Spain
Denmark, Korea
Portugal, South Africa
Australia,
European Court
of Auditors
Brazil, Chile, Mexico
Notes: Australia: The Australian Accounting Standards Board covers both the private sector and the public
sector; the separate Public Sector Accounting Standards Board and the former Australian Accounting
Standards Board were merged in 2000. Brazil: The Brazilian Institute of Chartered Accountants (Conselho
Federal de Contabilidade) sets Brazilian public sector accounting standards and the National Treasury
Secretariat sets accounting standards aiming to guide the local and central governments to provide information
for the consolidation of accounts. Chile: Office of the Comptroller General of the Republic. Denmark: In 2008,
the government of Denmark established an advisory committee, on the suggestion of the National Audit Office
of Denmark, to guide the Minister of Finance on the development and maintenance of governmental
accounting. The committee includes representatives of the National Audit Office of Denmark. Israel: Israeli
Government Accounting Standards Board. Korea: Ministry of Strategy and Finance with advice from National
Accounting System Deliberation Committee. Mexico: National Council for the Harmonisation of Accounts
comprised of 13 members of the 3 levels of government with responsibility for establishing parameters
(guidelines) that must be adopted for public accounting based on best international practice. Peru: Dirección
Nacional de Contabilidad Pública. Portugal: Comissão de Normalização Contabilística since 2012; previously
this task was committed to a specific body dedicated to public accounting setting (CNCAP). South Africa:
Accounting Standards Board, constituted jointly by Institute of Public Finance and Auditing, South African
Institute of Chartered Accountants, the Auditor-General of South Africa and the Department of State
Expenditure. The Office of the Accountant General issues a preparation guide on financial statements to be
adopted by government departments per financial year.
Source: Adapted from OECD Budget Practices and Procedures Survey, Q. 63 “How are the technical standards
for the budget and related documents and the technical accounting standards for financial statements
determined?”; OECD (2013), “Countries’ responses to the 2013 Accruals Questionnaire”, 13th Annual OECD
Public Sector Accruals Symposium, Paris, 7-8 March.
Table 1.9. Role of supreme audit institution in setting public sector accounting standards
Sets standards
Participates in advisory board
Provides commentary on standards
No role
Chile
Denmark, European Court
of Auditors, Portugal, South Africa
Costa Rica, Korea, Spain
Australia, Brazil, Israel, Italy
Notes: Australia: The Australian National Audit Office provides comments on exposure drafts to the Australian
Accounting Standards Board to share a public sector view. This typically occurs through the Australasian
Council of Auditors-General, which represents auditors-general of various audit jurisdictions across Australia,
New Zealand, Fiji and Papua New Guinea. By convention, a member of the Australasian Council of
Auditors-General has also held a membership position of the Australian Accounting Standards Board.
Government entities are required to comply with Australian Accounting Standards as well as the Finance
Minister’s Orders. The Finance Minister’s Orders are a legislative instrument which sets additional reporting
and disclosure requirements for Commonwealth government entities. The Finance Minister’s Orders are issued
by the Finance Minister with support from the Department of Finance and Deregulation. The Australian
National Audit Office provides feedback and comments on draft changes to the Finance Minister’s Orders.
Costa Rica: According to Article 93 of Act 8 131, the Ministry of Finance must prepare and propose the
government accounting standards, the SAI must issue an opinion regarding the proposal. Denmark: In 2008,
the government of Denmark established an advisory committee, on the suggestion of the National Audit Office
of Denmark, to guide the Minister of Finance on the development and maintenance of governmental
accounting. The committee includes representatives of the National Audit Office of Denmark. European Court
of Auditors: The European Court of Auditors is an observer in the committee advising the Accounting Officer
on the accounting rules. The accounting rules are based on International Public Sector Accounting Standards.
Korea: Each public entity shall ask the Korean Board of Audit and Inspection for an opinion on a bill or draft
decree enacting, amending or repealing a law or decree concerning the accounting of the state; enacting,
amending or repealing a law or decree concerning the bookkeeping of receipt or decree concerning the
bookkeeping of receipt or disbursement of cash, articles and securities of the state; enacting, amending or
repealing a law or decree which may affect the powers of the Korean Board of Audit and Inspection, for
instance, relating to the interpretation of accounting laws or decrees (Korean Board of Audit and Inspection
Act, Art. 49). Portugal: The Portuguese Court of Audit is represented in the national Commission for
Accounting Standardisation which has the mission of issuing rules, opinions and recommendations, in the
accounting domain, to private sector and public sector entities, in order to establish and ensure accounting
procedures harmonised with European and international rules of the same nature, thus contributing to the
development of high-quality standards of financial information and reporting. South Africa: The Public
Finance Management Act, Section 87, establishes an Accounting Standards Board to set the accounting
standards for the public sector. It stipulates that the Minister of Finance must consult the Auditor-General of
South Africa when appointing members and the chair of the Accounting Standards Board; and establishes
regulations concerning the standards set by the Accounting Standards Board, as well as the qualifications,
remuneration and tenure of members of the Board. At present the Auditor-General of South Africa is one of the
ten members of the Accounting Standards Board.
to Q. 7.
In addition, the CGR manages the National General Accounting System (Sistema de
Contabilidad General de la Nación, SICOGEN). Through SICOGEN, the CGR receives
and validates monthly accounting reports of public entities and municipalities and
conducts analysis of the information’s compliance with the CGR’s accounting
regulations. SICOGEN co-exists with the State Financial Management Information
System (Sistema de Información para la Gestión Financiera del Estado, SIGFE) operated
by the Ministry of Finance’s Budget Directorate. The creation of SIGFE was intended to
merge the government’s then budgeting control system (Sistema de Información de la
Administración Presupuestaria, SIAP) and SICOGEN as the two systems were
duplicative of one another and not integrated with those subsidiary systems in the public
sector entities (World Bank/IADB, 2005). However, SIGFE did not ultimately merge
these two systems and in fact, SIGFE does not include information at the municipal level.
The co-existence of SIGFE and SICOGEN meant that until 2008, public entities reported
different types of information to the Budget Directorate and the CGR. As of 2008,
however, the CGR eliminated this requirement and used directly the information
collected by SIGFE. However, while the base figures are the same, there are some
differences in methodology, coverage and frequency of the Budget Department’s
(Dirección de Presupuestos, DIPRES) and the CGR’s information which makes
cross-checking and reconciliation difficult. The CGR is in the process of developing a
new system, SICOGEN II. This system will seek to complement, rather than substitute
SIGFE by: i) using it as a key information provider; and ii) including municipalities,
public corporations and universities (currently not covered by SIGFE). The information it
generates will be shared with the executive.
It should be noted that fiscal policy is reported and assessed on the basis of fiscal
statistics collected through SIGFE and classified by the Ministry of Finance broadly
following the directions of the IMF 2001 Handbook of Fiscal Statistics. The classification
for accounting and fiscal statistics are different from one another and it is very difficult to
trace one set of accounts to the other. Fiscal statistics are not subject to audit by the CGR
and are published under the authority of the Ministry of Finance alone.
Chile is introducing International Public Sector Accounting Standards (Normas
Internacionales de Contabilidad del Sector Público, NICSP in Spanish) a process which
began in 2011 and is expected to be completed in 2015. The CGR also prepares the
consolidated general government accounts and makes them publically available in May
each year, i.e. five months after the end of the fiscal year. The CGR’s consolidated
government report, Informes de Gestión Financiera del Estado, includes the budgetary
position, financial position and balance sheet of the general government sector
(Law 10 336, Art. 144; Decree Law 1 263/1975, Art. 69). The CGR Organic Law
establishes that the Comptroller General must provide the President and both houses of
Congress, no later than April of each year, with the year-end consolidated government
report. This report is to include the budgetary, financial and property of the state for the
previous fiscal year (Law 10 336, Art. 142).
During 2012, the CGR received 11 500 monthly accounting and budget reports, of
which the CGR has objections to 1-2% of information related to public services and
objections to 10-15% of the information related to municipalities. Any objections by the
CGR to the accounting information received must be addressed by the public entities.
More recently, the CGR has sought to redesign its accounting function from that of
collection of information to place greater emphasis on the production of reports
containing consolidated information. For example, in 2011 the CGR began producing
reports focusing on the structure and financing of the higher education sector and public
universities (CGR, 2011a; 2012b). Chapter 2 discusses these reports in more detail.
The CGR’s judicial function establishes civil responsibility of public officials
in the case of non-compliance with government regulations related to the use
of public funds
The Constitution (Art. 98) gives the CGR authority to examine and judge the
accounts of individuals in charge of public resources under the Comptroller General’s
oversight, with the purpose of assesing any civil responsibility over the loss of all or part
of the assigned public resources. If an ex post audit assignment or special investigation
gives rise to any objection (reparo), this will be transferred, at the request of the relevant
division head or regional comptroller, to the Tribunal of Accounts (Tribunal de Cuentas),
an independent court located within the organisational structure of the CGR. The
objection must clearly identify the defendants, outline the facts and the legal basis for the
trial and state the proposed settlement (Law 10 336, Art. 107b). The CGR Organic Law
provides the legal rules for the trial of accounts, including the appeal of the tribunal’s
decision (Law 10 336, Arts. 95-130). The existence of the judicial function is similar to
the SAI of Brazil, Costa Rica, Italy, Portugal and Spain (Table 1.10).
Table 1.10. Existence of judicial powers of supreme audit institutions
Yes
No
Brazil, Chile, Costa Rica, Italy, Portugal, Spain
Australia, Denmark, European Court of Auditors,
Israel, Korea, Mexico, Peru, South Africa
The Deputy Comptroller General serves as the judge of the Tribunal of Accounts of
the First Instance. The Comptroller General and two lawyers appointed by the President
of the Republic on the proposal of the Comptroller General serve as the judges in the
Tribunal of Accounts of the Second Instance. Throughout the trial of accounts, the
patrimonial interests of the state are represented by the CGR Prosecutor (Fiscal). The trial
process begins with the public official being notified of the case and the opportunity to
respond to the allegation. The public official is obliged to answer the allegation within
15 days from the time of the notification. The reply must be accompanied by all
documents the defendant deems appropriate for his/her defence. If the objections are not
answered within the statutory period, the judge of first instance will declare default
ex oficio solely through the certificate that will be issued by the clerk of the court, unless
it decides to grant extension of the time. After the Tribunal of Accounts of the First
Instance has concluded its verdict, the public official and/or the CGR Prosecutor may
appeal the decision to the Tribunal of Accounts of the Second Instance within 15 days.
The number of cases examined by the CGR’s Tribunal of Accounts has increased
steadily since 2007, following the introduction of new internal operating procedures
(Figure 1.6). Chapter 5 discusses the introduction of new internal operating procedures
within the CGR.
Figure 1.6. Cases entering the Office of the Comptroller General of the Republic of Chile’s
Tribunal of Accounts
According to level of government
National (central) administration
Municipal administration
200
150
100
50
0
2007
2008
2009
2010
2011
2012
CGR, Santiago.
The CGR plays a formal role in guiding public sector internal audit units,
though this function is shared with the Council of Government’s General
Internal Auditors
The CGR Organic Law (Law 10 336/2009, Art. 18) states that each public sector
entity under the control of the CGR must establish an internal audit unit with a broad
mandate to evaluate the level of economy, efficiency and effectiveness of the use of
public resources and achievement of the institution’s objectives. Moreover, the CGR
Organic Law (Law 10 336, Art. 18) and the Organic Law on the State Financial
Administration (Decree Law 1 263) states that the CGR is responsible for supervising and
guiding the activities of internal audit units within public entities. The role of the CGR in
guiding public sector internal audit is similar to the SAIs of Costa Rica, Denmark and
Portugal (Table 1.11). In other benchmark countries, this function is fulfilled by other
parts of the administration like Brasil, Italy or Mexico (Table 1.12).
Table 1.11. Role of supreme audit institutions in co-ordinating public sector internal audit
Yes
No
Chile, Costa Rica, Denmark, Korea, Portugal
Australia, Brazil, European Court of Auditors, Italy, South Africa, Spain
Notes: Chile: The Office of the Comptroller General of the Republic of Chile Organic Law (Law 10 336,
Art. 18) and the Organic Law on the State Financial Administration (Decree Law 1 263) state that the Office of
the Comptroller General of the Republic is responsible for supervising and guiding the activities of internal
audit units within public entities. Costa Rica: The Act on Internal Control assigns a leading (rectory) role to the
Comptroller General of the Republic on internal audits of all public institutions. The rectory is performed by
issuing regulations for internal audits and reviewing internal audit work plans. Denmark: It is clarified in the
Auditor Generals Act (2012) § 9 that the Auditor-General can arrange audit tasks with internal audit bodies in
the ministries or other administrative entities. This paragraph is vividly used and the National Audit Office of
Denmark depends on well conducted audit of the internal audit entities to ensure a qualified final audit in all its
audit products. The National Audit Office of Denmark also co-operates with the Institute of Internal Auditors
and has hosted two national conferences on “Trends in the Development of Public Audit” and “The Value of
Public Sector Auditing”. The National Audit Office of Denmark has created a website directed at internal
public auditors. Korea: The Board of Audit and Inspection may provide necessary support for the development
of internal audit and inspection work and efficient conduct of audit and inspection work. The heads of central
government agencies, metropolitan governments and provincial governments, and government-invested
organisations shall, if necessary, in order to avoid duplication of audit and inspection, discuss their audit and
inspection plans with the Board of Audit and Inspection. The Board of Audit and Inspection may, when it is
recognised that the head of the internal audit and inspection unit of an organisation under the provisions of §2
is markedly negligent of audit and inspection work, recommend his replacement to the appointing authority or
the appointment recommending authority concerned (Board of Audit and Inspection Act, Art. 30-2). Portugal:
Under the law, the internal control departments of the public administration are bound to inform the court of
their activity plans and reports and send it their actions reports whenever they may be of interest to the court.
The President of the Court may also meet with the inspector generals and auditors of the public administration
in order to promote the exchange of information on the activity plans of the court and the internal control
departments and the harmonisation of internal and external control criteria. Members of the Court’s staff
provide training to public officials on several matters related to public management, such as public
procurement, local indebtedness, public management control, or ethics and deontology in public services.
to Q. 8.
Table 1.12. Institutions’ arrangements for internal audit within the public administration in Chile and selected countries
Country
Australia
Brazil
Chile
Existence of internal audit units within public entities
Yes
Centralised within the Office of the Comptroller
General for direct administration; individual audit
units exist for indirect administration
Yes, internal audit units
Existence of audit
boards/audit committees
Yes
No
No
Existence of separate
financial inspection body
No
No
No
Costa Rica
Denmark
Israel
Italy
..
Yes, but only in some public entities
Every public body
Yes, provided by independent performance
evaluation bodies
No
No
No
No
No
No
No
Ministry of Economy and Finance; State
General Accounting Department (central);
territorial accounts offices (regional)
Korea
Mexico
Peru
Internal audit units
Internal control offices
Yes, institutional control bodies – some in the Office
of the Comptroller General and in some public
entities
All ministries and most of the public sector, except
for smaller entities
Yes
Yes
No
No
No
No
No
No
General Inspectorate of Finance, Ministry
of Finance
No
General Control and Audit Office (IGAE) for
central administration, separate general
control and audit offices for autonomous
communities and local authorities
Portugal
South Africa
Spain
Yes
No
No
Internal audit co-ordination body
None
Secretariat of Federal Internal Control, Office of the
Comptroller General of the Union (CGU)
Office of the Comptroller General of the
Republic (CGR); Council of Government’s
General Internal Auditors (CAIGG)
Office of the Comptroller General of the Republic
National Audit Office of Denmark
..
Independent Commission for the Evaluation,
Integrity and Transparency of Public Administration
(CIVIT); Ministry of the Economy and Finance;
State General Accounting Department
Board of Audit and Inspection
Ministry of Public Administration
Internal Audit Co-ordination Council
..
General Control and Audit Office (IGAE)
Notes: ..: Not available. Financial inspection is usually understood as an ex post control activity exercised by either inspectors of a centralised control body, who are independent
from the entity they inspect, or inspectors working in a separate unit of the entity they inspect. The aim of the financial inspection is to rectify major irregularities and
dysfunctions and to impose administrative sanctions.
Denmark: An internal audit unit may be organised by agreement between the minister concerned and the Auditor-General (Section 9 of the Auditor General Act, hence
commonly known as a “Section 9 agreement”) for individual institutions, or for institutional or management areas. Internal audit extends to several ministerial remits at different
levels, including the following: Ministry of Finance; Ministry of Defence; Ministry of Food, Agriculture and Fisheries; Ministry of Taxation; Ministry of Justice; and Ministry of
Transport. The duties which internal auditors carry out and the part of the group concerned which is covered by the audit differ from ministry to ministry. In the Ministry of
Finance internal auditors audit all the group’s agencies, whereas in some other ministries internal audits are more focused both in terms of the areas audited and the project
portfolio. The following section is primarily based on how internal audits are carried out in the Ministry of Finance. Italy: The Italian public administration has not developed a
legal basis for an internal audit in the strict sense of the term. Nevertheless, many of the tasks that are part of an internal audit, above all financial and accounting activities, are
performed by the offices of the Ministry of the Economy and Finance (central accounts offices and territorial accounts units), with the aim of increasing the efficiency and
efficacy of public expenditure. No laws or regulations refer to internal audits and no apparently equivalent terms indicate the function of internal audit in the strict sense of the
term. This applies particularly to the central administrations of the state (ministries, the Prime Minister’s Office, etc.). Portugal: The Internal Audit Co-ordination Council is
chaired by the director of the Ministry of Finance’s internal audit unit and its members are the directors of other line ministries’ internal audit units (second level). The council
consists of 15 members, which is the current equivalent to the number of ministries.
Source: Adapted from European Commission (2011), Compendium of the Public Internal Control Systems in the EU Member States, 2012, European Union, Brussels.
In 2012, the CGR created an online Portal for Internal Audit Units (Portal para las
Unidades de Auditoría o Control Interno) in order to support communications and share
information with internal auditors in the central and municipal government. The portal
serves both as a means of CGR communication and information sharing and also a means
for discussion and knowledge sharing among internal auditors. For example, the portal
makes available CGR news, determinations, court of accounts’ decisions regarding the
actions of internal auditors, frequently used norms, accounting norms, INTOSAI norms,
documents of interest, and a directory of approximately 1 000 government internal
auditors. In addition, the portal includes a discussion forum structured around
four themes: i) matters spanning across levels of government; ii) matters related to the
central government sector (i.e. ministries, agencies and public enterprises); iii) matters
related to the municipal sector; and iv) matters related to public sector accounting.
The CGR’s responsibilities for internal audit are shared with the Council of
Government’s General Internal Auditors (Consejo de Auditoría Interna General de
Gobierno, CAIGG), located under the Ministry of Finance. The CAIGG was established
in 1997 by Supreme Decree 12 as an advisory body to the President of the Republic to
co-ordinate the internal control and internal audit system of central public entities. The
CAIGG is responsible for proposing policies, plans, programmes and internal control
measures for the public administration and individual public entities to strengthen
management practices. The function of the CAIGG was broadened in 2005 to incorporate
promoting integrity and transparency as well as the prevention of corruption,1311
reflecting the government’s adoption of the Inter-American Convention against
Corruption and the OECD Convention on Combating Bribery of Foreign Public Officials
in International Business Transactions.
The CAIGG is composed of the General Council, Technical Advisory Committee
(Comité de Asesoría Técnica) and Executive Secretariat (Secretario Ejecutivo). The
General Council consists of a group of six high-level public officials from the Ministry
General Secretariat of the Presidency and the Ministry of Finance, plus the
“Auditor-General” serving as executive secretary. The Technical Advisory Committee is
made up of the internal auditors from every government ministry and is chaired by the
Auditor-General.
In 2012 the CGR began working with the CAIGG in response to concerns of
overlapping and sometimes differing obligations and tools for the internal audit units to
follow. For example, the CGR and CAIGG have established different guidelines for the
formulation of risk matrices by the internal audit units. The CGR has established an
internal working group to facilitate closer co-ordination and collaboration with the
CAIGG. Chapter 4 discusses the interaction between the CGR and internal audit.
The CGR plays an important role in the overall anti-corruption efforts in
the public sector, including both prevention and detection of fraud and
corruption
The CGR is widely recognised as playing a significant role in Chile’s overall integrity
and anti-corruption efforts. Similar to the SAI of Israel (Table 1.13), this notion is not
part of a formal national strategy but rather an expression of the CGR’s independence and
its mandate. Moreover, the CGR recognises and partners with a number of public entities
and autonomous institutions that play complementary roles in this regard, including the
Council for Transparency (Consejo para la Transparencia), the Public Prosecutor
(Fiscalía), SEGPRES or the Chamber of Deputies. As an expression of this commitment,
the CGR has led a horizontal collaboration and information sharing project with the
Public Prosecutor and the State Defence Council (Consejo de Defensa del Estado) – in
order to facilitate the detection and enforcement of corrupt practices within the public
sector. The CGR helps to detect administrative, civil and criminal misconduct through its
audit work and to bring this to the attention of the State Defence Council or the Public
Prosecutor. The CGR also supports the work of these other bodies through its role in
processing and storing public officials’ disclosures of incomes and assets. In addition, the
CGR participates in the internal government committees for the Open Government
Partnership, Mechanism for Follow-Up on the Implementation of the Inter-American
Convention against Corruption and Asia Pacific Economic Co-operation.
Table 1.13. SAIs playing a formal role in national anti-corruption strategies
Yes
No
Brazil, Chile, Costa Rica, European Court of Auditors,
Italy, South Africa
Australia, Denmark, Israel, Korea, Portugal, Spain
Notes: Brazil: The National Strategy for Combating Corruption and Money Laundering involves approximately
60 public entities and civil society organisations, directly or indirectly, in preventing and combating corruption
and money laundering. The Court of Accounts is an active member of the National Strategy for Combating
Corruption and Money Laundering and is responsible or participates in several actions. Costa Rica: The
Comptroller General of the Republic, the Office of Ethics and the Costa Rican Institute on Drugs, have an
anti-corruption agreement that defines the national strategy on the topic. European Court of Auditors:
Formalised in the Stockholm Programme, one of the ECA’s tasks is to carry out screenings of the major antifraud and corruption legislation and systems to ensure that they provide adequate protection against fraud and
corruption and do not open up opportunities for fraud within the EU. Israel: Although the State Comptroller
and Ombudsman considers itself a leading force in the fight against corruption, that notion is not part of a
national strategy but rather an expression of the State Comptroller’s independence. According to its mandate
set by law, the State Comptroller examines, inter alia, the legality, moral integrity and orderly management of
the audited bodies; so the fight against corruption is part of the SAI’s ongoing audit function. Accordingly, the
State Comptroller and Ombusdman institution has conducted a number of audits which led to criminal
proceedings (by the Attorney General) against prominent public figures for acts of corruption. Moreover, the
State Comptroller also serves as Israel’s Ombudsman (Public Complaints Commissioner). Under this capacity,
he may investigate a complaint by a whistle-blower – an employee of an audited body about an injurious act by
which his superior reacted to his reporting of any acts of corruption committed in the body in which the
complainant is employed. The Ombudsman may make any order he deems right and just, including a
provisional order, to protect the rights of the employee, having regard to the proper functioning of the body in
which he is employed. Where the complaint relates to the dismissal of the employee, the Ombudsman may
order revocation of the dismissal or the award of special compensation to the employee, in money or in rights.
The Ombudsman may order the transfer of the employee to another post in the service of his employer. The
same applies to a complaint by an employee who is an internal auditor in an audited body, relating to his
removal from that post or to an act contrary to the provisions of any law, regulation or agreement, which is
directly injurious to or directly withholds a benefit from the complainant and which was committed by his
superior in reaction to his activities in fulfilling his duty. South Africa: The Auditor-General of South Africa
participates in relevant anti-corruption forums and co-ordinating bodies. The Auditor-General of South Africa
has also entered into memorandums of understanding with key institutions charged with fighting corruption.
One of the Auditor-General of South Africa’s strategic goals is, through leadership interaction, to facilitate
insight by those charged with governance into the extent to which poor internal controls and unaddressed risk
areas are potential breeding grounds for fraud and corruption. The Auditor-General of South Africa’s role with
regard to the training of senior government officials is limited to providing training material to the government
training authority on the role, functions and value-added role of the Auditor-General of South Africa. With
regard to the training of members and staff of legislatures, the Auditor-General of South Africa annually
participates in training interventions, focusing on training in the utilisation of audit reports for effective
oversight, as well as good governance principles. Spain: The SAI of Spain does not have a formal role in
national anti-corruption strategies; it is an expression of the SAI’s independence and mandate.
to Q. 11.
The CGR is responsible for adopting measures to ensure the obligation of presenting
the declaration of assets and private interests by public officials, as well as the adequate
and timely procedures of information. Approximately 17 500 public officials are required
to submit online declarations of private interests within the national (central) government
of Chile. The location of this responsibility within the SAI in Chile is similar to that in
Costa Rica, Israel and Italy (Table 1.14). In other countries the responsibility lies with the
central authority for the public administration, e.g. the Australian Public Service
Commission, the Ministry of Public Administration and Security in Korea, the Ministry
of Public Administration in Mexico, the Ministry for Finance and Public Administration
in Spain. The CGR verifies that disclosure forms were submitted and that the necessary
information was provided by public officials. Failure to submit information, the late
submission of information and submission of false information is subject to criminal and
administrative disciplinary procedures. Both the remuneration of civil servants and the
income and asset disclosures are public.
Table 1.14. Role of supreme audit institutions in the development and maintenance of public
officials’ private interest (income and asset) disclosures in Chile and selected countries
Yes
No
Chile, Costa Rica, Israel
Italy, Korea, Portugal, South Africa, Spain
Notes: Australia: The Australian Public Service Commission, in consultation with public entities, develops
broad policy guidance on private interest disclosures. Chile: The Office of the Comptroller General of the
Republic is responsible for adopting measures to ensure the obligation of presenting the declaration of interests
by public officials, as well as the adequate and timely procedures of information sharing. Costa Rica: Every
year, public officials must provide the Office of the Comptroller General with a sworn statement of their
personal assets and liabilities (required by the Law against Corruption and Illicit Enrichment in Public Sector
8 422). Denmark: Responsibility of the Prime Minister’s Office. Israel: Since 1977, the State Comptroller and
Ombudsman provides independent oversight of income and asset disclosures made by public officials, namely
ministers (including the Prime Minister) and deputy ministers. The norms used by the State Comptroller and
Ombudsman in fulfilling this task were updated in 2003 when the government promulgated the Rules for the
Prevention of Conflicts of Interest by Ministers and Deputy Ministers. The application of those rules is
reviewed by the State Comptroller, who is authorised to notify the Knesset if the rules have been breached.
Each minister and deputy minister must submit to the State Comptroller, upon entering office and each year, a
declaration on their income, assets, occupations and functions. The rules impose duties and limitations
regarding the above, and the State Comptroller is charged with examining compliance. Italy: Department for
Public Administration. Korea: Ministry of Public Administration and Security. Mexico: Ministry of Public
Administration. Portugal: Constitutional Court. Spain: Conflicts of Interest Office under the Ministry for
Finance and Public Administration.
Source: OECD (2012), Survey on Managing Conflict of Interest, OECD, Paris.
In May 2011 the government of Chile introduced a Public Sector Integrity Bill to the
Congress. The bill sought to strengthen existing regulations on public officials’ private
interest disclosures. Moreover, the bill unified, in one statutory instrument, all
requirements about public officials’ private interest disclosures that are currently
contained in different regulations. According to the Public Sector Integrity Bill, the CGR
is to be assigned oversight of the integrity and truthfulness of the content of the
Declarations of Interests and Assets.
The CGR does not have responsibility for auditing electoral/political financing as in
the case of the SAI of Israel, Italy, South Africa and Spain (Table 1.15). However, there
is reference to the role of the CGR in electoral financing (see Article 28 of Law 19 884 on
Transparency, Boundary and Electoral Expenditure Control). In fact, the CGR can
perform in situ audits, complementing the audit of formal aspects conducted by the
Electoral Service (SERVEL), and has exclusive authority to enforce the administrative
responsibility and corresponding sanctions relating to infranctions of the electoral law,
although no cases have been noted to date.
Table 1.15. Role of supreme audit institution in auditing political financing
Yes
No
Denmark, Israel, Italy, South Africa, Spain
Australia, Brazil, Chile, Costa Rica, European Court
of Auditors, Peru, Portugal
Notes: Denmark: There is no specific authority in Denmark entrusted with monitoring the adherence to
political financing rules by political parties, related entities or election candidates and there is no public
authority established to check the relevant accounting records of such entities and persons. However, the
National Audit Office of Denmark examines the soundness of all state accounts, i.e. checks that they are
without significant errors and deficiencies and this office is, according to the Finance Act (Section 7c),
authorised to demand accounting records from the beneficiary parties that have received public funding in
order to examine how such funding has been spent. Israel: Parliamentary groups are subject to year-round
monitoring by the Office of the State Comptroller. Italy: Shared with the Commission for the Control of
Election Expenses. In law, the presidents of the chambers and the Court of Accounts analyse the political
economy through the annual reports provided by parties, which includes the sources of financing. This system
of audits for a political party is limited to a control upon the formal compliance of reports with the
requirements of the law (controllo di legittimità) and not upon the merit (controllo di merito). South Africa:
“The Auditor-General may at any time audit any political party’s books and records of account and financial
statements relating to money allocated to the party from the Fund” (Public Funding of Represented Political
Parties Act, Art 6.6). Spain: The Court of Accounts is endowed with general authority to monitor political
financing. This responsibility is shared with the relevant audit institutions of the autonomous communities with
respect to elections to regional parliaments. Furthermore, pursuant to Article 132 of Organic Law 5/1985 on the
General Election Regime, election commissions (see §14) are also entrusted with certain oversight tasks during
election campaigns. The supervision performed by the aforementioned institutions is not only of a formal, but
also of a material, nature. In this connection, the responsible supervisory bodies are vested with wide
investigative powers to call for all necessary documents to verify that the funding received by political parties
(whether from public or private sources) complies with the legislation in force (Art. 132 and 134, Organic
Law 5/1985 on the General Election Regime; Art. 19, Organic Law 8/2007 on Political Parties Funding).
Source: Adapted from International IDEA Political Finance Database, Question 41 “Is it specified that a
particular institution(s) is responsible for examining financial reports and/or investigating violations?”,
www.idea.int/political-finance/question.cfm?id=294.
Independence
SAIs can accomplish their tasks objectively and effectively only if they are
independent of the entities that they audit and are protected against outside influence.
This is explicitly recognised in the International Standards of Supreme Audit Institutions,
specifically the “Lima Declaration of Guidelines on Auditing Precepts” and the “Mexico
Declaration on SAI Independence” (INTOSAI, 1977; 2010a). These declarations draw
attention to organisational, functional and administrative dimensions of independence.
Organisational independence is closely related with the SAI leadership – i.e. the SAI head
or members of collegial institutions – including security of tenure and legal immunity in
the normal discharge of their duties. Functional independence requires that SAIs have a
sufficiently broad mandate and full discretion in the discharge of their assignments,
including unrestricted access to information and powers of investigation. Functional
independence also requires that SAIs have the freedom to plan audit work, to decide on
the content and timing of audit reports, and to publish and disseminate them.
Administrative independence requires that SAIs be provided with appropriate human,
material and monetary resources as well as the autonomy to use these resources as they
see fit (INTOSAI, 1977; 2010b).
The CGR has a high level of independence, specified in the Constitution and the
institution’s organic law (Law 10 336). Chile’s Constitution establishes the conditions for
the appointment, term and removal of the Comptroller General. The Constitution provides
a relatively long term for the Comptroller General, though it has been reduced from life to
an eight-year fixed-term with the aim of supporting the institution’s renewal. The CGR
Organic Law establishes a number of guarantees of the functional independence of the
Comptroller General, including powers to sanction public officials who do not comply
with CGR request or that omit information in their response. The CGR also has the
authority to decide upon the content and timing of its audit reporting, and may bring these
reports to the attention of the Congress, the media or the general public as it deems
appropriate. Finally, the CGR has significant administrative authority over its human
resource and financial decision making, though the institution falls under the same legal
framework and practices as the public administration.
However, the CGR is not completely autonomous financially. The Comptroller
General has responsibility for preparing the annual CGR budget within the amounts set in
the General Budget Law (Ley General de Presupuestos). The CGR’s budget is formulated
using the same policies and procedures as other public entities, similar to the SAI of
Australia and Portugal (Table 1.17A) and submitted as a budget request to the Ministry of
Finance (in particular, the DIPRES), for consideration. If there are any differences of
opinion between the requested and allocated amounts, the Comptroller General can raise
objections to the Congress Joint Budget Commission (Box 1.3). In Congress, the amount
allocated by the DIPRES may be reduced or maintained, but, as with any other expense,
the legislature cannot increase the allotment presented by the DIPRES. A higher level of
financial autonomy has been called for by the Follow Up Mechanism to the
Implementation of the Interamerican Convention Against Corruption (MESICIC), in its
meeting of September 2013. However, it is important to note that the experience of recent
years is of mutual understanding and no major budgetary conflicts have been recorded.
Recent amendments to the Constitution support institutional renewal while
maintaining a high level of organisational independence
A 2006 amendment to the Constitution changed the term of the Comptroller General
to an 8-year fixed term with an automatic retirement at the age of 75 (Constitution,
Art. 98, as amended by Law 20 050, Art. 144). Previously, the Comptroller General was
appointed until mandatory retirement at 75 years of age. Life tenure was intended to
reduce politicisation of the position of Comptroller General by ensuring tenure spanned
across different administrations. However, many of Chile’s Comptroller Generals left
office before retirement age (prior to the 2000s) or were appointed at an advanced age
(since the 2000s) (Annex 1.A1). The use of a fixed-term, non-renewable term for the
Comptroller General is similar to the SAIs of Australia, Israel and South Africa
(Table 1.16). The eight-year term is the equivalent of two electoral terms for the lower
house and one electoral term for the upper house of the Congress – slightly longer than in
Peru and South Africa (1.4 electoral terms; unicameral) and Israel (1.75 electoral terms;
unicameral) but less than Australia (3.3 electoral terms for the lower house and
1.7 electoral terms for the upper house).
Box 1.3. Formulation of the annual budget of the Office of the Comptroller
General of the Republic
The formulation of the CGR’s budget begins at the end of March, at the initiation of the
institution’s Finance Department. The budget is prepared based on historical expenditure
information and proposed capital and ICT projects before the CGR receives an indicative budget
ceiling from the Ministry of Finance’s Budget Office (DIPRES). Prior to 2011, the CGR reports
that its division heads/regional comptrollers were not involved in the preparation of the budget.
Upon receipt of the budget proposals from each division head and regional comptroller, the
Finance Department prepares a preliminary draft budget for discussion internally with the
General Secretary and Comptroller General in mid-June. It is around this time the CGR receives
its indicative budget ceiling from the DIPRES. The CGR’s Finance Department, in co-ordination
with the Comptroller General and the division heads/regional comptrollers, subsequently revises
its budget and shares it with the DIPRES in mid-July. If the DIPRES’ indicative budget ceiling
is less than the CGR’s budget request, the Finance Department separates and prioritises nonpersonnel expenditure and submits its budget to the DIPRES. Discussions between the CGR and
the DIPRES take place in August and the CGR’s budget is transmitted to the Congress Joint
Budget Commission in mid-October with the state budget bill.
The CGR considers that the DIPRES’ approach in analysing the CGR’s budget varies
between years. In recent years the CGR reports that the DIPRES has focused more on its budget.
This attention has focused on three main topics: i) increase in the CGR’s personnel expenditure;
ii) the CGR’s infrastructure and building renovation expenditure; and iii) the CGR’s ICT
investments. In relation to infrastructure and ICT investments, the CGR reports that the
DIPRES’ analysis has been very helpful to ensure that full consideration had been given to
technical and financial issues and that adequate consideration had been given to maintenance
costs, drawing upon the DIPRES’ expertise. If there are any differences of opinion with the
DIPRES over the CGR’s budget, the Comptroller General can raise objections to the Congress
Joint Budget Commission. In general, the Congress has increasingly supported the CGR in
recent years following the improved performance of the institution. In 2012, the DIPRES
challenged some of the CGR’s budget regarding investment, but Congress granted the full
budget request.
Source: Interviews with members of the Congress of the Republic of Chile, Ministry of Finance’s Budget
Directorate, Office of the Comptroller General of the Republic.
The Constitution requires that the Comptroller General be a lawyer by profession.
Moreover, since 2006, the Comptroller General must be at least 40 years of age, have at
least 10 years of experience as a lawyer and possess other necessary requirements to vote
(Law 20 050/2006, Art. 1.44). The inclusion of selection criteria for the Comptroller
General in the constitutional and statutory framework is similar to all of the benchmark
SAIs involved in this peer review, experience, professional qualifications and age being
the most common legislated selection criteria. Some countries also include character
qualifications such for the SAIs of Brazil, South Africa and the European Court of
Auditors (Annex 1.A3). Chile’s constitutional and statutory framework does not,
however, establish any incompatibilities such as professional activities (in Brazil, Israel,
Korea, Portugal, Spain and the European Court of Auditors) and membership in a
political party (in Brazil, Israel, Korea and Portugal) (Annex 1.A3).
Table 1.16. Tenure of supreme audit institutions’ leadership in Chile and selected countries
Tenure of leadership
Country
Head of organisation
Fixed term,
non-renewable
(term in years)
Fixed term, renewable
(term in years)
Australia
Auditor-General
Brazil
9 ministers, one of
whom is elected
internally as president
for 1-2-year term
Chile
Comptroller General
Costa Rica
Comptroller General
Denmark
Auditor-General
European Court
of Auditors
28 members, one of
whom is elected
internally as president
Israel
State Comptroller
Italy
President
Korea
Chair
4
Open-ended
10
Mandatory retirement
age (years)
Not specified
8 (since 2006)
●
70
● (prior to 2006)
75
6
Not specified
6+4
3
Not specified
7
..
●
72-75 with extension
70
Commissioners
4
65
Mexico
Superior-Auditor
8
No limit
Peru
Comptroller General
7
..
Portugal
President
4
70
Members of Court
Spain
●
12 members, one of
whom elected internally
as president for 3-year
term
South Africa
Auditor-General
9
5-10
70
No limit
Not specified
Notes: ● = Yes; .. = Missing data; The statistical data for Israel are supplied by and under the responsibility of the relevant
Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and
Israeli settlements in the West Bank under the terms of international law. For full notes see Annex 1.A2. South Africa: Although
the current term is seven years, it could be anywhere between five to ten years.
The Comptroller General has the prerogatives and legal protection enjoyed by
members of the High Court (Tribunales Superior de Justicia) (Law 10 336, Art. 4).
Members of the High Court may only be removed upon reaching the mandatory
retirement age of 75 years, disability or by being deposed from their positions through a
legal sentence (Constitution, Art. 80). The inclusion of criteria for the removal of the
Comptroller General in the constitutional and statutory framework is similar to many of
the benchmark SAIs (Annex 1.A4). These statutory safeguards have existed since the
creation of the CGR in 1927. The Comptroller General has only been impeached once,
in 1945, by the legislature for failing adequately to control the executive.
The Comptroller General serves as a judge of the second instance of the Tribunal of
Accounts – an independent court located within the organizational structure of the CGR along with two lawyers appointed by the President of the Republic on the proposal of the
Comptroller General. It is recommended that the role and institutional set up of the
Tribunal of Accounts be assessed with a view to ensuring its independence and avoid any
potential conflict of interest. This can be explored in drafting a new Organic Law, but its
extensive analysis is beyond the scope of this study.
The CGR Organic Law establishes a number of guarantees of the functional
independence of the Comptroller General
The CGR Organic Law provides the Comptroller General authority to deal directly
with any public official or person who has an official relationship or has presented a
petition to the CGR (Law 10 336, Art. 9). The Comptroller General may request public
officials to provide all data and information and give instructions to public officials
necessary for the effective performance of the CGR’s functions (Law 10 336, Art. 9).
Failure to respond promptly to these requests may be penalised directly by the
Comptroller General with the disciplinary measure of a fine of up to 15-day’s pay. The
Comptroller General may suspend an official, without pay, responsible for withholding or
omitting information until such time as the information or reports requested are delivered
(Law 10 336, Art. 9). Moreover, the Comptroller General may directly or through CGR
officials, request the mandatory assistance of the forces of law and order in order to carry
out its functions in the same regard as the Ordinary Courts of Justice (Law 10 336,
Art. 8).
The norms that establish secrecy or confidentiality on certain matters do not prevent
the CGR from being provided with the information or details that it needs in order to
perform its functions. CGR officials are under the same obligation to preserve the
confidentiality or secrecy of government information (Law 10 336, Art. 9).
The CGR Organic Law establishes that the Comptroller General has the freedom to
decide the content and timing of audit reports and to publish and disseminate them. The
CGR Organic Law establishes that the Comptroller General may report on any other
matter related, or potentially related, to the investment or promise of public funds, insofar
as doubts arise with regard to the correct application of the laws concerned. However, the
Comptroller General may not intervene or report on matters that by their nature are
obviously litigious, or have been brought to the attention of the courts of justice, that are
within the sphere of competence of the State Defence Council (Law 10 336, Art. 6).
Moreover, the CGR Organic Law obligates the Comptroller General to prepare an annual
report on the management of the institution during the previous year and to share the
report with the President of the Republic and the Congress, no later than May each year.
In relation to the CGR’s legal functions, legal opinions on matters within the
institution’s sphere of competence are definitive (Law 10 336, Art. 5). The decisions and
rulings of the CGR shall be the only means capable of validating matters related to
Administrative Law (Law 10 336, Art. 6). The definitive rulings of the Comptroller
General are not open to any appeal before governmental or administrative authorities
(Law 10 336, Art. 8). The Comptroller General is also obliged to provide written response
at the request of any head of public entities with regard to any matter related to the
budget; the administration, collection, investment or destination of funds, income or any
other assets; to the organisation and operation of the public administration; to the powers
and duties of public employees, or to any other matter in which the law entitles the CGR
to intervene (Law 10 336, Art. 9).
The Comptroller General has significant administrative independence
to reallocate resources in line with the institution’s changing needs
The Comptroller General has authority to close, merge or create units, establishing to
whom officials report and assigning to them powers and assignments, as guaranteed by
the CGR Organic Law. This includes establishing regional offices and assigning powers
and assignments to these offices in order to facilitate the effective delivery of its functions
and assignments in an efficient manner. The Comptroller General is also responsible for
allocating personnel among the divisions and offices of the CGR and for appointing
officials who serve as division heads, regional comptrollers and prosecutors (Law 10 336,
Art. 51). The CGR Organic Law, however, requires that officials remain in these regional
offices for a minimum of four years, except for service needs or reasons of force majeure
(Law 10 336, Art. 24). The CGR reports to the Congress annually, and to the public, on
the use of these resources, as required by the CGR Organic Law.
The Comptroller General is free to appoint staff within the budgetary framework
approved by the Congress, including mobilising short-term expertise through honorarios
and other service contracts. CGR officials are appointed, promoted and removed at the
pleasure of the Comptroller General (exclusiva confianza del Contralor), with complete
independence from any other public authority (Law 10 336, Art. 3). The CGR’s General
Secretariat is responsible for implementing the human resource management policies of
the Comptroller General. The CGR reports that it has no interaction with the central
government’s human resource management body, the National Civil Service Directorate
(Dirección Nacional del Servicio Civil, DNSC). The CGR does not discuss, formally or
informally, patterns or guidelines established by the DNSC. However, the CGR could
benefit from engaging with the DNSC to learn of good practices and emerging trends in
human resource management within the public administration as input into its own
institutional reforms.
The CGR’s jobs categories and their accompanying levels of remuneration are
regulated by the same rules as the public administration. Decree-Law 3 551/1980
establishes the employment categories, necessary qualifications and base salary both for
CGR officials as well as for the rest of the public administration (Art. 12). Within this
framework, CGR officials are categorised in the same group as other “oversight
institutions”, including the National Competition Agency (Fiscalía Nacional Económica),
the National Customs Service (Servicio Nacional de Aduanas), the Labour Directorate
(Dirección del Trabajo) and the Superintendent of Social Security (Superintendencia de
Seguridad Social) (Decree-Law 3 551/1980, Art. 1). Law 19 187/1992 subsequently
establishes a technical category of employment specifically for the CGR. Base salaries
are set annually by an act of the Congress, although as part of this process, employee
associations may present a request of salary increase.
Regarding the management of the allocated annual CGR budge, the Comptroller
General has a high degree of budget flexibility and receives lump-sum appropriations for
personnel expenditure and materials consumables and goods expenditure. However, there
is relatively less flexibility to reallocate investment expenditure, such as that for vehicles,
machinery and ICT (Table 1.17C). The CGR is allowed to carry-over expenditures that
have been committed but not yet disbursed. It is more difficult to carry over appropriated
amounts that have yet to be committed.
Table 1.17. Budget flexibility of supreme audit institutions in Chile and selected countries
Country
Australia
A. How is the budget for the supreme
audit institution prepared?
Same
Included in
Sent
policies,
draft state
directly to
procedures
budget
legislature
as other
without
for
public
change
approval
entities
Chile
Costa Rica
No
●
Brazil
B. Budget of SAI
as a fixed ratio of
GDP/ budget
No
●
No
●
●
Denmark
●
●
Italy
Korea
Mexico
Peru
Portugal
No
No
For personnel and
materials only
No
No
No
For personnel,
materials and capital
For personnel,
No
..
For capital
For personnel,
x
South Africa
Spain
No
No
No
No
No
●
●
●
x
●
x
x
For personnel,
For personnel,
For personnel and
materials only
No
●
European Court
of Auditors
Israel
C. “Lump sum”
appropriations
No
No
For personnel,
D. Flexibility to vire (i.e. reallocate)
funds between expenditure
categories
Yes, without any limit and without
executive/legislative approval
Not possible without ex ante
legislative approval
Yes, without any limit and
without executive/legislative
approval
Flexibility to make internal
modifications without
Flexibility to allocate between
operating, capital expenditure
without executive/legislative
approval
Yes, up to certain threshold with
ex ante legislative approval
Yes without any limit, and without
Yes
Yes up to certain threshold
..
Yes, up to a certain threshold
executive/ legislative approval
Notes: ● = Yes; o = No; x = Not applicable; .. = Missing data.
Block/lump sum appropriations involve allocating a lump sum to line ministries or agencies, which are then free to determine
the best mix of economic inputs to produce their services. Australia: The budget is prepared following the same procedures as
other public entities; however, the Australian National Audit Office’s (ANAO) budget estimates are also subject to consideration
by the Joint Committee of Public Accounts and Audit. The ANAO receives a lump sum appropriation for departmental
expenses, including personnel, materials and capital. Capital injections are appropriated as a lump sum in a separate
appropriation. Costa Rica: The Office of the Comptroller General of the Republic has the ability to make internal budget
modifications- resource transfers between programmes or cost centers within the SAI- to the preapproved budget, but external
modifications or requests for extraordinary budgets must be approved and monitored by the Ministry of Finance. Denmark: The
budget for the Rigsrevisionen is approved through the Public Accounts Committee, which holds the statutory authority. Israel:
The budget of the State Comptroller is determined by the Finance Committee of the Knesset upon the proposal of the State
Comptroller, and is approved separately from the state budget. Korea: Reallocation of resources requires ex ante approval of the
Finance Ministry and legislature. Peru: Article 31 of the Law on the System of National Control provides that the CGR’s budget
will stay constant in real terms from one year to the next. A review of the budgets executed from 1998 through to the approved
budget for 2001 indicates that the approved budget for 2001 was 5% lower in nominal terms than that of 1998, which implies a
significant reduction in real terms. South Africa: The Auditor-General of South Africa’s funding arrangements are provided for
in Section 36 of the Public Audit Act. The Auditor-General of South Africa earns revenue from audit fees or services performed
in terms of its mandate, appropriations from parliament and revenue earned from its own investments. To date, the AuditorGeneral of South Africa has not required any funds from parliament to supplement its income generated through audit fees. The
Auditor-General is self-funded by way of billing auditees for audit hours worked. It generates its income through cost recovery.
Parliamentary oversight of the Auditor-General of South Africa’s funding therefore consists of annual scrutiny and approval of
the Budget and Strategic Plan. Parliament, on recommendation of the Standing Committee on the Auditor-General, annually
approves: revenue and expenditure estimates for the year ahead and projected revenue and expenditure for the next three-year
period. During the consideration of the annual budget, the Standing Committee on the Auditor-General will take note of the
Treasury’s view of the impact that the AGSA’s budget will have on the national fiscus. Spain: Court of Audit Organic Act
(Organic Act 2/1982). The Court of Audit shall draw up its own budget, which shall be incorporated in an independent section of the
General State Budget and will be subject to approval by the Cortes Generales (legislature) (Section 6). Limitations to the reallocation
of funds are outlined in the State Budget Regulations, and are established based on a combination of factors which include, but are not
limited to, the quantity, nature of the expenditure and the nature of the operation. In some cases, the approval of the full session of the
SAI or eventually the parliament may be required.
Source: OECD (n.d.), International Budget Practices and Procedures Database (v2), www.oecd.org/gov/budget/database,
responses to Q. 30: “In practice, which option most accurately describes the way in which the budget is prepared for the supreme
audit institution?” and adapted from unpublished OECD Survey of Benchmark Supreme Audit Institutions 2013, responses to
Q. 20.
Conclusions
This chapter highlighted that the CGR is an autonomous government body and is
largely considered as a co-equal branch of government with a high level of organisation
and administrative independence. However, it is recommended that the CGR reassess the
institutional setup of the Tribunal of Accounts with a view to ensure its independence and
to prevent any potential conflict of interest. Reassessment should include an evaluation of
the role of the Comptroller General, in particular, given its hierarchical role with the CGR
staff.
The CGR sees its role as contributing to good public governance and has a broad
mandate to achieve this. However, the CGR undertakes some functions that in other
countries are performed by the executive branch (e.g. ex ante control of legality – toma de
razón, TdR – and accounting). At the same time, the CGR appears to interpret some of its
statutory functions in a restrictive manner (e.g. performance audit). This can be explained
in part because the CGR’s legal framework stems from a time when government was
much smaller than it is today, and public administration far less professionalised. Still,
these features make the CGR lag behind some recent innovations in public management
in Chile. The CGR is willing to catch-up. It has initiated a process of “reform from
within”, including its processes, ICT, and workforce. This can be taken even further but,
of course, deeper changes in the CGR’s mandates would require legal reforms that would
need broad political support.
A discussion of the value added by the different functions of the CGR is necessary in
the light of the modernisation of the Chilean public sector, both past and future. Chile’s
economic and social development has been supported by good public governance. The
government of Chile, similar to governments in many OECD countries, is now investing
in building capacity to increase strategic agility. Strategic agility, together with low levels
of trust in government, may necessitate the CGR to review and reassess its functions and
assignments, within its legislative mandate, while taking appropriate action to safeguard
its independence. This is addressed in Chapter 2.
The CGR’s role of contributing to good public governance is also supported by the
institution’s high level of organisation, functional and administrative independence.
Moving forward, the CGR needs to focus its attention on its ability to be strategically
agile in order to be responsive to the changes in the public administration and Chilean
society. This is addressed in Chapter 3. However, in order to materialise the value and
benefit of its activities, the CGR also needs to change the way in which it engages with its
stakeholders, in order to position itself as a thought leader and not simply an inspection
service and to build confidence its work. This has been recognised as a strategic objective
for the CGR. It also needs to be effective at engaging with the legislature to ensure
awareness, understanding and use of its work, and with central executive authorities to
improve public management maturity models and governance arrangements. This is
discussed in Chapter 4. In parallel, the CGR will need to invest in improving the
prioritisation and ensuring quality of its audit engagements to ensure relevance and
confidence in its work. This is discussed in Chapter 5.
Notes
1.
This legislation includes the State Financial Administration Organic Law (Ley
Orgánica de la Administración Financiera del Estado – Decree Law 1 263); the
Constitutional Organic Law 18 575 regarding the General Norms of the Government
(Ley Organica Constitucional de Bases Generales de la Administracion del Estado);
Law 18 834 regarding the State Administration (Estatuto Administrativo);
Law 19 880 establishing the Administrative Procedures Governing State
Administrative Acts (Bases de los Procedimientos Administrativos que Rigen los
Actos de los Organos de la Administracion del Estado); Law 19 886 regarding the
Norms for Administrative Contracts and Services (Ley de Bases sobre Contratos
Administrativos de Suministro y Prestacion de Servicios); Law 20 285 on Public
Access to Information (Transparencia y Acceso a la Información Pública).
2.
The CGR articulates that it has between four and five main functions, depending on
the information source. The CGR’s website states four functions: ex ante audit and
interpretation of administrative law; ex post audit; judicial audit; and accounting
function. The CGR’s annual reports define that the institution has five functions,
including ex ante and concurrent audit assignments of state personnel management. In
the first instance, the ex ante and concurrent audit assignments of state personnel
management is considered part of the ex ante audit and interpretation of
administrative law.
3.
Chile’s national Anti-Corruption Strategy is available at: www.anticorrupcion.cl
(accessed 8 August 2013).
4.
Law 10 336, Art. 16 refers to services (servicios), fiscal and semi-fiscal institutions
(instituciones fiscales y semifiscales), legal autonomous organisations (organismos
autónomos), public enterprises (empresas del estado) and other statutory entities.
5.
See also CGR Legal Opinion 20 241/2008.
6.
The CGR Organic Law can give rise to confusion about the institution’s mandate. For
example, the CGR Organic Law states that the institution may audit services, fiscal
and semi-fiscal institutions, autonomous organisations, public enterprises and, in
general, all those public entities established by law, without this affecting the control
exercised by independent regulatory agencies (superintendencia). Moreover, the law
states that the CGR’s audit is independent of that exercised by the Superintendent of
Banks (Superintendencia de Bancos) over the central bank and the Banco del Estado
de Chile (Law 10 336, Art. 16). This suggests that the CGR may audit the central
bank and the Banco del Estado de Chile; which it does have authority to do so. The
current law also suggests that the CGR may audit the State Copper Company
(Corporación Nacional del Cobre de Chile, CODELCO), which it may not under
other statutes (Decree Law 1 349/1976, Art. 12).
7.
For a complete list of decentralised institutions see CGR Legal Opinion 38 427/2013.
8.
This is contrary to IMF (2003).
9.
See also CGR Legal Opinion 29 576/1992.
10.
See www.poderjudicial.cl/modulos/Transparencia_InfoPubl/Auditoria
8 August 2013).
11.
See www.bcentral.cl/acerca/estados-financieros/index.htm (accessed 8 August 2013).
(accessed
11.
See CGR Dictamine 37 839/1961.
12.
This exclusion was formalised by Law 19 817/2002, amending the CGR Organic
Law. This amendment followed a proposal introduced into the Chamber of Deputies
by the President of the Republic in 2000 that the CGR be authorised to “audit the
compliance with legal norms and safeguard the public patrimony”. Although this
amendment passed through the Chamber of Deputies and the Senate Constitutional,
Legislative, Judicial and Regulation Commission (Comisión de Constitución,
Legislación, Justicia y Reglamento del Sanado) it was challenged by a senator in the
Senate Plenary. The Senator raised a question over whether the CGR may be able to
audit the merit and convenience, including the efficiency of public entities, or have its
authority limited to compliance. The bill was subsequently returned to the Senate
Constitutional, Legislative, Judicial and Regulation Commission and revised to
prohibit the CGR from auditing the merit of administrative acts (Morales
Espinoza, 2012).
13
See Ministry of the Secretariat of the President of the Republic Supreme Decree 147.
Annex 1.A1
Comptrollers-General of the Republic of Chile, 1927-2013
Table 1.A1. Comptrollers-General of the Republic of Chile, 1927-2013
Name
Term
Prior career
Approximate term
Reason for removal
Pablo Ramírez Rodríguez
March 1927-July 1927
Former deputy and minister
4 months
Kenneth Page Oxley
Rodolfo Jaramillo Bruce
July 1927-December 1927
January 1928-January 1929
5 months
1 year
Edecio Torreblanca White
January 1929-November 1929
Stockbroker and Major of Valparaíso
Director of State Railway Company (Empresa de
Ferrocarriles del Estado) and Superintendent of
the Mint (Casa de Moneda)
Minister of Agriculture
Left office to become lawyer to the Foreign Trade Council
and Director of central bank
Left office to become director of different firms
Left office to become Director General of Public Works
10 months
Became Minister of Agriculture
Miguel Solar Formas
November 1929-February 1932
..
2 years, 4 months
..
Gustavo Ibáñez Rondizzoni
February 1932-December 1938
..
6 years, 11 months
..
Agustín Vigorena Rivera
January 1939-December 1945
6 years, 11 months
Impeached by Congress
Humberto Mewes Bruna
February 1946-June 1952
Sub-Secretary of War (1921-24), Dean of
Universidad de Chile Law School (1929-31),
Head of Chilean Postal Service (1932-33)
Minister in the Appealing Court of Valdivia
6 years, 4 months
Resigned
Luis Enrique Bahamonde Ruiz
September 1952-May 1959
Secretary, Ministry of Education
6 years, 9 months
Left office to become Minister of Territory and Colonisation
Enrique Silva Cimma
May 1959-January 1967
CGR official (Deputy Comptroller)
7 years, 8 months
Left office to become lawyer of the Supreme Court of Justice
Vacant
January 1967-August 1967
-
-
-
Héctor Humeres Magnan
August 1967-December 1977
10 years, 5 months
Political pressures near to his retirement age
Sergio Fernández Fernández
December 1977-April 1978
Former senator and minister
4 months
Left office to become Minister of Interior
Osvaldo Iturriaga Ruiz
April 1978-March 1997
19 years, 11 months
Reached retirement age
Arturo Aylwin Azócar
April 1997-August 2002
5 years, 4 months
Gustavo Sciolla Avendaño
August 2002-July 2006
CGR official
3 years, 11 months
Vacant
July 2006 – April 2007
-
-
-
Ramiro Mendoza Zúñiga
April 2007 – present
Lawyer/academic
8 year appointment
x
Note: .. = Missing data; x = Not applicable.
Annex 1.A2
Appointment, tenure and salaries of supreme audit institutions’ leadership in Chile and selected countries
Table 1.A2. Appointment, tenure and salaries of supreme audit institutions’ leadership in Chile and selected countries
9 ministers, one of whom is elected internally as president
●
Chile
Comptroller General
Costa Rica
Comptroller General
●
Denmark
Auditor-General
●
European Court
of Auditors
28 members, one of whom is elected internally as president
Israel
State Comptroller
●
6
3
7
Other
Fixed with other
position in
government
-
8
●
Set by
legislature
70
Set by executive
Fixed term,
renewable (term
in years)
Fixed term,
non-renewable
(term in years)
●
10
●
●
C. Remuneration
Mandatory
retirement age
(age in years)
Auditor-General
Brazil
B. Tenure of leadership
Open-ended
Australia
Other
Legislature
Jointly by
executive and
legislature
Leadership
Executive with
legislative
approval
Country
Executive
A. Selection and appointment of leadership
●
●
75
●
No limit
..
..
..
..
..
..
..
..
-
..
..
..
..
..
..
..
..
..
Table 1.A2. Appointment, tenure and salaries of supreme audit institutions’ leadership in Chile and selected countries (cont.)
Other
●
72
..
..
..
..
4
70
●
4
65
Fixed term,
renewable (term
in years)
Fixed term,
non-renewable
(term in years)
Other
Legislature
Jointly by
executive and
legislature
●
Fixed with other
position in
government
Commissioners
Set by
legislature
●
Set by executive
●
Chair
C. Remuneration
Mandatory
retirement age
(age in years)
Korea
President
B. Tenure of leadership
Open-ended
Italy
Leadership
Executive with
legislative
approval
Country
Executive
A. Selection and appointment of leadership
Mexico
Superior-Auditor
●
8
No limit
Peru
Comptroller General
●
7
..
4
70
Portugal
President
●
Members of Court
South Africa
Auditor-General
Spain
●
●
●
5-10
●
●
●
●
..
-
9
●
No limit
●
●
●
Notes: ● = Yes; - = Not specified; .. = Missing data. Portugal: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use
of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
The SAI of Portugal’s President is designated by the head of the state, under proposal of the government.
Annex 1.A3
Organisational independence of supreme audit institutions’ leadership in Chile and selected countries
Table 1.A3. Organisational independence of supreme audit institutions’ leadership in Chile and selected countries
Other
Membership in a
political party
Membership in a
union
Professional
activities
Other
Employment in the
public sector
Age
Auditor-General
No
o
o
o
o
o
o
Yes
o
o
o
o
●
Brazil
9 ministers, one of whom is elected internally as president
Yes
o
o
●
●
●
o
Yes
●
o
●
●
●
Chile
Comptroller General
Yes
o
●
o
●
●
o
No
o
o
o
o
o
Costa Rica
Comptroller General
Yes
o
o
●
o
●
●
Yes
●
o
●
●
●
Denmark
Auditor-General
No
o
o
o
o
o
o
Yes
o
o
●
o
o
Yes
o
●
●
●
o
o
Yes
o
●
●
●
●
Israel
State Comptroller
Yes
o
o
o
o
o
●
Yes
●
●
●
●
o
Italy
President
Yes
o
●
o
●
o
o
No
o
o
o
o
o
Korea
Commissioners, including chair
Yes
o
●
o
●
●
o
Yes
●
o
●
●
o
Mexico
Superior-Auditor
..
..
..
..
..
..
..
..
..
..
..
..
..
Peru
Comptroller General
Yes
●
●
o
●
●
o
..
..
..
..
..
..
Portugal
President
No
o
o
o
o
o
●
Yes
●
●
●
o
o
Members of Court
Yes
●
●
●
●
●
o
Yes
●
●
●
o
o
South Africa
Auditor-General
Yes
o
o
●
●
o
●
Yes
●
o
●
●
●
Spain
Yes
●
●
o
●
o
o
Yes
o
o
●
●
●
Position
Experience
Australia
Country
Character
qualifications
Professional
qualifications
Legislation defines
incompatibilities
Incompatibilities of office
Education
qualification
Legislation defines
qualifications
Selection criteria
Source: Adapted from unpublished OECD Survey of Benchmark Supreme Audit Institutions 2013, responses to Q. 14, 15 and 16.
Annex 1.A4
Safeguards for the removal of supreme audit leadership in Chile and selected countries
Table 1.A4. Safeguards for the removal of supreme audit leadership in Chile and selected countries
By which authority?
Executive
Judiciary
Other
Loss of
confidence
Incapacitation –
health
Misconduct
Absence
Bankruptcy
Other
Reasons for removal?
Legislature
Legislation
provides
criteria for
removal
from office
Has the
leadership
ever been
removed?
Australia
Auditor-General
Yes
o
o
o
●
o
●
●
o
●
●
No
Brazil
9 ministers, one of whom is
elected internally as president
Yes
●
o
o
o
o
o
●
o
o
o
No
Chile
Comptroller General
Yes
o
o
●
o
o
●
o
o
o
●
Yes (1945)
Costa Rica
Comptroller General
Yes
●
o
o
o
o
o
●
o
o
o
Yes (2004)
Denmark
Auditor-General
No
o
o
o
o
o
o
o
o
o
o
No
European Court
of Auditors
28 members, one of whom is
Yes
o
o
●
o
o
o
o
o
o
●
No
Israel
State Comptroller
Yes
●
o
o
o
o
●
●
o
o
o
No
Italy
President
No
o
o
o
o
o
o
o
o
o
o
No
Korea
Commissioners, including chair
Yes
●
●
●
o
●
●
●
o
o
o
No
Mexico
Superior-Auditor
..
..
..
..
..
..
..
..
..
..
..
..
Peru
Comptroller General
..
..
..
..
..
..
..
..
..
..
..
…
Portugal
Members of Court, including
President
Yes
o
o
o
o
oo
o●
●●
●●
oo
oo
No
South Africa
Auditor-General
Yes
●
o
o
o
o
●
●
o
o
o
No
Spain
12 members, one of whom is
Yes
●
..
●
●
o
●
●
●
o
o
No
Country
Head of organisation
Source: Adapted from unpublished OECD Survey of Benchmark Supreme Audit Institutions 2013, responses to Q. 16 and 17.
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2. SUPPORTING STRATEGIC AGILITY AND REBUILDING TRUST IN GOVERNMENT – 93
Chapter 2
Supporting strategic agility
and rebuilding trust in government*
This chapter examines the role of the Office of the Comptroller General of the Republic
(Contraloría General de la República, CGR) – Chile’s supreme audit institution (SAI) – in
supporting strategic agility and rebuilding trust in government. The chapter analyses the
CGR’s ex ante control of legality – referred to as toma de razón (TdR) – and ex post
audit assignments with a view to explore how these could be adjusted to enhance the
institution’s impact on good public governance. It also focuses on how the CGR could
further leverage knowledge from its existing and new audit assignments in order to
deliver additional value and benefit for the institution’s diverse stakeholders. The
analysis is framed by OECD work on strategic agility and trust, the OECD
“Recommendation on Regulatory Policy and Governance” and the OECD “Best
Practices on Budget Transparency”, as well as various International Standards
of Supreme Audit Institutions (ISSAI). The chapter includes comparative data for the
CGR as well as 13 SAIs collected through an OECD survey conducted specifically for
this peer review, as well as other OECD and non-OECD databases.
*
94 – 2. SUPPORTING STRATEGIC AGILITY AND REBUILDING TRUST IN GOVERNMENT
Introduction
This chapter examines the role of the Office of the Comptroller General of the
Republic (Contraloría General de la República, CGR) – Chile’s supreme audit institution
(SAI) – in supporting strategic agility and trust in government. Chile, together with other
OECD countries, has collectively recognised the need to enhance strategic agility and
rebuild trust in government and public institutions in order to support inclusive and
sustainable development (OECD, 2013a). Strategic agility is necessary to ensure that the
public sector is responsive and effective in an increasingly complex policy environment.
Rebuilding trust in government is critical for achieving strategic agility, especially when
short-term sacrifices are involved and long-term gains may be less tangible.
Strategic agility in the public sector necessitates strategic sensitivity, collective
commitment and resource flexibility. Strategic sensitivity is the ability to understand and
balance current and emerging trends as well as societal preferences and expectations.
Collective commitment refers to the existence of a common vision and set of overall
objectives, and the use of this vision and set of objectives to steer and implement
strategies at a whole-of-government level. Resource flexibility refers to the ability to
align resources with changing needs and priorities, as well as to promote innovative ways
to maximise government performance. Evidence-based policy making and leveraging the
knowledge of different knowledge bases are considered contributors to strategic agility.
Trust in government is influenced by key governance attributes, including reliability,
responsiveness, openness, inclusiveness and integrity, including the functioning of
accountability processes. SAIs have traditionally supported trust in government by
providing reasonable assurance that public resources are used legally, for their intended
purpose, as well as economically, efficiently and effectively. By doing so, SAIs reduce
information asymmetries and empower the legislature and citizens to hold government
accountable. The contribution of SAIs to overall trust in government is not limited to
enforcing integrity alone, but also to securing reliable and responsive governments
through agility in service delivery and flexibility to respond to changing needs. Similarly,
INTOSAI’s “The Value and Benefits of Supreme Audit Institutions - making a difference
in the lives of citizens”, outlines that SAIs have a positive impact on trust in society as
they focus those responsible for allocating resources on how well resources are used, thus
enhancing accountability (INTOSAI, 2013c). This places on SAIs the responsibility to
assess the value they add through their different areas of work.
In examining the role of the CGR in supporting strategic agility and rebuilding trust
in government and public institutions, the chapter analyses:

the modernisation of the Chilean public administration as a basis for discussing
its impact on the CGR’s audit assignments

the toma de razón (TdR) and ex post audit assignments with a view to explore
how these could be adjusted to enhance the institution’s role in supporting good
public governance

the opportunities to leverage knowledge generated from the CGR’s audit
assignments to deliver additional value and benefit for those charged with
governance and citizens.
The analysis contained in this chapter is framed by OECD work for identifying the
elements of strategic agility and trust in government as well as International Standards of
Supreme Audit Institutions (ISSAI). The elements of strategic agility and trust in
government and public institutions have been explored in a number of OECD Public
Governance Reviews and discussion chapters (OECD, 2010; 2011a; 2011b; 2012a;
2012b; 2012c; 2013b; 2013c). The “Lima Declaration of Guidelines on Auditing
Precepts” and the “Fundamental Principles for Public Sector Auditing” define the general
purpose of audits and distinguish between the types of audit assignments
(INTOSAI, 1977; 2013). This chapter also draws upon the OECD (2012d)
“Recommendation on Regulatory Policy and Governance” and the OECD (2002) “Best
Practices on Budget Transparency” which note the role of SAIs in supporting good public
governance.
This chapter posits that the CGR could better support efforts within government to
develop strategic agility and rebuild trust in government and public institutions by:

leveraging ex ante control of legality to incentivize efforts by the public
administration to enhance risk-based internal control within public entities and to
develop good management practices

orienting its ex post audit assignments to assess the reliability of financial and
non-financial information reported by public entities

delivering new value-added products, presenting findings from audit work in new
ways to further engage with those charged with governance and those with
interest.
Modernisation of the state and its impact on the Office of the Comptroller General
of the Republic
Chile has undergone rapid modernisation and development in recent years, benefiting
from democratisation, globalisation, technological development and social change.
Chile’s public governance arrangements have helped to support economic development
and serve as a base for achieving its social goals. In furthering inclusive and sustainable
development, sustained efforts by different governments have focused on the need to
increase strategic agility and strengthen trust in government. Increasingly complex
societal challenges and changing societal preferences necessitate strategic agility, and the
current modernisation agenda seeks to provide many of the elements in this direction.
Building trust in government is also critical for developing strategic agility in Chile,
especially when structural reforms are required in order to achieve long-term gains.
Chile’s public governance arrangements have helped to support economic
development and serve as a base for achieving its social goals
Chile has put governance arrangements in place to maximise the potential of its
public administration and to deploy resources in pursuit of its economic and
socio-economic goals. Transparent and institutionalised mechanisms have been
established for setting and communicating the government’s strategic vision and policy
priorities. Fiscal discipline has placed the government on solid ground to implement its
policy agenda, supported by the central government’s structural balance fiscal rule and
Fiscal Responsibility Law. Relative to other OECD countries, Chile has successfully
maintained low general government debt (Figure 2.1). The use of performance
information in public budgeting is advanced, drawing upon a combination of performance
targets, spending reviews and policy evaluations. The government has taken steps to
establish maturity models for a number of core administration functions, the obtainment
of which is supported by team performance-related pay. Progress has been made in using
information and communication technologies (ICT) as an instrument to modernise
government structures and increase the transparency of government operations.
Transparency and integrity have been core priorities of recent government
administrations. Today, Chile has an advanced and respected regulatory and institutional
framework on access to public information, which includes the Transparency Council
(Consejo para la Transparencia). Decentralisation, with the aim of providing subnational governments with the tools, capacities and legitimacy to improve their autonomy
and performance, has been identified repeatedly as a priority, but progress in this field has
been more limited.
Figure 2.1. General government debt in Chile and selected countries
As a % of GDP
2011
2009
2001
160
120
80
40
0
Italy
Portugal
Israel
OECD
Spain
Brazil
Denmark
Australia South Africa
Korea
Chile
Mexico
Notes: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli
authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East
Jerusalem and Israeli settlements in the West Bank under the terms of international law.
Source:
OECD
(2013),
Government
at
http://dx.doi.org/10.1787/gov_glance-2013-en.
a
Glance
2013,
OECD
Publishing,
Paris,
Developing strategic agility could further assist the government to respond
to emerging policy challenges and support the achievement of inclusive
and sustainable development
The government of Chile’s ability to respond to emerging policy needs and to achieve
inclusive and sustainable development is challenged by both internal and external factors.
Internally, government co-ordination is challenged by a lack of medium- and long-term
strategic planning that results in a project-based planning system based on annual
presidential priorities. The inclusion of performance information in budgeting is
advanced, but the feedback loop between performance outcomes and budget formulation
could be improved. Like many OECD countries, the government faces challenges in
developing an interoperable ICT framework, common platforms and shared back-office
components necessary to support more integrated public service delivery (OECD, 2009b;
2011b). In addition, effective decentralisation and capacity building at the sub-national
level will require stronger political commitment and ambitious implementation efforts.
External factors affecting the government’s ability to achieve inclusive and
sustainable developments include globalisation, changing societal preferences and needs
as well as increasingly complex societal challenges. As a small, very open economy with
a large share of copper in total exports – close to 60% in 2010 – Chile is vulnerable to
global markets (OECD, 2012a). Chile’s population is also ageing rapidly, with the
old-age support ratio – i.e. the number of those who are capable of providing economic
support to the number of older people that may be materially dependent on the support of
others – to decrease from 6.8 to 2.5 in the next 40 years (Figure 2.2). Inequality remains a
critical concern, compromising the inclusiveness of economic growth.
Strategic agility can help the government of Chile to effectively respond to internal
and external factors that have the potential to affect sustainable and inclusive
development. Strategic agility in the public sector context entails capacity for strategic
sensitivity, collective commitment and resource flexibility (Box 2.1).
Figure 2.2. Demographic change in Chile and selected countries
A. Old-age support ratio (2008)
Number of people of working age (20-64) per person
of pension age (66+)
12.5
South Africa
Brazil
Mexico
Chile
Korea
Israel
Australia
OECD
Spain
Denmark
Portugal
Italy
8.9
8.9
6.8
6.3
5.4
4.5
4.2
3.7
3.7
3.5
3.0
14
12
10
8
6
4
B. Decline in the old-age support ratio 2008-50
Old-age support ratio 2008-50
2
0
6.1
2.6
2.5
2.5
1.5
2.9
2.3
2.1
1.5
2.3
2050
Difference 2008-50
1.6
1.5
0
2
4
6
8
10
12
14
Notes: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli
East Jerusalem and Israeli settlements in the West Bank under the terms of international law. The old-age
support rates relate to the number of those who are capable of providing economic support to the number of
older people that may be materially dependent on the support of others. The support rate indicator used here is
the population aged 20 to 64 as a ratio of those aged 65 and over. The projections for old-age support rates used
here are based on the most recent “medium-variant” population projections.
Source: OECD (2011), Society at a Glance 2011: OECD Social Indicators, OECD Publishing, Paris,
http://dx.doi.org/10.1787/soc_glance-2011-en.
Previous and current reform agendas have aimed to enhance the responsiveness and
effectiveness of the state. This has led to an advanced budgeting system, common
performance criteria in line ministries, and the establishment of co-ordination committees
to develop more harmonised policy formulation and implementation. Likewise, the
Senior Civil Service System (Sistema de Alta Dirección Pública) and initiatives like
Chile Gestiona seek to improve the management and efficiency of government
programmes.1 A number of initiatives have been considered to strengthen ex ante and
ex post evaluation of public programmes, including in the Ministry of Social
Development (Ministerio de Desarrollo Social), the Education Quality Agency (Agencia
de Calidad de la Educación) and persistent discussions on the need to to create an
Agency for the Evaluation of Public Policies (Gobierno de Chile, 2012a).
Rebuilding trust in government is also critical for developing strategic agility in Chile
Between 2007 and 2012, confidence in Chile’s central government decreased
11 percentage points, based on comparative international perception surveys – though this
trend is less pronounced in different sectors, such as education and healthcare systems
(Figure 2.3). The trend at the national (central) government is similar to that across many
OECD countries, despite the fact that Chile was not so much affected by the economic
crisis.
Box 2.1. Strategic agility in the public sector context entails capacity
Strategic sensitivity is the ability to understand and balance government values, societal
preferences, current and future costs and benefits, and expert knowledge and analysis, and to use
this understanding coherently for planning and decision making. It is premised on the use of
evidence to explore policy options based on wide consultation and research, including an active
and purposeful dialogue with a wide variety of stakeholders. Strategic sensitivity requires
analytical frameworks and structures for collecting knowledge, capability and capacity to
undertake research and analysis as well as access to quality data and knowledge bases. However,
it is prudent to emphasise that strategic sensitivity does not automatically result from amassing
more evidence or even from improving the frequency and quality of analysis. Rather, strategic
sensitivity requires a clear and transparent flow of information and analysis from the
administration to political and administrative decision makers to inform discussions, clarify
options and explore their possible consequences.
Collective commitment is the adherence to a common vision and set of overall objectives,
and its use to guide public actors’ individual work. It also necessitates co-ordination and
collaboration with other actors, both within the central government, between levels of
government and with non-governmental actors, as needed to achieve this vision and objectives.
The increasing complexity of policy challenges requires whole-of-government action, across the
same levels of government and between different levels of government, to develop and
implement cross-sectorial policy responses. Policy issues such as the global economic and
financial crisis, poverty, equality and social inclusion, ageing population, climate change and
natural disaster emergencies do not fit neatly within a single public entity’s competencies. An
effective and timely response requires joint efforts to achieve efficiencies across entity
boundaries. Collective commitment may in turn necessitate reforming structures, aligning
incentives and managing change through effective leadership.
Resource flexibility involves the ability to make the most of existing resources, both at the
programme or project level and at the whole-of-government level. Flexibility requires the ability
to move or reallocate resources to: better support existing priorities; reallocate them to address
new priorities in crisis situations (with appropriate accountability and controls); and set priorities
in order to guide allocation. This can be achieved through process re-engineering and innovative
service delivery, top-down budgeting and relaxed input controls, as well as shared services and
the ability to effectively pool resources to meet cross-government objectives. From a human
resource perspective, resource flexibility requires preparing for large-scale demographic changes
at all levels of government in order to ensure that the resulting smaller public service has the
capacity and capability to work smarter, and that a culture is created to overcome informal
barriers to mobility within the public service.
Source: OECD (2010), Finland: Working Together to Sustain Success, OECD Public Governance Reviews,
OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264086081-en.
Trust legitimises decisive and effective action by government, and creates the
favourable conditions for stakeholders’ buy-in. Furthermore, research suggests that a fall
in political trust can affect social trust and reduce social cohesion, and increase
transaction costs driven by asymmetric and costly information. Trust is necessary for the
fair and effective functioning of public institutions and to the success of public policies
(OECD, 2013b).
Figure 2.3. Confidence in national (central) government in Chile and selected countries
A. In your country, do you have confidence in national government? Percent of “yes”
2012
2007
100
80
60
40
20
0
Denmark South Africa
Brazil
Australia
Germany
OECD
Israel
Spain
Mexico
Chile
Italy
Portugal
Korea
B. Percentage point change in confidence with education and healthcare system (2007-11)
Healthcare system
Education system
Israel
Australia
OECD31
Korea
Spain
Mexico
Portugal
Chile
Italy
Denmark
Korea
Australia
Portugal
Spain
Italy
OECD31
Denmark
Mexico
Chile
Israel
-10
-5
0
5
10
-10
-5
0
5
10
Note. Data are drawn from the Gallup World Poll. The Gallup World Poll is conducted in approximately
140 countries around the world based on a common questionnaire, translated into the predominant languages of
each country. With few exceptions, all samples are probability based and nationally representative of the
resident population aged 15 and over in the entire country (including rural areas); however, results may be
affected by sampling and non-sampling errors. Sample sizes are limited to around 1 000 persons in each
country. Figure B presents percentage point change in satisfaction with the education system and schools and
healthcare: percentage of respondents who answered “satisfied” to the questions: “In the city or area where you
live, are you satisfied or dissatisfied with the educational system or the schools?” and “In the city or area where
you live, are you satisfied or dissatisfied with the availability of quality healthcare? The statistical data for
Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the
OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the
West Bank under the terms of international law
Source: OECD (2013), OECD Government at a Glance 2013, OECD Publishing, Paris,
Citizens are sensitive not only to the content and outcome of policies, but also to how
policies are designed and implemented and fit with broader standards of behaviour. It is
not only the what of policies that matters, but the how, for whom and with whom. Trust
can be influenced by public governance and institutional frameworks, including:

responsiveness: the provision of accessible, efficient and citizen-oriented public
services that effectively address the needs and expectations of taxpayers

reliability: the ability of governments to minimise uncertainty in the economic,
social and political environment of their citizens, and act in a consistent and
predictable manner

openness and inclusiveness: a systemic, comprehensive approach to
institutionalising a two-way communication with stakeholders, whereby relevant,
usable information is provided and interaction is fostered as a means to improve
transparency, accountability and engagement

integrity: the alignment of government and public institutions with broader
principles and standards of conduct that contribute to safeguarding the public
interest while preventing corruption (OECD, 2013b).
SAIs have traditionally supported trust by providing reasonable assurance that public
resources are used legally, for their intended purpose, as well as economically, efficiently
and effectively. By doing so, SAIs reduce information asymmetries and empower the
legislature and citizens to hold government accountable. However, SAIs could also
contribute to responsiveness and reliability of governments, by ensuring that integrity is
not secured at an unbearable cost in terms of operational rigidity and unacceptable delays
in public action.
The Office of the Comptroller General of the Republic can support government
efforts to enhance strategic agility and rebuild trust
SAIs are a key part of the institutional framework of democratic states and support
citizens to hold those charged with government and elected representatives accountable.
Enhancing strategic agility in government and rebuilding trust in government places new
demands and creates new opportunities for the CGR’s to strengthen good public
governance. Resource flexibility and new forms of service delivery present risks that the
CGR must address in its audit work. CGR audit findings can serve as a valuable evidence
base for government accountability and decision-making processes. The broad scope of
the CGR’s mandate, discussed in Chapter 1, enables the institution to examine issues at a
whole-of-government level, rather than individual programmes, entities or funds. The
CGR’s independence is a valuable asset that can contribute to developing a collective
commitment within government and its operational flexibility allows it to adapt to
changing needs and priorities so as to maximise value added. Moreover, the long tenure
of the Comptroller General can enable the institution to look beyond the electoral cycle.
In responding to these new demands and opportunities, the CGR may need to reassess
its portfolio, within its constitutional mandate, reviewing the continued relevance of its
existing assignments and exploring new ones, while taking appropriate measures to
safeguard its independence. Specifically, the functional focus on ex ante control of
legality – referred to as toma de razón (TdR) – and the concentration of ex post audit on
legal compliance, as a means to provide incentives to further develop internal control,
performance and accountability capacities in public entities.
These tensions have been felt in many OECD countries in the past 20 years. This has
been reflected, first, in a general trend to move away from ex ante audit assignments,
where they have existed, towards ex post audit assignments and greater focus on the
functioning of internal controls and performance (Ruffner and Sevilla, 2004). Second,
there has been a move for SAIs to develop better awareness and understanding of the
value and benefit that they provide for citizens that is particularly noticeable in recent
years (INTOSAI, 2010b).
The move from ex ante to ex post audit in the public sector has been influenced by
changes in the size of government, technological innovation, the shift towards
performance management and new forms of service delivery. This trend has taken place
in both internal audit and SAIs (Ruffner and Sevilla, 2004; European Commission, 2011).
Of the four benchmark SAIs involved in this peer review that had ex ante audit
assignments at the beginning of the 1990s, two – the SAIs of Italy and Portugal – have
significantly reduced their ex ante audit assignments since (Table 2.1). Beyond these
benchmarks, a number of other SAIs also phased out or redesigned their ex ante audit
assignments since the 1990s. Among those that phased out ex ante audit assignments are
the Supreme Audit Office of Poland in 1994 (though it rarely conducted ex ante audit
assignments after 1921); the Court of Accounts of Luxembourg in 1999 and the Court of
Accounts of Belgium in 2012 (Box 2.2).
Table 2.1. Redesign of ex ante audit assignments in supreme audit institutions
Existence of ex ante audit assignment circa 1990
Limited change in ex ante
audit assignments since
the 1990s
Significantly reduced ex ante
audit assignments since the
1990s
Chile, Costa Rica
Italy, Portugal*
Historically function existed
but ended well before
the 1990s
Never had such a function
Brazil, South Africa,
Australia, European Court
of Auditors, Israel, Korea, Spain
Notes: *Portugal: While the incidence of ex ante audit has been significantly reduced, major restructuring of
the ex ante audit function has led to an increase in the scope of the ex ante audit. See Box 2.2 for more detail.
to Q. 3.
Box 2.2. Changes to ex ante audit assignments in supreme audit institutions
of Italy, Portugal and Belgium
A number of supreme audit institutions (SAIs) have phased out or redesigned their ex ante
audit assignments since the 1990s. The Italian Court of Accounts (Corte dei conti) significantly
redesigned its ex ante audit function during the mid-1990s in parallel with reforms to the budget
act and the accounts structure (budget and financial statements). Various reforms since the early
1990s in the Portuguese Court of Accounts (Tribunal de Contas) have significantly varied the
criteria that determine which entities and transactions are subject to ex ante audit, causing a
reduction in the incidence of ex ante audit, but an increase in scope. The Belgian Court of
Accounts (Cour des Comptes) ended its ex ante audit assignments in 2012 following the
introduction of new accounting standards and the automation of financial management systems.
In all cases, the change to these SAIs’ ex ante audit assignments also led to the introduction of
ex post performance audit assignments.
Italy 1994
The Italian Court of Accounts significantly redesigned its ex ante audit function during the
mid-1990s in parallel with reforms to the budget act and the accounts structure (budget and
financial statements). For over 130 years, until 1994, the Italian Court of Accounts carried out
ex ante audits of almost all administrative acts in order to prevent unlawful expenditure. This
amounted to approximately 5 million ex ante audits annually during the early 1990s. Moreover,
since 1976, the Constitutional Court has recognised that the Italian Court of Accounts has the
power to raise, during the procedure of ex ante compliance audit, interlocutory questions of
constitutionality, especially with regard to violation of Article 81 of the Constitution (violation
of respect of the equilibrium of the budget and of the correct funding of the spending laws)
assimilating the function to a jurisdictional one.
of Italy, Portugal and Belgium (cont.)
The proposal to change the ex ante audit function came from the Italian Court of Accounts.
In 1991, the Italian Court of Accounts, in its annual reports, urged the legislature to take action
to reform its mandate in line with the reforms within the public administration. These broader
reforms sought to enhance the performance management and accountability of individual public
entities, including the development of internal control. Underlying the Italian Court of Accounts’
request to reform its mandate was concern over duplicated work carried out by the central
accounting offices located in each ministry. The Italian Court of Accounts articulated that
duplication of ex ante audit assignments with the accounting offices weakened the responsibility
of public officials, often resulting in issues being deferred to the Italian Court of Accounts to
certify the legality of administrative acts.
The redesign of the Italian Court of Accounts’ ex ante audit assignment – as established by
Law 20/1994 – considerably reduced the number of acts subject to this form of control,
especially those of regional governments and local authorities. The Italian Court of Accounts
retained some assignments to conduct ex ante audit of high-value contracts as well as
government acts regarding directives for the performance of administrative activities; the
appointment of executive officers to the civil service and setting personnel levels; normative acts
of central government with external effects; programming acts involving expenditure; acts
implementing rules of the European Union; and central government acts determining the
distribution or allocation of financial resources (e.g. deliberation of Economic Planning
Committee).
The 1994 reform also authorised the Italian Court of Accounts to conduct ex post
performance audit assignments to enhance the accountability of public officials. The Italian
Court of Accounts became responsible for conducting ex post as well as concomitant
compliance, financial and performance audits on all the administrative sectors and related
managements. More recently, statutory reforms have enabled the executive to request the expert
opinion of the Italian Court of Accounts (Law 131/2003 and Law Decree 78/2009, Art. 17,
par. 30).
Other important commitments concern the report to parliament on the financial account of
the state (recently it has also been established the report on the financial accounts of regions to
regional councils) and the related certifications, as well as the report to parliament on the
co-ordination of the multilevel public finance.
Portugal
The Portuguese Court of Accounts has exercised its ex ante control powers since 1881,
covering almost all administrative acts and contracts, in view of preventing unlawful
expenditure. The 1990s were marked by the growing independence of the court as set out by the
Court of Auditors Law 86/89 of 8 September. This began the implementation of a strategic
option for strengthening, improving and expanding the court’s scope of audit control to include a
focus on management assessment. This coincided with a remarkable reduction of the incidence
of ex ante audits and the establishment of a classification system for grounds of refusal for the
“seal of approval” (visto) and declaration of conformity.
Reforms in 1997, as determined by the Court of Auditors Law 98/97 of 26 August, included
new legal criteria for the court to intervene based on the nature of the entity involved. In effect,
the reforms extended the subjective scope of financial control powers of the court to include all
entities benefiting from capital investment by public entities or receiving money or other public
values, regardless of their legal status. This extension was thus considered to strengthen the
effectiveness of all audit procedures, as it enabled the court to verify acts and contracts of all
entities managing public funds, including public companies, associations and foundations as
well as private entities.
A 2006 reform of the Court of Auditors Law again changed the jurisdiction of the Court of
Auditors, forcing the first Chamber to focus on acts and contracts deemed materially relevant,
regardless of the entity involved. Since then, the determining factor has been the presence, usage
and management of public resources or other values in acts and contracts, not the entity itself
that uses the resources. This change aimed primarily, among other reasons, to subject contracts
to ex ante audit that were previously outside of the audit criteria. A further enlargement in 2012
added any contracts of public and private entities under public control or contracts valued at
more than EUR 5 million of public resources. Furthermore, all contracts above EUR 950 000 are
frozen until they obtain a seal approval.
Although the number of ex ante audit assignments has decreased since the 1990s, both the
scope and the financial value of acts and contracts subject to ex ante control have increased. The
court’s current ex ante audit control ensures the legality of and the budgetary cover for acts and
contracts which generate expenses or have any direct or indirect costs and responsibilities for:

the state and its services

the autonomous regions and its services

local authorities, their associations or federations and services and their metropolitan
areas.
Additionally, the court’s ex ante audit control spans any entities created by the state or other
public entities to carry out administrative functions originally incumbent on the public
administration financed, directly or indirectly, by the state.
Belgium 2012
The Belgian Court of Accounts ended its ex ante audit assignments in the beginning of
2012. Through its ex ante audit assignments, the Belgian Court of Accounts issued a visa of
payment (visa préalable au paiement) authorising the disbursement of funds from the treasury.
All central government expenditure was subject to the ex ante audit by the Belgian Court of
Accounts, excluding fixed costs (salaries and pensions), cash advances and municipal
(communes) expenditure. In the 2001 fiscal year, the Belgian Court of Accounts’ ex ante audit
assignments covered:

the federal government : 56 388 orders of expenditure (excluding debt), representing
approximately 10 748.6 billion francs (EUR 266.4 billion)

the Dutch Community : 23 909 orders of expenditure (excluding debt), representing
approximately 216.4 billion francs (EUR 5 364.0 billion)

the French Community : 9 842 orders of expenditure (excluding debt), representing
approximately 81 043.0 francs (EUR 2 009.0 billion)

the Walloon Region : 39 683 orders of expenditure (excluding debt), representing
approximately 187.9 billion francs (EUR 4.7 billion).
The development follows a number of reforms within the public administration introduced
since the early 2000s that gave rise to public accounting reforms (Law of 22 May 2003) and the
roll out of computerised accounting systems (FEDCOM). These reforms were led by the
government with the Belgian Court of Accounts participating in the General Delegation for the
Reform of Public Accounts (la Délégation générale à la Réforme de la comptabilité publique).
The reform was part of the convergence of the government of Belgium to the European System
of National and Regional Accounts (i.e. ESA95). Convergence was intended to support the
collection of comparable, up-to-date and reliable information on the structure and developments
of the Belgian economy and its regions.
The Law of 22 May 2003 also amended the Law of 29 October 1846 on the organisation of
the Belgian Court of Accounts, giving the court a number of new skills and ending the ex ante
audit of expenditure. Ex ante transaction-based audits were considered as inefficient and
incompatible with the desire to perform more in-depth ex post audits and also with the move
towards performance management introduced since 2003. The focus on a priori expenses meant
that the ex ante audit presented only a fragmented picture of overall management. Removing the
ex ante audit function can also work to disempower those public officials that would have
otherwise hidden behind prior approval. The reforms also gave rise to the introduction of a new
organisational structure of the Belgian Court of Accounts. Prior to the abolition, the Belgian
Court of Accounts estimated that 30% of its workforce was involved in ex ante audits.
The trend towards ex post audit and managerial flexibility does not mean there is less
control, but rather more and more varied types of control. The move puts a new burden
on managers to implement processes to achieve effectiveness, reliability and compliance.
In practice it means trading the inefficient but relative certainty of checking the regularity
and legality of individual transactions to the more efficient and relative uncertainty of
verifying the proper operation of systems. The SAI of Peru has limited its previous
control function to audit only high risk areas including additional budgets of public
works, procurement of asset services or military works exonerated of public bidding or
direct awarding. The rise of internal control has freed up external auditors and controllers
to adapt their processes to focus on governmental performance. The tendency is that there
is more work for both, rather than internal control influence coming at the expense of
external control (Ruffner and Sevilla, 2004).
It is interesting to note that the legal framework of the CGR foresees the possibility of
rebalancing ex ante control of legality (TdR) and ex post audits. Regarding the former,
the CGR may exempt operations from TdR (a possibility that is used, with limitations, by
the CGR, as discussed later). Similarly, the law does not prevent the CGR from
performing in-depth analysis of processes and systems at a government-wide or sector
scale on the basis of its audit work – as it has begun to do recently – nor from auditing the
accuracy of data that support performance assessments. Even performance auditing itself
could be contemplated by the CGR to the extent that it does not pass judgement on the
merit of public policies. Thus, the changes that in other countries have required legal or
even constitutional reforms, in Chile fall within the purview of the authority of the CGR.
The next sections elaborate further on why these changes can be necessary and how they
can be implemented, if so decided by the CGR.
Leveraging ex ante control of legality and ex ante audit to incentivise good
governance
The INTOSAI “Lima Declaration of Guidelines on Auditing Precepts” defines
ex ante audit – or a priori audit or pre-audit as it may be sometimes referred – as a
“before the fact” review of administrative or financial activities. Generally speaking,
administrative or financial activities may not be executed by the administration until after
the ex ante audit is completed and the SAI gives authorisation. The Lima Declaration
notes that ex ante audit has the advantage of being able to prevent damage to the state
before it occurs. Moreover, it is frequently cited that refusal to authorise administrative or
financial activities as a result of an ex ante audit can have an educational effect and lead
to positive changes in the functioning of the administration. Nevertheless, the Lima
Declaration notes that ex ante audit may have the disadvantage of creating an excessive
amount of work and blurring responsibilities under public law. However, the Lima
Declaration is explicit that ex ante audit may be carried out by institutions other than the
SAI or other audit institutions (INTOSAI, 1977, Section 2).
Where ex ante audit is conducted by an SAI, it is differentiated from an expert
opinion (INTOSAI, 1977, Section 12). A matter subject to ex ante audit must be
transmitted to the SAI, the SAI must authorise (or reject) the matter and the executive
authority must subsequently abide by the SAI’s decision. In contrast, an SAI is not
obliged to respond to a matter brought before it for an expert opinion by an executive
authority or a legislative body, though an SAI may also provide an expert opinion without
a request. The executive authority or legislative body subsequently bears sole
responsibility for accepting or rejecting an SAI’s expert opinion. When issuing an expert
opinion, the SAI should not anticipate future audit findings and the opinion must not
interfere with the effectiveness of its audit assignments (INTOSAI, 1977, Section 12).
Ex ante control of legality – or toma de razón (TdR) as it is referred in Chile – is a
core element of the CGR’s portfolio. Toma de razón (TdR) is a preventive, ex ante
verification of the legality of certain administrative acts, exclusively focused on legal
complicance vis-à-vis the whole spectrum of the national and applicable international
legal framework (Constitution, international treaties, laws and regulations). The
Constitution (Art. 99) establishes that the Comptroller General has the authority to record
and perform TdR administrative acts. However, the CGR Organic Law gives the
institution much discretion over the TdR process and it may exempt administrative acts
other than those issued by the President of the Republic from TdR. All administrative acts
subject to TdR must be processed by the CGR before being published in the the Official
Journal (Diario Oficial). In case of violation of these provisions, the CGR has authority to
apply administrative sanctions against the responsible official (Law 10 336, Art. 154).
Toma de razón spans back to the 19th century in Chile (Box 2.3) and has led to the
TdR being a function deeply integrated into the Chilean administration (Cordero, 2006;
Santiso, 2006; Faundez, 2007, 2010). TdR is seen by the CGR as an important control for
the preservation of law and order that can be associated with legitimacy of administrative
action and trust in government. At the same time, it is important to note that this ex ante
audit function does not exist in the majority of benchmark SAIs (Chapter 1), while in the
few where it is present, the scope is limited, either functionally (e.g. Italy) or financially
(e.g. Portugal).
In recent years, the CGR has taken a number of actions to enhance the timeliness and
consistency in the way it conducts TdR. These actions, together with those discussed in
Chapter 1, have contributed to improving internal management within the CGR, and
could be complemented by reassigning this function vis-à-vis: i) ongoing efforts to
modernise the public administration, including trends to enhance internal control and
institutionalise performance management; and ii) potential risks associated with a broad
application of the TdR.
The broad application of TdR may undermine incentives for the heads of public
entities to strengthen their internal control frameworks as a key management system.
Heads of public entities and other public officials may choose to rely on the CGR to
review the legality of their administrative acts ex ante, rather than investing in the
development of strong, independent internal control mechanisms that could reliably fulfil
the purpose to respect and act in alignment with Chile’s legal system. Or public entities
may pay excessive attention to the acts that will be subject to TdR, thereby duplicating
efforts and incurring in an opportunity cost in the use of internal control units. However,
efforts to rebalance TdR need to go hand in hand with broader public administration
efforts to strengthen its control system, so as to ensure that the purpose fulfilled by TdR
can be reliably achieved through other means, namely independent, capable and efficient
internal control systems within public entities and professionalised, independent legal
units.
Box 2.3. History of the Office of the Comptroller General of the Republic of Chile’s
toma de razón
The Office of the Comptroller General of the Republic’s (CGR) ex ante audit assignment – the
toma de razón (TdR) – can be traced back to the 19th century. During this period TdR was not
formally differentiated from the recording of administrative acts and the terms were often used
interchangeably from one another. Decree with Force of Law of 18 May 1839 gave the Accounting
Department (Departamento de Contabilidad) the responsibility of “recording (tomar razón)” laws,
regulations and decrees so that they could be reproduced extensively. Moreover, administrative acts
compiled at the turn of the 20th century (1891-1918), by the then Prosecutor of the Chilean Tribunal
of Accounts, Valentín Letelier, appear to confirm that the review of administrative acts through the
TdR was limited to matters of public property and employment.
The TdR was not initially discussed in the proposal to create the CGR by the Kemmerer
Mission’s recommendations, nor was reference to this assignment included in Decree with Force of
Law 400-bis/1927 establishing the CGR. It was only nine months after the establishment of the
CGR that the institution was formally bestowed – through Decree with Force of Law 2 960-bis/1927
– responsibility of controlling the legality and constitutionality of supreme decrees. This Decree
with Force of Law provided the CGR 20 days to accept (cursar) or reject (representar) a supreme
decree issued by the President. The Constitutional Reform of 1943, which recognised the CGR as an
autonomous body, stated only that the CGR “will perform those functions assigned by the law”; it
did not make specific reference to TdR. It was only in the 1980 Constitution of the Republic of
Chile that the TdR was recognised as a constitutional CGR responsibility.
The current application of the TdR can be understood as a consequence of the marginalisation
of the CGR during the 1920s and 1930s. During this period, the executive treated the Comptroller
General and the TdR with much disdain, made possible because of the lack of clear authority and
independence of the CGR. On a number of occasions, the executive resorted to issuing “insistence
decrees” before forwarding the original decree to the Comptroller General for TdR – a process
known as “unborn decrees” (decretos nonatos). The government used unborn decrees on 116
occasions from 1932-37 (i.e. the Alessandri administration), 65 occasions from 1938-41
(the Aguirre administration) and 24 occasions in 1942 (the first year of the Ríos administration),
often to exceed expenditure limits set in the state budget.
Box 2.3. History of the Office of the Comptroller General of the Republic of Chile’s
toma de razón (cont.)
In response to these developments, the Congress took two decisions that led to the radical
transformation of the TdR. In 1943, Congress elevated the status of the CGR to that of an
autonomous constitutional body, enhancing its authority within the political system and reinforcing
its independence. Then, in 1945, Congress impeached then Comptroller General on the grounds,
among others, that he had failed to discharge his role as guardian of administrative legality. The
impeachment noted that the Comptroller General had rubber-stamped decrees issued by the
President related to the breaking labour strikes and fixing commodity prices without considering the
public interest – even though this went beyond the Comptroller General’s mandate to enforce the
legality of administrative acts.
After the impeachment of the Comptroller General in 1945, the government took the CGR very
seriously. Moreover, the Comptroller General abandoned its earlier minimalist approach to TdR that
was limited to issues of legality. Between 1946-58, i.e. the Ríos and Ibáñez administrations, not a
single “unborn decree” was issued by the government. The Comptroller General also began to
examine the merit underlying administrative acts. For example, in 1958 the Comptroller General
required the government to provide evidence that labour strikes posed a threat to public health or
paralysed industries deemed vital to the national economy as a prerequisite for approving decrees to
break these strikes. In 1962, the CGR successfully challenged an attempt by the government to use
its requisition powers, in this case of wheat, as a device to enforce price controls.
In more recent years the CGR has limited its scope in the TdR of administrative acts to legal
aspects. This has been reinforced by Law 19 817/2002 which modified the CGR Organic Law and
states that the TdR may only focus on the legality and not the merit of administrative acts (Law
10 336, Art. 21.b).
Source: Aldunate, L.E. (2005), “La evolución de la función de Control de la Contraloría General de la
República [The evolving function of the Office of the Comptroller General of the Republic]”, Revista de
Derecho de la Pontificia Universidad Católica de Valparaíso, Vol. XXVI, tomo II, pp. 19-30; Armijo
Dinamarca, I. and A. Carreño Riveros (1997), “La Contraloría General de la República, evolución histórica,
organización y funciones [The Office of the Comptroller General of the Republic, historical evoluation,
organisation and functions]”, Memoria de Prueba (Licenciatura en Ciencias Jurídicas y Sociales), Universidad
Central; Rajevic, M.E. (2007), “La ugente reforma del sistema de control administrativo: Una exigencia de la
probidad [The urgent reform of the administrative control system: The requirement of probity]”, in Revista de
Derecho Público, Vol. 69 (Actas de las XXXVI Jornadas de Derecho Público), Universidad de Chile, pp. 3659; Faundez, J. (2007), Democratisation, Development and Legality, Chile, 1983-1973, Palgrave MacMillan,
New York; Faundez, J. (2010), “Chilean constitutionalism before Allende: Legality without courts”, Bulletin of
Latin American Research, Vol. 29, No. 1.
CGR authorisation through the TdR gives tacit approval to the legality of an
administrative act. Insofar as the CGR examines the legality of administrative acts
through the TdR, a conflict may arise when and if an ex post audit questions the legality
of, or finds related problems with, previously examined administrative acts. While these
acts are in principle independent (TdR looks at the legality of the proposed act while
ex post audit will look at legal compliance during execution), such a conflict may give
arguments to administrators to contest the CGR’s ex post audits.
TdR may also create a substantial opportunity cost for the CGR to conduct other audit
assignments that could contribute further to strategic agility in the public administration.
The sheer number of administrative acts subject to TdR crowds out capacity within the
CGR to work on other ex post audit assignments. Moreover, the competencies necessary
for conducting TdR are different to those necessary for ex post audit assignments,
creating internal rigidities.
This section provides an overview of the scope, criteria and procedures for the TdR in
order to discuss how it may be rebalanced. Its preliminary recommendations centre upon:

integrating TdR automation with government ICT systems to enhance internal
control and reduce administrative burden, moving towards ex post control of
legality (validación), as will be the case in matters related to human resources via
the Public Administration Personnel Information and Control System (Sistema de
Información y Control del Personal de la Administración del Estado, SIAPER)
starting in the first quarter of 2014

further the use of exemptions to TdR of administrative acts in order to incentivise
sustained improvements in internal control

providing public entities with structured information on recurring issues by type
of administrative act or public entity identified through the TdR process in order
to support the identification of ways to improve administrative decision making

further support efforts to consolidate an independent, capable and efficient
system of internal control in the Chilean public sector

reallocate efforts and capacity to undertake ex post audits of regulatory
management.
The scope of ex ante toma de razón is broad in coverage and the process is
deeply integrated into administrative decision making
The CGR Organic Law defines the general scope, criteria and procedure for the TdR.
The Comptroller General may review administrative acts of the President of the Republic,
the heads of public entities (Law 10 336, Art. 10) and some acts of certain public services
(Resolution 1600/2008). Lower level administrative acts, such as instructions, oficios,
ministerial orders or opinions, are exempt from TdR. Specific laws may exempt specific
types of administrative acts from TdR. For example, administrative acts of Chile’s 345
municipalities are exempt from TdR by the Organic Constitutional Law on Municipalities
(Law 18 695, Art. 53). Administrative acts of the Council for Transparency (Consejo
para la Transparencia) are exempt from TdR under the Transparency and Access to
Information Law (Law 20 285, Art. 43). Administrative acts related to economic, social
and environmental regulation issued by an independent regulatory agency
(superintendente) and those of the Public Prosecutor (Fiscalía) are also exempt from
TdR.
The TdR applies to administrative acts that have direct budgetary consequences above
a certain threshold (Arts. 7, 8 and 9 of Resolution 1600/2008) as well as those related to
general economic, social and environmental matters other than those issued by an
independent regulatory agency. Administrative acts that have direct budgetary
consequences include those related to human resource management, procurement and
public debt. Administrative acts related to human resource management include the
decisions to employ an individual public official and to pay him/her a salary. For
example, the CGR must perform TdR the renewal of approximately 80 000 public
officials employed on renewable one-year contracts at the beginning of each and every
year.2 This can result in delays of contracts being approved and individuals receiving pay,
which can make it difficult retaining competent public officials.
Administrative acts related to public procurement include individual calls for tender,
prequalification, contract award and payment. Administrative acts related to public debt
include that issued by the Ministry of Finance (Ministerio de Hacienda), the State
Treasury (Tesorería General de la República), public universities, public enterprises and
the Social Security Institute (Instituto de Previsión Social) (Law 10 336, Art. 13).
Regulation related to economic, social and environmental matters – other than that issued
by an independent regulatory agency – includes that relating to urban and municipal
planning, among others. The CGR’s approval of municipal regulatory plans is considered
as contributing to a drawn out approval process that can take more than two decades
(OECD, 2013d).
The CGR focuses on the legality of administrative acts through the TdR process.
However, historically this has not always been the case, as discussed in Box 2.2.
Law 19 817/2002 modifying the CGR Organic Law, made explicit that the CGR may
only focus on the legality and not the merit of a decision conveyed through an
administrative act (Law 10 336, Art. 21.b). This means that the CGR may review the
compliance of an administrative act with higher order regulation as well as the quality of
legal drafting. The CGR will also not acknowledge any administrative act if it includes
spending that is not authorised by the Annual Budget Law or another special laws
(Law 10 336, Art. 147). The CGR does not review whether the administrative act has a
clear policy goal, whether there has been an impact assessment to examine the benefit and
cost of the decision, or whether co-ordination within government or public consultation
with business and citizens has been satisfactory.
The CGR Organic Law establishes a deadline for the TdR as 15 working days after
receipt of the administrative act from the administration. This period may be extended for
a further 15 days by the Comptroller General by means of a justified resolution if there
are considered serious and specific reasons (Law 10 336, Art. 10). The CGR must inform
the Chamber of Deputies a list of decrees that have not been dispatched within the
specific period of 15 days with an explanation of the reason for the extension
(Law 10 336, Art. 10).
Through the TdR process, the CGR may either:

approve (tomar razón) the administrative act, stamping the act with “Contraloría
General de la República – Tomado Razón”

approve the administrative act with interpretation (tomar razón con alcance),
adding a comment on the administrative act that complements or rectifies it or

reject (representados) the administrative act because it is considered illegal or
unconstitutional.
The CGR must inform the Ministry of the General Secretariat of the Government
(Ministerio Secretaría General de Gobierno, SEGPRES) of all administrative acts that it
rejected through the TdR process. Formally, the SEGPRES is to channel this information
to the relevant public entity so that the matter can be recorded in the relevant official’s
records and the relevant authority can initiate disciplinary measures, as appropriate
(Law 10 336, Art. 11). However, as noted in Chapter 1, the SEGPRES does not have a
role in overseeing and guiding these legal units, raising concern over the ability to
systematically address errors in administrative acts. The CGR does not provide the
administration with structured information on recurring issues by type of administrative
act or public entity identified through the TdR process. Providing structured information
could support discussions of the root causes of these problems as a basis for identifying
ways to improve administrative decision making.
The President of the Republic may force the issuance of an administrative act rejected
by the CGR by using an insistence decree (decreto de insistencia) signed by all the
ministers of state. The Constitution (Art. 99) establishes that the Comptroller General
must permit (cursar) an insistence decree irrespective of any observations that it may
have regarding the original administrative act (with the exception of rejections based on
unconstitutionality or expenditure decrees that exceed the limit set constitutionally). The
Comptroller General must also inform the Chamber of Deputies of the use of any
insistence decrees within 30 days of their issuance, sending a complete copy of the decree
together with background information on the original administrative act. The CGR is also
obligated to report cases of insistence by the President of the Republic in its Annual
Report (Law 10 336, Art. 10). The President of the Republic did not issue any insistence
decrees in FY 2007-12 (CGR, 2008; 2009; 2010a; 2011a; 2012a; 2013).
The Comptroller General may also initiate ex oficio or upon consideration of an
explicit request by the President of the Republic to authorise the enactment of
administrative acts before they have been subject to TdR. This may be done, for example,
for administrative acts designed to avoid or repair damages to the community or state
caused by earthquakes, floods, fires, disasters, calamities or other emergencies; or
measures that would cease to be timely or be likely to lose their relevance if not
implemented immediately, provided that these do not infringe people’s essential rights.3
Such administrative acts must, however, state the circumstance on which it is based. If the
Comptroller General does not expedite those administrative acts, the fact and reasons
must be made known to the President of the Republic and the Chamber of Deputies (CGR
Resolution 1 600/2008).
The CGR approved, outright or with modification, the majority of administrative acts
subject to TdR. The CGR conducted, on average, approximately 275 000 TdR of
administrative acts annually in 2008-11: 250 000 related to state personnel matters and
25 000 related to other matters (Chapter 1). Information was not reported through the
CGR’s annual report on the number of administrative acts related to public works.
Between 2008 and 2012, an average of 5% of administrative acts related to state
personnel were rejected by the CGR, ranging from 4% in 2008 to 7% in 2011. During the
same period, the CGR rejected 8% of administrative acts not related to administrative acts
other than human resources, public procurement or public debt, ranging from 5% in 2008
to 10% in 2011. Between 2008 and 2012, the CGR rejected approximately 9% of decrees
with force of law, 4% of decrees and 11% of resolutions (Figure 2.4). Information was
not reported through the CGR’s annual report or available from the CGR, on the recurring
issues underlying the rejection of administrative acts, preventing any more detailed
analysis.4 It is expected that the automation of TdR through SIAPER (SIAPER TRA) will
facilitate statistical information and reporting on the recurring issues regarding human
resource administrative acts.
In 2011, the average time for the TdR of administrative acts related to human
resource management in the central government was 13.9 working days – 18.3 working
days in the CGR headquarters and 9.6 working days in the 14 CGR regional offices –
compared with an average time of 22.8 working days in 2010. Detailed information was
not available for the processing time for TdR of administrative acts addressing matters
other than human resource management (e.g. public works, for public debt). However, the
average time for TdR for acts other than those related to human resource management is
reported to be 12.9 working days in 2010 and 11.7 working days in 2011.
Figure 2.4. Outcome of toma de razón by the Office of the Comptroller General
A. Administrative acts related to human resource management
Approved
100%
Rejected
Withdrawn (by administration)
3.7%
80%
6.0%
Pending at end of year
Other*
6.9%
5.8%
5.6%
60%
40%
20%
0%
2008
2009
2010
2011
2012
B. Administrative acts addressing matters other than human resource management
Approved
Approved with modification
Rejected
100%
80%
60%
40%
20%
Decree promulgating a Law
Decree with force of Law
Decree
2012
2011
2010
2009
2008
2012
2011
2010
2009
2008
2012
2011
2010
2009
2008
2012
2011
2010
2009
2008
0%
Resolution
Notes: A decree promulgating a law is issued by the President for signing into law as a bill approved by
Congress; a decree with force of law is issued by the President, under a power delegated for this purpose by the
National Congress, which must be specific and limited to a maximum period of one year and has legal force; a
decree is an administrative act is by the President or a minister of state; a resolution is an act issued by a chief
of the administrative service. In 2012, the number of acts withdrawn by the administration before TdR was
3 559 (not including personnel matters).
C. Administrative acts addressing public debt
Approved
Observed
100%
80%
60%
40%
20%
0%
2008
2009
2010
2011
2012
CGR, Santiago.
The improved processing time for administrative acts related to human resource
management is attributed to the automation of the TdR process. In addition, the CGR
reports that TdR of other administrative acts has been made more efficient by the use of
standardised formats (bases administrativas) that are pre-approved by the CGR5 and
internal CGR process re-engineering. The CGR has agreed on over 50 standardised
formats for different public entities related to procurement and public works – 8 in 2009,
6 in 2010, 19 in 2011, 17 in 2012 and – as of the time of preparing this chapter – 1 in
2013. Chapter 4 discusses the CGR’s process re-engineering in more detail.
Integrate toma de razón automation with government ICT systems to enhance
internal control and reduce administrative burdens
Automation has been a key element for enhancing the timeliness and efficiency of the
TdR process. Prior to the automation of the TdR, public entities had to submit the
physical draft documents in chapter copy to the CGR offices. Automation of the TdR has,
however, largely been limited to administrative acts related to human resource
management through SIAPER. The CGR has sought to promote the automation of TdR
for other administrative acts through the Electronic Transmission System (Sistema de
Tramitación Electrónica). However, at of the time of preparing this review, the take up of
this system was limited to the Ministry of Interior’s Subsecretariat for Regional
Development (Subsecretaría de Desarrollo Regional y Administrativo, SUBDERE) and
two regional governments (Coquimbo and Los Lagos).
SIAPER was launched in 2009 and its use has expanded during the last several years.
During the first phase, SIAPER was used as a database for the CGR on state personnel
administration. In August 2011, the SIAPER RE (SIAPER Registro Electrónico) module
was launched to support the registration of human resource decisions exempt from
TdR.6,7 Today this service is open to nearly all public entities, including 24 municipalities
as of 2013. In 2013, the CGR launched the SIAPER TRA (SIAPER Toma de Razón
Automática) module to support the digitalisation of the TdR conducted based on
pro forma business rules and catalogues of administrative acts for each public entity. 8 The
SIAPER TRA will start operating with 20 public services in the first quarter of 2014. As a
further stage of development, the CGR will enable SIAPER interoperability with
information systems from the judiciary, the University of Chile, the Ministry of
Education, the Ministry of Foreign Affairs and the Civil Registry (Figure 2.5).
SIAPER was conceived to: i) support integration of human resources data and
information dispersed in different government information systems; ii) assist the
preparation of comprehensive, accurate, timely and user-friendly data and information to
support human resource decision making; iii) enhance transparency and public access to
information on the human resource management information; and iv) increase efficiency
of recording of human resource decisions and reduce the risk of loss of administrative
documents (World Bank/IADB, 2005).
However, SIAPER and the Electronic Transmission System primarily support the
CGR’s assignments and do not support public entities to improve their own management
practices and related internal controls. As of today, they do not provide those charged
with governance and human resource management within individual public entities with
information to support their decision making and internal control responsibilities.9 The
CGR offers three ways for public services to submit information, from direct input on the
CGR’s website to automated transfer via web services, depending on the actual capacities
of each public service. While overall SIAPER has reduced significantly the time required
for registering administrative acts, in practice it still imposes an administrative burden on
those public services with less IT capacity.
Figure 2.5. Public Administration Personnel Information and Control System (SIAPER)
developed by the Office of the Comptroller General of the Republic of Chile
Public Administration Personnel Information and Control System (SIAPER)
SIAPER Database
Judiciary
Felony
convictions
SIAPER RE
Registration of
personnel
administrative
exempt from ex ante
audit
Ministry of
Foreign
Affairs
Certificate of
professional
degree
ratification
Ministry of
Education
Certificate of
licences
SIAPER TRA
Electronic ex ante
audit of personnel
administrative
subject to ex ante
audit
Universidad
de Chile
Certificate of
professional
degree and
degree
ratification
SIAPER MUN
Ministry of
Defence
Recruitment
status
Civil Registry
Record
Certificate
Register of
Convictions
Registration
Disabilities
Death
Certificate
Name
Registrations
Moreover, the development of these systems has largely been independent of the
government’s efforts to modernise and integrate its own back-office systems – though
this was not always the case. When originally conceived in 2001, SIAPER was to be
developed as part of the State Financial Management Information System (Sistema de
Información para la Gestión Financiera del Estado, SIGFE) to be operated by the
Ministry of Finance’s Budget Directorate (Dirección de Presupuestos, DIPRES).
However, slow progress led the DIPRES to agree and provide the necessary funds for the
CGR to develop the system. As a result, SIAPER may respond today better to the
information needs of the CGR, rather than becoming the joint information system initially
thought of.
The CGR substantively involved the Ministry of Finance’s National Civil Service
Directorate (Dirección Nacional del Servicio Civil) in the initial development of SIAPER.
The National Civil Service Directorate was created in 2003 to support the modernisation
of the public sector through co-ordinating, supervising and proposing measures for
strategic workforce management. Enhanced availability of data on public officials and
strengthened internal control of human resource management is closely linked with this
directorate’s mandate. The National Civil Service Directorate’s responsibilities include:
i) formulating policies to improve human resource management in government;
ii) providing specialised advice on human resource management issues to public entities;
iii) supporting the professionalisation of human resource units within public entities; and
iv) promoting measures to improve human resource management within the public sector.
Today, SIAPER provides relevant information to the National Service Directorate,
particularly in what concerns the System of High Public Management (Alta Dirección
Pública). Recently, the CGR has invited the National Civil Service Directorate to
participate in the pilot of SIAPER TRA.
Although automation of TdR is in line with broader government modernisation
initiatives, it has been developed with limited engagement of executive authorities in
charge of e-government. In particular, the government has created the Personnel
Management Integrated System – Personnel and Remuneration Registration (Sistema
Integral de Gestión de Personas – Registro de Personal y Remuneraciones) to maintain
employee records, wages, attendance and medical leave, among others. The development
of this human resource management system began in 2009 and it was launched in 2011
(Gobierno de Chile, 2012a) – in parallel with the rollout of SIAPER. These initiatives
have strong potential synergies, yet they been developed independent of one another and
the potential for SIAPER to support critical human research management functions in the
executive branch, including strategic workforce remains largely unexploited.
Further utilise exemptions to toma de razón of administrative acts in order
to incentivise sustained improvements in internal control
The CGR Organic Law grants the Comptroller General authority to exempt
administrative acts related to matters considered “non-essential” (no esenciales). As noted
previously, only administrative acts issued by the President of the Republic may not be
exempt from TdR, as stated in the Constitution (Art. 99). Exemptions to TdR were first
introduced in 1962 by Law 14 832 (Art. 1b) amending the CGR Organic Law. The
amendment was proposed by the then Comptroller General Enrique Silva Cimma to
President Jorge Alessandri in line with the principles of effectiveness and efficiency of
the public administration (Varas, 2012). The Comptroller General may exempt
selectively, in one or more public entities or for specific periods, as deemed appropriate.
One consideration could be to limit the focus of the ex ante control of legality to high risk
areas including additional budgets of public works exonerated of public bidding or direct
awarding, as does the SAI of Peru. Exemptions may be initiated ex oficio by the
Comptroller General or upon consideration of an explicit request from the President of
the Republic. The Comptroller General must report to the Chamber of Deputies on
exemptions of the TdR (Law 10 336, Art. 10) – though it is silent as to whether the CGR
must explain the reasons underlying a decision to exempt or reassign TdR for specific
administrative acts.
Exemptions of administrative acts for TdR are currently regulated by CGR Resolution
1 600/2008, a summary of which is provided in Annex 2.A1. This resolution was not the
first time the CGR regulated which administrative acts are exempt from TdR. The CGR
has issued six resolutions updating the list of administrative acts subject to, and exempt
from, TdR between 1973 and 2008.10 Although the current resolution presents
information in a more structured and consolidated manner, it does not systematically
relax TdR. For example, personnel matters for the armed forces, district judges and other
officials were exempt in 1980 but once again subject to TdR in 2008. Modification of
budget amendments and the issuance of debt instruments for state universities were
exempt from TdR in 1996 but once again subject to TdR in 2008. The monetary
thresholds to exempt public contracts from TdR were also increased in 2008. Moreover,
exemptions are valid only for a period of one year and may be rescinded at any time by
the CGR, raising concerns over the sustainability of efforts and the cost versus the benefit
for public entities to pursue exemption. As of today, no public entity has requested
exemption.11
In addition, CGR Resolution 1 600/2008 (Art. 19) permits public entities to request
specific administrative acts to be exempt from TdR. Public entities may request an
exemption if they can demonstrate that their specific administrative acts have not
received any observations from the CGR for a minimum period of one year. Exemptions
are valid for a period of one year – though this may be rescinded at any time by the CGR.
However, to date no public entity has requested to be exempt from TdR as made
possible in Resolution 1 600/2008. The CGR recognises that this may be partly attributed
to a lack of a communication strategy on its behalf. However, there is also little incentive
for public entities to request exemption – or even for that matter to expedite the speed of
TdR through the use of the Electronic Transmission System. The CGR also assumes that
public entities have the information systems to track the outcomes of TdR. As mentioned
previously, the submission of administrative acts for TdR is done in chapter copy and the
CGR electronic systems do not provide public managers with a dashboard to identify
which of their administrative acts meet the criteria for exemption.
More attention could be given by the CGR as to how to utilise exemptions to TdR as
a basis for incentivising sustained improvements in internal control within individual
public entities. Exemptions could serve as certification of a public entity’s legal,
budgetary and human resource management controls and systems – or to “graduate” from
TdR. The exemption of some public entities from TdR could serve as a basis to
incentivise improvements across the public administration. In addition, the possible
sanction that public entities that neglect their internal control would once again come
under TdR would serve as a means to ensure that management is accountable for
maintaining its controls. Specific attention would be needed to ensure that a clear criteria
be formulated for the assessment of public entity’s legal, budgetary and human resource
management controls and systems.
The CGR criteria could be formulated in co-ordination with the public administration
to integrate with other government programmes. Various government programmes target
improvement of the management frameworks of individual public entities. For example,
the ChileGestiona programme aims to: i) strengthen oversight and co-ordination within
ministries and over their subordinate entities; ii) create indicators of management
practices; and iii) formulate plans for improving human resource management. The
Management Improvement Programme (Programa de Mejoramiento de Gestión, PMG) is
another programme that aims to strengthen various elements of public management,
including human resource management and public procurement. The programme defines
the level of development, or maturity, for different management systems and establishes
technical requirements for each level, defined in terms of content and requirements. In the
past, the PMG even applied to Internal Audit. Table 2.2 presents a maturity model that
was used for this purpose, to illustrate both the rationale of this approach and how it
intended to support a function that is important for the whole control system in Chile.
These considerations, however, cannot be made in a vacuum. Rather, it is necessary
to take into account the broader system of control in Chile, including: i) the absence of
administrative courts within the justice system (which were provided for in the
Constitution of 1925 but not in the current one); ii) weak capacity of internal control
units, and the absence of a formalised legal status for the function and profession of
internal control;12 and iii) the professionalisation of legal units within each public entity,
whose head of divisions are generally appointed at the request of the head of service (only
20% did not change between 2010 and 2013).
Table 2.2. Management Improvement Programme – maturity levels
for internal audit without Chile’s public entities 2001-2012
Level 1
Level 2
Level 3
Level 4
– The entity formally creates – The entity, through its
– The institution, through its
– The institution reports to the
an Internal Audit Unit,
Internal Audit Unit,
Council of Government
through the formal
undertakes a diagnosis
implements the annual audit General Internal Auditors on
appointment of the head of
using a Strategic Risk
plan for the period,
corrective and preventive
the unit, reporting directly to
Matrix (Matriz de Riesgos
including: i) applying audit
actions based on the
the head of the service and
Estratégica) identifying
procedures according to the
recommendations made by
objectives aligned with the
strategic processes and
methodology established by
the Internal Audit Unit, and
strategic directions of the
support, sub-processes and
the Council of Government
a follow-up report on the
entity.
stages, in order to prioritise
General Internal Auditors,
commitments made by the
service.
audit activities and support
indicating the guidelines to
the formulation of an Annual
be followed to plan, conduct
Audit Plan (Plan Anual de
and report on the
Auditoría).
implementation of the
annual audit plans; and
ii) perform the activities
defined in the Annual Audit
Plan, including the audit
categories: institutional,
ministerial and
governmental.
– The entity develops and/or
updates its internal audit
charter, approved by the
head of the service.
– The entity reports on the
activities of the Internal
Audit Unit, analysing the
strengths and weaknesses
of the unit, identifying
specific skills requirements
for the operation of the unit
and participating in the
regional and ministerial
audit committees (Comité
de Auditorías Ministeriales y
Regionales).
Internal Audit Unit, prepares
an Annual Audit Plan for the
generates monthly reports
following year based on the
on the implementation of
diagnosis made and
the Annual Plan and audits
considering three audit
conducted in their
categories: “institutional”
respective programmes,
audits considering the
identifying the audit’s
levels and threat of the risks
general and specific
and available human
objectives, scope, timing
and results.
resources; “ministerial” and
“governmental”.
Internal Audit Unit, develops
and implements a plan for
monitoring of the
recommendations
contained in internal audit
reports, including the
subject matter to be
monitored, commitments,
deadlines and
responsibilities linked to the
audit conclusions and the
degree of compliance with
this and other aspects.
– The institution must meet a
minimum target level of
generates an annual report
monitoring to ensure the
of the audits carried out in
reduction of the level of risk
implementing on the Annual
in the management of
public resources.
Plan, the outcome of the
work and recommendations – The institution should
identified.
maintain the level of
maturity of the system at
each level.
Note: The PMG’s internal audit module was eliminated in 2012-13 as most agencies reached the minimum
standard, and were absorbed in a “Performance Monitoring System” introduced thereafter.
Reallocate efforts and capacity to undertake ex post audits of regulatory
management practices
As noted previously in this chapter, the change from ex ante to ex post audit does not
mean there is less control, but rather more and more varied types of control. The change
places the burden on managers to implement effective internal control and risk
management practices. For SAIs, the change means more and more varied forms of
control.
In addition to using ex post audit assignments to verify the functioning of entities’
internal controls, the CGR may also give consideration to examine regulatory
management practices. Regulatory management aims to ensure that regulations and
regulatory frameworks are justified, of good quality and “fit for purpose”. Regulation is
indispensable to the proper functioning of economies and societies, and creates the “rules
of the game” for citizens, business, government and civil society. At the same time,
regulations are not costless, excessive regulation can retard the competitiveness of
product markets and lower rates of growth in GDP per capita (OECD, 2011a; Wölfl et al.,
2010).
The CGR does not have a formal role in reviewing good regulatory management
practices, in comparison to a number of OECD countries (Table 2.3). SAIs in more than
half of all OECD countries report having a mandate to review regulatory management
tools and/or programmes – though only half of these SAIs report that they have actually
undertaken a review of regulatory management tools and/or programmes. Most SAI
reviews focus on the functioning of regulatory impact assessments such as the European
Court of Auditors (Box 2.3). A few SAIs in OECD countries, among them Denmark,
report to review administrative simplification reduction programmes. Only the SAI of the
United Kingdom has undertaken a comprehensive review of its work on regulatory
management. In addition, SAIs in ten OECD countries – including the SAIs of Australia,
Korea and Mexico, as well as the European Court of Auditors – are able to report on the
performance of independent regulators.
Table 2.3. Audit of regulatory management sytems by supreme audit institutions in Chile and
selected countries
Country
Australia
Mandate to review regulatory
management tools and/or
programmes
Undertaking a review of
regulatory management tools
and/or programmes
Has undertaken a review of
the performance of regulators
or inspection authorities
●
●
●
Brazil
..
..
..
Chile
o
o
o
Costa Rica
..
..
..
Denmark
●
●
o
●
●
●
Israel
o
o
o
Italy
●
●
o
Korea
●
●
●
Mexico
●
●
●
Peru
..
..
..
Portugal
..
..
..
South Africa
●
o
o
Spain
●
●
●
Notes: ● = Yes; o = No; .. = Missing data.
Source: Adapted from OECD (2012), Measuring Regulatory Performance Questionnaire, OECD, Paris.
Box 2.3. Supreme audit institution reviews of regulatory management:
Examples from the National Audit Office of Denmark and the European Court of Auditors
Regulatory management aims to ensure that regulations and regulatory frameworks are justified, of
good quality and “fit for purpose”. Regulation underpins markets (i.e. economic regulation), protects the
rights and safety of citizens (i.e. social) and ensures the delivery of public goods and services
(i.e. administrative). At the same time, regulations are not costless. The Recommendation on Regulatory
Policy and Governance recognises the role of regulation in achieving government policy goals and the role
of supreme audit institutions (SAIs) in supporting good regulatory management practices. SAIs in
approximately 20% of all OECD countries report to undertaking a review of regulatory management tools
and/or programmes. Regulatory management tools and/or programmes include, for example, regulatory
impact assessments (RIA), public consultation and administrative burden reduction programmes.
The National Audit Office of Denmark and the European Court of Auditors are two examples of SAIs
auditing regulatory management.
National Audit Office of Denmark’s audit of better regulation and simplification
In 2006, the National Audit Office of Denmark conducted a review of the impact of better regulation
and simplification, a policy that had existed in Denmark since the 1980s. The audit asked:

How have the better regulation and simplification activities been managed?

Which measurement methods have been developed to evaluate target fulfilment?

What are the gains of the activities?

How do the ministries ensure that new legislation is kept simple?
The audit took stock of the better regulation and simplification effort made in the period 2001-06 with
a focus on the Ministry of Finance, the Ministry of Economic and Business Affairs, the Ministry of
Taxation, the Ministry of Justice and the Ministry of Social Affairs. These entities had been selected as the
Ministry of Social Affairs and Ministry of Justice are the administrators of legislation which, in particular,
affect citizens; the Ministry of Taxation and the Ministry of Economic and Business Affairs are the key
administrators of legislation affecting businesses; the Ministry of Finance was selected because of its
overall, co-ordinating role in the government’s better regulation and simplification activities.
European Court of Auditors’ audit of regulatory impact assessments
In 2010, the European Court of Auditors conducted an audit to analyse whether impact assessments
support decision making in European Union institutions (i.e. the European Commission, European
Parliament and Council). Impact assessments are at the cornerstone of the European Commission’s Better
Regulation policy for the improvement and simplification of new and existing legislation. The audit
examined the extent to which, during the period 2003-08:

impact assessments were prepared by the Commission when formulating its proposals and the
European Parliament and the Council consulted them during the legislative process

the Commission’s procedures for impact assessment appropriately supported the Commission’s
development of its initiatives

the content of the Commission’s impact assessment reports was appropriate and the presentation
of findings was conducive to being taken into account for decision making.
Source: Adapted from NAOD (National Audit Office of Denmark) (2007), Report to the Public Accounts Committee
on the Impact of Better Regulation and Simplification, February, RB A501/07; ECA (European Court of Auditors)
(2010), Impact Assessments in the EU Institutions: Do They Support Decision-Making?, Special Report No. 3, ECA,
Luxembourg, http://ec.europa.eu/governance/impact/docs/coa_report_3_2010_en.pdf.
Focusing ex post audit on reliability of information
International Standards of Supreme Audit Institutions (ISSAI) define three general
types of public sector auditing: financial, compliance and performance. Financial audit
focuses on determining whether a public entity’s financial information is presented in
accordance with the applicable financial reporting framework. Compliance audit focuses
on whether the activities of public entities have been conducted in accordance with the
applicable authorities. Performance audit focuses on whether government interventions,
programmes and entities are conducted in accordance with the principles of economy,
efficiency and effectiveness. However, an audit of the legality and regularity of financial
management and of accounting – sometimes referred to as regularity audit – may embrace
elements of both financial and compliance audit. In other cases, elements of performance
audit may be combined with financial or compliance audit activities (INTOSAI, 2013a).
The CGR’s ex post audit assignments focus primarily on compliance with legal
standards in order to safeguard public funds and promote administrative integrity.
Through these ex post audit assignments the CGR seeks to assess public entities’ internal
control, operations performed and the completeness of financial records and its
supporting documentation. The CGR does not audit the end of year financial statement of
individual public entities or the government more broadly.13 Rather, the CGR
consolidates the general government financial statements. Nor does the CGR formally
conduct performance audits, though issues of economy, efficiency and effectiveness may
be addressed as part of an individual audit engagement. The CGR reports that evaluating
the performance of the administration is the exclusive responsibility of the Ministry of
Finance’s Budget Directorate.
This section provides an overview of the CGR’s ex post audit assignments, including
its responsibility for consolidating the government financial statements, and explores the
linkage of these assignments with government accountability and decision-making
processes. Its preliminary recommendations for the CGR centre upon:

introducing financial audit of the reliability of the year-end financial statements of
public sector entities to increase usability of government accounts

auditing the reliability of non-financial performance indicators that underpin
programme management and accountability

developing a programme of ex post audit to address whole-of-government issues linked
to strategic agility.
The CGR’s ex post audit assignments focus on compliance with legal standards
in order to safeguard public funds and promote administrative integrity
The Constitution (Art. 98) defines the CGR’s responsibilities to include: i) overseeing
the legality of acts of the public administration, as well as revenue received and
investment funded by the state treasury, municipalities and other statutory public entities;
ii) examining and judging the accounts of individuals entrusted with resources of public
entities under the oversight of the CGR. The CGR Organic Law states that the institution
shall examine and inspect the books, records and documents related to fiscal, municipal
or social security accounting; and review of the accounts of all individuals involved in
managing public funds or assets.14 In the process, the CGR has the functional
independence to request reports, declarations or data from any official subject to the
authority of its control (Law 10 336, Art. 21).
The CGR Organic Law states that the examination of accounts aims to verify: i) the
receipt of income by the state treasury, or by other entities under the oversight of the
CGR, and the investment of funds by public enterprises, and whether it has complied with
relevant laws and regulations; and ii) the completeness of accounts, authenticity of
support documentation and accuracy of calculations (Law 10 336, Art. 95). Accounts are
to be audited, settled and closed or amended within a period not exceeding one year from
the date of the receipt of the accounts by the CGR. After this period, the civil
responsibility of the accountable entity and that which could affect third parties will
cease, without prejudice to the disciplinary measures that are applicable to the employees
responsible for the delay, and civil and criminal responsibilities which remain subject to
common legal norms (Decree Law 1 263/1975, Art. 58; Law 10 336, Art. 96). However,
not all public entity accounts are audited each year.
The CGR may issue an objection and/or observations as conclusions of its audit
assignments. Objections relate to the lack of necessary information or non-compliance
with any law or regulation that refers to the use of public funds. Observations relate to
amendments that are deemed necessary to be made for the proper presentation of the
accounts and other deficiencies that are not classifiable as an objection, including the
omission of documents. However, observations may be adjusted to become objections if
the audited entity does not attend to the observation within the time period specified by
the CGR (Law 10 336, Art. 101). The CGR will also notify the courts if there are
objections or irregularities related to suspected criminal activity (Law 10 336, Art. 102).
Verification and assessment of compliance with the objectives and goals set for
public entities falls within the mandate of the public administration and is the
responsibility of the executive branch. The executive branch must evaluate social
programmes, industrial and institutional development included in each public entity’s
budget, in accordance with the instructions of the Ministry of Finance. Public entities
governed by Title II of Law 18 575 – the Organic Law on General State Administration
(Ley Orgánica Constitucional de Bases Generales de la Administración del Estado) –
must prepare and disseminate an annual report, including an account of operational and
financial management of the previous year, with the achievement of objectives, tasks and
goals which is shared with the National Congress, in accordance with the instructions
from the Ministry of Finance (Decree Law 1 263/1975, Art. 52).
Introduce audits of year-end financial statements in order to increase
the reliability, usability and confidence of government reporting
A financial audit is an independent examination of the financial accounting and
reporting of public entities intended to support government accountability and
decision making. The purpose of an audit of financial statements is to enhance the degree
of confidence of intended users in the financial statements. The results of the audit are
presented in a report which expresses an opinion on whether the financial statements as a
whole and the information contained therein fairly present each entity’s financial position
and the results of its operations and cash flows. The accounting treatments and
disclosures reflected in the financial statements by the entity are assessed against relevant
accounting standards and legislative reporting requirements (INTOSAI, 2013b).
The OECD (2002) “Best Practices for Budget Transparency” considers the timely
external audit of the annual report/financial statements by a country’s SAI and subsequent
scrutiny by the legislature as critical for integrity, control and accountability. The “Best
Practices” establish that the audited year-end government reports be made available,
including free of charge on the Internet within six months following the end of the fiscal
year. The role of an SAI with respect to the year-end government reports is to provide
independent assurance of the quality and integrity of reported information. The role of the
legislature is to hold the executive to account for its management of public finances and
the delivery of public policies, drawing upon the SAI’s audit main findings.
The case of Chile is different than that of benchmark SAIs, insofar as it is the CGR,
rather than the executive, which consolidates the year-end government report (Table 2.4)
using the information provided by public entities and municipalities through the National
General Accounting System (Sistema de Contabilidad General de la Nación, SICOGEN).
The CGR’s consolidated government report, Informes de Gestión Financiera del Estado,
includes the budgetary position, financial position and balance sheet of the general
government sector (Law 10 336, Art. 144; Decree Law 1 263/1975, Art. 69). The CGR
Organic Law establishes that the Comptroller General must inform the President of the
Republic and both houses of Congress, no later than April of each year, of the year-end
consolidated government report. This report is to include the budgetary and financial
information, including state property, for the previous fiscal year (Law 10 336, Art. 142).
Table 2.4. Audit of government accounts by supreme audit institutions
Country
Year-end accounts of individual public sector entities Consolidated government year-end accounts
Australia
●
●
Brazil
●
●
Chile
o
o
Costa Rica
..
..
Denmark
●
o
●
●
Israel
o
o
Italy
●
o
Korea
●
●
Mexico
●
●
Peru
..
..
Portugal
●
●
South Africa
●
●
Spain
●
●
Source: See Annex 2.A2.
To prepare this report, the CGR receives and validates monthly accounting reports of
public entities and municipalities and conducts analysis of the information’s compliance
with CGR accounting regulations. During 2012, the CGR received 11 500 monthly
accounting and budget reports, of which the CGR had objections to 1-2% of information
related to public services and objections to 10-15% of the information related to
municipalities. Any objections by the CGR to the accounting information received must
be addressed by the public entities.
The CGR does not audit any element of the government’s financial reporting
framework (Table 2.5). In addition, it is important to note that fiscal statistics are also
collected through SIGFE but follow a different classification from accounting statistics,
making it almost impossible to trace one set of accounts to the other. Fiscal statistics are
not subject to audit by the CGR and are published under the authority of the Ministry of
Finance alone.
Neither the annual reports nor the comprehensive management reports issued by
individual public entities include financial statements. The annual reports are comprised
of key statistics of an entity’s achievements for the past fiscal year. Comprehensive
management balance reports include information on the public entity’s achievement of its
strategic goals, organisation, human resources and financial resources. Each
undersecretariat, service, fund, institution, commission, regulatory agency, public
company has its own comprehensive management report.15 This makes it difficult to
examine sectoral and whole-of-government issues.
In introducing the audit of the annual financial statements issued by individual public
entities, the CGR could benefit by considering the timetable for budget preparation.
Although the OECD “Best Practices for Budget Transparency”, discussed above,
emphasise that the government’s year-end report/financial statements be audited within
six months of the end of the fiscal year, it is simply an average. In Chile it would be
critical to complete the audits of the annual financial statements of all individual public
entities, or a materially significant share of them, within five months of the end of the
fiscal year. This would ensure that the audited financial statements are completed before
public entities begin preparing their annual budget proposals (Figure 2.6). Indeed, many
benchmark SAIs involved in this peer review complete their audit of individual public
entity financial statements within four to five months of the end of the fiscal year
(Figure 2.7). This is particularly important vis-à-vis the process of convergence of Chile
with international accounting standards for the public sector (normal internacionales
contabilidad para el sector publico, NICSP).15
December
November
October
September
August
July
June
May
April
March
February
January
Figure 2.6. Chile’s timetable for budget preparation and reporting, approximation
Source: based on Blöndal, Jón R. and Teresa Curristine (2006), “Budgeting in Chile”, OECD Journal
on Budgeting, Vol. 4/2, OECD Publishing Paris, http://dx.doi.org/10.1787/budget-v4-art8-en.
Table 2.5. Summary of central government’s financial management reporting in Chile
Report
Monthly central government
budget execution
Quarterly central government
budget execution
Quarterly state-owned
companies’ financial reports
Comprehensive management
balance (balance de gestión
integral)
Entity annual reports (cuentas
públicas)
Public finance statistics
(estadísticas fiscales)
Public finance report
Public debt report
Content
– Central government’s income and expenses, by subtitle
– Outturn (balance)
– Central government’s income and expenses, by subtitle
– Outturn (balance)
– Balance ajustado
– Income from taxes
– Financing items
– Central government’s gross debt
– Financial statement both by company and consolidated
– Status of results, both by company and consolidated
– Central government: execution of income and expenses, by
subtitle, operative classification of the expense, outturn, balance
ajustado, income from taxes, financing items, gross debt, main
financial assets, the Reserved Copper Law
– Municipalities: execution of income and expenses, by subtitle,
outturn (balance)
– General government: execution of income and expenses, by
subtitle, outturn (balance)
– State-owned companies: financial statement, state of
consolidated results, execution of income and expenses by
subtitle, cash balance
– Central government’s financial statement
– Contingent liabilities
– Tax expenditures
– Others, to be determined
– Central government’s gross and net debt
– Central bank’s gross and net debt
– Explanatory notes and complementary information
Release calendar
Monthly
Approximate publication
date
45 days after the end
of the month
of the quarter
Responsibility
Audited by CGR
Budget Directorate (DIPRES),
Ministry of Finance
Ministry of Finance
No
No
Annually
Ministry of Finance/
State-Enterprise System
Individual public entities
Annually
No
Quarterly
Quarterly
of the quarter
No
No
Annually
March
Ministry of Finance
No
Annually
September
Ministry of Finance
No
Biannually
March, September
Ministry of Finance with
collaboration from the central
bank
No
Source: based on International Monetary Fund “Chile: Report on observance of standards and codes: Fiscal transparency”, IMF Country Report, No. 03/237, IMF..
Figure 2.7. Time for the audited public entity and consolidated government year-end reports
to be made publicly available in Chile and selected countries
Months following the end of the fiscal year
Consolidated government
Australia
Brazil
Chile
Costa Rica
Denmark
Israel
Italy
Korea
Mexico
Peru
Portugal
South Africa
Spain
Public sector entities
n.a. n.a.
n.a.
n.a.
n.a. n.a.
n.a.
n.a.
0
3
6
OECD Best Practices for
Budget Transparency
9
12
15
18
21
24
Notes: n.a. = Not applicable (i.e. not produced). The statistical data for Israel are supplied by and under the
responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the
status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of
international law. Australia: Entity accounts deadlines include 4 months for agencies under the Financial
Management and Accountability Act 1997; 4 months for Commonwealth companies under the Corporations
Act 2001; and 3.5 months for authorities under the Commonwealth Authority and Companies Act 1997.
Consolidated accounts are to be audited as practicable after the end of the financial year. If not submitted 5
months after 30 June, reasoning must be tabled (Sections 55 and 56 of the Financial Management and
Accountability Act 1997). Brazil: The year-end reports of individual public officials are not at the level of
individual public sector entities. Accountable officials are defined as “public administrators and other
individuals responsible for public money, goods and assets within the direct and indirect federal public
administration”. Chile: No consolidated year-end government report or year-end reports of individual public
sector entities. Mexico: Data missing on year-end reports of individual public sector entities. Korea: The
statutory deadline for public entities to transmit their unaudited end of year reports to the Ministry of Strategy
and Finance on 28 February, the Ministry of Strategy and Finance transmits the unaudited entity end of year
reports to the Board of Audit and Inspection on 10 April; the Board of Audit and Inspection transmits the
audited entity end of year reports to the Ministry of Strategy and Finance on 20 May; and the Ministry of
Strategy and Finance transmits the audited entity end of year reports to the National Assembly on 31 May
(National Finance Act, Arts. 58-61). South Africa: Entity accounts deadlines are six months for national and
provincial entities and seven months for local government.
to Q. 5 and 6.
Audit the reliability of non-financial performance indicators that underpin
performance management and accountability
The CGR does not conduct performance audit assignments, making it an outlier in
relation to the benchmark SAIs in this peer review (Table 2.6). INTOSAI (2013c) defines
performance audit as an independent, objective and reliable examination of whether
government undertakings, programmes, systems, activities or organisations are
performing in accordance with the principles of economy, efficiency and effectiveness
and whether there is room for improvement. The principle of economy is about keeping
the costs low, using resources in appropriate quantity and quality and at the best price.
The principle of efficiency is about getting the most from the available resources, and the
relationship between those resources employed and outputs in terms of quantity, quality
and timing. The principle of effectiveness is about meeting the objectives set, and
achieving the intended results.
Table 2.6. Performance auditing by the supreme audit institutions in Chile
and selected countries
Yes
No
Australia, Brazil, Costa Rica, Denmark, European Court of Auditors, Israel,
Italy, Korea, Mexico, Peru, Portugal, South Africa, Spain
Chile
Notes: Performance audit includes: i) audit of the economy of administrative activities in accordance with
sound administrative principles and practices, and management policies; ii) audit of the efficiency of utilisation
of human, financial and other resources, including examination of information systems, performance measures
and monitoring arrangements, and procedures followed by audited entities for remedying identified
deficiencies; and iii) audit of the effectiveness of performance in relation to the achievement of the objectives
of the audited entity, and audit of the actual impact of activities compared with the intended impact. Chile: The
Office of the Comptroller General of the Republic of Chile reports that it does not conduct performance audits
drawing reference to the institution’s Organic Law that states that it may not audit the “merit” of political or
administrative decisions (Law 10 336, Art. 21b). However, the CGR reports that it may examine issues of the
economy, efficiency and effectiveness (or matters that INTOSAI considers to be a part of performance audit) in
its ex post compliance audit assignments.
In articulating its reasons for not conducting performance audit, the CGR cites the
restriction on auditing the “merit” of political or administrative decisions, contained in the
institution’s Organic Law (Law 10 336, Art. 21b).16 Nevertheless, the CGR notes that it
may address issues of economy, efficiency and effectiveness in its ex post compliance
audit assignments.17
Performance auditing does not need to question the merit of intentions and decisions;
instead, it may focus on examining whether possible shortcomings in organisation,
management and support systems have affected the capacity to deliver the expected
results. Performance auditing promotes accountability by assisting those charged with
governance and with oversight responsibilities in improving performance, rather than
merely to identify weaknesses or past errors. It does this by examining whether decisions
by executive authorities or the legislature are efficiently and effectively implemented, and
whether taxpayers or citizens have received value for money (ISSAI 300, § 4).
Performance audits provide new information or knowledge by: new analytical insights
(broader or deeper analysis or new perspectives); making information accessible to
various stakeholders; improving the quality of findings or conclusions by doing additional
research; and providing recommendations based on an analysis of audit findings
(ISSAI 300, § 5).
A second reason that the CGR does not conduct performance audit is because
verification and assessment of compliance with the objectives and goals is considered as
the mandate of the administration. The Organic Law on General State Administration
states that the executive is responsible for evaluating performance – for which it has
established an advanced system (Figure 2.8). This system, known as the “system of
evaluation and management control”, aims to improve the effectiveness of policy making
and management throughout the central government, to create performance incentives for
public officials and to make the budget results-oriented. The Chilean performance
management system has been developed and is managed by the Ministry of Finance’s
Budget Directorate. Among the system’s key elements are: strategic definitions
(definiciones estratégicas); performance indicators and targets; and evaluation
(Hawkesworth et al, 2013).
Figure 2.8. Performance budgeting in Chile and selected countries (2013)
1.0
0.9
0.8
0.7
0.6
0.5
OECD average
0.4
0.3
0.2
Portugal
Spain
Belgium
Italy
Poland
Denmark
Australia
Mexico
Korea
0.0
Chile
0.1
Notes: No data for Costa Rica, Peru and South Africa. This figure contains 14 variables that cover information
on the type of performance information developed, processes for setting goals, processes for monitoring and
reporting on results, and whether (and how) performance information is used in budget negotiations and
decision making by the central budget authority, line ministries and politicians.
Source: Adapted from OECD (2013), Government at a Glance 2013, OECD Publishing, Paris,
http://dx.doi.org/10.1787/gov_glance-2013-en based on the OECD Budget Practices and Procedure Survey.
Each public entity is required by the Budget Directorate to develop and present
strategy directions in its budget information chapter (the Antecedentes Complementarios
Control de Gestión Pública). The Budget Directorate’s policies require that a public
entity’s strategic definitions: i) specify the entity’s mission, objectives, strategic products
and clients/users/beneficiaries; ii) link the entity’s objectives to government priorities and
“government programmes”; and iii) be prepared based on a logical framework of
outcomes, outputs, processes and inputs. The Budget Directorate’s guidelines state that
strategic products must be the goods or services (i.e. outputs) which serve the institution’s
strategic objectives. For example, the Ministry of the Interior’s main sub-secretariat has
defined six strategic products, including public security, public order and human rights.
Expressed differently, the strategic products are supposed to be groups of outputs with a
common outcome (Hawkesworth et al., 2013).
Performance indicators are developed for each of the strategic products contained in
the entity’s strategic directions. Approximately 1 200 performance indicators have been
defined within the central administration. Performance targets are set for each of these
performance indicators, and the performance incentive system delivers rewards which are
to a large degree based on institutional performance against these performance targets.
There are three different types of evaluation in the Chilean performance management
system: impact evaluations, programme evaluations and institutional evaluations. Impact
evaluations focus on whether a programme has achieved its intended outcomes.
Programme evaluations focus on the programme’s intervention logic and the causal chain
by which programme outputs are supposed to generate specific outcomes. Institutional
evaluations focus on specific institutions or sectoral groups of institutions, examining the
consistency of institutional and sectoral objectives, organisational structures, production
and management processes, resource use and service delivery performance.
The coverage of evaluations has varied over time, with 38 evaluations conducted in
2009, 41 in 2010, 30 in 2011 and 2012 and 23 in 2013. The programmes and
organisations to be evaluated are selected by the Budget Directorate in consultation with
the Congress. Evaluations are then carried out by external evaluators (consultants or
research institutions) contracted by the Budget Directorate, which provides terms of
reference and methodological guidelines to the evaluators. All final evaluation reports are
made available to the Congress and the public, and their summaries are included in the
budget information chapters in the form of “Executive Minutes”. The Budget Directorate
and the relevant ministry discuss the recommendations of the evaluations and agree on
the actions which should be taken in response to evaluation recommendations. The
ministry’s response becomes the subject of a formal agreement, the implementation of
which is the monitored in subsequent years by the Budget Directorate.
Based on the current position regarding performance auditing in Chile, the CGR
could consider auditing the reliability of non-financial performance information. Auditing
non-financial performance information focuses on confirming the reliability of
performance information, and is often conducted as an integral part of the audit of
year-end reports/financial statements. Auditing non-financial performance information is
being implemented by a growing number of SAIs, such as in Australia and South Africa –
as well as the European Court of Auditors. Box 2.5 presents an overview of the approach
of the Auditor-General of South Africa.
While well-developed, Chile’s performance management system is contingent on
reliable and timely non-financial performance information provided by individual public
entities. The Budget Directorate does not have the responsibility nor the capacity to
examine the reliability of 1 200 performance indicators. This would require
understanding and testing the policies, procedures and controls related to the management
of performance information; understanding and testing of systems and controls relevant to
collecting, monitoring and reporting performance information; confirming the existence
and consistency of performance information between strategic/annual performance plans,
quarterly reports and annual performance report and its presentation in annual reports;
and comparing reported performance information to relevant source documentation and
auditing the validity, accuracy and completeness of reported information.18
Internal audit units within individual public entities may provide reasonable assurance
of the reliability and timeliness of non-financial performance information. However, this
is by no means guaranteed. For example, neither the CGR’s guidance to internal audit
units nor that provided by the Council of Government’s General Internal Auditors
(Consejo de Auditoria Interna General de Gobierno, CAIGG) addresses more general
issues of, for example, risk management, evaluating internal control systems, preparing
an annual internal audit work plan. Moreover, concern has been raised on a number of
occasions over the independence and capacity of these internal audit units, both at the
national and sub-national level (CGR, 2010b; Deloitte, 2011). In formulating guidance,
the CGR could take into account the Institute of Internal Auditor’s International
Standards for the Professional Practice of Internal Auditing.
Box 2.5. Audit of non-financial performance information by
the Auditor-General of South Africa
Beginning in 2005-06, the Auditor-General of South Africa (AGSA) began to audit
non-financial performance information. This stemmed from the requirement under the Public
Finance Management Act, 1999 (Act 1/1999) and the Municipal Finance Management Act, 2003
(Act 56/2003) that accounting officers must report annually on the performance against
predetermined objectives.
The AGSA audit approach focuses on:

understanding and testing the policies, procedures and controls related to the
management of performance information

understanding and testing of systems and controls relevant to collecting, monitoring and
reporting performance information

confirming the existence and consistency of performance information between the
strategic/annual performance plan, quarterly reports and annual performance report and
its presentation in annual reports

comparing reported performance information to relevant source documentation and
auditing the validity, accuracy and completeness of reported information.
The AGSA audit criteria includes:
Compliance
with planning
and reporting
requirements
Usefulness of
reported
performance
information
Reliability of
reported
performance
information
– Existence of defined objectives, indicators and targets, with information reported against those
predetermined objectives, indicators and targets
– Timeliness of the reporting of performance information within two months after the end of the year
– Presentation of performance information using the National Treasury guidelines; the consistency of
performance information in tables and the narrative of the annual report; with clear explanations of
material differences between actual and planned performance
– Measurability of objectives using indicators and targets, with well-defined indicators and SMART
(specific, measurable, attainable, relevant and time bound) targets
– Relevance with a clear and logical link between the objectives, outcomes, outputs, indicators and
performance targets
– Consistency between objectives, indicators and targets and between various planning and reporting
documents
– Validity of actual reported performance
– Accuracy in the amounts, numbers and other data relating to reported performance
– Completeness of results and events in the annual performance report
The AGSA recognises the following as sources against which the performance management
system and annual performance report will be evaluated as a basis for an audit
conclusion/opinion:

all relevant laws and regulations

framework for the managing of programme performance information, issued by the
National Treasury

relevant frameworks, circulars and guidance issued by the National Treasury and the
Presidency regarding the planning, management, monitoring and reporting of
performance information.
Source: www.agsa.co.za.
Develop a programme of ex post audit assignments to address
whole-of-government issues linked to strategic agility
In recent years the CGR has been changing its ex post compliance audit assignments
to provide a more holistic approach of public entities and government programmes. For
example, in 2008 the CGR introduced national and transversal audits programmes
(programas nacionales, PNAC, and programas transversales, PTRA, respectively).
National audits focus on the same subject within a single central public entity that has
activities throughout the entire country. These audits apply the same procedures in a
number of the central public entity’s units spread across the country. A single lead audit
unit prepares the audit plan and the preliminary and final audit reports and partner audit
units play a supporting role and conduct the audit procedures in their respective
jurisdiction. Transversal audits focus on the same subject across a range of centralised
and decentralised entities that share a common hierarchical or financial dependence with
the same central public entity. Each audit unit prepares its own preliminary and final audit
report with a single lead audit unit preparing a consolidated report for the central
government entity.
For example, in 2010 the CGR audited compliance of municipal internal audit units
with the regulatory requirements across all 345 municipalities. Internal audit is intended
to provide an independent, objective assurance and advisory services to management in
order to add strategic value and improve an entity’s operations. Internal audit provides
assurance that the internal controls in place are adequate to mitigate risks, that
governance processes are effective and efficient, and that the entity’s goals and objectives
are met. These activities help that entity accomplish its objectives by bringing a
systematic, disciplined approach to evaluate and improve the effectiveness of risk
management, control and governance processes, which helps to monitor the
accomplishment of progress (IIARF, 2004). Although this audit was focused on legal
requirements, the CGR included an analysis of improvement needs as recommendations
to be taken into account by the government and Congress. This could be replicated and
extended by examining the maturity of the internal audit function against the
government’s maturity model, presented earlier in this chapter. In a similar regard, the
CGR could audit other whole-of-government issues linked to strategic agility, such as is
done by the SAI of the United Kingdom (Box 2.6).
Providing added value products and counsel
A key challenge facing the CGR is the communication of the findings of its various
audit assignments in a way that elevates these findings to the attention of government
authorities, public officials and the general public. CGR stakeholders within the executive
and legislature, as well as representatives of civil society and the media, find it difficult to
articulate what the main issues are that the CGR has raised regarding specific public
entities, government sectors and/or management functions. To the extent that the CGR
identifies common challenges and risks affecting good public governance, it serves more
as input into the institution’s annual audit planning rather than its external
communications. The CGR currently does not provide a combined analysis of common
findings, trends and root causes at a whole-of-government, sectoral or entity level.
However, a number of recent developments within the CGR indicate that the institution
may be beginning to move in this direction, including the consolidation of summary
reports in the areas of health and education.
Box 2.6. Audit of whole-of-government issues by the United Kingdom National Audit
Office
During the last several years the United Kingdom National Audit Office (NAO) has conducted a
number of audits to address whole-of-government issues as a means of supporting strategic agility
within government. These audits have included:

the maturity of risk management in public entities, the ability of the centre of government to
identify and meet its skills requirements

the capacity of the centre of government to define the expected benefits and to measure the
actual benefits of reorganisations of public entities

the effectiveness of the central government’s communication and engagement with local
governments

the capacity of the central government to take early action in health and social policies, to use
a strong evidence base, to link evidence to long-term planning and to co-ordinate the response
across government

the capacity of the central government to identify and implement opportunities to integrate
service and programme delivery.
Source: Adapted from NAO (2011a), Good Practice, Managing Risks in Government, Financial Management and
Reporting, NAO, London, www.nao.org.uk/wp-content/uploads/2011/06/managing_risks_in_government.pdf;
NAO (2011b), Identifying and Meeting Central Government’s Skills Requirements, Report by the Comptroller and
Auditor-General, HC 1276 Session 2010-12, 13 July, NAO, London, www.nao.org.uk/wpcontent/uploads/2011/07/10121276.pdf; NAO (2012a), Cabinet Office, Reorganising Central Government Bodies,
Report by the Comptroller and Auditor-General, HC 1703 Session 2010-13, 20 January, NAO, London,
www.nao.org.uk/wp-content/uploads/2012/01/10121703.pdf; NAO (2012b), Department for Communities and
Local Government, Central Government’s Communication and Engagement with Local Government, Report by
the Comptroller and Auditor-General, HC 186 Session 2012-13, 13 June, NAO, London, www.nao.org.uk/wpcontent/uploads/2012/06/1213187.pdf; NAO (2013a), Cross-Government, Early Action: Landscape Review,
Report by the Comptroller and Auditor-General, HC 683 Session 2012-13, 31 January, NAO, London,
www.nao.org.uk/wp-content/uploads/2013/03/Early-Action-full-report.pdf; NAO (2013b), Cabinet Office and
HM Treasury, Integration Across Government, Report by the Comptroller and Auditor-General, HC 1041 Session
2012-13, 13 March, NAO, London, www.nao.org.uk/wp-content/uploads/2013/03/10091-001_Integration-acrossgovernment.pdf.
A modern and effective SAI does not limit itself to auditing, and a purely
retrospective identification of deficiencies is insufficient for an SAI to support good
public governance – let alone to support strategic agility and rebuild trust in government.
An SAI needs not limit itself to the one-time submission of an audit report to the
respective public entity or those charged with governance. For maximum effect, an SAI
can use audit findings as a resource to inform discussion and debate on good public
governance. Specific actions may include analysing the findings contained in individual
audit reports as to their relevance beyond the specific cases, including common findings,
trends and root causes. Moreover, attention can also be given to developing thematic and
target-group specific publications and materials based on the conclusions of various audit
assignments to further engage those charged with governance (UN/INTOSAI, 2013).
Audit assignments may also be used to highlight good and innovative practices that
exist in the public administration. The identification of good practices can facilitate
mutual learning between different public sector entities and demonstrate that the SAI can
help to improve performance and not merely identify weaknesses and past errors.
This section focuses on how the CGR can further leverage knowledge from existing –
as well as any new – audit assignments to deliver value and benefit for the institution’s
diverse stakeholders. Its preliminary recommendations centre upon:

developing products that combine the findings of different audit assignments and
communicate a broader understanding of issues in specific public entities, government
sectors or management functions

developing products that communicate good practice identified through audit
assignments as input into the development of management frameworks in the public
sector.
Develop products that combine the findings of different audit assignments
and communicate a broader understanding of government issues
The CGR has a limited set of instruments to communicate common findings, trends
and root causes drawn from individual audit engagements. Among the instruments that it
may rely upon are the transversal audits, discussed in the previous section, that were
introduced in 2008, and the CGR’s annual report (cuenta pública). However, the
identification of common findings, trends and root causes through the transversal audits
are limited to the subject matter addressed by the specific audit (for example, the
functioning of internal audit). The CGR’s annual report, which is presented to the
President of the Republic and the National Congress in April every year, does not provide
a combined analysis of its individual audit assignments. Each regional comptroller must
issue an annual report for his/her respective office to be shared with the regional
government (executive) (Law 10 336, Art. 143).
There is nothing prohibiting the CGR from using its annual report to present
combined analysis of its individual audit assignments. The CGR Organic Law requires
that the institution’s annual report contain a summary of the main activities in the
performance of its functions; the main concerns and difficulties raised in regard to the
interpretation and application of legal norms, and the institution’s financial statements
(Law 10 336, Art. 143). However, the annual reports of the CGR’s regional offices do not
include a discussion of the main doubts and difficulties raised in regard to the
interpretation and application of legal norms, as this is a matter that is centralised within
the institution’s Legal Division and the capacity of regional offices is limited to the
application of existing jurisprudence.
The summary of the CGR’s main activities contained in the annual report is limited to
a quantification of the institution’s outputs categorised around its four main functions.
These functions are: i) “legal”, including ex ante audit and legal opinions that serve as
administrative jurisprudence; ii) “audit”, ex post audit, inspection and special
investigations; iii) “accounting”, to set national public accounting standards and prepare
the general government accounts, as defined in the Constitution; iv) ”judicial”, to
establish administrative and civil responsibility of public officials in the case of
non-compliance with regulations related to the use of public funds. While this can
demonstrate to the legislature, executive and the general public how the CGR complied
with its mandate and used its financial resources, it does little to elevate the discussion on
public governance in Chile.
The summary of the CGR’s main concerns and difficulties contained in the annual
report relates to the institution’s interpretation of legal norms and suggested modifications
(principales dudas y dificultades respecto a las normas jurídicas y sugerencia de
modificaciones). For example, the CGR’s 2012 annual report focused on various matters
such as: the absence of a public authority to intervene on matters formally responsible by
the Advisory Commission for the Identification of Victims of Political Incarceration and
Torture (Comisión Asesora para la Calificación de Detenidos Desaparecidos, Ejecutados
Políticos y Víctimas de Prisión Política y Tortura) formally required to be established by
Law 20 405 and Supreme Decree 43/2010; and difficulties in the application of Article 59
of the General Law on Cities and Construction (Ley General de Urbanismo y
Construcciones) that sets time limits for the declaration of public utility on roads and
parks that indicates that gaps exist in such regulation in areas such as the regulation of
local roads expiration and no service available within for this purpose, and which has led
to an amendment proposal before Congress.
This is not to assert that the CGR must incorporate an analysis of common findings,
trends and root causes identified in its audit assignments in its annual report. Rather, the
CGR could give consideration to the development of specific products that combine the
findings of different audit assignments and communicate a broader understanding of the
current and emerging risks facing government. SAIs in a number of benchmark countries,
including South Africa, seek to achieve this (Box 2.7). However, care should be taken to
develop a clear framework for the identification and analysis of trends and not simply an
ad hoc presentation of highlights from the previous year. Moreover, it is critical that
information is presented in a simple and user-friendly manner, giving consideration to
how Web 2.0 technologies can enable information to become more accessible to all. This
can be achieved by enabling components of reports to be downloaded individually, or by
stakeholders using the data to generate their own reports. An example in this direction
could be the implementation of web-based system that informs of observations pending
action by audited entity, currently being considered by the CGR.
Box 2.7. General Report on the National Audit Outcomes of the Auditor-General of South Africa
The General Report on the National Audit Outcomes of the Auditor-General of South Africa (AGSA)
summarises the results of the audit outcomes of 671 auditees (162 departments – including parliament and the
provincial legislatures – and 509 public entities). Public entities include the major public entities, government
business enterprises, national and provincial public entities, constitutional institutions and trading entities that are
audited in terms of the Public Finance Management Act (PFMA), as well as other entities audited in terms of any
legislation other than the PFMA. The audit outcomes of the 135 public entities not audited by the AGSA are not
analysed in this general report. The General Report on the National Audit Outcomes is presented to parliament
eight months after the end of the fiscal year, to facilitate dialogue on the understanding of the key underlying
issues driving these audit outcomes and possible solutions in this regard.
The report is structured into four parts: i) consolidated analysis of the audit outcomes of national and
provincial governments; ii) audit outcomes of ministerial portfolios; iii) sector audit outcomes (e.g. education,
health, human settlements, public works, social development); and iv) highlights of provincial audit outcomes.
The report is 500 pages in length, though its structure enables the document to be disassembled into smaller
sections in print and electronic formats. Key to the report’s usability is a traffic light coding used throughout the
document to compare between entities in a single year and to compare changes within public entities over time
(i.e. green = good outcomes/trends; orange = stagnant or little progress; and red = poor outcomes/trends).
Box 2.7. General Report on the National Audit Outcomes
of the Auditor-General of South Africa (cont.)
The audit outcomes of national and provincial governments include trend analysis of issues over the
previous several years, key findings arising from the audit of the financial statements, reporting by auditees
against their predetermined objectives and key compliance by auditees with key laws and regulations. Root
causes of audit findings and recommended best practices are also presented, which is intended to be read
together with an analysis of the auditees’ internal control system. Root causes are the underlying causes or
drivers of audit findings, i.e. why the problem occurred. They are structured around planning, oversight and
monitoring; systems and processes; proper record keeping; and human resource management. Addressing the
root cause helps to ensure that the actions address the real issue or opportunity, thus preventing or reducing
incidents of recurrence as opposed to simply providing a one-time or short-term fix. Compliance by auditees
with key laws and regulations include supply chain management and unauthorised, irregular as well as fruitless
and wasteful expenditure incurred.
The status of the auditees’ internal control system identifies the drivers of audit outcomes, namely
leadership, financial and performance management and governance.
Category
Leadership
Financial and
performance
management
Governance
Dimensions
– Provide effective leadership based on a culture of honesty, ethical business practices and good governance, protecting
and enhancing the interests of the entity.
– Exercise oversight responsibility regarding financial and performance reporting and compliance with laws and regulations
and related internal controls.
– Implement effective human resource management to ensure that adequate and sufficiently skilled resources are in place
and that performance is monitored.
– Establish and communicate policies and procedures to enable and support an understanding and execution of internal
control objectives, processes and responsibilities.
– Develop and monitor the implementation of action plans to address internal control deficiencies.
– Develop and monitor the implementation of action plans to address internal control deficiencies in the IT environment.
Establish an IT governance framework that supports and enables the business, delivers value and improves performance.
– Implement proper record keeping in a timely manner to ensure that complete, relevant and accurate information is
accessible and available to support financial and performance reporting.
– Implement controls over daily and monthly processing and reconciling of transactions.
– Prepare regular, accurate and complete financial and performance reports that are supported and evidenced by reliable
information.
– Review and monitor compliance with applicable laws and regulations.
– Design and implement formal controls over IT systems to ensure the reliability of the systems and the availability,
accuracy and protection of information and to address application systems susceptible to compromised data integrity
(Information systems).
– Implement appropriate risk management activities to ensure that regular risk assessments, including consideration of IT
risks and fraud prevention, are conducted and that a risk strategy to address the risks is developed and monitored.
– Ensure that an adequately resourced and functioning internal audit unit is in place that identifies internal control
deficiencies and recommends corrective action effectively.
– Ensure that the audit committee promotes accountability and service delivery through evaluating and monitoring
responses to risks and providing oversight of the effectiveness of the internal control environment, including financial and
performance reporting and compliance with laws and regulation.
– It also examines the drivers of: effective human resource management as a driver of audit outcomes; the use of
consultants by some national departments; information technology management as driver of audit outcomes; and the
effectiveness of audit committees and internal audit units.
The analysis also includes attention to the role and impact of key “role players” in terms of the assurances
required from them in relation to their responsibilities. Role players include assurance providers in national and
provincial governments (i.e. senior management, accounting officers, the audit committee and internal audit);
legislative bodies (i.e. the national and provincial standing committees on public accounts, national and
provincial portfolio committees), executive authorities (i.e. the President and the national ministers at the
national level and the Premier and members of the Executive Council and the provincial level – as well as the
role of co-ordinating institutions).
Source: AGSA (Auditor-General of South Africa) (2013), PFMA 2011-12, Consolidated General Report on National and
Provincial Audit Outcomes, AGSA, www.agsa.co.za.
The CGR could complement information from its different audit assignments with its
other knowledge bases, such as on accounting analysis and its tribunal of accounts. For
example, in 2011 the CGR began producing studies using accounting information
focusing on the structure and financing of the higher education sector and public
universities (CGR, 2011a; 2012b). The CGR produced these studies using accounting
information it receives from all central government and municipal public entities on a
monthly basis. This information could be coupled together with combined analysis of its
common findings, trends and root causes at a whole-of-government or sectoral level.
Moreover, the CGR could complement this again further with information on key audit
findings and the status of actions by government to address past audit findings. For
example, in 2013 the CGR began to prepare summary reports of actions already taken and
pending to address audit observations by government sector.
Reports including information on government spending, government structures and a
consolidated analysis of outcomes of individual audit assignments could serve as a
valuable complement to the public entity’s reporting. Moreover, such reporting by the
CGR could help to create a holistic understanding of the institution’s functions – and how
they complement one another – by its various audiences of how its functions complement
each other. Such reports have proven useful for SAIs in other countries, such as in the
United Kingdom (Box 2.8).
Developing products that communicate good practice identified through audit
assignments as input into the development of management frameworks
In addition to presenting analysis of common findings, trends and root causes
identified through its audit assignments, the CGR could consider how to generate
information on good practices within the government. This is done, for example, by the
SAI of Australia (Box 2.9). Such an approach can help to recognise good practices within
one public entity and to promulgate them among other public entities as a basis to support
mutual learning. Such materials can also respond to a perceived need or demand for
guidance material in a particular area of public administration. Moreover, information can
also be complemented by examining practices in the public or private sectors in Chile and
other countries. The Australian National Audit Office introduced such an approach in
1987 and those issued after 1996 are available through the institution’s website (Box 2.7).
Table 2.7. Good practice guidance by supreme audit institutions in Chile
Yes
No
Australia, Korea, Costa Rica, Italy
Chile, Denmark, European Court of Auditors,
Israel, Portugal, South Africa
Notes: Australia: The Australian National Audit Office publishes better practice guides with the aim to
improve public administration by providing a mechanism whereby better practices employed in organisations
are recognised and promulgated to all Australian government entities. Costa Rica: As stipulated by the Act on
Internal Control, the SAI of Costa Rica is tasked with the function of issuing guidelines and directives
regarding audit and control.
to Q. 13.
Box 2.8. Example of the United Kingdom National Audit Office departmental
overviews
In 2010-11, the United Kingdom National Audit Office (NAO) issued 17 short departmental
overviews. These guides are designed to provide a quick and accessible overview of departments
and focus in particular on where the NAO believes the department’s performance could be
improved, using examples from its published work. This has since been repeated in 2011-12.
The departmental overviews are categorised into three groups, “citizens and services”
(i.e. children and families; civil society and commissioning; culture, media and leisure;
education and skills; employment, jobs and careers; health and social care; local services;
welfare and benefits); “economic” (i.e. business and industry; central finance and treasury;
private finance; science, technology and innovation; tax and duties) and “environment”
(i.e. communities, regions and regeneration; environment, energy and sustainability; housing,
property and construction; transport and infrastructure).
The departmental overviews are approximately 30 pages structured into 3 parts and annexes:

Part 1: About the department, including the departments’ responsibilities, how the
department is organised, where money is spent, recent developments and current
changes, capability and leadership (including a value-for-money assessment scorecard
drawn from the Cabinet Office’s Capability Review of the respective department) and
civil service survey results.

Part 2: Financial management, including financial outturns, progress on cost reductions,
relevant NAO reports on financial management in the respective department, NAO
financial audit findings in the respective department, issues raised in governance
statements.

Part 3: Performance, including the instruments for reporting the department’s
performance, the respective department’s reported performance, information on the
reliability of performance data in the respective department, issues identified in the
NAO’s performance audit work.

Annexes, including key NAO audit reports on the respective department, key NAO
cross-government audit reports of relevance to the department, other sources of
information on the respective department, NAO work in progress.
The contents of the report are shared by the NAO with the department before they are
released to ensure that the evidence presented is factually accurate.
Source: www.nao.org.uk.
Again, the CGR has begun to provide guidance on specific matters, though focused
on clarifying the legal framework for public officials and interested parties. For example,
in 2012 the CGR issued a Manual of Administrative Jurisprudence on Community,
Inter-Community and Municipal Regulatory Planning (Manual Práctico de
Jurisprudencia Administrativa sobre Planes Reguladores Comunales, Intercomunales y
Metropolitanos). The Manual was issued jointly by the CGR and the Ministry of Housing
and Urban Areas (Ministerio de Vivienda y Urbanismo) to facilitate understanding of the
laws and regulations for community, inter-community and municipal planning drawing
upon recurring CGR audit observations from the previous three years. The Manual does
not seek to cover all issues related to planning, only those considered more complex and
challenging, such as social integration, heritage listings, environmental protection, people
with living disabilities as well as demands for quality urban infrastructure and services
and citizen participation in the decision-making process.
Box 2.9. The Australian National Audit Office’s better practice guides
The Australian National Audit Office (ANAO) produces better practice guides as part of its
integrated audit approach, which includes providing information support services to audit
clients. Better practice guides aim to improve public administration by providing a mechanism
whereby better practices employed in organisations are recognised and promulgated to all
Australian government entities. This can involve examining practices in the public or private
sectors, in Australia or abroad. The ANAO’s emphasis in its better practice guides is to identify,
assess and articulate good practice from its knowledge and understanding of the public sector as
well as areas where improvements are warranted.
Introduced in 1987, the better practice guides were designed to give examples of sound
practice that should be adopted by the whole of the Australian public sector. Initially the better
practice guides were produced on an ad hoc basis but in later years they have become an integral
part of the ANAO’s performance audit strategy. The ANAO reinforces its audit findings and
recommendations through the publication of better practice guides which are specifically
designed to provide practical, workable guidance to promote better practice in specific areas of
public administration. The guides are seen as “reference guides” in some areas of public
administration – they are certainly warmly received by public sector agencies.
Depending on the subject and nature of the information collected during an audit, better
practice guides may be produced in conjunction with an audit or prepared as a result of a
perceived need to provide guidance material in a particular area of public administration.
A complete list of all better practice guides published by the ANAO since 1996 is available
on the ANAO’s website. These better practice guides can be listed by date, title or theme. A
summary identifies the purpose of the better practice guides, and the guides can be downloaded
from the website. Examples of better practice guides include:

Internal audit: Public Sector Internal Audit (2012; 2007)

Public Sector Environmental Management (2012)

Developing and Managing Contracts (2012)

Public Sector Audit Committees (2011)

Human Resource Information Systems (2011)

Fraud Control in Australian Government Entities (2011)

Strategic and Operational Management of Assets by Public Sector Entities (2010)

Implementing Better Practice Grants Administration (2010)

Planning and Approving Projects an Executive Perspective (2010)

Innovation in the Public Sector (2009)

Preparation of Financial Statements by Public Sector Entities (2009)

Business Continuity Management Building Resilience in Public Sector Entities (2009)

Developing and Managing Internal Budgets (2008)

Agency Management of Parliamentary Workflow (2008)

Fairness and Transparency in Purchasing Decisions (2007)

Administering Regulation (2007)
Box 2.9. The Australian National Audit Office’s better practice guides (cont.)

Implementation of Programme and Policy Initiatives (2006)

Legal Services Arrangements in Australian Government Agencies (2006)

User Friendly Forms (2006)

Betters Practice in Annual Performance Reporting (2004)

Public Sector Governance (2003)

Performance Information in Portfolio Budget Statements (2002)
Source: McPhee, I. (2012), “The evolving role and mandate of the Australian National Audit Office since
federation”, Chapters on Parliament, No. 57, February, www.aph.gov.au; Australian National Audit Office
(ANAO) website, www.anao.gov.au.
Whereas this guidance is based on the CGR’s legal function, these efforts could be
complemented by findings of the institution’s audit assignments. Further, the CGR could
use this information to provide expert opinion to refine the administration’s management
maturity models discussed earlier in this chapter.
Conclusions
Modernisation of the state provides an opportunity for the CGR to reassess its audit
assignments. Chile’s public sector and its governance arrangements have undergone
significant changes, especially in the past two decades. Despite notable efforts in the past
six years in the execution of audits (from new methodological approaches to an increased
focus in high social and economic areas), the CGR’s audit assignments remain largely
unchanged. Government efforts to increase strategic agility in order to support sustainable
and inclusive development and to effectively respond to emerging policy challenges will
place new demands on, and create opportunities for, the CGR. Moreover, the CGR’s
mandate and independence position it as a valuable knowledge base for developing
government strategic sensitivity and collective commitment, and managing operational
risks associated with resource flexibility.
Responding to these new demands and opportunities, the CGR will need to reassess
its portfolio, within its legislative mandate. Regarding ex ante control of legality,
correctly redesigning the TdR can provide further incentives to increase the maturity of
internal control within public entities and good management practices, and allow the
CGR to invest additional resources in new forms of ex post audit assignments – including
performance auditing and quality of regulatory management. Advancing further in this
direction should be possible given that, in fact, close to 90% of administrative acts subject
to TdR obtain it, and the steps taken by the CGR are towards automation and the
provision of exemption from TdR. These considerations, however, need to take into
account the broader system of control in Chile, including capacity and independence
concerns in internal control systems and legal units within each public entity.
The CGR’s ex post audit assignments can similarly be redesigned in order to provide
reasonable assurance of the reliability of financial and non-financial information reported
by public entities. Enhancing the reliability of government information, and the
functioning of the internal control measures underpinning it, can support government
accountability and decision making – as well as contribute to rebuilding trust in
government. In addition, the CGR can use the findings of its audit assignments to provide
added value products and counsel for its stakeholders. Table 2.8 provides a summary of
the recommendations made in this chapter.
Table 2.8. Preliminary recommendations matrix:
Supporting strategic agility and rebuilding trust in government
Preliminary recommendation
Response to challenge/weaknesses
Expected impact of recommendation
Utilise ex ante audit assignments to
enhance the maturity of risk-based
internal control within public entities and
to develop good management practices,
including by:
– integrating the automation of the
CGR’s ex ante audit assignments with
government management ICT systems
in order to enhance internal control and
reduce administrative burden within
government
– further utilising exemptions to the
CGR’s ex ante audit assignments in
order to incentivise sustained
improvement in decision making and
internal control within individual public
entities
– reallocating capacity to undertake
ex post audits of decision-making
systems, regulatory management
practices and internal control within
public entities and across the
government.
The broad application of the CGR’s
ex ante audit assignments creates a
number of risks, including weak
incentives for public managers to
strengthen internal controls within their
respective public entities and an
opportunity cost for the CGR to focus on
other assignments.
Although the CGR reviews a broad
number of administrative acts, it is
unable to conclude what are the
recurring challenges and their root
causes.
Although the CGR is taking action to
automate its ex ante audit assignments,
further efforts are necessary, including
the opportunity to leverage co-ordination
between the CGR and other parts of the
government in the development of
systems to automate the CGR’s ex ante
audit assignments.
Incentivise public managers to
strengthen internal control and the
maturity of their management systems
as well as to focus greater attention on
the appropriate competencies of
officials occupying roles in legal,
financial, procurement and human
resource management units.
More effective government internal
control and greater maturity of
management systems can support
strategic agility and trust in government
by enabling public managers to take
appropriate due diligence of their
decision-making processes.
The CGR will also be able to focus its
audit assignments on the
well-functioning of government systems
and understanding the recurring
problems and the root causes rather
than limiting itself to the identification of
illegal acts. This has the potential to
better support the efforts to strengthen
public governance at national and
sub-national levels, including the
identification of good practices.
Proactively support efforts to consolidate
an independent, capable and efficient
system of internal control in the Chilean
public sector, including by:
– conducting assessments of strengths
and weaknesses, challenges and
opportunities of existing mechanisms,
including internal control and legal
units, and promote policy discussion to
facilitate decision making
– providing guidance and support for the
professionalisation and capacity
building of internal control, taking into
account the Institute of Internal
Auditor’s International Standards for
the Professional Practice of Internal
Auditing
– providing public entities with structured
information on recurring issues by type
of administrative act or public entity
identified through the TdR process in
order to support the identification of
ways to improve administrative
decision making.
The consolidation of the TdR has
responded in part to weaknesses in the
overall control system in Chile, including:
i) the absence of independent
administrative courts; ii) the absence of a
legal mandate and professionalisation of
the function of internal audit/internal
control; and iii) concerns over the
independence and professionalisation of
internal audit units and legal units.
A stronger institutional control
framework that can provide better
guidance and capacity for improving
strategic agility in the public sector.
Convergence of Chile towards
international standards in internal audit
and control.
Supporting strategic agility and rebuilding trust in government (cont.)
Utilise ex post audit assignments to enhance
responsibility over the use of public resources
and the reliability of information generated and
reported by public entities to enhance the use
of this information for accountability and
decision-making processes, including:
– auditing the reliability of annual financial
statements of public entities, linking the
process to the annual budget cycle
– auditing the reliability of non-financial
performance information together with the
audit of annual financial statements
– auditing whole-of-government issues that
are key for the government to become more
strategically agile.
Ex post audit assignments focus on
the compliance of transactions, the
identification of errors and deficiencies,
but not the root causes of the
errors/deficiencies.
The CGR does not audit the annual
financial statements of public entities
or the consolidated government
(constitutional provisions require the
CGR to prepare the consolidated
financial statements).
Despite a strong focus on performance
management in government, the CGR
does not conduct performance audits.
Efforts in this direction are beginning and
could be further pursued and leveraged.
Enhance the reliability of information
generated and reported by public
entities to enhance the use of this
information for accountability and
decision-making processes.
Focus the attention of the legislature
and citizens on the content and
reliability of information that
government actually produces.
Support and ensure convergence
and compliance with International
Accounting Standards for the Public
Sector.
Deliver value-added products, presenting
findings from ex post audit work in new ways
to further engage those charged with
governance, including:
– developing products that combine the
findings of different ex post audit
assignments, understanding common trends
and root causes across the government
– developing products that combine the
findings of different ex post audit
assignments to provide a clear picture of
specific public entities, government sectors
or management functions
– developing products that communicate good
practices identified through ex post audit
assignments as input for the revision of
public sector management frameworks.
Although the CGR conducts thousands
of audits on an annual basis, there are
only incipient efforts to report on
common challenges and risks affecting
good governance at either an entity or a
public administration-wide level.
To the extent that information on key
challenges and risks affecting good
public governance are identified, this
serves more as input into the CGR’s
internal audit planning rather than
anything else.
The CGR has begun to produce
value-added products drawing upon its
legal and accounting functions; further
efforts could be pursued to complement
each function.
Elevate recurring and systematic
challenges affecting public entities
or the public administration to the
attention of public managers and those
charged with governance.
Highlight and disseminate good
practices to empower public managers
and those charged with governance to
learn from within the public
administration.
Demonstrate the value and benefit
of the work of the CGR to its diverse
audience within the executive and
legislature – as well as citizens and
the media.
In order to ensure audit assignments continuously identify and respond to changes in
the external environment, the CGR must also focus on its own strategic agility. The CGR
will need to invest in developing its own strategic sensitivity to emerging trends and risks
affecting public governance and changing citizens’ expectations utilising its own data and
that of government. The CGR will also need to capitalise on its independence to build a
workforce with the necessary skills and competencies to effectively respond to emerging
governance issues and changing societal expectations. Redesigning the CGR’s portfolio
also necessitates new skills and competencies that may not exist at present. This is
addressed in Chapter 3.
Moreover, in order to materialise the value and benefit of its activities, the CGR also
needs to leverage the way in which it engages with its stakeholders, in order to position
itself as a thought leader and not simply an inspection service. It also needs to be effective
at engaging with the legislature to ensure awareness, understanding and use of the CGR’s
work, and with central executive authorities to improve public management maturity
models and governance arrangements. This is discussed in Chapter 4. In parallel, the
CGR will need to invest in improving the prioritisation and ensuring the quality of its
audit engagements to ensure relevance and confidence in its work. This is discussed in
Chapter 5.
Notes
1.
A bill to modernise public administration and senior public service was submitted to
Congress on 2 September 2013 (boletín 9084-05).
2.
Chile has two types of human resource management systems operating side by side.
The traditional system, known as planta, is highly inflexible and covers
approximately 50% of government employees who are hired for life. The contrata
system, which is very flexible, covers approximately 50% of government employees
who are hired on renewable one-year contracts. Other members of the staff are casual
employees known as honorarios (consultants) whose contracts are for less than
one year, and the presidential appointees. It is worth noting that only planta and
contrata staff are considered officials or civil servants. Both contratas and honorarios
are exempt of TdR (Resolution 1600/08, Art. 7) and subject to registro (Art. 15),
which does not hold administrative decision.
3.
This was the case after the 2010 earthquake (Resolution 817 of 2010).
4.
The CGR mentions, among others, calculation errors, issues of legal or regulatory
compliance, lack of available budget for the proposed act, lack of supporting
evidence, problems of justification of certain decisions (e.g. direct awarding,
declaration of inadmissibility of procurement tenders).
5.
CGR Resolution 1 600/2008.
6.
Initially 32 central public entities, including the CGR, began using SIAPER RE (CGR
Resolution 908/2011) and expanded to cover 120 central public entities in May 2012
(CGR Resolution 245/2012). Moreover, since May 2012, the functionality of
SIAPER RE was extended to include the registration of officials’ holidays,
administrative leave, medical leave and qualifications obtained by public officials in
periodic evaluations (calificaciones) (CGR Resolution 908/2011, Art. 3 and
transitional article).
7.
It focused on the registration of: i) the transfer of officials within the same entity,
except confianza positions; ii) personnel contracts less than 15 days; iii) contract
extensions; iv) honorarios contracts with a monthly payment of 75 UTM (unit of
account, updated for inflation, used in Chile for tax purposes and fines) or less, or any
other method of payment less than 150 UTM, or a honorarios contract renewal (CGR
Resolution 908/2011, Art. 2).
8.
Initially 20 central public entities began using SIAPER TRA with the intention that
use be expanded to include all central public entities subject to TdR of their human
resource decision making by the end of 2013.
9.
The implementation of SIAPER TRA and an accompanying reporting module will
allow public services to obtain indicators and statistical information on human
resources, thus possibly information management and policy decisions.
10.
See CGR Resolutions 1 100/1973 (10 November); 600/1977 (18 July); 1 050/1980
(28 August); 55/1992 (31 January); 520/1996 (14 December); and 1 600/2008
(6 November).
11.
A UTM is a unit of account, updated for inflation, used in Chile for tax purposes and
fines. It was created in 1974 by Decree Law 830 (Art. 8). Initially it was a tax
measure (fines, pay scale, etc.) by the Internal Revenue Service but was later
extended to cover other matters. It is adjusted every month according to the consumer
price index reported by the National Institute of Statistics. It is paid in Chilean pesos
(CLP). Contracts of less than 2 500 UTM using direct negotiation and less than
5 000 UTM for tenders were made exempt in 2008. Previously all contracts of less
than 4 000 UTM were exempt.
12.
In 2005, the government of Ricardo Lagos presented a draft law to give legal status to
the Internal Audit Council. As of today, the legal proposal remains paralyzed in the
Senate.
13.
An exception are the financial audits of supply companies in isolated areas (EMAZA)
and of the loans facilitated to Chile by multilateral financial institutions, such as the
Inter-American Development Bank or the World Bank.
14.
Article 21A states that the Office of the Comptroller General shall perform audits, the
aim of which is to ensure compliance with legal standards, safeguard public property
and guarantee administrative probity. In accordance with the above, by means of
these audits, the Office of the Comptroller General shall evaluate the internal auditing
systems of the services and institutions; audit the application of the provisions
referring to the financial administration of the state, especially insofar as the
budgetary execution of public resources is concerned; examine the operations carried
out and the exactitude of the financial statements; check the veracity of the supporting
documentation and verify compliance with the statutory regulations that apply to
public employees; and formulate appropriate proposals to rectify any gaps that it may
detect.
15.
Accounting units in each public entity are responsible for preparing accounting
information and financial statements required by the Comptroller General and reports
on budgetary operations, funds and assets (Decree Law 1 263/1975, Art. 66). These
units are to transmit these reports to the senior leadership of each institution (Decree
Law 1 263/1975, Art. 67). Public services must prepare a balance of income and
expenditure and a statement of financial position for each fiscal year. These
statements are sent to the CGR and the Budget Office (DIPRES) (Decree
Law 1 263/1975, Art. 68).
15.
The CGR oversees the process of convergence of Chile with international accounting
standards for the public sector. In this context, the CGR will perform the essential role
of ensuring compliance and thereby declare with confidence that Chile meets the
accounting standards, reassuring decision makers and the public on the validity of the
information submitted by the country. To comply with this challenge, the CGR is
evaluating two possible strategies: i) build capacity in the CGR to undertake the audit
of financial statements; or ii) commission the audit of financial statements with
registered private consultants while retaining a supervisory role/cross-check role. The
first option will require a significant reform in the CGR’s audit skills, taking into
account the coverage of public bodies and the importance of audited financial
statements are presented in a timely manner, especially considering the deadline
recommended (five months from the end of the fiscal year). With respect to the
second option, the audit of financial statements is a well-established process in the
private sector. Furthermore, it would allow the statements of the CGR, as a public
entity, and the Consolidated Financial Statements of the Government to be audited by
an external independent agent.
16.
This exclusion was formalised by Law 19 817/2002, amending the CGR Organic
Law. This amendment followed a proposal introduced into the Chamber of Deputies
by the President of the Republic in 2000 that the CGR be authorised to “audit the
compliance with legal norms and safeguard the public patrimony”. Although this
amendment passed through the Chamber of Deputies and the Senate Constitutional,
Legislative, Judicial and Regulation Commission (Comisión de Constitución,
Legislación, Justicia y Reglamento del Sanado) it was challenged by a senator in the
Senate Plenary. The Senator raised a question over whether the CGR may be able to
audit the merit and convenience, including the efficiency of public entities, or have its
authority limited to compliance. The bill was subsequently returned to the Senate
Constitutional, Legislative, Judicial and Regulation Commission and revised to
prohibit the CGR from auditing the merit of administrative acts (Morales
Espinoza, 2012).
17.
For example, CGR Audit Report 115/2011 on Junta Nacional de Auxilio Escolar y
Becas, published on 16 March 2012.
18.
Since 2011, DIPRES added a procedure to verify the value of indicators included in
PMG, in addition to reviews by internal auditors. This is performed by private
auditors or external consultants hired by DIPRES through public tender.
Annex 2.A1
Decrees and resolutions subject to toma de razón
and those exempt from toma de razón by
the Office of the Comptroller General of the Republic
Table 2.A1. Decrees and resolutions subject to toma de razón and those exempt from
toma de razón by theOffice of the Comptroller General of the Republic
Based on CGR Resolution 1 600/2008
State personnel management
Appointments and contracts
General appointments
Substitutions arranged with staff of the same service, unless they refer to positions of confianza
Appointments in reserva
Appointments to contrata scheme for less than 15 days
Extensions of appointments on contrata
Any appointment that does not imply the performance of public responsibility
Appointment of lawyers
Encasillamientos
Reinstatements/Reincorporaciones
Personnel contracts
Extensions of personnel contracts
Contracts of workers under jornal modality
Honorario contracts
Contract (asimilados a grado) renewals arranged in equal conditions
Honorario contracts based on fees of foreigners who provide services occasionally
Public sector career and disciplinary measures
Upgrades and promotions
Accident declarations, related to services’ work, when they imply social security benefits
Dismissals, acquittals and disciplinary action after special investigations and administrative
disciplinary proceedings instructed by the CGR. Application of disciplinary measures in other special
investigations and administrative disciplinary proceedings and expulsive measures related to the
Armed Forces and Carabineros de Chile
Non-expulsive disciplinary measures related to regional prosecutors
End of service by any cause of staff whose appointment is subject to TdR
Other state personnel management matters
Evictions and initial granting of pension benefits
Non-contributory pensions referred to Art. 6 of Law 19 234 on political exonerated individuals from
the private sector
Pension recalculation because of time recognition of fertilizers in accordance with Art. 4 of
Law 19 234
Pensions granted by the Instituto de Normalización Provisional generated by retired tax payers
Retirement of staff transferred to the municipalities that remained under the pension scheme of the
former Caja Nacional de Empleados Públicos y Periodistas, provided that they are not teachers or
officials governed by Law 15 076
Monthly pension referred to Art. 17.3 of Law 19 169 on National Awards
Payment for time served in difficult living areas or in isolated places
Payment by harmful radiation or radiology activities
Subject to TdR
Exempt from TdR
Exempt from TdR
Exempt from TdR
Exempt from TdR
Exempt from TdR
Subject to TdR
Subject to TdR
Subject to TdR
Subject to TdR
Exempt from TdR
Exempt from TdR
Subject to TdR
Exempt from TdR
Exempt from TdR
Subject to TdR
Subject to TdR
Subject to TdR
Exempt from TdR
Subject to TdR
Subject to TdR
Exempt from TdR
Exempt from TdR
Exempt from TdR
Exempt from TdR
Exempt from TdR
Exempt from TdR
Exempt from TdR
Other state personnel management matters (cont.)
Payment for the last two years or four semesters of professional studies of officers of the Armed
Forces and Carabineros de Chile
Pensions granted by the Instituto de Normalización Provisional generated by non-contributory
pensioners referred to by Art. 6 of Law 19 234
Awards and transfers of times
Planta regimes and salary determination and modifications
Special rulings
Decrees and resolutions relating to Carabineros de Chile institutional appointment of permanent staff
and seafarers of the Armed Forces shall be exempt from TdR
Decrees and resolutions relating to expulsive measures and the granting of pensions and the
granting of evictions
Financial and economic matters
Budget
Approval and amendment of budget
Those from the welfare services
Those from auxiliary social security entities
Exemption or replacement rules for financial management dispositions, budget execution and
financial management
Authorisation and contracting of loans or bonds
Decrees authorising the issuance and change of date of issuance of bonds and notes
Transfers of resources, with or without agreement, of amounts greater than 5 000 UTM
Agreements relating to the delivery of additional contribution related to capital cost increase, referred
to by Law 19 532
The agreements concluded under the higher education fund (Fondo de Desarrollo Institucional para
la Educación Superior)
Returns of taxes, duties and any other payment made under item in amounts exceeding 2 500 UTM
Those from the accomplishment of judgments and court sentences
Refunds for port service charges or storage fees
Granting of tax and customs exemptions
The exemptions provided for in Laws 3 427, 10 328, 13 039 (Art. 35), and Decree Laws 1 260/1975,
(Art. 12.B.10) and 825/1974 as well as Law 17 238 (Art. 6.10)
Contracts
Procurement of goods
Contracts for the procurement of movable and immovable property, or for the procurement of credits,
financial instruments and securities, by direct negotiation or private tender, for an amount exceeding
2 500 UTM, or by public tender, for an amount exceeding 5 000 UTM
Purchases and supplies delivered in execution of a framework agreement signed by the Purchasing
and Procurement Department (Dirección de Compras y Contratación Pública)
Those that are made by the Armed Forces for national security purposes
Contracts for the purchase of shares or other equity securities in companies
Acceptance of gifts in excess of 5 000 UTM
Contracts for the sale of properties by direct negotiation or private bidding in amounts exceeding
2 500 UTM or by public tender exceeding 5 000 UTM
Contracts for the free transfer of real property whose valuation exceeds 2 000 UTM
Contracts for the sale by direct negotiation or private bidding of credit, financial instruments,
securities, shares or other equity securities in companies, for a total exceeding 2 500 UTM. Contracts
for the sale of credits, financial instruments, securities, etc. exceeding 5 000 UTM
Procurement of services
Service delivery agreements between public entities, whose total amount exceeds 5 000 UTM
Agreements for the implementation of actions related to the purposes of the service, support actions
and other services concluded by direct negotiation or private bidding when their total exceeds
2 500 UTM, or by public tender exceeding 5 000 UTM
Those awarded under a framework agreement of the Purchasing and Procurement Department
Exempt from TdR
Exempt from TdR
Subject to TdR
Subject to TdR
Subject to TdR
Exempt from TdR
Exempt from TdR
Subject to TdR
Exempt from TdR
Exempt from TdR
Subject to TdR
Subject to TdR
Subject to TdR
Subject to TdR
Exempt from TdR
Exempt from TdR
Subject to TdR
Exempt from TdR
Exempt from TdR
Subject to TdR
Exempt from TdR
Subject to TdR
Exempt from TdR
Exempt from TdR
Subject to TdR
Subject to TdR
Subject to TdR
Subject to TdR
Subject to TdR
Subject to TdR
Subject to TdR
Exempt from TdR
Other contracts
Agreements regarding transfer of services or for the management of facilities or property
Agreements entrusting of functions between public services
The mandate agreements, when its execution is related to administrative acts under TdR
Special contracts for oil operations
Extra-judicial settlements in amounts exceeding 1 000 UTM
Agreed under the mediation procedure provided in Title III, § II of Law 19 966, not exceeding 2 000
UTM
Public works
Acquisitions for the execution of public works by direct contact or private tender for an amount
greater than 5 000 UTM, or by public tender exceeding 10 000 UTM
Public works or procurement, including the repair of property, by direct or private proposal, of an
amount exceeding 5 000 UTM or by public tender exceeding 10 000 UTM
Payment of compensation and overhead; refund of withholding; early termination of the contract and
final settlement; compensation balances different contracts of the same contractor and transfer of
contracts
Projects and studies that are directly related to the execution of a specific work, contracted by direct
contact or by private proposal amounting to over 2 500 UTM, or by public tender exceeding
5 000 UTM
Sanctions to contractors and consultants
Approval of procurement criteria
Approval of administrative criteria and any amending act, where they relate to making contracts
subject to TdR
Those attached to a format already approved by the CGR
Special rules
Approving resolutions of the framework agreements signed by the Purchasing and Procurement
Department will be subject to TdR
These approving resolutions when they give rise to contracts exempt from TdR
Approving resolutions referred to by No. 8.5 of Section 8, the No.9.1.1, 9.1.4, 9.2.2, 9.3.1, 9.4.1, 9.4.2
and 9.4.4, of this article, and No. 10.1.2 of Art. 10 when its related contracts come from public tender
and resolutions meet the format previously approved by the CGR. In these cases only, the allocation
process will be subject to TdR
Approving resolutions referred to in No. 9.2.1 and 9.3.2 of this article that conform to a standard
format previously approved by the CGR
The allocation decision and contract will be subject to TdR when the text of the contract is contained
in administrative criteria subject to TdR or conform to a standard format previously approved by the
CGR
General attributions
Concessions
Concessions in telecommunications, gas, electricity and health sectors, amendments, termination
and tariff definition
In telecommunications concessions, their amendment that does not imply transfer or termination
In telecommunications concessions, those related to minimum broadcast coverage or limited
telecommunications services or amateur radio service providers
In the electricity concessions, their modification
In concessions to public transport routes and technical review of plants, are subject to TdR the acts
relating to the bidding, award, termination, and those modifications that alter the essential conditions
of financial equilibrium the grant
Maritime concessions, their modification and termination
Those granted by fiscal services
Those granted by Dirección General del Territorio Marítimo y de Marina Mercante and maritime
authorities under its control
Concessions of geothermal energy
Constitution of water use rights
Those provided under the provisions of Law 20 017 (Arts. 4 and 6)
Subject to TdR
Subject to TdR
Exempt from TdR
Subject to TdR
Subject to TdR
Exempt from TdR
Subject to TdR
Subject to TdR
Subject to TdR
Subject to TdR
Subject to TdR
Exempt from TdR
Subject to TdR
Exempt from TdR
Subject to TdR
Subject to TdR
Subject to TdR
Exempt from TdR
Subject to TdR
Exempt from TdR
Exempt from TdR
Exempt from TdR
Subject to TdR
Subject to TdR
Exempt from TdR
Exempt from TdR
Subject to TdR
Subject to TdR
Exempt from TdR
Legal identity of corporations
Cancellation of any legal status
Creation, participation, modification or termination of legal entities in which the state participates
Sanctions
Acts imposing loss of Chilean nationality
Measures affecting the freedom of individuals
The revocation of the measures provided in accordance with Art. 169 of the Health Code
Expulsion of foreigners from the country
Suspension or denial of payment of subsidies to schools
Various materials
International treaties and measures that affect its validity, and agreements with foreign or
international organisations, including transactions before they take place
Constitution of advisory committees by decree
Delegation of authority and signature that affect matters subject to decision point
Declaration of national monuments
Clemency
Resumption of work
Territorial planning instruments
Authorisation for the entry of foreign troops on the territory of the republic and to the departure of
national troops outside the country regulated in Arts. 2 and 5 of Law 19 067
Decrees authorising the return of property tax under Law 19 568
Declaration of populations as irregular status
Payment of awards by an amount exceeding 1 000 UTM
Declarations reduction, prohibition, restriction, depletion and scarcity alluded to in Arts. 62, 63, 65,
282 and 314 of the Water Code
Public enterprises
Resolutions of public companies on formation, participation, modification and withdrawal or
termination of legal entities, and the acquisition of shares or other equity securities in companies,
unless they fall under reimbursable financial contributions in any of the regulatory systems that
contemplate.
Information of public companies whose personnel are subject to collective bargaining regime,
according to the instructions issued by the CGR
Subject to TdR
Subject to TdR
Subject to TdR
Subject to TdR
Exempt from TdR
Subject to TdR
Subject to TdR
Subject to TdR
Subject to TdR
Subject to TdR
Subject to TdR
Subject to TdR
Subject to TdR
Subject to TdR
Subject to TdR
Subject to TdR
Subject to TdR
Subject to TdR
Subject to TdR
Subject to TdR
Notes: TdR = toma de razón; UTM is a unit of account, updated for inflation, used in Chile for tax purposes
and fines. It was created in 1974 by Decree Law 830 (Art. 8). Initially it was a tax measure (fines, pay
scale, etc.) by the Internal Revenue Service but was later extended to cover other matters. It is adjusted every
month according to the consumer price index reported by the National Institute of Statistics. It is paid in
Chilean pesos (CLP).
Source: Based on information from CGR Resolution 1 600/2008.
Annex 2.A2
Public sector entity and consolidated government year-end reports in Chile and selected countries
Table 2.A2.1. Public entity level year-end reports in Chile and selected countries
Country
Name of report
Entities required to
produce report
Number of entities preparing reports
Audited by supreme
audit institution
Australia
Annual report, including financial statements
LM+A+SOE
19 line ministries, 91 central government agencies, 71 Commonwealth authorities and
corporations that are wholly owned by the government, 15 government enterprises
Yes
Brazil
Management report (Relatório de Gestão)
LM+A+SOE
1 158
Yes
Chile
x
x
x
x
Costa Rica
Annual Report
LM+A+SOE
24 entities within central government, 204 decentralized public sector entities, 23 trusts and 42
private entities that manage public funds
No
Denmark
Annual report/annual account
(Årsrapport/årsberetning)
LM+A+SOE
All central government entities
Yes
European Court
of Auditors
Annual accounts
LM+A+SOE+other
11 institutions, 6 executive agencies, 32 decentralised agencies, 2 other controlled entities,
5 joint ventures, 4 associates
Yes
Israel
Financial statements
LM+A+SOE+other
152 entities included in the central government’s consolidated financial statements; 68 statutory
entities (not included in the central government’s consolidated financial statements); and
30 government enterprises that failed to file financial statements and are not included in the
central government’s consolidated financial statements
No
Italy
..
..
..
..
Korea
Annual report
LM+A+SOE+other
50
Yes
Mexico
Various reports1
LM
29
Yes
Various reports2
A+SOE+other
185
Yes
Various reports3
Trust funds
369
Yes
Peru
..
..
..
..
Portugal
Financial statements
LM+A+other
Over 720
Yes
South Africa
Annual report
LM+A+SOE+other
CG: 316
Yes
SG: 271; LG: 337
Yes
Approximately 19 000
Yes
Spain
Annual accounts
LM+A+SOE+other
Notes: GG = General government; CG = Central government; SG = State/provincial government; LG = Local government; SS = Social security; E = Executive; L = Legislature;
J = Judiciary; LM = Line ministries; A = Central government agencies; SOEs = State-owned enterprises; x = Not applicable; .. = Missing data.
European Court of Auditors: In entities required to produce reports, line ministries refers to the European Commission (the EU “ministries”, European Parliament, European
Court of Justice) which is the equivalent of line ministries in national administrations. Central government agencies refer to EU agencies. Other refers to (executive) agencies and
joint ventures. The statutory deadline for the release of these reports is three months after year end for the provisional report and seven months after year end for the final report.
The European Court of Auditors audits both the individual entities’ year-end reports and the consolidated year-end reports. Korea: Other in entities required to produce a report
relates to public institutions. The statutory deadline for public entities to transmit their unaudited end of year reports to the Ministry of Strategy and Finance is 28 February. The
Ministry of Strategy and Finance transmits the unaudited entity’s end of year reports to the Board of Audit and Inspection on 10 April. The Board of Audit and Inspection
transmits the audited entity’s end of year reports to the Ministry of Strategy and Finance on 20 May. The Ministry of Strategy and Finance transmits the audited entity’s end of
year reports to the National Assembly on 31 May (National Finance Act, Arts. 58-61). Portugal: Other in entities required to produce a report relates to local governments,
regional governments’ departments. The Court of Auditors issues binding and detailed instructions on the information the accounts must provide and the documents which must
be presented together with the financial statements. The statutory deadline for the release of these reports is four months. South Africa: Other in entities required to produce a
report relates to provincial departments and public entities and municipalities and municipal entities. Entity accounts deadlines are six months for national and provincial entities
and seven months for local government. Spain: Other in entities required to produce a report relates to all entities part of the Spanish public sector not covered by title of
ministry, central government agency and state-owned enterprise. It includes state governments (autonomous communities or regions); local governments; social security; public
foundations, etc. Statutory deadlines for the release of the reports are: for central government entities, 31 March (Section 127 of the General Act of Central State Budgets – Ley
47/2003 of 26 November); for state governments (regions or autonomous communities) it depends on their specific regulations; for local governments: 15 May of the following
year (Section 212 RDLeg. 2/2004 of 5 March, of local governments’ finances).
Source: Adapted from unpublished OECD Survey of Benchmark Supreme Audit Institutions 2013, responses to Q 5.
Table 2.A2.2. Consolidated government year-end reports in Chile and selected countries
Reporting boundaries
Country
Australia
Brazil
Name of report
Produced by
Levels of
government
Within national
government
Within the
executive
Audited by supreme
audit institution
Commonwealth Consolidated Financial
Statement for the year ended 30 June [year]
Department of Finance and Deregulation
CG
E
LM+A+SOE
Yes
Final Budget Outcome
Department of the Treasury
CG
E
LM+A+SOE
No
Accounts of the President of the Republic
(Prestação de Contas do Presidente da
República), including:
Yes
– General Balance of the Union
Secretariat of National Treasury
CG+SS
E+L+J
LM+A+ SOE
– Report by the central authority of the Internal
Control System of Federal Public
Administration
Office of the Comptroller General of the Union
CG+SS
E
LM+A+ SOE
– National Public Sector Balance
Secretariat of National Treasury
CG+SG+LG
E+L+J
LM+A+SOE
No3
Chile
State Financial Management Report
CG+ LG
E+L+J
LM+A+SOE
No
(consolidated by
SAI)
Costa Rica
..
Ministry of Finance and National Planning Ministry
CG+LG+SS
E+L+J
..
No
Denmark
Danish State Accounts
Agency for the Modernisation of Public Administration
CG
E
LM+A
Yes
European Court
of Auditors
Consolidated annual accounts of the European
Union
European Commission
CG
E+J
LM+A+SOE+
other
Yes
Israel
Government of the State of Israel – Financial
Statements as of 31 December [year]
Accountant General of the Ministry of Finance
CG+SS
E+L+J
LM+A+SOE
No
Italy
Economic consolidated account of the public
administrations
National Institution of Statistics
CG+SG+LG
+SS
E
LM+A+SOE+
local entities
No
Korea
National Annual Report
(국가 결산보고서)
Ministry of Strategy and Finance
CG+SG+LG
+SS
E+L+J
LM+A
Yes
Mexico
Federal Public Finance Account
Secretariat of Finance and Public Credit
CG+SG+LG
E+L+J+other
LM+A+SOE+
other
Yes
Peru
..
..
..
..
..
..
Table 2.A2.2. Consolidated government year-end reports in Chile and selected countries (cont.)
Reporting boundaries
Country
Portugal
South Africa
Spain
Name of report
Produced by
Levels of
government
Within national
government
Within the
executive
Audited by
supreme audit
institution
General State Account, including the
Social Security Account
Ministry of Finance, Directorate General of Budget
CG+SS
E+L+J
LM+A
Yes
Regional Account of the Azores
Vice-Presidency of the Regional Government of the
Azores
SG
E+L
LM+A
Yes
Regional Account of Madeira
Secretariat of Regional Planning and Finance
SG
E+L
LM+A
Yes
Consolidated financial information for the
year ended 31 March
South African National Treasury
CG+SS
E+L+J+other
LM+A+SOE
Yes
Consolidated Financial Information by
province
Provincial treasuries
SG
E+L+J
LM+A+SOE
Yes
General Account of the State
Ministry of Finance, General Control and Audit Office
CG+SS
E+L+J
LM+A+SOE
+other
Yes
Summary of the General Account of the
State
Ministry of Finance, General Control and Audit Office
CG+SS
E+L+J
LM+A+SOE
+other
Yes
General Account of the Autonomous
Community/City of…
General Intervention of the Autonomous Community
of...
SG+SS
E+L+J
Other
Yes
General Account of the Local
Government of…
General Intervention of the Local government of…
LG
E
Other
Yes
Notes: GG = General government; CG = Central government; SG = State/provincial government; LG = Local government; SS = Social security; E = Executive; L = Legislature;
J = Judiciary; LM = Line ministries; A = Central government agencies; SOEs = State-owned enterprises; x = Not applicable; .. = Missing data.
Line ministries: Central government organisations responsible for designing and implementing policies in line with wider government policies, and for the direction of agencies
under their authority. These ministries may be called departments in some countries and are responsible for their own budget portfolios, although they must report to the central
budget authority and are subject to their review. While they usually come under the authority of line ministries and report to a minister, central government agencies can in some
cases report directly to the chief executive (e.g. president/prime minister or cabinet). State-owned enterprises: Organisations that are entirely or mainly owned and/or controlled
by the public authorities; because of the nature of their activities, the technology they employ, and their mode of operation, these establishments are classed as industries.
Australia: Most Commonwealth reporting entities’ accounts are not-for-profit. A limited number of Commonwealth authorities and corporations are for-profit and operate
similarly to a commercial entity. The Commonwealth of Australia Consolidated Financial Statements were first produced for FY 1994-95 on a trial basis. The first
Commonwealth of Australia Consolidated Financial Statements to be produced by the Australian government and audited by the Australian National Audit Office was for
FY 1996-97. The reporting boundaries include all Australian government controlled entities. This includes 182 general government sector entities, 10 public non-financial
corporations and 5 public financial corporations. Brazil: Accountable officials are defined as public administrators and other individuals responsible for public money, goods and
assets within the direct and indirect federal public administration. (1) The consolidated year-end government report has been produced since 1892. Between 1892 and 1933,
theFederal Court of Accounts of Brazil (Tribunal de Contas da União, TCU) issued an audit opinion prior to the year-end report being published and presented to the National
Congress. From 1934, the TCU has issued its audit opinion following publication of the year-end report and its presentation to the National Congress. (2) The consolidated
financial statement of the public sector – the National Public Sector Balance – has been published by the Secretariat of the National Treasury since 2000. Since FY 2010, the
National Public Sector Balance has been prepared in line with International Public Sector Accounting Standards. (3) The National Public Sector Balance is not audited; however,
individual financial statements of all states and municipalities and the Federal District are audited individually. Costa Rica: The Office of the Comptroller General of the
Republic issues opinions and judgements on the consolidated government report, prepared by the Ministry of Finance and National Planning Ministry, and public entity financial
statements, and reports where applicable, by May 1 following each fiscal year. European Court of Auditors: In entities required to produce reports, line ministries refers to the
European Commission (the EU “ministries”, European Parliament, European Court of Justice) which is the equivalent of line ministries in national administrations. Central
government agencies refer to EU agencies. The European Commission has prepared accounts on an accruals basis since 2005 and the European Court of Auditors has been
assessing them as reliable since 2007. Regulation (EU, Euratom) No. 966/2012 of the European Parliament and of the Council of 25 October 2012 on the Financial Rules
applicable to the general budget of the Union (OJ L 298, 26.10.2012, p. 1) requires that the final accounts be sent by 31 July of the following financial year (Art. 148). Israel:
Government ministries and agencies, government enterprises and statutory entities submit financial statements to the government of Israel or to the Israeli Parliament. Ministries
and the government enterprises must also present performance reports. The State Comptroller’s Office does not audit or approve these financial statements. The audit reports
periodically address specific accounting aspects. The government of Israel annually files an unaudited financial statement. The financial statement contains information on the
economic activities of 152 entities – government ministries, agencies, government enterprises and the National Social Security Fund. The annual published financial report is a
consolidated report does not include 68 statutory entities (such as the central bank, television and radio broadcast authorities and the National Standards Institute). The
government’s annual financial statement also includes the operations of the State Comptroller’s Office. Municipal authorities independently file financial statements with the
Ministry of Interior. These financial statements are not included in the government’s consolidated financial statement. Korea: The National Annual Report was first produced for
FY 2011. The statutory deadline for public entities to transmit their unaudited end-of-year reports to the Ministry of Strategy and Finance is 28 February. The Ministry of
Strategy and Finance transmits the unaudited entity’s end of year reports to the Board of Audit and Inspection on 10 April. The Board of Audit and Inspection transmits the
audited entity’s end of year reports to the Ministry of Strategy and Finance on 20 May. The Ministry of Strategy and Finance transmits the audited entity’s end of year reports to
the National Assembly on 31 May (National Finance Act, Arts. 58-61). Mexico: Branches of government also include autonomous entities, administrative courts and trusts
funds. (1) Government units, autonomous entities, legislature, judiciary, presidency of Mexico, Attorney General of Mexico and administrative courts must prepare: i) a
worksheet; ii) the state of budget execution; iii) state income analytics; iv) an analysis of treasury accounts; v) the state of federal government debt; vi) adjustments to the budget
exercise; vii) adjustments to the Income Law; and viii) main variations to the balance sheet accounts and results. (2) Central government agencies and state-owned enterprises
must prepare: i) a worksheet; ii) an income statement; iii) analysis of cash flow; iv) state of origin and application of resources; v) cash flow; vi) the state of budget execution;
and vii) state integral analytical internal and external debt. (3) Units and entities whose budgets have been transferred to trust funds or entities that co-ordinate trust fund
operation must provide: i) accomplishment report on trust fund targets and goals in addition to the report on exercised resources. Portugal: The General State Account, including
the Social Security Account, was first produced in 1884. The statutory deadline for the release of these reports is 30 June, i.e. six months after the end of the fiscal year. South
Africa: The consolidated financial information for the year ended 31 March was first produced for FY 2001. Spain: General Account of the State and Summary of the General
Account of the State: Other within national government refers to the central bank; central state public universities, central state public foundations, central state consortia.
General Account of the Autonomous Community/City of… other within the executive refers to departments of the government of the autonomous communities; regional
government agencies; regional government enterprises; regional public universities, regional public foundations, regional consortia. General Account of the Local Government
of… other within the executive refers to departments of the government of the municipality; municipal government agencies (if any exist); municipal government enterprises (if
any exist); municipal foundations, municipal consortia.
Source: Adapted from unpublished OECD Survey of Benchmark Supreme Audit Institutions 2013, responses to Q. 6.
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3. FOSTERING STRATEGIC AGILITY IN CHILE’S OFFICE OF THE COMPTROLLER GENERAL – 159
Chapter 3
Fostering strategic agility in Chile’s
Office of the Comptroller General*
This chapter examines strategic agility in the Office of the Comptroller General of the
(SAI) – to effectively identify and respond to the evolving environment in which it
operates and changing societal expectations. In analysing the strategic agility of the
CGR, this chapter analyses the institution’s: i) strategic sensitivity, drawing upon
concepts of institutional strategic planning and foresight (horizon scanning) activities;
and ii) operational agility, drawing upon concepts of SAI (administrative) independence
and human resource management. The analysis is framed by OECD work on public
governance and International Standards of Supreme Audit Institutions (ISSAI) – in
particular, the “Lima Declaration on the Precepts of Government Auditing” (ISSAI 1),
the “Mexico Declaration on SAI Independence” (ISSAI 10), the “Principles for
Transparency and Accountability” (ISSAI 20) and “Quality Control for SAIs” (ISSAI 40)
– as well as International Organisation of Supreme Audit Institution (INTOSAI) good
practice guidance on strategic planning, capacity building and human resource
management.
*
160 – 3. FOSTERING STRATEGIC AGILITY IN CHILE’S OFFICE OF THE COMPTROLLER GENERAL
Introduction
This chapter examines strategic agility in the Office of the Comptroller General of the
(SAI) – to effectively identify and respond to the evolving environment in which it
operates and changing societal expectations. Strategic agility refers to the capability and
capacity to keep an organisation on the leading edge of its activity, whether in the public
or private sector. Strategic agility in the public sector context entails developing strategic
sensitivity, collective commitment and operational agility in order to respond to an
increasingly complex and changing policy environment. Strategic sensitivity is the ability
to understand and balance current and emerging trends as well as societal preferences and
expectations. Collective commitment refers to the existence of a common vision and set
of overall objectives, and the use of this vision and objectives to steer and implement
strategies at a whole-of-government level – or for SAIs, at an organisational level.
Operational agility is the ability to align resources to changing priorities and to promote
innovative ways to maximise government performance.
The need for strategic agility in SAIs should be considered in the context of the move
to enhance strategic agility and rebuild trust in government, discussed in Chapter 2.
INTOSAI’s “The Value and Benefits of Supreme Audit Institutions - making a difference
in the lives of citizens” emphasizes the need for SAIs to be seen as model institutions and
as trustworthy in order to fulfil their functions and ensure potential value to citizens
(INTOSAI, 2013). OECD countries have collectively recognised the role of strategic
agility in government and trust in public institutions to support inclusive and sustainable
growth (OECD, 2013a). The move to enhance strategic agility and build trust in
government places new demands on SAIs, but also creates opportunities for these
institutions to further their existing role in enhancing good governance. Evidence-based
decision making can enable the findings of SAI audit assignments to not only support
accountability processes but also to provide insight and foresight in decision-making
processes. The findings of SAI audit assignments can support insight by broadening and
deepening the government’s understanding of the key challenges facing the public
administration. These findings can also support foresight by drawing attention to
emerging medium- and longer term challenges and risks that may adversely affect public
governance and to encourage the early adoption of mitigating measures (GAO, 2007;
2012). The CGR’s independence is a valuable asset that can contribute to developing a
collective commitment within government. Moreover, the long tenure of the Comptroller
General enables the institution to look beyond the electoral cycle.
In examining the strategic agility of the CGR, as a means to further contribute to
strategic agility in the public sector of Chile, this chapter analyses the institution’s:

strategic sensitivity to understand emerging issues in the government and public
administration as well as societal expectations, drawing upon concepts of
institutional strategic planning and foresight (horizon scanning) activities

operational agility to allocate and redeploy resources in order to effectively
respond to these emerging issues and expectations, drawing upon concepts of
SAI independence and human resource management.
The analysis is framed by OECD work on public governance, International Standards
of Supreme Audit Institutions (ISSAI) and International Organisation of Supreme Audit
Institution (INTOSAI) good practice guidance. OECD literature has developed the
concept of strategic agility within the public sector and illustrated its application in
several OECD Public Governance Reviews (OECD, 2010a; 2011a; 2012b; 2012c;
2012d). Though this work has not explicitly focused on SAIs, the lessons are equally
relevant for these institutions. The “Lima Declaration of Guidelines on Auditing
Precepts” and the “Mexico Declaration on the Independence of Supreme Audit
Institutions” provide principles regarding organisational, functional and administrative
independence necessary for the effective functioning of SAIs (INTOSAI, 1977; 2010a).
The “Principles for Transparency and Accountability” and “Quality Control for SAIs”
(INTOSAI, 2010b; 2010c) further focus on the role of human resource management on
SAI operations. This is complemented by INTOSAI guidance on human resource
management (INTOSAI, 2010c; 2012a; 2012b). This chapter includes comparative data
for the CGR as well as 13 SAIs collected through an OECD survey specifically
conducted for this peer review. The assessment is coherent with the INTOSAI Peer
Review Guidelines and Checklist (INTOSAI, 2010e; 2010f).
This chapter notes that the CGR has introduced strategic planning to advance the
institution’s management reforms that were initiated in recent years, and to create a
collective commitment to the institution’s future mission, vision and values. The strategic
planning process has drawn upon various assessment instruments focused on
benchmarking the CGR against international norms and good practice. The process for
formulating the strategic plan has supported the realisation of collective commitment,
engaging not only senior and middle management but also through the broad participation
of CGR staff. The Comptroller General has significant administrative independence to
reallocate resources in line with the institution’s changing needs. This administrative
independence has allowed the CGR to undertake a reorganisation of a number of its
central divisions and standardised the structure of its regional offices to increase the
performance, efficiency and timeliness of its functions. It has also enabled a restructuring
of the CGR workforce to support institutional renewal and professionalisation of its
workforce.
This chapter posits that the CGR could, building on its current achievements, enhance
its strategic agility by:

fostering strategic sensitivity of emerging trends and risks affecting public
governance and changing citizens’ expectations as input to the CGR’s strategic
planning and institutional modernisation

developing operational agility by using strategic human resource management in
order to effectively respond to emerging governance issues and changing societal
expectations.
Fostering strategic sensitivity of the evolving external environment and societal
demands
Strategic sensitivity is crucial for the CGR to ensure that it can serve as a thought
leader and active contributor to increasing public governance, providing greater value and
benefit for the public sector and citizens. Strategic sensitivity in this context is the ability
to identify, understand and assess emerging risks affecting public governance; evolving
informational needs of those charged with governance; and concerns and expectations of
stakeholders. This attention has arisen in response to the redefinition of the role of the
state, the increasingly complex nature of policy challenges and demands for more
inclusive, responsive and effective public service delivery (OECD, 2012a). Moreover, the
concept of public governance is also evolving, including through the role of transparency,
citizen engagement and co-production (i.e. involving citizens in the design, delivery and
oversight of public services) (OECD, 2009a; 2011b; 2013b). This provides an
environment in which the CGR can provide not only oversight, but valuable insight – and
even foresight – for those charged with governance to support the modernisation of the
state and foster trust in government.
The capabilities and information requirements to foster strategic sensitivity in the
CGR are different to those necessary for providing oversight and delivering traditional
core business lines (Table 3.1). Strategic sensitivity necessitates building capabilities to
anticipate foreseeable changes in government policies and management practices, as well
as to explore other possible disruptive trends and changes affecting governance. It
requires a good understanding of the current state and future directions of government
policies and management practices based on their own work. This understanding needs to
be developed at all levels of the CGR, and not just among senior management. Strategic
sensitivity also depends on sourcing different perspectives and necessitates actively
seeking and consolidating the experience and expertise of multiple stakeholders in order
to harness innovative thinking. However, care should be taken to ensure that the
involvement of external experts and stakeholders does not undermine the real or
perceived level of the CGR’s independence – a core principle for SAIs (INTOSAI, 1977;
2010a).
Table 3.1. Strategic sensitivity for supreme audit institutions to provide
oversight, insight and foresight
For the supreme audit
institution to provide:
Necessitates strategic
capabilities such as:
Drawing upon activities
such as:
Accessing information
such as:
In order for the supreme
audit institution:
Foresight
(long-term > 8 years
in Chilean context; or
more than 2 terms of
the administration;
and 1 term of the
Comptroller General)
Anticipation of, and
preparation for, both
foreseeable and
disruptive trends
affecting the role of
government and the
state
Continuous scanning and
consultation; pattern
recognition; analysis of
“weak signals”; futures
studies; consensual
views
Futures reporting;
horizon scanning;
long-term fiscal
projections; scenario
planning
To engage in strategic
planning and develop
new competencies
Insight
(medium-term,
2-8 years in Chilean
context)
Anticipation of, and
preparation for,
foreseeable changes in
government policies,
institutions and
management practices
Analysis of historical and
trend data; comparable
information and analysis
across government;
comparison of national
and international trends
Government
programme;
medium-term budget
framework; spatial and
capital investment
plans; comparative
international
government data
To engage and adjust
strategic planning and
plan in order to build
capacity and capabilities
to respond to emerging
governance challenges
Oversight
(short-term,
1-2 years)
Identification of current
risks affecting
governance and
accountability, and
identification of good
practice within the
administration
Understanding of
government programmes,
functioning of internal
control
Executive action;
annual budget; findings
of past audit work and
follow-up activities
To plan and programme
annual audit work in order
to provide independent
oversight of government
programmes and use of
public resources
Source: Adapted from OECD (2010), Finland: Working Together to Sustain Success, OECD Public
Governance Reviews, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264086081-en.
The CGR has recently introduced strategic planning as a tool to broaden its attention
beyond annual planning activities and to create a collective commitment among its
officials to the institution’s mission, vision and values. Collective commitment is the
adherence to a common vision and set of overall objectives, and their use to guide the
work of individuals, as well as co-ordination and collaboration as needed to achieve the
institution’s strategic goals. However, the CGR’s strategic planning has largely been
informed by an assessment of internal capacity gaps against international good practices.
This exercise could be strengthened by seeking to identify and understand the impact of
the changing external environment on the CGR’s operations in the medium and long
term. Developing an understanding of the changing external environment could help the
CGR to proactively build its capability and capacity in order to respond to emerging
challenges – as well as to provide insight and foresight to those charged with governance.
In order to foster strategic sensitivity to possible changes in its external environment,
the CGR could:

explore current trends and risks affecting governance, utilising information and
data generated through its own audit planning, implementation and follow up

build awareness and understanding of future trends and risks affecting
governance in Chile, drawing open government data and horizon scanning
activities

develop awareness and understanding of modernisation of the state and risks
affecting governance in other countries as a basis for anticipating change in
Chile.
The remainder of this section examines the introduction of strategic planning within
the CGR and explores possible ways in which the institution can foster strategic
sensitivity to possible changes in its external environment, evolving informational needs
of those charged with governance, and concerns and expectations of stakeholders.
Strategic planning has been introduced to respond to changes in
the institution’s operating environment and create collective commitment
in the future mission, vision and values
The CGR (2012a) defines strategic planning as a systematic process that can give
attention to changes to the environment in which it operates and to enhance the ability of
the institution to respond to the demands of its stakeholders. It considers the planning
process a “best estimated response” to the dynamic environment in which the institution
operates. As such, strategic planning provides focus and guides efforts to support the
definition of goals and quantitative targets, the formulation of strategies and the
assessment of institutional performance. Moreover, the CGR considers that strategic
planning can support the institution to reach agreement internally on priorities essential to
its mission and the environment in which it operates. Collective commitment is
considered critical as the planning process involves decisions that will have long-term
consequences for which it is necessary to have clear knowledge about its own
institutional capabilities.
Strategic planning is a relatively new practice within the CGR and was introduced in
order to advance the institution’s management reforms that were initiated in recent years.
Of the 12 SAIs involved in this peer review: one introduced strategic planning in the
1980s, three in the 1990s, three in the 2000s and four have yet to do so (Table 3.2).
Strategic planning follows a process of a number of reforms that involved, among other
changes, the standardisation of the institution’s internal procedures, the introduction of a
philosophy of “management by results” and a restructuring of the CGR workforce.
Although the current strategic plan is formally the institutions’ first such plan, the CGR
has previously published different strategy documents to articulate its mission and its role
within the public administration. For example, in 1995 the CGR undertook a series of
actions to explore, together with other government authorities, the needs to modernise the
CGR and its role with a new administrative reality in Chile and prepare it for the
21st century (CGR, 1995; 1997). In 2003, the CGR published “institutional directions”
and in 2010 it published “strategic directions” (Table 3.3).
Table 3.2. Strategic planning by the supreme audit institutions of Chile and selected countries
Country
Australia
Strategic plan
exists
Year of first
strategic plan
Years covered by
current strategic
plan
External stakeholders consulted in strategic planning process
Other
Full strategic plan
available on SAI’s
website
Public reporting
on strategic plan
implementation
Executive
Legislature
Citizens
Yes
1985
2013
No
No
No
No
Yes
Yes (annually)
Brazil
Yes
1994
2011-15
Yes
Yes
Yes
Yes
Yes
Yes (quarterly)
Chile
Yes
2013-15
2013-15
No
No
No
No
No
x
Costa Rica
Yes
2000
2008-12
No
No
No
No
Yes
Yes (annually)
Denmark
Yes
Prior to 2000
2012-15
No
Yes
No
No
Yes
Yes (annually)
European Court
of Auditors
Yes
2008
2013-17
Yes
Yes
No
Yes
Yes
Yes (annually)
Israel
No
x
x
x
x
x
x
x
x
Italy
No
x
x
x
x
x
x
x
x
Korea
No
x
x
x
x
x
x
x
x
Mexico
..
..
..
..
..
..
..
..
..
Peru
Yes
..
2012-14
..
..
..
..
Yes
..
Portugal
Yes
1999
2011-13
No
No
No
No
Yes
Yes (annually)
South Africa
Yes
2005-06
2013-16
No
No
No
No
Yes
Yes (annually)
Spain
No
x
x
x
x
x
x
x
x
Notes: Australia: The Strategic Statement was introduced in 2013 to replace the 2010-13 strategic plan. It captures the ANAO’s enduring programmes and is designed to be used
into the future with yearly review by senior management. The Strategic Statement is complemented by a more detailed annual business plan. Israel: A full strategic plan is under
preparation and expected to be completed and implemented within a year. Currently, an annual work plan covering 18 months and encompassing multi-annual goals is the basis
for ongoing activity. Spain: Strategic planning is being addressed in an in-depth modernisation process being undertaken by the SAI of Spain. Currently, some core elements of
strategic planning are dispersed amongst internal documents.
Table 3.2. Strategic planning by the supreme audit institutions of Chile and selected countries (cont.)
Plan incorporates the results of an assessment of
Country
Australia
Brazil
Chile
Costa Rica
Denmark
European Court
of Auditors
Israel
Italy
Korea
Mexico
Peru
Portugal
South Africa
Spain
Supreme audit institution’s current operations
Strategic plan
exists
Years covered
by current
strategic plan
Emerging trends
affecting
government and
auditees
Emerging trends
affecting the
supreme audit
institution
Institutional
performance
and impact
Engagement
with external
stakeholders
Compliance
with auditing
standards
Human
resource
capabilities
Support
systems
capabilities
Internal
organisation
and
governance
Yes
Yes
Yes
Yes
Yes
2013
2011-15
2013-15
2008-12
2012-15
Yes
Yes
No
No
No
Yes
Yes
No
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
No
Yes
No
Yes
Yes
No
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
2013-17
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
..
Yes
Yes
Yes
No
x
x
x
..
2012-14
2011-13
2013-16
x
x
x
x
..
..
Yes
Yes
x
x
x
x
..
..
Yes
Yes
x
x
x
x
..
..
Yes
Yes
x
x
x
x
..
..
Yes
Yes
x
x
x
x
..
..
Yes
Yes
x
x
x
x
..
..
Yes
Yes
x
x
x
x
..
..
Yes
Yes
x
x
x
x
..
..
Yes
Yes
x
Source: ANAO (2010), Australia National Audit Office Corporate Plan 2010-2013, Australian National Audit Office, Canberra, www.anao.gov.au/AboutUs/~/media/AA6EA069D6D94B8D9AF1798136E70825.pdf; TCU (2011), Plano Estratégico TCU 2011-2015 [TCU Strategic Plan 2011-2015], Tribunal de Contas da União,
Brasília, http://portal2.tcu.gov.br/portal/page/portal/TCU/planejamento_gestao/planejamento2011/pet.pdf; Contraloría General de la República (Costa Rica) (2008), Plan
Estratégico
Institucional
2008-2012:
Un
Compromiso
con
la
Sociedad
Costarricense…
[Institutional
Strategic
Plan
2008-2012:
A
Commitment to Costa Rican Society…], Contraloría General de la República, San José, http://cgrw01.cgr.go.cr/portal/page?_pageid=434,2625184&_dad=portal&_schema=PO
RTAL; NAOD (n.d.) http://uk.rigsrevisionen.dk/about-us/strategy-and-performance-targets; ECA (2013), European Court of Auditors Strategy 2013-17, European Court of
Auditors, Luxembourg; ASF (2011), Plan Estratégico de la ASF (2011-2017) [ASF Strategic Plan 2011-2017], Auditoria Superior de la Federación, Mexico DF,
www.asf.gob.mx/uploads/41_Instrumentos_Legales/Plan_Estrategico_ASF_2011-2017_web.pdf; Contraloría General de la República (Peru) (2012), Plan Estratégico
Institucional 2012-2014 [Institutional Strategic Plan 2012-2014], Contraloría General de la República, Lima, www.contraloria.gob.pe/wps/wcm/connect/518e43a4-7cbf-44feaa54-46a6d14881bc/RC_039_2012_CG.pdf?MOD=AJPERES; Tribunal de Contas (Portugal) (2010), Plano Trienal 2011/2013 [Triennual Plan 2011-2013], Tribunal de Contas,
Lisbon, www.tcontas.pt/pt/actos/outros/pt-2011-2013.pdf; AGSA (2013), Budget and Strategic Plan of the Auditor-General of South Africa for 2013-2016, Auditor-General of
South Africa, http://www.agsa.co.za/Documents/AGSAreports/Budgetandstrategicplans/tabid/94/id/14/Default.aspx.
Table 3.3. The vision, mission and values of the Office of the Comptroller General
of the Republic
2010 strategic directions
2013-2015 Strategic Plan
Mission To ensure compliance with the law, the
protection and proper use of public
property, the preservation and
strengthening of administrative integrity,
and accuracy and transparency of the
government's financial management,
achieved with a high level of excellence
as an essential part of the “National
System of Control”
2003 institutional directions
To ensure compliance with the
principles of the law, to protect
public patrimony; to oversee and
strengthen integrity in administrative
matters, to ensure regularity and
transparency in financial
management by the public
administration
To ensure legal compliance by the
public administration through a
collaborative relationship with
public entities and citizens,
promoting the public good through
efficient institutional management
to safeguard the integrity of
transparency and correct use of
public patrimony
Vision
Not defined
Serving as the country’s highest
oversight body, capable of acting
independently enhancing public
management and governance;
protecting integrity and providing
assurance of the actions and
performance of the public
administration
To be an entity that delivers timely
and high-quality products and
services for civil society and the
state, generating trust in the
proper use of public resources
and actively integrating control
processes in order to increase the
impact of the institution’s work
Values
Not defined
– Independence and responsibility
– Objectivity
– Professionalism (integrity,
efficiency, excellence)
– Transparency
– Accountability
– Constructive and collaboration
– Consistency
– Reliability
– Integrity
– Collaboration
– Responsibility
– Autonomy
– Transparency
Source: CGR (2003), “Doctrina institucional [Institutional doctrine]”, CGR mimeo, CGR, Santiago; CGR
(2010), “Aprueba las definiciones estatégicas de la Contadloria General de la Republica”, CGR, Santiago,
17 November; CGR (2013), “Plan Estratégico 2013-2015 Contraloría General de la República, marco
estratégico [Office of the Comptroller General of the Republic 2013-15 Strategic Plan, strategic bases]”, CGR,
Santiago, May.
Several key differences exist between the CGR’s 2013-15 Strategic Plan and previous
strategic documents. The strategic planning process was prepared based on a broad
assessment of the CGR’s capacity needs, involved the broad participation of CGR
officials and various strategies have been prepared to support its implementation.
The identification of the CGR’s capacity needs drew upon various assessment
instruments focused on benchmarking the CGR against international norms and good
practice. These assessment instruments included a SWOT analysis and the Strategic
Development Framework contained in the IDI (2009) Strategic Planning: A Handbook
for Supreme Audit Institutions. The SWOT analysis was informed by the results of a 2012
CGR Organisational Climate Survey (Estudio de Clima Organizacional 2012) and a 2012
Performance and Satisfaction of Services and Processes (Estudio de Desempeño y
Satisfacción de Servicios y Procesos). The SWOT analysis was discussed and
subsequently revised based on the input provided by participants of a CGR Capacity
Needs Assessment Workshop (Taller de Detección de Necesidades). The Strategic
Development Framework was used to define the desired CGR performance in
seven domains: i) independence and legal framework; ii) human resources; iii) audit
standards and methodology; iv) internal governance; v) corporate support; vi) external
stakeholder relations; and vii) performance/results.
The process for formulating the CGR’s strategic plan has supported the realisation of
a collective commitment to the modernisation of the institution and the achievement of its
future vision. The formulation of the strategic plan placed significant emphasis on
building not only ownership of senior and middle management (equipo directivo) but also
broad participation of professionals (funcionarios). Professionals were involved directly
and indirectly in order to understand their views on the institution’s strategic direction
and to identify critical issues. Direct participation was achieved through workshops and
focus group discussions to discuss the institution’s mission and vision; indirect
participation was achieved through the Organisational Climate Survey. (The CGR
Organisational Climate Survey is discussed in more detail in Chapter 6). The CGR’s
management was involved to validate the process and to agree on the goals and strategies
moving forward. The formulation of the strategic plan was by a dedicated committee of
senior management to guide and oversee and a working team to support the process.
Despite defining strategic planning as a means to explore changes in the external
environment, the CGR did not utilise this process to explore this very issue. The CGR
could learn from the experiences of the SAIs of Australia, Brazil, Portugal and
South Africa, as well as the European Court of Auditors, which examined emerging
trends that could affect government and auditees, as well as the SAI directly. The
Brazilian Federal Court of Accounts conducted a scenario analysis of the future trends in
the public sector drawing upon external experts as well as its internal management in the
preparation of its 2011-15 Strategic Plan (Box 3.1). The National Audit Office of
Denmark explored how the financial crisis and push towards efficiency within the public
sector would affect the focus of its work in the preparation of its 2012-15 strategic plan.
The Portuguese Court of Accounts examined the main structural constraints affecting the
country’s economic development and financial sustainability – e.g. demographic change
and its impact on the sustainability of social security and the National Health Service, the
fiscal burden resulting from public-private partnerships and the high level of public and
national indebtedness – in the formulation of its 2011-2013 Strategic Plan. The European
Court of Auditors examined the increasing complexity, interconnectedness and
unpredictability of the global environment and change in the European Union’s financial
management practices – e.g. mainstreaming of expenditure, new financial instruments
and developments in the control framework for directly managed expenditure – in the
formulation of its strategic plan.
The process could have been strengthened by consultation with external stakeholders,
such as the legislature, executive or representatives of civil society in the strategic
planning process. However, only 3 of the 12 benchmark SAIs involved in this peer
review consulted with external stakeholders. The SAI of Brazil engaged with a broad
range of stakeholders including the executive, legislature, representatives of labour and
employers, civil society organisations and the media. The European Court of Auditors
consulted with the European Parliament’s Budgetary Control Committee, discussed its
regular key performance indicators with the European Commission and surveyed SAIs in
all European Union countries (Box 3.2). The National Audit Office of Denmark engaged
with the parliament’s Public Accounts Committee, the body to which it submits all of its
audit reports and discusses its annual budget. This was done by both formal and informal
meetings with the heads of committee secretariat and other relevant staff members.
During the process the members of the Public Accounts Committee were invited to more
informal dialogue meetings between the committee itself and the Auditor-General.
However, the final strategy was decided upon by the National Audit Office of Denmark.
Box 3.1. Using the results of assessment of emerging trends affecting government
in the strategic planning of the supreme audit institution of Brazil
Strategic planning was introduced within the Brazilian Federal Court of Accounts (TCU) in 1994. Strategic
planning involves: i) clarifying an organisation’s mission and values; ii) developing a vision for the future;
iii) analysing external opportunities and risks; iv) assessing internal strengths and weaknesses; v) evaluating
alternative strategies; and vi) developing monitorable action plans. Since the first TCU Strategic Plan (Plano
Estratégico do Tribunal, PET) in 1994, six strategic plans have been issued by the TCU, each varying in their
approach. Through this process the TCU has sought to align itself with best practices adopted by other supreme
audit institutions.
The TCU’s 2011-14 Strategic Plan was developed using a balanced scoreboard approach and scenario
analysis. The approach represents an evolution from the earlier strategic plan. For example, the second plan,
issued in 1999, was based on guideline management (Gerenciamento de Diretrizes) where yearly guidelines
were created in order to improve management efficiency. The third plan, issued in 2001, included an institutional
self-evaluation to diagnose strengths and weakness, opportunities and risks. The fourth plan, issued in 2003,
emphasised managing for results and the creation of the institutional values. The fifth plan, issued in 2005, was
based on a balanced scoreboard approach together with guideline management that was utilised in 1999.
Underlying the preparation of the TCU’s 2011-14 Strategic Plan was an awareness of the growing
complexity of the environment in which the institution operated. Although the management strategy adopted by
the TCU until then was satisfactorily meeting most of the institution’s needs, it had some deficiencies as to
foreseeing future events that could impact the performance of the institution if they occurred. Through the
strategic planning process, the TCU attempted to create a strategy that would be effective in the long term and
that would not become obsolete quickly. In order to deal with these changes, the TCU sought to formulate a
strategy that could foresee possible changes in the external environment and that would enable the organisation
to be prepared and capacitated to realign the strategy in the shortest time possible, without getting in the way of
achieving the desired results.
The scenarios analysis was conducted using the “Grumbach method” to examine the probability of future
events that could have a significant impact on the TCU’s performance. The Grumbach method is used to support
the formulation of strategies by organisations that find themselves in a competitive and turbulent environment,
where traditional models of planning, forecasting and projections are not appropriate. The Grumbach method
uses traditional tools of strategic planning together with scenarios planning methods, for example, Delphi,
Cross-Impact and the Monte Carlo Simulation. The Grumbach method also includes an analysis of the strategic
posture of other actors in face of the alternative scenarios identified.
The Grumbach method closes the strategic management cycle by prioritising and planning the strategic
initiatives and their monitoring. This is done by using indicators that are monitored in real time, thus allowing
adjustment between the long-term objectives of the organisation and the execution of strategic initiatives that are
necessary to reach those objectives in the present.
Among the issued examined in the scenario planning were:

macro and micro-economic trends within the Brazilian economy

take up of e-government and m-government

participation of society in the oversight of public expenditure

private participation in the delivery of public services

increasing outsourcing in government service delivery

ability of the public administration to attract and retain officials

actions to prevent and detect corruption within the public sector.
Box 3.1. Using the results of assessment of emerging trends affecting government
in the strategic planning of the supreme audit institution of Brazil (cont.)
The scenario analysis was supported by a survey of 1 500 external experts on issues ranging from the
economy, the environment and direct social control/citizen engagement who were surveyed about future
developments related to government control. In addition, a survey was conducted of the TCU leadership on their
perceptions of the organisation’s external control activities, structure, planning and management. In addition,
two separate surveys focused on the opinions of TCU officials and external experts as input into the TCU
strategic planning activities. Approximately 550 TCU officials responded to a survey regarding the internal
challenges affecting them in their work.
Main challenges identified through the Federal Court of Accounts’ Strategic Planning for 2011-14
Internal challenges
– Timeliness of the TCU’s judgments and findings
– Use of strategic information in planning control actions
– Effectiveness of control actions in different sectors
– Communication and information sharing between TCU units
– Pressure for enhancing the specialisation of TCU technical units
– Capacities of TCU officials to respond to future challenges
– Integration of IT systems used by TCU
– Balance staffing of TCU units
– Adherence of decision making to strategic plan
– Administrative continuity
– Involvement of high-level officials in strategic planning
– Information sharing between actors of both internal and external control
– Co-ordination between TCU and the internal control system of the
federal public administration
External challenges
– Pressure for more control actions
– Need to develop new areas of expertise and skills
– Growth of direct social control
– Growth of complex issues such as public-private partnerships,
Pré-Sal, airport infrastructure
– Growth of electronic fraud
– Demands for more performance audit
– Demands for improvements and increases in productive
infrastructure
– Growth of e-government within the federal public administration
Source: Adapted from TCU (2011), Planejamento Estratégico, Construindo o TCU do futuro, 2011-2015, Sumário Executivo
[Strategic Plan, Building the Future of the TCU, 2011-2015, Executive Summary], TCU, www.tcu.gov.br; OECD (2013),
Brazil’s Supreme Audit Institution: The Audit of the Consolidated Year-End Government Report, OECD Public Governance
Reviews, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264188112-en; and interviews with TCU officials.
Box 3.2. Consultation of external stakeholders in the strategic planning
of the supreme audit institution of the European Court of Auditors
During the development of the ECA’s 2013-2017 Strategic Plan the European Parliament was consulted in
the form of meeting between members of the Budgetary Control Committee and the ECA. In addition, the
committee organised a public hearing entitled “Future Role of the European Court of Auditors: Challenges
Ahead and Possible Reform” that featured contributions of former and current members of the ECA as well as
independent experts. The results of both events were taken into account by a reflection group of ECA members
in their final report that contained suggestions for the strategic orientation of the ECA. These were integrated in
the new strategy, for instance, in the sections on “Working with others to leverage the ECA’s contribution to EU
accountability”.
The ECA also consulted with the SAIs of the (then) 27 member countries of the EU in the form of an open
question survey on the following issues: inter-SAI co-operation, audit methodology and communications of
SAIs. The SAIs gave extensive replies which were synthesised and included in the final report of the strategy
reflection group.
Source: European Court of Auditors.
In the preparation of its strategic plan, the CGR proposed to communicate its final
strategic plan with its stakeholders and subsequently solicit input from these stakeholders
as input into the future revision of the plan. This will be done through the CGR’s website.
The CGR launched its first strategic plan in May 2013, with the plan covering the
period 2013-15 – and covering the last two years of the current Comptroller General’s
tenure. The strategic plan was communicated through the CGR’s 2012 annual report and
institutional website (Table 3.4). In July and August 2013, the CGR undertook a number
of activities to “socialise” the plan to all of its staff, including regional comptroller
offices. At the time of publishing this review, the CGR was still formulating operational
plans and projects to support the implementation of the strategic plan. CGR divisions
have proposed a number of projects in line with the CGR’s strategic goals that are
currently being reviewed internally by the institution’s senior management. Once
approved, they will be included in the annual operating plans, together with the indicators
for assessing the achievement of the strategic objectives. It is critical that the CGR align
Table 3.4. Office of the Comptroller General of the Republic’s
strategic objectives and strategies
As contained in the CGR 2013-15 strategic plan
Strategic objectives
1. Deliver timely,
high-quality and
value-added products and
services
Strategies
1.1 Sustain the quality improvements of institutional products and services targeting different
audiences
1.2 Evaluate the impact of key CGR products and services on citizenship and public institutions
1.3 Increase the online coverage of CGR products and services
1.4 Enhance the quality of products and services supporting the operational functions of the
institution
2. Strengthen relations with
external stakeholders in
order to increase the
impact of the institution’s
work
2.1 Develop stronger links and measures of mutual collaboration with key CGR stakeholders
2.2 Promote improvements in transparency and integrity in the administration’s use of public
resources
2.3 Increase sharing of good practices with international/national organisations to enhance
institutional management
2.4 Understand and enhance citizens’ perception of the management of the institution and its role in
the public sector
3. Standardise and improve 3.1 Strengthen co-ordination among different CGR divisions/offices in order to adopt uniform
guidelines and criteria
institutional processes with
a focus on managing for
3.2 Standardise processes and procedures nationwide for core and support functions
results
3.3 Develop and integrate information systems supporting the institution’s functions
3.4 Increase added-value of CGR management control in order to support internal decision making
3.5 Strengthen capacity and dissemination of internal control to improve internal management
4. Develop competent and
motivated staff with
appropriate skills for the
institution
4.1 Develop an institutional competency framework to increase staff performance and satisfaction
4.2 Support the development of staff competencies and knowledge through effective training
programmes
4.3 Enhance individual performance assessments giving attention to different institutional levels and
responsibility
4.4 Enhance the organisational climate to encourage continuous management improvement
4.5 Enhance leadership skills within the institution and evaluate the role of headships
Source: CGR (2013), “Plan Estratégico 2013-2015 Contraloría General De La República, marco estratégico
[Office of the Comptroller General of the Republic 2013-15 Strategic Plan, strategic bases]”, CGR, Santiago,
May.
and integrate the operational plans and projects with the institution’s performance
management systems and its budgeting processes. Chapter 6 discusses the alignment of
performance management with strategic planning with the budget process in more detail.
The CGR could take action to ensure that future strategic planning processes are
concluded before the start of the plan’s period. Moreover, future strategic plans could be
designed with consideration of the term of the Comptroller General. The current strategic
plan spans three years and ends in 2015, the same year as the appointment of a new
Comptroller General. In could be advantageous to consider preparing the strategic plan on
a four-year cycle to better fit with the term of the Comptroller General. In future, action
could also be taken to ensure the strategic planning process only begins after the
appointment of the new Comptroller General to ensure ownership of the new leadership.
Explore current trends and challenges affecting governance utilising
information and data generated by audit planning, implementation
and follow up
The CGR has access to a wealth of information and data from both its audit and
non-audit activities that can support it to identify common trends and risks affecting
governance. Recent reforms within the CGR also support the potential utilisation of this
information and data. For example, the CGR has developed a matrix of relative
importance (matriz de importancia relativa) and risk indicators (indicador de riesgo) in
order to prioritise annual audit planning. Adjustments to the CGR’s audit information
systems support the recording, monitoring and follow up of audit observations and other
matters of emphasis identified through audit implementation. Furthermore, the creation of
a dedicated function for monitoring auditee’s actions to address audit observations can
provide an additional source on the maturity of internal control (Chapter 5). The CGR has
also sought in recent years to analyse this information to provide added value and
knowledge using government accounting information (Chapter 1). The CGR could also
give consideration to the establishment of a specific organisational unit responsible for
identifying and processing intelligence, such as in the case of the Korean Board of Audit
and Inspection (Box 3.3). A first step in this direction has been the creation of the
technical units of external control.
Build awareness and understanding of future plans for the modernisation
of government in Chile drawing upon horizon scanning activities
The CGR could take concrete actions to familiarise itself with the government’s
reform priorities to seek to understand the expected impact on the public sector and good
governance. The executive branch in Chile has clear and institutionalised mechanisms for
setting its strategic vision and policy priorities. Among its primary tools are the
Government Programme (Programa de Gobierno) and its Government Programming
(Programación Gubernamental). The Government Programme, delivered as part of the
Presidential Speech of 21 May each year, articulates the country’s strategic direction in a
manner that is accessible and clear to citizens, and enables citizens to hold the
government accountable throughout the electoral term and at the next election.
Government Programming is a roadmap for public entities of how the country’s strategic
aims will be achieved sectorally, including articulating ministerial objectives and how
they relate to programme priorities set by the President. Published online, these activities
are available to citizens, thus promoting transparency. They also serve to hold the
implementing body accountable both to citizens and to the government through an
established monitoring system.
Box 3.3. Research capacity on public governance within in the Korean
In 2005, the Korean Board of Audit and Inspection (BAI) established a research arm – the
Evaluation Research Institute (ERI). The BAI recognised that its external environment was
changing, with an expansion of the public sector and growing use of performance management
within the public administration. The establishment of the Evaluation Research Institute aimed
to provide the BAI with the necessary infrastructures to support the evaluation of public sector
performance using an objective methodology; and to effectively support the BAI’s new systembased audit approach. In 2008, the ERI was renamed the Audit and Inspection Research Institute
(AIRI) following the revision of the Board of Audit and Inspection Act in the same year. As part
of the new act, part of the BAI mandate on evaluation of the public sector was transferred to the
Office of the Prime Minister. The AIRI’s duties were redefined as to carry out research and
development related to financial audit, performance audit and inspection of acts related to major
politices, projects and government operations.
The AIRI conducts a combination of research and audit support. The institute’s research
function focuses on current and emerging policy issues, current and emerging trends in the
national audit system and public auditing practices and methodologies. Furthermore, the AIRI’s
research function involves professional networking with domestic and international research
institutes. The institute’s audit support function includes analysing changes in the BAI’s audit
environment, a now essential part of BAI’s annual audit planning process; providing
consultation on individual audit design and data collection and analysis; conducting in-depth
case studies on major government policies and/or projects; and conducting studies to improve
audit methodology and procedures.
The AIRI has three main research divisions resourced with 35 staff, 19 of which have a
PhD. In addition to three research divisions, there exists a Micro Analysis Project (MAP), which
focuses on developing and promulgating the computer assisted audit techniques (CAAT).
Organigramme of the Audit and Inspection Research Institute
President
Research Managing Director
-- Finance, economy and
financial markets
-- Government accounting
and financial audit
-- Major government policies
and projects
-- Performance audit policies,
changes in external
environmental and impact on
the BAI’s audit directions
-- Measuring and qualifying the
BAI’s audit performance
-- Audit methods in the areas
of construction, environment,
social welfare etc.
-- Audit and inspection theory,
practices and national audit
system
-- Public audit standards and
evaluation of audit result
Total staff: 10
PhD: 7
Supporting staff: 1
Total staff: 9
PhD: 7
Supporting staff: 1
Total staff: 8
PhD: 5
Supporting staff: 0
Planning and Administration
Division
Total staff: 8
Source: Korean Board of Audit and Inspection, Audit and Inspection Research Institute.
In addition, the CGR could draw upon the results of various horizon scanning
activities. Horizon scanning is a policy tool that systematically gathers a broad range of
information about trends and emerging issues in the political, economic, social,
technological or ecological environment. Horizon scanning is synonymous for a variety
of so-called foresight activities that aim to develop the capabilities of organisations to
deal better with an uncertain and complex future. Governments in many OECD countries
conduct and commission horizon scanning activities related to the future of government,
public finances and individual sectors such as public health (Habegger, 2009).
The government of Chile is beginning to invest in capacity for horizon scanning
(OECD, 2011b). Currently, the National Statistical Institute (INE) collects and
consolidates statistical data and projections on Chile’s population, education, health and
other social issues. For example, this information can support the CGR to understand
shifting demographic trends at a national and provincial level (Figure 3.1). This
information can be used to understand changing demands and pressures on public service
delivery. Chile’s 2012 Budget Law establishes provisions for the government to include
information on long-term fiscal projections on pension expenditure in the “Public
Finances Report”. Efforts are also being made to prepare separate long-term fiscal
projections on health and education expenditure in future years. Long-term fiscal
projections are a common instrument used by governments to provide information on the
allocation of public finances in different sectors using various policy, demographic and
economic assumptions (Anderson and Sheppard, 2009).
The CGR could also tap into a broad range of knowledge bases and sources of
information about trends and emerging issues that could affect the government in Chile.
This includes political knowledge such as the experience, analysis and judgement of
political parties; research and technical knowledge produced by universities, research and
technical institutions; professional and practical knowledge produced by professional and
managerial communities; citizen knowledge obtained through engaging with citizens,
businesses and civil society organisations (CSOs); and the public administration is
responsible for providing its own impartial advice to government, but it also has a duty to
provide analysis of the information collected from the various areas of the evidence base.
Figure 3.1. Demographic projections for Chile
0-14
15-29
30-44
45-59
60 +
100%
80%
60%
40%
20%
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
0%
Source: Instituto Nacional de Estadísticas, Departamento de Demografía, Programa de Proyecciones de la
Población.
Box 3.4. Long-term fiscal projections as a source of information for supreme audit
institutions
Fiscal projections provide a means to assess fiscal sustainability based on assumptions of
current policies, stable taxes, and other key demographic and micro- and macroeconomic
parameters. Fiscal projections offer invaluable signposts to help current governments to respond to
known fiscal pressures and risks in a gradual manner, earlier rather than later, and help future
governments avoid being forced to adopt sudden policy changes. In doing so, they can also help
future governments to position themselves better to manage unforeseen or less predictable fiscal
pressures. The OECD “Best Practices for Budget Transparency” (2002) recommend that fiscal
projections should cover between 10 and 40 years and be prepared or updated at least every
5 years or when major changes are made in revenue and expenditure programmes. In addition, all
key assumptions underlying the long-term fiscal projections should be made explicit, together with
a range of plausible scenarios. Governments should publish periodic reports on long-term public
finances, and the focus of these projections should be on more than just demographic changes.
For supreme audit institutions (SAIs), long-term fiscal projections can provide information on
the future direction of government spending. Although there is little evidence of SAIs using
long-term fiscal projections, their practical application becomes apparent when reviewing what
information they provide.
Australia is one country that has given consideration to the issue of long-term fiscal
sustainability – though the projections are not directly used by the Australian National Audit
Office. Projections of government spending per capita, the primary balance (the difference
between revenues and expenditures, not including interest payments on debt) and net government
debt are prepared by the Treasurer and presented to the House of Representatives in the
Intergenerational Report (IGR). These data are complemented by a measure of the fiscal gap at the
end of the projection period. Projections span 40 years and are updated at least every 5 years as
required under the Charter of Budget Honesty Act 1998. However, the government has recently
agreed to produce the IGR more frequently, updating projections every three years.
Three projections have been prepared to date, in 2002/03 (Intergenerational Report 1), 2007/08
(Intergenerational Report 2) and 2010 (Intergenerational Report 3). The fourth report is anticipated
to be released in 2013/14.
The report analyses the sensitivity of specific projected expenditure categories – but not the
projected primary balance, projected net debt or adjusted primary balance – to different Treasury
demographic and macroeconomic assumptions. Policy options are also presented for gradual
reductions in government spending. The report presents the methodology and key assumptions
behind the projections and the sensitivity analysis, which are substantiated by textual discussion.
The Commonwealth government considers the intergenerational reports to have been
influential in framing public debate on economic policy and focusing attention on the long-term
consequences of current policies. The reports are widely used by the executive, ministers and
Cabinet to inform debates on a range of public policy areas including health, education, family
benefits, welfare, superannuation and pensions. Moreover, in addition to the work of the
Treasury’s Budget Policy Division to prepare the Intergenerational Report, issues of fiscal
sustainability are now considered by a number of other units within the Treasury and the
Department of Finance and Deregulation. The reports have also generated changes to regular
budget practices and procedures. Long-term fiscal projections have been embedded into the annual
budget document through the inclusion of a 15-20-year (extended medium-term) projection of the
underlying cash balance as part of the medium-term fiscal outlook for the federal budget.
Source: Anderson, B. and J. Sheppard (2009), “Fiscal futures, institutional budget reforms and their effects:
What can be learned?”, OECD Journal on Budgeting, Vol. 2009/3, OECD Publishing, Paris,
http://dx.doi.org/10.1787/budget-9-5kmh6dnl056g; Commonwealth of Australia (2010), Australia to 2050:
Future Challenges, Commonwealth of Australia, Canberra.
Develop awareness and understanding of similarities and trends in other
countries as a basis for engaging SAIs in a discussion of governance challenges
In addition to using the results of horizon scanning activities, the CGR could also
seek to understand how the government of Chile compares with other countries and
international norms. For example, overall the Chilean performance budgeting framework
is advanced and is grappling with issues other best practice OECD countries have not yet
found clear solutions to. The government of Chile’s systems for the development and use
of performance information in the budget process is high relative to OECD countries and
the central government has established general guidelines and definitions for the
performance budgeting process, standard templates for reporting performance
information, a standard set of performance indicators and standardised ICT tools for
entering and reporting performance information (Table 3.5). At the same time, Chile has
a relatively more centralised system for human resource management, similar to Korea,
Chile and Mexico (Figure 3.2).
Table 3.5. Key elements of standard performance budgeting frameworks
in central government in Chile and selected countries (2012)
Country
General guidelines
and definitions
for the performance
budgeting process
Standard template(s)
for reporting
performance
information back
to the CBA
Standard
performance
rating system
Standard set
of performance
indicators
and/or targets
Standard ICT
tool/application for
entering and reporting
performance information
to the CBA
Australia
x
x
x
x
x
Belgium
x
x
x
x
x
Chile





Denmark





Italy





Korea





Mexico





Portugal
x
x
x
x
x
Spain





Total yes
5
5
2
3
6
Notes: ● = Yes; o = No; x = Not applicable; .. = Missing data
Source: Adapted from OECD (2012), “Budgeting levers, strategic agility and the use of performance budgeting
in 2011/12”, GOV/PGC/SBO (2012)10, OECD, Paris.
Moreover, the CGR could also consider how decision-making practices may change
if the government of Chile converges with international norms. For example, the
government of Chile is developing initiatives and policies to improve the quality of
regulatory management and performance, albeit from a low base. Over time, it could be
anticipated that the use of formal and open consultation and regulatory impact
assessments will assist in improving regulatory quality and performance (Figures 3.4
and 3.5). The CGR could also explore how SAIs provide independent oversight of
regulatory policy and management in countries with more advanced systems. As
discussed in Chapter 1, a number of SAIs in these countries audit the use of formal and
open consultation and regulatory impact assessments. The issue of regulatory policy is
particularly significant given the CGR’s focus on the integrity of administrative
decision making in its audit activities.
Figure 3.2. Delegation of human resource management practices in central government
in Chile and selected countries (2010)
1
0.8
0.6
0.4
0.2
0
Australia
Portugal
Denmark
OECD33
Italy
Korea
Chile
Spain
Mexico
Israel
Brazil
Notes: The figure shows the extent of delegation of human resource management practices to line ministries in
central government. The figure reflects the existence of a central HRM body and the role of line ministries in
determining the number and type of posts within organisations; allocation of the budget envelope between
payroll and other expenses; staff compensation levels; position classification, recruitment and dismissals; and
conditions of employment. The statistical data for Israel are supplied by and under the responsibility of the
relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the
Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
No data for Costa Rica and Peru.
Source:
OECD
(2011),
Government
at
a
Glance
2011,
OECD
Publishing,
http://dx.doi.org/10.1787/gov_glance-2011-en, based on the OECD 2010 Strategic HRM Survey.
Paris,
Moreover, such knowledge could bring new opportunities for dialogue between the
CGR and other SAIs on how to provide effective oversight given the characteristics of
their institutions and systems. The CGR is active in INTOSAI (International Organisation
of Supreme Audit Institutions) bodies aimed to facilitate knowledge sharing rather than
those networks involved in professional audit standards (Annex 3.A1). The CGR actively
contributes to enhance knowledge sharing among SAIs in Latin America through the
OLACEFS (Latin American Organisation of Supreme Audit Institution) (Llanos, 2002;
see Annex 3.A1). The CGR is also active in following the development of accounting
standards, due to its role in setting public sector accounting standards in Chile
(Chapter 1).
Figure 3.3. Formal and open consultation processes in regulatory decision making
in Chile and selected countries (2009)
Primary laws
Regulations
1.0
0.8
0.6
0.4
0.2
0.0
European Australia
Union
Korea
Denmark OECD30
Mexico
Spain
Portugal
South
Africa
Italy
Israel
Brazil
Chile
Note: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli
East Jerusalem and Israeli settlements in the West Bank under the terms of international law. No data for
Costa Rica and Peru.
Source: Adapted from Jacobzone, S., C. Choi and C. Miguet (2007), “Indicators of regulatory management
systems”, OECD Working Papers on Public Governance, No. 4, OECD Publishing, Paris,
http://dx.doi.org/10.1787/112082475604.
Figure 3.4. Overall regulatory impact assessment processes in Chile
and selected countries (2009)
1
0.8
0.6
0.4
0.2
0
Australia Denmark Mexico
Korea European
Union
Italy
OECD30
Spain
Portugal
n.a.
n.a.
n.a.
n.a.
Brazil
Chile
Israel
South
Africa
Note: n.a. = Not available. The statistical data for Israel are supplied by and under the responsibility of the
relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan
Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. No data
for Costa Rica and Peru.
Source: Adapted from Jacobzone, S., C. Choi and C. Miguet (2007), “Indicators of regulatory management
systems”, OECD Working Papers on Public Governance, No. 4, OECD Publishing, Paris,
http://dx.doi.org/10.1787/112082475604.
Enhancing operational agility in order to effectively respond to emerging issues
and expectations
Fostering operational agility is key to ensuring that the CGR can effectively respond
to emerging governance issues and changing civic expectations. Operational agility
involves the ability to make the most of existing resources, including moving and
reallocating resources to better support existing priorities and to respond to new and
emerging priorities. At the same time, operational agility requires coherent adaptability,
so as to ensure that redeployment of resources and priorities does not generate internal
vacuums, risks or inconsistencies in the light of the different functions performed by the
organisation.
Operational agility is a product of SAI independence – specifically administrative
dimensions – and its human resource management practices. For SAIs, human resources
are a key asset noting that audit assignments are knowledge intensive and dependent on
professional judgement. A core part of managing a modern SAI is ensuring that the
organisation is able to attract, retain and motivate the right number of staff, with the right
skills and experiences.
SAI independence underpins its ability to accomplish its tasks objectively and
effectively. Independence is broadly comprised of organisational, functional and
administrative dimensions, of which administrative dimensions are particularly critical
for operational agility. This section focuses on administrative independence and its role in
supporting agility. Administrative independence requires that SAIs be provided with
adequate means to fulfil their mandate and accomplish their assignments, using their
resources as they see fit. Organisational independence is closely associated with the SAI’s
leadership, the conditions for its appointment, removal and retirement, the guarantee of a
long and fixed term, as well as its immunity from prosecution arising from the routine
discharge of SAI duties. Functional independence requires that SAIs have a sufficiently
broad mandate and full discretion in the discharge of its assignments, including the
freedom to plan audit work and report on the findings, unrestricted access to information
and powers of investigation, as well as authority to follow up on audit findings
(INTOSAI, 1977; 2010a).
Human resource management offers some of the key instruments to ensure
operational agility within SAIs. It provides a framework for SAIs to identify, acquire and
develop the competencies they need now and in the future; to allocate resources to
address emerging challenges and demands; and to align individual performance with the
institution’s strategic objectives. Successful management of human resources requires
strategic workforce planning, attention to workforce competencies and the use of
traditional human resource management tools such as recruitment, compensation and staff
development. SAIs are dependent on highly skilled staff with professional experience and
high standards of integrity (INTOSAI, 1977). To support this, SAIs need to maintain and
develop skills and competencies to perform the work in order to achieve their mission
(INTOSAI, 2010a) and establish effective policies and procedures to do so
(INTOSAI, 2010b). However, to be effective, it is essential to align workforce
management with the strategic goals of the SAI.
The CGR has a high level of administrative independence to (re-)allocate resources in
line with the institution’s changing needs. The CGR has significant authority over its
organisational design and delegation of functions and powers, its human resource
management and budgetary resources. During recent years, the CGR has taken a number
of actions to reorganise its institution and restructure its workforce as part of its
institutional renewal. However, the CGR falls under the same human resource
management legal framework and practices as the public administration, which can
restrict its operational agility. The CGR is commonly recognised as an attractive
institution to work in owing to its opportunities for continuous professional development
and high remuneration relative to the public administration (e.g. World Bank/
Inter-American Development Bank, 2005; OAS, 2007). The CGR’s human resource
management practices are founded on the principles of merit and impartiality in
recruitment, promotion and performance management, and recent reforms have sought to
reinforce these principles.
In order to enhance operational agility to emerging governance issues and changing
societal expectations, the CGR could consider:

introducing multi-year workforce planning to strengthen and complement recent
institutional reforms to restructure the workforce

establishing a competency framework for all officials in order to support the
achievement of institutional goals

utilising traditional human resource management practices to support the
development of competencies and encourage internal horizontal co-operation

aligning performance assessment at all levels within the institution to the goals
contained in the strategic and human resource plans.
The Comptroller General has significant administrative independence
to reallocate resources in line with the institution’s changing needs
The CGR Organic Law gives the Comptroller General authority to close, merge or
create divisions/units, establishing to whom officials report and assigning to them
assignments and powers, as guaranteed by the CGR Organic Law. This includes
establishing regional offices and assigning powers and assignments to these offices in
order to facilitate the effective delivery of their functions and assignments in an efficient
manner. The Comptroller General is also responsible for allocating personnel among the
CGR divisions and offices and for appointing officials who serve as division heads,
regional comptrollers and prosecutors (Law 10 336, Art. 51). The CGR Organic Law,
however, requires that officials remain in these regional offices for a minimum of
four years, except for service needs or reasons of force majeure (Law 10 336, Art. 24).
The CGR reports to the National Congress annually, and to the public, on the use of these
resources, as required by the CGR Organic Law.
The main criteria used to define the CGR’s organisational structure is its functions,
similar to the SAI of Costa Rica. Other approaches include aligning organisational
structure to audited entities, or, as in the case of Brazil, to government functions
(Table 3.6).
Table 3.6. Main criterion used to define the organisational structure of supreme audit
institutions in Chile and selected countries
Audit assignments/functions
Australia, Portugal, Chile, Costa Rica
Audited entities
Other
Denmark, Israel, Italy, Korea,
South Africa, Spain
Brazil, European Court of Auditors
Notes: Brazil: The Federal Court of Accounts’ structure was changed in 2013 in order to promote a focus on
government functions (e.g. national defense and public security, health, education, social welfare) and
whole-of-government management issues (e.g. privatisation, state personal management, public procurement).
Costa Rica: Four divisions depend on the Comptroller General: the Control Division (which is organised by
area of oversight and type of audit); Administrative Contracting Division, Legal Division and Management
Support Division. Denmark: As of January 2013, the National Audit Office of Denmark rearranged the entire
organisation. European Court of Auditors: By income and spending areas. Portugal: The Court of Accounts is
organised according to functions (i.e. ex ante and ex post audits and judicial functions). Spain: Although the
first method of organising the SAI is along the division of public sector levels (state, autonomous communities
and municipalities) there are several departments in charge of the Spanish state public sector which have
assignments in line with government functions. This second method is to account for the extension and variety
of the Spanish state public sector, and allows auditors to be more specialised and experienced in the field they
audit.
to Q 4.
In recent years, the CGR has reorganised a number of its central divisions and
standardised the structure of its 14 regional offices to increase the performance, efficiency
and timeliness of its functions. The Comptroller General has restructured the
Infrastructure and Regulation Division (2007); Accounting Analysis Division (2011);
State Personnel Management Division (May 2012, formally the Registration and Toma de
Razón Division); and Administrative Audit Division (January 2013). The restructuring
has followed recent internal reforms to standardise and automate internal working
procedures and the introduction of “management by results”. For example, the
restructuring of the State Personnel Management Division followed the automation of the
registration and toma de razón (i.e. ex ante control of legality) of state personnel
management decisions as a consequence of the SIAPER system (discussed in more depth
in Chapter 2). The restructuring of the Administrative Audit Division followed the
redesign of annual audit programming and the implementation of new practices for audit
field work and follow up (discussed in more depth in Chapter 5).
However, concern has been expressed that the CGR’s divisions do not support one
another in the execution of their functions, and that they work independently of one
another. Furthermore, and as discussed in Chapter 2, the CGR’s functions can be
expected to change over time. For example, automation of the CGR’s ex ante control of
legality assignments will place greater emphasis on ex post audit assignments. This would
likely have an impact on the functions of the different divisions and may generate new
opportunities for horizontal collaboration. In parallel, growing decentralisation in Chile
could see a decline in the relative role of the Municipalities Division vis-a-vis other
divisions involved in ex post audit assignments and the regional offices.
Figure 3.5. Organisation chart of the Office of the Comptroller General
Comptroller
General
Cabinet
- Access to Information Unit
- Internal Audit Unit
- Communications & PP.RR department
- Secretariat of External Control Units
- National Co-ordination Unit for Follow-Up
ICT Centre
Deputy
Comptroller
General
International
relations and
co-operation
Court of Accounts
Divisions
Accounting
Analysis
Legal
Administrative
Audit
State
Personnel
Management
Infrastructure
and
Regulation
Valparaíso
Bio Bío
Legal
Co-ordination
and
Information
Municipalities
Prosecutor
General
Secretariat
Regional comptrollers
Tarapacá
Arica y
Parincota
Atacama
Antofagasto
Coquimbo
Libertador
General
Bernardo
O´Higgins
Los Ríos
Maule
Aysén del
General
Carlos Ibañez
del Campo
La Araucanía
Magallanes y
Antártica
Chilena
Los Lagos
Source: Office of the Comptroller General of the Republic.
In response to these challenges, several options exist for the CGR to reorganise itself:
along audit assignments, audited entities and government functions. Organising by audit
assignments allows the SAI of Australia to account for the different requirements of
undertaking performance audits and financial statement audits. These audit assignments
require staff with differing skill sets and qualifications, utilise different methodologies
and documentation technologies, and operate on different audit cycles. The SAI of
Denmark underwent a major organisational restructuring in early 2013, transitioning from
an organisation along audit assignments to one along audited entities. The experience has
provided the SAI of Denmark with a better basis for selecting audits on the basis of
materiality and risk, and has been received positively by both audited entities and SAI
employees. Organising along government functions, as in the case of the SAI of Brazil
and the European Court of Auditors, can help to address sectoral and other cross-cutting
challenges (Box 3.5). Organising along government functions could be particularly
relevant as the government of Chile seeks to become more agile and adopt a
whole-of-government perspective.
Box 3.5. Reorganisation of the supreme audit institution of Brazil
In 2012, the supreme audit institution of Brazil, the Federal Court of Accounts, reorganised
audit units to enhance co-ordination between units and to focus each unit on public governance.
Prior to the reorganisation the Federal Court of Accounts had three types of secretariats of
external control: typical, specialised and state. Eight typical secretariats were each responsible
for a group of federal ministries and the public sector entities (e.g. agencies and foundations)
below these ministries’ responsibility. Eleven specialised secretariats were each responsible for
subjects that span across the federal government, such as ICT, public works and deregulation.
Twenty-six state secretariats – one for each of Brazil’s 26 states – were responsible for control
and oversight of federal programmes at a sub-national level; each is located in the locality for
which it is responsible. These were co-ordinated by the General Secretariat for External Control.
Following the change the Federal Court of Accounts established four co-ordination
secretariats for external control. Moreover, each seceretariat was branded with a specific
government function. Previously they were named by number only.

General Co-ordination for Essential Public Services and Centre-West and South
Regions
 National Defence and Public Safety (Secretaria de Controle Externo da
Defesa Nacional e da Segurança Pública)
 State Management (Secretaria de Controle Externo da Administração do
Estado)
 Personnel (Secretaria de Fiscalização de Pessoal)
 Information Technology (Secretaria de Tecnologia da Informação)
 Procurement (Secretaria de Controle Externo de Aquisições Logísticas)
 State secretariats in Brazil’s centre-west and south region (six in total).

General Co-ordination for Social Policies and Northeast Region
 Education, Culture and Sports (Secretaria de Controle Externo da
Educação, da Cultura e do Desporto)
 Social Security, Labour and Social Assistance (Secretaria de Controle
Externo da Previdência, do Trabalho e da Assistência Social)
 Health (Secretaria de Controle Externo da Saúde)
 State secretariats in Brazil’s northeast region (nine in total).

General Co-ordination for Infrastructure and Southeast Region
 Public Works – Airports and Buildings (Secretaria de Fiscalização de Obras
Aeroportuárias e de Edificação)
 Public Works – Roads (Secretaria de Fiscalização de Obras Rodoviárias)
Box 3.5. Reorganisation of the supreme audit institution of Brazil (cont.)
 Public Works – Energy and Sanitation (Secretaria de Fiscalização de
Obras de Energia e Saneamento)
 Public Works – Ports, Hydric and Railways (Secretaria de Fiscalização de
Obras Portuárias, Hídricas e Ferroviárias)
 Regulation – Transport
 Regulation – Energy and Communication
 State secretariats in Brazil’s southeast region (four in total).

General Co-ordination for National Development and North Region
 Economic
Development (Secretaria
Desenvolvimento Econômico)
de
Controle
Externo
do
 Environment and Agriculture (Secretaria de Controle Externo da
Agricultura e do Meio Ambiente)
 National Treasury (Secretaria de Controle Externo da Fazenda Nacional)
 Government Macro Assessment (Secretaria de Macroavaliação Governamental)
 State secretariats in Brazil’s north region (seven in total).
Source: Adapted from OECD (2013), Brazil’s Supreme Audit Institution: The Audit of the Consolidated
Year-End Government Report, OECD Public Governance Reviews, OECD Publishing, Paris,
http://dx.doi.org/10.1787/9789264188112-en.
The Comptroller General is free to appoint officials within the institution’s budgetary
framework approved by the National Congress, including mobilising short-term expertise
through honoraria and other service contracts. CGR officials are appointed, promoted
and removed at the pleasure of the Comptroller General (exclusiva confianza del
Contralor), with complete independence from any other public authority (Law 10 336,
Art. 3). Over the past five years the CGR staffing has increased from 1 600 to 1 900
(Figure 3.6). Moreover, the CGR General Secretariat is responsible for implementing the
Comptroller General’s human resource management policies. The CGR has limited
interaction with the central government’s human resource management body, the
National Civil Service Directorate (Dirección Nacional del Servicio Civil, DNSC). The
CGR does not discuss, formally or informally, good practices and emerging trends in
human resource management with the DNSC. However, the CGR could benefit from
engaging with the DNSC to learn of good practices and emerging trends in human
resource management within the public administration as input into its own institutional
reforms.
The CGR workforce has been significantly restructured during the past six years in
order to support institutional renewal, made possible because of the institution’s
administrative independence. Between 2007 and 2012, the number of CGR officials
56 years of age and over decreased from 31% to 16% and the number of officials that
were 35 years of age and under increased from 20% to 41%. These actions have reduced
the average age of CGR officials from 53 in 2007 to 40.7 in 2012 (Figure 3.7). Although
restructuring has resulted in a temporary reduction in the share of CGR officials with
professional qualifications, it has resulted in a greater range of professional backgrounds.
The share of CGR officials with backgrounds in accountancy and law has decreased from
61% as a share of total officials with professional qualifications in 2007 to 53% in 2012.
The share of CGR officials with a background in public and business administration as
well as engineering and architecture has increased from 23% as a share of total officials
with professional qualifications to 36% during the same period (Figure 3.8). Overall,
these changes have facilitated the introduction of new management methods as well as
the increase of the overall personnel budget available, resulting in an increase of the
workforce.
Figure 3.6. Office of the Comptroller General of the Republic total staffing
As of 31 December each year
2 000
1 900
1 800
1 700
1 600
1 500
1 400
2007
2008
2009
2010
2011
2012
Source: Adapted from CGR (2008, 2009, 2010b, 2011, 2012b, 2013b), various Cuenta Pública Contraloria
CGR, Santiago.
Figure 3.7. Office of the Comptroller General of the Republic workforce restructuring
A. Age distribution, as of 31 December each year
66 or over
56 - 65
46 - 55
36 - 45
25 - 35
Less than 25
100%
80%
60%
40%
20%
0%
2007
2008
2009
2010
2011
2012
B. Average age, as of 31 December each year
55
50
45
40
35
Jun-07
Dec-07
Jun-08
Dec-08
Jun-09
Dec-09
Jun-10
Dec-10
Jun-11
Dec-11
Jun-12
Dec-12
CGR, Santiago.
Past international assessments of the CGR have, however, expressed concern over the
discretion of the Comptroller General on the institution’s human resource
decision making. For example, the OAS (2007) noted that consideration should be given
to amending the CGR Organic Law so that not all officials are at the discretion of the
Comptroller General, and to study the feasibility of establishing a career system for
administrative positions. Perhaps more significant, however, is that the CGR does not
have a dedicated workforce plan that can assist in multi-year planning. While it may be
due to the fact that the CGR operates within an annual budget, long-term perspectives
could be adopted to support decisions in the short term and the vision in the medium
term. The CGR has taken initial steps in this direction, with the plan to establish an Area
of Personnel Management that would assist in medium- and long-term planning.
Figure 3.8. Educational backgrounds of officials of the Office
of the Comptroller General of the Republic
A. Share of officials with professional qualifications, as of 31 December each year
With professional qualifications
Without professional qualifications
100%
80%
60%
40%
20%
0%
2007
2008
2009
2010
2011
2012
B. Types of professional qualifications, as of 31 December each year
Law
Public and business management
Engineering and architecture
Accountancy
Other professional
100%
80%
60%
40%
20%
0%
2007
2008
2009
2010
2011
2012
CGR, Santiago.
The CGR’s job categories and their accompanying levels of remuneration are
regulated by the same rules as the public administration. Decree-Law 3 551/1980
establishes the employment categories, necessary qualifications and base salary both for
CGR officials as well as for the rest of the public administration (Art. 12). Within this
framework, CGR officials are categorised in the same group as other “oversight
institutions”, including the National Competition Agency (Fiscalía Nacional Económica),
the National Customs Service (Servicio Nacional de Aduanas), the Labour Directorate
(Dirección del Trabajo) and the Superintendent of Social Security (Superintendencia de
Seguridad Social) (Decree-Law 3 551/1980, Art. 1). Law 19 187/1992 subsequently
establishes a technical category of employment specifically for the CGR. Base salaries for
all the public sector are adjusted annually by an act of the Congress following informal
negotiations with between employee associations. In addition, CGR staff are part of a
group performance incentive mechanism (Law 19 553), similar to those established for
the public administration at large under the PMG.
Table 3.7. Office of the Comptroller General of the Republic’s employment categories (escalafón)
Category
Grade
Directors (directivos)
1b-12
Professional (profesionales)
4-18
Auditors (fiscalizadores)
11-17
Managers (jefaturas)
13-16
Technical (técnicos)
14-18
Administrators
(administrativos)
17-24
Stewards (mayordomos)
19-20
Auxiliary (auxiliares)
20-25
Minimum qualifications
General qualifications
University degree
The Administrative Statute states
that to enter the public
administration, the following
requirements must be met:
University degree, of at least 8 semesters
i) Chilean citizenship – though, in
University degree, of at least 6 semesters, and
exceptional cases identified by the
1 year professional experience or a degree in
authority responsible for the
accounting and 5 years of work experience and
appointment, contract employment
training
positions may be given to foreign
citizens with scientific or other
University degree
special knowledge; ii) compliance
with the Law on Recruitment and
i) professional or technical degree awarded by a
state higher education institution or non-university, Mobilisation, when applicable;
or an equivalent institution recognised by the state iii) health compatible with
and 2 years of work experience; ii) professional or performance of the position’s
duties; iv) completion of basic
technical degree awarded by state media
education and possession of the
technical-vocational education establishment, or
educational level or technical or
an equivalent institution recognised by the state,
professional qualification required
and 5 years of work experience; iii) serving as a
technical staff prior to the new requirements being by law for the nature of the position
in question; v) have not been
introduced; or iv) media license or 8 years of
equivalent CGR work experience and successfully dismissed from a public position as
a result of deficient assessment or
passing 70 hours of CGR training
disciplinary measure, unless at
Secondary degree
least five years have passed since
the date of termination; and
vi) have not been disqualified from
Completion of 8 years of basic education and 2
years work experience or completion of 6 years of holding public positions or office,
and no conviction for felonies or
basic education and 5 years work experience
crimes (Art. 12).
Completion of 6 years of basic education (see
letter (d) of Art. 12 of the Administrative
Regulations
Source: Adapted from Decree-Law 3 551/1980 on the educational qualifications for different employment
groups within the CGR; Law 19 187/1992.
The Comptroller General has responsibility for preparing the CGR’s annual budget
within the amounts set in the General Budget Law (Ley General de Presupuestos), as
explained in detail in Chapter 2. Financial resources have included that for investment for
a renovation of the CGR’s offices nationally and the procurement of new ICT systems
(Figure 3.9). The CGR has much budget flexibility and receives lump sum appropriations
for personnel expenditure and materials consumables and good expenditure. However,
there is relatively less flexibility for investment expenditure such as vehicles, machinery
and information and communications technology (ICT), similar to the SAI in Denmark
(Table 3.8). The CGR is allowed to carry-over expenditures that have been committed but
not yet disbursed. It is more difficult to carry over appropriated amounts that have yet to
be committed. In recent years the CGR’s levels of human and financial resourcing have
increased.
Figure 3.9. Office of the Comptroller General of the Republic’s budget appropriation
A. Level, by expenditure category, nominal value, millions CLP
Personnel expenditure, including social security
Investment initiatives and acquisition of non-financial assets
Consumer goods and services
Other
80 000
60 000
40 000
20 000
0
2007
2008
2009
2010
2011
2012
B. Share of total, by expenditure category
Personnel expenditure, including social security
Investment initiatives and acquisition of non-financial assets
Consumer goods and services
Other
100%
80%
60%
40%
20%
0%
2007
2008
2009
2010
2011
2012
CGR, Santiago.
Table 3.8. Budget flexibility of supreme audit institutions in Chile and selected countries
Supreme audit institution receives
“lump sum” appropriations?
Country
Supreme audit institution may vire (i.e. reallocate)
funds between expenditure categories
Australia
For personnel and materials only
Yes, without any limit/threshold
Brazil
For personnel, materials and capital
Not possible without legislative approval
Chile
..
Costa Rica
..
Denmark
Flexibility to allocate between operating and capital
expenditure
No
Yes, up to certain threshold
Israel
Italy
Yes
Korea
No
Mexico
..
..
Peru
For capital
Yes, up to certain threshold
Portugal
South Africa
x
..
Spain
Notes: x = Not applicable; .. = Missing data.
to Q. 19 and 20.
Introducing workforce planning could help to consolidate recent institutional
reforms to restructure the workforce
Multi-year workforce planning can help the CGR to ensure that it has adequate
human capital to support the implementation of its mission, vision and strategic goals, as
well as to respond to changes within the public administration. The use of multi-year
workforce planning is a trend among governments in OECD countries to ensure capacity
for service delivery while generating efficiency gains (Huerta Melchor, 2013). Among
SAIs, a multi-year workforce has been introduced as a formal and regular instrument in
Australia, Brazil, Denmark and Spain, and as an ad hoc instrument in Israel, Korea and
South Africa (Table 3.9). By identifying the knowledge, skills and competencies needed,
the CGR can begin to determine the gaps that other human resource management
practices, such as recruitment and training, need to address. Doing so could more
systematically prepare the CGR to better re-deploy resources to meet new priorities and
respond to societal expectations. Strategic workforce planning can also support the CGR
to focus on outcomes and results, and its effectiveness, but also its efficiency.
Table 3.9. Multi-year workforce planning in supreme audit institutions in Chile
Country
Australia
Is forward-looking planning in
place to ensure that the supreme
audit institution has an adequate
workforce to deliver its mission
and achieve its vision?
Formal and
Ad hoc
None
regular
●
Denmark
European Court
of Auditors
Israel
●
●
●
Spain
2-3 years
●
●
●
x
4-5 years
2-3 years
●
South Africa
4-5 years
x
..
2-3 years
2-3 years
●
Italy
Korea
Portugal
2-3 years
●
Brazil
Chile
Costa Rica
How many years are
covered by the
supreme audit
institution’s workforce
planning?
4-5 years
●
3-5 years
●
What are the key aspects explicitly considered by the
supreme audit institution when conducting workforce
planning?
People-related investment choices and associated
strategies
Change in audit standards, efficiency savings
x
Changes in institutional mandate, changes in audit
standards, possible efficiency savings
Efficiency savings, reorganisation
Possibilities for outsourcing, efficiency savings, staffing
needs and turnover
Possibilities for outsourcing in the case of information
and communication technology services only
x
Change of auditees, that is, the operation, personnel,
mission, work of the auditees; change of society, public
administration and people’s expectations
Possibilities for outsourcing, efficiency savings
(e.g. e-government)
Changes in institutional mandate; changes in audit
standards; possibilities for outsourcing; availability of
skills
Staff turnover, changes in public administration (and
impact on audit work)
Q. 35-37.
Box 3.6. Formulating a human resource strategy for a supreme audit institution
What should be covered in a human resource strategy?
In addition to setting out the strategic goals for human resources in a supreme audit
institution (SAI), the strategy should set out the ways and means that the SAI will achieve these
goals. In particular, it should cover:

The numbers and types of officials required over the planning period and how these will
be obtained, taking into account improvements in efficiency, natural turnover,
retirements and changes in audit assignments.

How the SAI will maintain and develop a dynamic workforce, including target levels of
turnover to create opportunities for promotion and for integrating new officials and
expertise at all levels of the organisation.

How talent will be actively developed and managed, including induction training,
professionalisation of officials and continuous professional education, including for
corporate service and administrative support.

Changes to performance management arrangements, including individual performance
appraisals, managing poor performance and disciplinary systems.

Introduction and regular updating of personnel or human resource manuals and other
policies and procedures – including related to promotion, rotation, integrity, codes of
conduct, diversity and welfare.

Rewards policies – including pay and grading issues, pension and other benefits, and
non-monetary rewards – including support for such initiatives as staff social committees
and activities.

A reference to consultative mechanisms and processes for officials for reporting on the
performance of the human resource management function.

Key targets and measures to assess the effectiveness of the human resource management
strategy, including for example sickness/absence rates, staff turnover rates, vacancies
and time taken to recruit.
How can an SAI identify its current and future workforce needs?
The numbers of officials being recruited, and the training and development programmes
available to them, should relate to the likely demands for different competencies in future years.
Attention should be given to:

What extent are officials currently being used efficiently? How many staff days are
being spent on different types of audits? Is the grade mix right?

What is likely to be the impact on the volume of work auditors can carry out of greater
professionalisation or improved ICT?

How much of an auditor’s time can reasonably be spent on actual audit and how much
needs to be allowed for training, leave and unplanned work?

Can the organisational hierarchy be reduced – creating a flatter structure and eliminating
some management posts? How many officials can a manager directly manage?
Box 3.6. Formulating a human resource strategy for a supreme audit institution
(cont.)

What is the normal annual turnover of officials through retirement and staff leaving for
other jobs? What allowance needs to be made for sickness and absentee rates and
maternity/paternity leave?

What audits does the SAI need to do annually? Are there any additional requirements
emerging as a result of requests from the legislature or a desire to move into new types
of audit?

Are there any audits which are currently done annually which could be done less
frequently without significantly increasing the financial risks?

When modeling the expected demand for audit staff by grade and profession, how does
this compare with existing numbers?
Source: INTOSAI (2007), Building Capacity in Supreme Audit Institutions: A Guide, National Audit
Office, London, http://cbc.courdescomptes.ma.
Recent CGR management reforms support the introduction of workforce planning.
In 2009, the CGR launched Hefestos, an ICT system that supports the collection and
management of all human resource management data related to the institution’s officials
(CGR, 2009). In 2011, the CGR also established management process units (unidades de
gestión de procesos) and divisional and regional administrators (administradores
regionales y división). Management process units are responsible for measuring, among
other issues, workload within the individual divisions/regional offices. Divisional and
regional administrators were established to support the management of personnel, assets
and finances, including the collection and processing of information for management and
the General Secretariat. Divisional and regional administrators report directly to their
respective regional comptroller but their activities are guided by the CGR General
Secretariat (CGR Resolution 04850/2011).
A key barrier to establishing a multi-year workforce plan within the CGR is the
distribution of roles and responsibilities for human resource management (HRM).
Responsibility for operational planning resides with CGR division heads and regional
comptrollers. The responsibility of the CGR General Secretariat, within which the
institution’s HRM function is located, is to support the selection and recruitment of staff
as identified by division heads and regional comptrollers to respond to their operational
needs. This situation has, in the past, been the result of a silo mentality of the different
offices and a lack of systematised human resources data. However, the absence of a focus
on strategic workforce planning with the CGR is similar to the general situation within
the Chilean public administration. The public administration workforce planning is
largely confined to the annual budget process. This limits the ability to meet changing
labour needs, and to detect and prepare for future changes in the organisation’s needs in
relation to skills and competencies (OECD, 2009b; 2011c).
Use competency management to align human resource management to support
the institution’s goals and enhance responsiveness to changes within the public
administration
In recent years, the CGR has begun to develop job profiles to guide the work of its
officials and support the development of technical skills of individuals aspiring to occupy
these positions. This process to develop job profiles began in the mid-2000s but was put
on hold until an internal review of the institution was undertaken following the
appointment of the current Comptroller General in 2007. Within the new institutional
structure and processes, the CGR has defined the profiles for specific positions, such as
supervisors (supervisors), heads of legal units (jefe de unidad jurídica), heads of areas
(jefe de area), management process unit supervisors and analysts (supervisor y analista
UGP). However, there is an uneven number of competencies for each position and the
framework has not been designed to develop movement between different positions
(Annex 3.A2). The SAI of Australia has the same broad competency descriptors at each
level with progressively increasing expectations aligned with higher positions and
responsibility. This competency framework supports consistent recruitment procedures,
targeted training sessions and structured performance assessments. When creating a
model for competencies, the SAI of Brazil chose to have the same competencies for all
managerial levels, aiming at promoting alignment of the leadership and management
practices. Every manager, regardless of his/her level, will focus on promoting results,
developing his/her team, leading by example and promoting innovation. He/she will
guide their performance based on the strategic reference established by the organisation.
Each one will do so within his/her scope of action, according to his/her team, unit and
institution.
Competency management complements job profiles and can support SAI agility by
promoting internal mobility and collaboration, and overcoming the compartmentalisation
of the institution. Competency management focuses on defining the abilities and
behaviours officials need to do their jobs well, and using it as input into HRM practices
(e.g. recruitment, training and promotion). The use of competency management in the
public administration and SAIs in OECD countries has increased steadily in recent years
and has been linked to demands for increased flexibility and autonomy in workforce
management (Table 3.10). Competencies are broader concepts that encompass
demonstrable performance outputs as well as behavioural inputs, and may relate to a
system or set of minimum standards required for effective performance at work.
Competencies are often defined as the combination of knowledge, skills and behaviours
that result in good performance. The behavioural aspect is crucial: employers understand
that, for example, strategic thinking, communication, teamwork, flexibility and
interpersonal skills are closely related to employee performance.
An agile SAI also requires officials capable of identifying and promoting innovative
ways to maximise the use of resources and managing increased complexity and
uncertainty. Developing these competencies will require a change in the culture of the
SAI to become less risk averse. Training managers and employees to manage risk will
facilitate this change, but governments will also have to establish explicit guidelines for
staff to clarify what levels of risk are acceptable. In creating these policies, governments
should recognise that some level of uncertainty will always be unavoidable.
Table 3.10. Core human resource management competencies of supreme audit institutions in Chile and selected countries
Country
Existence of framework
Year introduced
Australia
Yes
Brazil
Yes
2005
Chile
Costa Rica
No
Yes
x
2000
Denmark
European Court
of Auditors
No
Yes
x
2007-08 (major update)
Top management
– Respectful and productive relationships
– Clear and influential communication
– Personal and people development and leadership
– Proactive self and project management
– Rigorous analysis and sound judgement
– Technical and subject matter expertise
– Development of the staff
– Management by results
– Leadership by principles
– Strategic orientation
– Innovation
– Result-oriented performance
– Professional relationships
– Learning and information
x
x
– Interpersonal relations
..
– Teamwork
– Resource management
– Discipline
– Communication
– Innovation
– Leadership
– Achievement
– Systems thinking
– Strategic vision
..
..
– Analysing and problem solving
– Communicating
– Delivering quality and results
– Learning and development: Flexibility
– Prioritising and organising
– Working with others
– Leadership
Core competencies
Middle management
Professionals
– Result-oriented performance
– Professional relationship
– Learning and information
x
..
..
Table 3.10. Core human resource management competencies of supreme audit institutions in Chile and selected countries (cont.)
Country
Core competencies
Middle management
Year introduced
Israel
Italy
Korea
No
No
Yes
x
x
2005
x
x
– Leadership
– Professionalism
– Ethics
x
x
– Managerial capability
– Ethics
Mexico
Peru
Portugal
..
..
Yes
..
..
2004
..
..
– Orientation towards results
– Commitment to the institution and integrity
– Representation and institutional
co-operation
– Planning and organisation
– Leadership and human resources
management
– Strategic vision
..
..
– Commitment to the institution and
integrity
– Tolerance to pressure and setbacks
– Specialised knowledge and
experience
– Decision capacity
– Co-workers development and
motivation
South Africa
Yes
2010
– Strategic thinking
– Communication
– Build relationships
– Client service excellence
– Drive performance excellence
– Leadership
– Teamwork and collaboration
– Demonstrate initiative and innovation
– Embrace change
Top management
Professionals
x
x
– Knowledge of law or accounts or
social science
– Capability of learning and using
audit and inspection methodology
– Diligent attitude
– Ethics
..
..
– Commitment to the institution and
integrity
– Specialised knowledge and
experience
– Continuous adaptation and
improvement
– Initiative and autonomy
– Team work and co-operation
– Tolerance to pressure and setbacks
– Innovation and quality
– Resources optimisation
Table 3.10. Core human resource management competencies of supreme audit institutions in Chile and selected countries (cont.)
Country
Spain
Year introduced
Yes
1982
Top management
– Impartiality and objectivity
– Education background and permanent
training update
– Professional capacity
– Due diligence
– Professional secret
– Strategic thinking
– Communication skills
– Leadership
Core competencies
Middle management
– Education background and
permanent training update
– Due diligence
– Capacity of Innovation
– Human resources management skills
– Leadership
Professionals
– Education background and
permanent training update
– Due diligence
– Team working abilities
Source: Adapted from unpublished OECD Survey of Benchmark Supreme Audit Institutions 2013, responses to Q. 34.
Box 3.7. Competency management within the supreme audit institutions
in Brazil, Costa Rica and the European Court of Auditors
Brazil
The Federal Court of Accounts does not distinguish competencies among the management positions.
The difference is the expected level of complexity regarding the delivery of such competencies, depending
on the level of the position. The competencies for leadership and management of all those who hold a
management position are the following:

Development of the staff: Provides means and urges people to develop their personal and technical
competencies, integrating learning into the institutional objectives.

Management by results: Ensures effective results aligned according to the Federal Court of
Accounts’ (TCU) strategic orientation.

Leadership by principles: Promotes a commitment environment that favours the practice of
institutional values as well as engagement with the professional role.

Strategic orientation: Establishes and proposes priorities aiming at contributing to the fulfilment of
the court’s strategies considering the characteristics of its clients and the internal and external
environments of the institution.

Innovation: Identifies the need for innovation and contributes to its implementation and
dissemination, investing in the evolution process of the court, in partnership with other institutions.
The levels of complexity of the delivery of the aforementioned competencies are divided, in our case, in
three:

Strategic focus (Levels IV and V, i.e. head of department, advisory office or secretary general)
 manages more complex work processes or macro processes of TCU focused on the impact of
the institution’s performance on society
 has managers under his direction: proposes guidelines for the unit that he/she manages; has
autonomy to make decisions to guide management of the unit (or units)
 proposes changes regarding TCU’s performance or macro processes, analysed together with
partner managers.

Tactic focus (Level III, i.e. directors)
 manages semi-structured activities or work processes focused on their impact on the institution
 has a subordinate work team or other subordinate managers: proposes guidelines for the results
of the work
 has autonomy to decide how to execute the activities under his/her responsibility
 proposes changes to the work process that are subject to superior authorisation.

Operational focus (Levels I and II, i.e. head of service)
 manages structured and routine activities or semi-structural activities, focused on their impact
on the work processes
 deals daily with a subordinated staff: guides the activities of the team
 has autonomy restricted to the organisation of the activities under his/her responsibility, which
must be carried out according to the predefined procedures.
Box 3.7. Competency management within the supreme audit institutions
in Brazil, Costa Rica and the European Court of Auditors (cont.)
As for professional competencies, which in TCU are called “personal”, they are the following:

Result-oriented performance: Produces results aligned with the strategies of TCU.

Professional relationship: Creates and maintains personal and professional relationships that are
corporate and positive.

Learning and information: Creates and takes advantage of opportunities to continuously learn and
make available information that is relevant to the work done.
Costa Rica
Following the modernisation process in 2000, Costa Rica introduced the idea of a competency-based
approach. The Competence Management Manual was issued in 2010. The model describes ten institutional
competences and expertise. The first is common to all officers in various positions, while others are
specialised depending on the administrative unit. The expected proficiency for each competition varies in
different career stages and is an indicator of the progress made in terms of the knowledge, skills and
behaviours required to function successfully throughout their career.
The level of mastery of skills is classified as:

Initial: Officials show behaviour at a basic level. The competence is in its first stage of
development. They have the ability to recognise and understand the processes of the institution.

Intermediate: Officials show developing behaviours. They have the ability to apply knowledge by
implementing processes.

Advanced: Officials’ behaviour shows a higher skill level, applied knowledge with greater mastery.
They have the ability to analyse and interrelated processes.

Parent: Officials show the highest degree of competence and constitute a role model. They have the
ability to generate value propositions using the verification processes and criticism.

Analysing and problem solving: Ability to conceptualise problems, identify and implement
solutions; inquiring mind; numeracy.

Communicating: Capacity to communicate technical or specialised information; drafting skills;
ability to chair meetings; at ease in public.

Delivering quality and results: Ability to work in a proactive and autonomous way; accountability;
eye for detail/accuracy.

Learning and development: Flexibility (openness towards new demands, etc.).

Prioritising and organising: Capacity to deliver in a structured way; co-ordination skills.

Working with others: Ability to work in a team; knowledge sharing ; diplomatic skills.

Leadership: Capacity to allocate tasks and organise work; capacity to plan and manage resources;
ability to lead a team; supervision, monitoring and appraisal abilities; managerial communication
skills; ability to create enthusiasm and passion.
Source: Adapted from information from the unpublished OECD Survey of Benchmark Supreme Audit Institutions 2013
and information received from the different SAIs.
Within the public sector, competency management is often viewed as a vehicle for
bringing about cultural change and injecting more flexibility, adaptability and
entrepreneurship into organisations. Competency management and mobility are
interdependent. SAIs can use mobility to give employees a wider, whole-of-government
perspective on governance challenges and to develop competencies to respond to these.
Internal mobility of SAIs’ officials is effective only when officials possess transferrable
competencies that can be applied to multiple positions.
Utilise traditional human resource management practices to support
the development of competencies and encourage internal horizontal
co-operation
The CGR’s training in recent years has shifted towards a focus on certification of
officials in new audit techniques – e.g. planning field work, essential tests that have to be
defined in an audit, statistical sampling, execution of tests in the field, issuing of reports –
and new institutional audit systems. This is in addition to a compulsory 2.5 week training
for all new entrants, and 1 week of compulsory annual training in accordance with their
position. A network of trainers is co-ordinated by the Training Department, with the
network of trainers taught in pedagogical methodologies and topics specific to their roles.
Other training is provided by public and private institutions, contracteed by the CGR
(e.g. Universidad de Chile, Pontificia Universidad Católica y Pontificia Universidad
Católica de Valparaíso). Much of this training is provided on the CGR’s premises (74%
in 2012). It is proposed that an Annual Training Plan (Plan Anual de Capacitación) be
developed in line with the strategic plan.
In 2013 the Training Department began to use a Training Needs Assessment
(Detección de Necesidades de Capacitación) survey to collect information on the training
needs of all of the CGR’s officials. This enables the CGR’s officials to identify their
individual, team and institutional needs, for technical knowledge and transferable skills.
Technical needs refer to the knowledge, skills, abilities and tools to perform in the
workplace, i.e. processes and functions of the profession and/or position in which the
officer develops. Transversal skills refer to a set of skills, abilities and tools that allow the
official and his team develop and implement related skills and interpersonal relations,
e.g. effective communication, supervision, negotiation, leadership. Previously, division
heads/regional comptrollers played a key role in defining training needs together with the
Training Department. The process was conducted through meetings with division
heads/regional comptrollers and management process units.
Specific attention is necessary to ensure that training is linked to the development of
competencies with the CGR. This is not to say that recent training initiatives should be
eliminated, as certification of audit officials in technical skills and the use of ICT are
indispensable. However, learning and development of a range of competencies is critical
to ensure adaptability, problem solving and innovation within the CGR. It is also
necessary to ensure that officials’ identification of training needs does not result in a
strong bias for technical skills and crowd out training in behavioural competencies.
Biannual individual performance evaluation for all officials, except the Comptroller
General and the Deputy Comptroller General, is mandated by the CGR Organic Law
(Law 10 336, Art. 48). The CGR’s internal regulations subsequently establish the criteria
for assessing an individual’s performance. The assessment focuses on the completion of
tasks as well as other qualitative factors and is the same for all officials (Table 3.11). The
final evaluation is the result of the weighted average of the criteria. Officials are
subsequently categorised into one of four groups based on their evaluation: merit
(group 1), good (group 2), regular (group 3) and elimination (group 4). In 2007, the CGR
introduced a quota system for its performance evaluation, though there is no requirement
to do so under law. Previously, there was a tendency that most officials obtained the
highest performance evaluation. Today, only a low proportion of officials obtain the
highest performance category, most receive the middle.
Table 3.11. Office of the Comptroller General of the Republic’s criteria
for evaluating an official’s performance
Primary factor (50%)
– Quality of work
– Criteria
– Workload
– Discretion
– Loyalty
– Xritical skills for the function
Secondary factor (30%)
– Dedication
– Initiative and collaboration
– Preparation and knowledge
– Formal quality
– Obedience
Tertiary factor (20%)
– Official and social behaviour
– Attendance and permanence
– Punctuality
– Compliance with financial obligations
In addition to pay and the work environment, the CGR could also give attention to
learning and development to develop competencies that can support career advancement.
The CGR is exploring how to develop a more structured approach to, and understanding
of, rewards to enhance its ability to attract and retain officials. Previously the CGR’s
well-being programme provided benefits that were separate from the working
environment, such as recreation, loans and health bonuses. Moreover, the department has
social workers that can support officials in personal issues, such as illness,
depression, etc. However, these benefits and services are not of the interest of the CGR’s
younger officials and many are not associated with the voluntary CGR well-being
activities. Rather, younger officials obtain benefits from the market, e.g. accessing loans
from banks and credit associations, as salaries are high relative to other institutions. The
CGR proposes two main changes: i) designing a well-being programme that supports a
better working life; ii) designing a well-being programme that covers all CGR personnel
segments. The new well-being programme and institutional structure for the Welfare
Department was anticipated for June 2013.
Align performance assessment at all levels within the institution to the goals
contained within the strategic and human resource plans
Encouraging agility in the workforce requires developing the right incentives, both
through individual performance management systems and compensation. There are
three components to the current CGR performance evaluation system: i) performance of
individual officials (discussed in the previous secton); ii) achievement of divisional and
regional office’s goals; and iii) achievement of performance agreements by division heads
and regional comptrollers. Team performance-related pay is tied to the achievement of a
division’s/regional office’s annual objectives. Each year the Comptroller General defines
objectives for each division and regional officers which is formalised through a
resolution. Upon completion of these goals, officials receive a bonus in the subsequent
year to which the goals were determined. These bonuses represent approximately 10% of
annual base salary pay for CGR officials. There is no individual performance-related pay.
More recently, the CGR is also exploring how to develop a more structured approach to,
and understanding of, rewards to enhance its ability to attract and retain officials.
Divisional and regional office’s goals are set annually, though somewhat separate
from the budget process. These goals are formulated in September-October and
completed before the end of the year. In contrast, the CGR’s budget formulation begins in
April each year and is largely concluded in September with the CGR budget being
submitted to the National Congress as part of the central government’s budget. This
disconnect means that performance goals are formulated separately from the budget,
causing disincentives to formulate more ambitious goals because additional resources will
not be made available. Indeed, CGR divisions and regional offices rarely fail to achieve
their performance goals and receive their team bonus. In 2012, the CGR achieved, on
average, 107% of its institutional goals with all but one unit achieving more than 100% of
their respective goals; the other achieved 96% (CGR, 2013b). In 2011, the CGR achieved,
on average, 115% of its institutional goals. The disconnect between performance setting
and the budget process is despite the conclusions of an independent evaluation of the
previous year’s performance by the CGR’s internal audit unit available in March-April of
each year (CGR, 2012b).
In addition to performance goals, the CGR established performance agreements
between the Comptroller General and individual division heads and regional comptrollers
in 2011 to further improve the management of the institution. Delivery of the
performance agreement results in the heads of divisions and regional comptrollers being
allowed to take on more responsibilities. If the delivery of the performance agreement is
not satisfactory, it can reflect bad management and is taken into account when evaluating
the performance of the heads of divisions/regional comptrollers.
Conclusions
Chile’s public sector and its governance arrangements have undergone significant
changes during the past two decades. Government efforts to increase strategic agility in
order to support sustainable and inclusive development and to effectively respond to
emerging policy challenges will place new demands on, and create opportunities for, the
CGR. In effectively responding to these demands and opportunities, the CGR will need to
invest in becoming more strategically sensitive to emerging trends and risks affecting
public governance and changing societal expectations. The CGR will also need to
capitalise on its independence – especially its administrative independence – to build a
workforce with the necessary skills and competencies to effectively respond to emerging
governance issues and changing societal expectations.
Redesigning the CGR’s portfolio also necessitates new skills and competencies that
may not exist at present. Table 3.12 provides a summary of the recommendations made in
this chapter. However, in order to materialise the value and benefit of its activities, the
CGR also needs to change the way in which it engages with its stakeholders, in order to
position itself as a thought leader and not simply an inspection service and to build
confidence its work. It also needs to be effective at engaging with the legislature to ensure
awareness, understanding and use of the CGR’s work, and with central executive
authorities to improve public management maturity models and governance
arrangements. This is discussed in Chapter 4. In parallel, the CGR will need to invest in
improving the prioritisation and ensuring the quality of its audit engagements to ensure
relevance and confidence in its work. This is discussed in Chapter 5.
Fostering strategic agility in the supreme audit institution
Foster strategic sensitivity of emerging trends
and risks affecting public governance and
changing societal expectations as input into the
CGR’s strategic planning and institutional
modernisation, including:
– explore current trends and risks affecting
public governance, utilising information and
data generated through its own audit planning
implementation and follow up
– build awareness and understanding of future
plans for the modernisation of government in
Chile drawing on open horizon scanning
activities
– develop awareness and understanding of
trends in other countries as a basis for
anticipating possible change in Chile and
discussing possible responses to these
changes with other SAIs
– establish capabilities and processes to
continuously collect external data and
information and to collate it with CGR sources
to enable discussions internally on trends
affecting public governance and changing
citizens’ expectations.
In preparation of the CGR’s strategic planning,
draw upon the institution’s knowledge of current
governance challenges and risks facing the
government, and the institution’s existing
capability in order to effectively address these
risks.
In preparation of the CGR’s strategic planning,
draw upon an awareness and understanding of
future plans for the modernisation of
government in Chile, as a basis for exploring
what capabilities need to be developed in order
to effectively address these risks.
Leverage the CGR’s strategic planning as an
opportunity to develop an awareness and
understanding of trends in other countries, as
well as similarities and differences between the
government of Chile and governments in these
other countries, as a basis for anticipating
possible change in Chile.
Strategic sensitivity to emerging trends and
risks affecting public governance and evolving
societal expectations can support the CGR to
become a thought leader on good public
governance. Strategic sensitivity can help the
CGR to provide not only effective oversight but
to provide valuable counsel and foresight of
these trends and risks affecting public
governance to those charged with governance.
The CGR’s awareness and understanding of
current governance challenges and risks facing
the government, as well as future plans for the
modernisation of government, can enable the
institution to adapt to changing circumstances,
rebalancing and adjusting its functions and
workforce internally.
A more nuanced awareness and understanding
of similarities and differences between the
government of Chile and governments in other
countries can support more targeted dialogue
with other SAIs on good public governance and
risks affecting public integrity – as well as
dialogue on different audit methods and criteria
for examining government.
Develop operational agility by using strategic
human resource management in order to
effectively respond to emerging governance
issues and changing societal expectations,
including:
– introduce multi-year workforce planning to
consolidate recent workforce restructuring
and align workforce skills and competencies
with current and future needs of the institution
– use competency management to align human
resource management to support the
institution’s goals and enhance
responsiveness to changes within the public
administration
– utilise traditional human resource
management practices (e.g. recruitment,
training and promotion) to support the
development of competencies and encourage
internal horizontal co-operation
– align performance assessment at all levels
within the institution to the goals contained in
the strategic and human resource plans
– consolidate human resource management
practices across the institution and ensure
greater complementarities between
recruitment, development and rewards.
Ensure that further CGR workforce restructuring
is aligned with a medium- to long-term
workforce plan in order to ensure sustainability
of the reforms.
Expand focus beyond defining job descriptions
to the competencies it wishes its officials to
develop. Encourage the development of
competencies than can foster greater internal
horizontal co-operation across its various
central units and regional offices.
The CGR’s recruitment and training decisions
are largely decentralised within each of its
central units and regional offices preventing the
creation and effective implementation of an
institution-wide workforce plan that supports
integrated planning, recruitment, development
and renewal, aligning the CGR’s goals,
resources and results.
The CGR’s human resources management
practices are fragmented across different
units – training and development, timekeeping
and financial rewards, and well-being – within
the General Secretariat without adequate
co-ordination between them.
Multi-year workforce planning can help the
CGR to ensure that it has adequate human
capital to support the implementation of its
mission, vision and strategic goals, as well as
to respond to changes within the public
administration.
Competency management can support the
CGR’s agility by promoting internal mobility and
collaboration, and overcoming
compartmentalisation of the institution.
Financial Audit Subcommittee
Compliance Audit Subcommittee
Performance Audit Subcommittee
Internal Control Subcommittee
Accounting and Reporting
Subcommittee
Capacity Building Committee
Sub-Committee 1:
Promote increased capacity
building activities among INTOSAI
members
Sub-Committee 2: Develop
advisory and consultant services
Sub-Committee 3:
Promote best practices
and quality assurance through
voluntary peer reviews
Committee on Knowledge Sharing
and Knowledge Services
Working Group on Public Debt
Working Group on IT Audit
Working Group on
Environmental Auditing
Working Group on Programme
Evaluation
Working Group on Key National
Indicators
Working Group on Value
and Benefits of SAIs
Working Group on Financial
Modernisation on Regulatory
Reform of Financial Markets and
Institutions
Goal 1: Professional Standards
Goal 2 : Capacity Building
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Source: Based on INTOSAI website, www.intosai.org.
Working Group on the Fight
Against Corruption and Money
Laundering
Working Group on Accountability
for and Audit of Disaster-related
aid
Harmonisation Project
Australia
Brazil
Chile
Costa Rica
Denmark
European
Court of
Auditors
Israel
Italy
Korea
Mexico
Peru
Portugal
South Africa
Spain
Project on Audit Quality Control
Supreme
audit
institution
INTOSAI Professional
Standards Committee
Annex 3.A1
Participation of the supreme audit institutions of Chile and selected countries in INTOSAI bodies
Table 3.A1.1. INTOSAI committees’ working groups and task forces
Goal 3: Knowledge Sharing
Table 3.A1.2. OLACEFS committees and commissions
Investigation
(Investigación)
Financial
Management
(Gestión
Financiera)
Ethics and
Transparency
(Ètica y
Transparencia)
Environment
(Medio Ambiente)
Performance
Evaluation and
Performance
Indicators
(Evaluación del
Desempeño e
Indicadores de
Rendimiento)
Accountability
(Rendición de
Cuentasi)
Information and
Communications
Technology
(Tecnologías de
Información y
Comunicaciones)
Citizen
Participation
(Participación
Ciudadana)
Argentina
Belize
Bolivia
Brazil
Chile
Colombia
Costa Rica
Cuba
Dominican Republic
Ecuador
El Salvador
Guatemala
Honduras
Mexico
Netherlands Antilles
Nicaragua
Panama
Paraguay
Peru
Puerto Rico
Uruguay
Venezuala
Norms
(Revisiòn
Normativa)
Supreme audit
institution
Commissions
Capacity Building
(Capacitación)
Committees
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o
o
o
o
o
o
●
o
o
●
●●
o
o
o
o
o
o
o
o
o
●
●
●
o
o
o
Notes: ●● = Chair ● = Member; o = Not a member. Committees deal with issues of significant, recurring interest to all members of INTOSAI (such as preparing standards and
guidelines for government auditing practice applicable to the whole of INTOSAI). Working groups are formed as a result of INTOSAI Congress themes and recommendations to
address SAIs’ interest in specific technical issues (e.g. privatisation, environmental audit). Task forces are formed by the Congress or the Governing Board as needed to deal with
issues of significant interest to many member SAIs.
Source: Based on OLACEFS website, www.olacefs.com/Olacefs/appmanager/PortalOlacefs/Portal.
Annex 3.A2
Office of the Comptroller General of the Republic’s human resource management competencies
Professionals Complaints Unit
and Citizenship
Management Process Units
(UGP) processes analyst
Oficial de Partes (OGP)
Head of External Control
Technical Unit (UTCE)
Head of follow-up unit
Head of legal unit
Divisions and regional offices
Supervisor of Public Works
Committee
●
o
●
o
●
o
●
●
o
●
o
o
o
Infrastructures and
Regulation Division
Division Supervisor
Teamwork
Ability to work under pressure
Communication
Finding information and information analysis
Results oriented and proactive
Leadership
Customer orientation
Focus on quality
Analytical capabilities
Responsibility
Strategic direction and commitment
Use of ICT (information and communications technology)
Adapting to change and new working patterns
Accounting Analysis
Division
Professional Projects Unit
Competencies
Regional Supervisor, State Personnel
Administration System (SIAPER)
Table 3.A2. Office of the Comptroller General of the Republic’s human resource management competencies
o
o
o
o
o
o
o
o
o
o
o
o
o
●
o
o
o
o
o
o
o
o
o
o
o
o
●
●
●
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
●
●
●
●
●
o
o
●
●
o
●
●
o
●
●
o
o
o
o
●
o
o
●
o
o
●
●
●
o
●
o
●
o
o
●
o
o
o
o
●
o
o
o
●
●
o
o
o
o
o
o
●
●
●
●
●
●
●
●
●
o
o
●
●
o
TOTAL
8
5
4
3
4
3
3
3
2
2
2
2
2
Infrastructures and
Regulation Division
Supervisor of Public Works
Committee
Professionals Complaints Unit
and Citizenship
Management Process Units
(UGP) processes analyst
Oficial de Partes (OGP)
Head of External Control
Technical Unit (UTCE)
Head of follow-up unit
Head of legal unit
Divisions and regional offices
Division Supervisor
Ability to systematise requirements for team work
Ability to apply jurisprudence
Processing of administrative acts
Ability to learn
Achievement orientation
Attention to detail
Commitment
Computational tools
Conflict resolution
Constructive and collaborative attitude
Integrity
Relationships
Uniformity at work
Professional update (Actualización)
TOTAL
Accounting Analysis
Division
Professional Projects Unit
Competencies
Regional Supervisor, State Personnel
Administration System (SIAPER)
Table 3.A2. Office of the Comptroller General of the Republic’s human resource management competencies (cont.)
o
o
●
o
o
o
o
●
●
●
●
o
●
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
●
o
o
o
●
●
●
●
o
o
o
o
●
o
o
●
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
●
o
o
o
o
o
o
o
o
o
o
o
o
12
0
1
3
0
11
10
6
4
11
TOTAL
1
1
1
1
1
1
1
1
1
1
1
1
1
1
● = Yes; o = No.
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4. ENGAGING CHILE’S SUPREME AUDIT INSTITUTION STAKEHOLDERS THROUGHOUT THE AUDIT CYCLE – 211
Chapter 4
Engaging Chile’s supreme audit institution’s
stakeholders throughout the audit cycle*
This chapter examines the practices used by the Office of the Comptroller General of the
(SAI) – to engage its stakeholders throughout the audit cycle. Effective engagement can
support better awareness, understanding and use of the SAI’s work in accountability and
decision-making processes. In analysing the practices used by the CGR to engage
external stakeholders, this chapter analyses the institution’s engagement with auditees,
including the executive; the legislature and its committees; the judiciary, including the
courts and prosecutors; and non-government actors including representatives of civil
society, business, academia and the media. This chapter examines three main phases
of the audit cycle, before, during and after the audit engagement; and focuses on different
types of SAI engagement, including sharing information, consultation and participation.
The analysis is framed by International Standards of Supreme Audit Institutions (ISSAI),
International Organisation of Supreme Audit Institution (INTOSAI) good practice
guidance and OECD work on citizen engagement. Specific reference is made to
“Prerequisites for the Functioning of Supreme Audit Institutions”, “Fundamental
Auditing Principles” and “INTOSAI Guidance for Good Governance”. The chapter
includes comparative data for the CGR as well as 13 SAIs collected through an OECD
survey specifically conducted for this peer review.
*
212 – 4. ENGAGING CHILE’S SUPREME AUDIT INSTITUTION STAKEHOLDERS THROUGHOUT THE AUDIT CYCLE
Introduction
This chapter examines the practices used by the Office of the Comptroller General of
the Republic (Contraloría General de la República, CGR) – Chile’s supreme audit
institution (SAI) – to engage its stakeholders throughout the audit cycle. Effective
engagement can support better awareness, understanding and use of the SAI’s audit work
in accountability and decision-making processes. SAI stakeholders include: auditees,
executive authorities responsible for formulation and oversight of management policies,
including internal audit;1 the legislature, parliamentary committees and their research
staff; the judiciary and public prosecutors. Stakeholders also include non-governmental
actors, including civil society, business, academia and the media. There are three main
phases of the audit cycle: i) before the audit, including annual audit programming and
planning and design of individual audit engagements; ii) during the audit engagement,
including audit field work to obtain appropriate evidence and the formulation of the audit
findings and reporting; and iii) after the audit, including the dissemination and the follow
up of audit findings. This chapter does not discuss the engagement of stakeholders in
strategic planning, as this is addressed in Chapter 3 of this peer review.
There are different types of engagement that the SAI may have with its stakeholders
throughout the audit cycle: sharing information, consultation and participation. Sharing
information refers to the one-way relation in which the SAI produces and delivers
information for use by its stakeholders. It covers both “passive” access to information
upon demand by stakeholders and “active” measures by an SAI to disseminate
information to stakeholders. Consultation refers to a two-way relation in which
stakeholders provide feedback to the SAI based on a prior definition by the SAI of the
issue on which stakeholders’ views are being sought and requires the provision of
information. Participation refers to a partnership where stakeholders actively engage with
the SAI, sharing information to shape the work of the SAI – although the responsibility
for the final decision rests with the SAI.
There has been growing attention among SAIs to how they engage their stakeholders
throughout the audit cycle. Much of this attention has focused on sharing information and
the one-way relationship between SAIs and stakeholders, including media and citizens,
especially as a means of demonstrating performance and the impact of SAIs. More
recently, the International Organisation of Supreme Audit Institutions (INTOSAI) good
practice guidance has focused on issues of “consultation” and the two-way flow of
information between SAIs and stakeholders. For example, How to Increase the Use and
Impact of Audit Reports includes reference to communicating with stakeholders
throughout the audit cycle, through consultation with stakeholders, to understand their
concerns and to collecting their views in audit planning and to soliciting feedback on
audit work. INTOSAI is currently developing guidance on “Enhancing SAI Effectiveness
through Co-operation with the Legislature, Judiciary and Executive”.
In examining the practices used by the CGR to engage external stakeholders, this
chapter analyses the institution’s:

engagement with auditees and internal audit as a basis for developing a
constructive working relationship and improving the effectiveness of audit
assignments

engagement with other stakeholders, including those charged with governance in
the executive and legislative branch, and non-governmental actors.
The analysis contained in this chapter is framed by International Standards of
Supreme Audit Institutions (ISSAI), INTOSAI good practice guidance and OECD work
on citizen engagement. Various ISSAIs emphasise the need for SAIs to communicate and
publically report on their activities and audit work with the government, the
administration, the legislature and the general public (INTOSAI, 1977; 2010a; 2010b;
2013). In addition, audit standards identify the possibility of co-ordination and
co-operation between SAIs and internal audit in public sector entities (INTOSAI, 2010b).
The OLACEFS (2009) “Declaration of Asunción” emphasises information transparency
and active citizen participation. INTOSAI’s (2010d) How to Increase the Use and Impact
of Audit Reports provides practical guidance on communication throughout the audit
cycle. OECD (2001; 2004; 2009a; 2011a) has focused on the benefits, instruments, costs
and risks associated with citizen engagement, albeit with a focus on the government and
administration and a basis for sharing lessons with SAIs.
Engaging auditees to develop a constructive working relationship
International Standards of Supreme Audit Institutions and INTOSAI guidelines
establish a number of good practices for SAIs to engage with auditees and responsible
parties. INTOSAI (2010b) “Principles of Transparency and Accountability” note that
SAIs adopt objective and transparent audit standards, processes and methods. Moreover,
INTOSAI (2013) “Fundamental Principles of Public Sector Auditing” recognise that
SAIs should enhance good communications with auditees in order to develop a
constructive working relationship. This communication may include information on the
responsibilities of the auditor and auditee throughout the audit cycle and the objective,
scope and timing of audit engagements. Moreover, these principles state that SAIs should
ensure that the terms of audit engagements have been clearly established in writing,
communicated and understood by the auditee and responsible parties (INTOSAI, 2013,
§ 48). INTOSAI (2010c) guidance on How to Increase the Use and Impact of Audit
Reports notes that the relationship between the SAI and the auditee can be greatly
improved if the SAI sets up communication protocols.
In recent years the CGR has revised many of its internal audit manuals and guidance
to standardise and enhance its interactions with auditees. These manuals include guidance
on “Model (Audit) Report and Structure (Estructura y Modelo de Informes)” and “Format
of the Follow-Up (Audit) Reports (Formato Informe de Seguimiento)” in January 2013
and April 2012, respectively. In 2010, the CGR initiated a survey to assess the quality and
timeliness of its oversight processes and to identify ways to enhance its processes and to
focus training of its officials. The objective was to identify the strengths and weaknesses
of current CGR oversight processes and to create a satisfaction index that could be used
as a baseline for subsequent evaluations. Moreover, the CGR has begun to more
systematically monitor and follow up auditee’s responses to audit findings, which can
also serve as a form of feedback. The revision of the CGR’s audit guidelines and follow
up of audit findings are discussed in more detail in Chapter 5 and the auditees surveys are
discussed in more detail in Chapter 6.
However, the CGR’s culture for audit engagements is still primarily one of inspection
and investigation to identify non-compliance with government regulation and accounting
errors. Interviews with CGR auditees noted that the institution is not viewed as a partner
in providing independent and objective information to assist senior public officials in
improving the reliability of information for accountability and decision-making processes
or in strengthening management practices and performance. Moreover, the CGR could
benefit from enhancing awareness and understanding of its audit methods to build
confidence in the audit process and engage senior public officials in a discussion on
enhancing good public governance.
The preliminary recommendations of this section centre upon:

broadening the scope of information communicated with auditees as part of
individual engagement in order to build constructive working relations

engaging auditees in formulating communication products about audit processes
and methods in order to increase their understanding about the CGR’s working
methods

engaging auditees, as well as other stakeholders, in reviewing audit reporting
guidance in order to increase the usability of audit reports

formulating auditee strategies to broaden engagement beyond individual audit
engagements and facilitate dialogue with auditees on governance issues.
Broaden the scope of information communicated with auditees as part
of individual engagement in order to support constructive working relations
The CGR’s audit engagements begin with formal notice of the beginning of audit
work (oficio de inicio de auditoria) and an initial meeting with the head of the public
entity, between one and three months in advance. The formal notice specifies in general
terms the scope of the audit, the CGR officials involved and the information that is to be
prepared by the auditee such as the organisational structure of the entity, the registration
of staff employed in the entity, the list of bank accounts used by the entity, access to the
entity’s information systems, institutional manuals and description of functions. In the
meeting, the CGR is represented by the external control technical units (unidad técnica de
control externo) and not the auditors that will conduct the work.
The CGR’s formal notice provides information on: i) the subject and scope to be
covered by the audit; ii) whether the audit includes an examination of accounts; iii) the
name of the head/deputy head of division or regional comptroller in charge of the audit;
iv) the names of the auditors; and v) request for physical space and the information for
conducting the audit work. In addition, the CGR may include a request for specific
information such as the auditee’s organisational chart, list of bank accounts used by the
entity, id and passwords for accessing the entity’s information systems, list of the senior
management and the duration of the employment, manual with a description of personnel
positions, list of administrative procedures conducted in the entity and list of financial
transfers. The request for such information can suggest that the CGR has not done
effective pre-audit planning and intelligence gathering.
The CGR could provide auditees information on the objective and criteria for audit
work in its initial formal notice in order to mitigate perceptions that auditors are seeking
only to identify errors. The omission of the audit objective and criteria in the formal
notice gives the impression that audit work is not focused on risks. INTOSAI (2013)
notes that each audit should have suitable criteria to evaluate the subject matter. The
precise significance and mix of criteria will depend on the objectives of the audit,
however, key characteristics of suitable criteria include relevance, completeness,
reliability, neutrality, understandability and objectivity. Making the criteria available to
auditees would help to enable them to understand how the subject matter has been
evaluated or measured (INTOSAI, 2013, § 30).
In addition, the CGR’s formal notice could provide information on when the audited
entity could expect to receive the preliminary audit report for comment – although this
information could be updated during the course of the audit work to enable the head of
the audited entity to allocate time to review the materials. At present, the CGR does not
inform the heads of audited entities in advance on when the preliminary report will be
prepared. Commenting on the preliminary audit report is critical for ensuring the principle
of contradiction, the checking of facts with the audited entity and incorporating responses
from auditees/responsible parties as appropriate. Sharing such information is a common
practice for benchmark SAIs involved in this peer review (Table 4.1).
Table 4.1. Communication with auditees at the beginning of an audit engagement
by the supreme audit institution in Chile and selected counties
Audit subject
and scope
Responsibilities of
SAI and auditee
for audit work
Lead SAI
contact for the
audit work
Audit plan
and timetable
for audit work
Information and
access needed
for audit work
When SAI will
share preliminary
audit report
Australia
●
●
●
●
●
●
Brazil
..
●
●
●
●
●
Chile
o
o
●
o
●
o
Costa Rica
●
●
●
●
●
●
Denmark
..
●
●
●
●
●
European Court
of Auditors
●
●
●
●
●
●
Israel
●
o
●
o
●
o
Italy
..
●
●
●
●
●
Korea
●
●
●
●
●
●
Mexico
..
..
..
..
..
..
Country
Peru
..
..
..
..
..
..
Portugal
●
●
●
●
●
●
South Africa
..
●
●
●
●
●
Spain
●
●
●
●
●
●
Total yes
7
10
12
10
12
10
to Q. 39-40.
On the completion of the audit field work, the CGR sends a preliminary report
containing its observations to the head of the audited entity. The preliminary report is
considered confidential and shared only with the head of the audited entity. The head of
the audited entity is provided with a deadline of ten working days to provide written
comment and share additional information. The CGR notes that an extension of another
five working days may be granted. Comments on the preliminary report are provided only
in writing and no meetings take place between the audited entity and the CGR. Based on
the comments, the CGR prepares its final report. In practice, comments are received on
more than 90% of audit work within the ten working-day period. Although the CGR has
the option of providing an extension, this is not always granted because this can affect the
annual audit plan and annual performance of the respective division/regional office.
The CGR could also give consideration to adjust the deadline auditees have to
comment on preliminary audit reports to be proportionate with the scope and depth of the
audit. The ten working days provided for auditees to provide written comment is
irrespective if the audit is narrowly defined or broad; represents one month of audit work
or nine months; or if the audit report is short or extensive. The finalised report is
subsequently sent to the director ten working days in advance of the CGR’s report being
made publically available on its website. The final published report includes the signature
of the respective head of the audited entity, confirming that they have received the report.
Box 4.1. Communication with audited entities in advance of the commencement
of audit engagements: Approach of the supreme audit institution of Denmark
The supreme audit institution of Denmark, the Rigsrevisionen, relies on the expertise of
various external groups for many of its major examinations which aim to contribute to
accountability within public sector administration. A call for an increase in dialogue with
auditees was outlined in an update to the annual audit in 2008, meant to align audits more
closely with developments in public sector auditing.
Auditees are involved from the outset and are part of close communication and cooperation
throughout the entire audit process. They are informed on the design of audit, preliminary audit
findings and the assessments and recommendations. Once the outset of the examination has been
settled, a joint meeting is established and is followed by a formal letter outlining the scope,
design and other relevant information. After a formal letter is issues, a second joint meeting is
held after which the audit commences.
Source: Adapted from “Major Examinations” and “Annual Audit” papers provided by, and discussions
with, Rigsrevisionen.
Engage auditees – as well as other stakeholders – in formulating
communication products about audit processes and methods to increase
understanding about working methods
The CGR could make information regarding its audit standards, processes and
methods publically available to build confidence in its audit engagements. During the past
several years the CGR has updated its audit manuals as part of its modernisation reforms.
The CGR may wish not only to publish its manuals but to present them in more
user-friendly language for the benefit of its stakeholders. For example, the
Auditor-General of South Africa’s website has a clearly visible tab on “audit guidelines”
which includes reporting and good practice guidance. The Auditor-General of
South Africa’s “Audit communication and reporting” explains matters that do and do not
affect the audit opinion on financial statements, as well as a clear chart about
communication with those charged with governance and management throughout the
audit cycle. It also includes a glossary of financial audit terms (Box 4.2). Over time, as
the CGR seeks to converge with ISSAIs, the CGR could also explain how its standards,
processes and methods contained in these manuals are coherent and/or diverge from
ISSAIs, as well as future plans to converge with these ISSAIs.
Engage auditees – as well as other stakeholders – in reviewing audit reporting
guidance in order to increase the usability of audit reports
As noted previously in this chapter, the CGR issued guidance on “Model (Audit)
Report and Structure” in January 2013 with the aim of standardising audit reporting by all
CGR external control units, both at the central and regional level. This guidance
addresses the formal and substantive aspects related to the preparation of a preliminary
and final audit report. Formal issues included the page formatting, number of themes,
titles and subtitles, spelling and writing style, the use of annexes and letterhead.
Substantive issues relate to the drafting and formal observations contained in the reports.
The guidance also includes templates for other official communications between the CGR
and auditees (e.g. notification of audit field work, cover letter for preliminary and final
audit reports). The guidance on “Model (Audit) Report and Structure” replaced the
CGR’s “Model for the Preliminary Report of Observations and Final Report” (Modelos
Preinforme de Observaciones e Informe Final) that was issued in September 2009. This
earlier guidance was developed by a single CGR division and its use was not obligatory
for other CGR divisions and regional offices.
Although there was much internal discussion on the “Model (Audit) Report and
Structure” guidance, there was no effort to understand the usability of audit reports for the
CGR’s stakeholders. Participation of these external stakeholders could provide valuable
input to improve the CGR’s audit reporting. That said, few SAIs directly seek input from
stakeholders when formulating their audit reporting guidelines (Table 4.2).
In addition, the CGR could give consideration to using executive summaries to
present audit findings, as well as establishment commitments to use plain language and
exhibits in its audit reports. The CGR explains that its institutional website audit search
engine provides a summary of the objectives of the audit, the audit scope and sample, the
audit conclusion and legal opinions (dictámen).2 While this supports users of the CGR’s
website, it does not automatically benefit other stakeholders who receive the audit report
in hard-copy. Moreover, there is no emphasis on clear and simple language and the use of
figures in audit reports. This is despite much emphasis by the CGR in recent years to
increase the use of its work by citizens. Rather, the CGR’s 2009 and 2013 guidance on
audit reporting focuses more on issues of syntax and text formatting. Reference to the use
of exhibits in the 2013 guidance is limited to not using excessive exhibits. However, it
does not explain and provide examples for the CGR’s audit staff on how to use exhibits
effectively.
Box 4.2. Approaches to raise awareness and understanding of audit reporting
and audit cycle: The example of the Auditor-General of South Africa
The Auditor-General of South Africa has developed and publishes information on “audit
communication and reporting” to support auditees and other stakeholder to understand its
financial audit opinions and audit process. The Auditor-General of South Africa’s website has a
clearly visible tab on “audit guidelines” which includes reporting and good practice guidance.
This information explains what matters do and do not affect the audit opinion on financial
statements, information about the audit process including the communication with those charged
with governance and management
and audit cycle: The example of the Auditor-General of South Africa (cont.)
Modification of the audit opinion
Communication in the audit process
Source:
AGSA
(2011),
“Audit
Communication
and
Reporting”,
www.agsa.co.za/Auditinformation/Auditcommunication/tabid/186/id/204/Default.aspx.
AGSA,
Table 4.2. Practices to support clarity of audit reporting used by supreme audit institutions
Commitment to
use plain language
in audit reports
Commitment to
use exhibits to
present complex
information clearly
and concisely in
audit reports
Style guide for
audit reports
●
●
●
●
Brazil
●
●
●
●
o
o
Chile
o
o
o
●
o
Costa Rica
●
●
●
o
o
Denmark
●
●
●
●
o
●
●
●
●
o
Israel
●
●
●
●
o
Italy
●
●
●
●
o
Korea
o
●
●
●
o
Mexico
..
..
..
..
..
Peru
..
..
..
..
..
Portugal
●
●
●
●
o
South Africa
●
●
●
●
o
Spain
●
●
●
●
o
Total yes
10
11
11
11
0
Use of executive
summaries to
present main audit
findings
Australia
Country
Involvement of SAI
audiences in
formulating/
updating external
audit reporting
guidance
Q. 42-45.
The use of executive summaries, plain language and exhibits are common among the
benchmark SAIs in this peer review (Table 4.3). Executive summaries help to draw
attention to the most important information about an audit in a way that is accurate, clear
and coherent. An executive summary should be able to stand alone as stakeholders may
not read the entire audit report. Stakeholders should be able to grasp easily what was
examined, why it is important, what was found and the proposed recommendations –
even if they read only the main points. Plain language means avoiding jargon or obscure
words, whenever possible, and explaining any technical or legal terms that need to be
used in order to make audit reports more readable, especially those reports that address
complex subjects. Exhibits, including illustrations, tables, charts or text boxes, can help to
attract a stakeholder’s attention and reinforce key points.
Formulate auditee strategies to broaden engagement beyond individual audit
engagements and facilitate dialogue on governance issues with auditees
INTOSAI (2010c) guidance on How to Increase the Use and Impact of Audit Reports
notes that the relationship between the SAI and the auditee is an ongoing one that goes
beyond audits and reports. Some SAIs meet with the heads of ministries to discuss
weaknesses that have been identified in their systems and talk about ways that auditees
can implement recommendations listed in or arising from audit reports. In other cases,
SAIs may produce a strategy to facilitate engagement with auditees/responsible parties.
An auditee strategy may cover: i) a summary of the key challenges and risks facing the
auditee that the SAI would want to address; ii) ways that SAI work can help improve the
auditee’s performance and services to citizens; iii) specific auditee weaknesses that need
to be addressed and improved, such as through creative and new approaches; and iv) what
new developments in the public sector will mean for the auditee, and how the auditee
might respond (INTOSAI, 2010c, § 30).
The CGR has not established any strategies for its engagement with auditees, unlike
the SAIs of Australia, Denmark, Italy, Portugal, South Africa and Spain as well as the
European Court of Auditors (Table 4.3) which have established strategies.
Table 4.3. Existence of auditee strategies by the supreme audit institution
Summary of the
key challenges
and risks facing
the auditee that
the SAI would
want to address
Ways that SAI
work can help
improve auditee’s
performance and
services to citizens
Specific auditee
weaknesses that
need to be
addressed and
improved
Assessment of what
developments in the
public sector mean
for auditee and how
the auditee may
respond
●
●
●
●
Brazil
●
o
x
x
x
x
Chile
o
x
x
x
x
Costa Rica
o
x
Denmark
●
●
x
o
x
o
x
o
●
o
●
●
●
●
x
x
x
x
●
●
●
●
Korea
●
o
x
x
x
x
Mexico
..
..
..
..
..
Peru
..
..
..
..
..
Portugal
●
●
●
●
o
South Africa
●
●
●
o
Spain
●
●
●
●
o
●
Total yes
7
7
5
4
4
Country
Australia
Israel
Italy
Existence of an
auditee strategy
Notes: ● = Yes; o = No; x = Not applicable; .. = Missing data. European Court of Auditors: Audit strategies
established for major audit areas not auditee/audited entities per se.
Q. 46.
The CGR could also leverage dialogue opportunities with the heads of ministries and
services as a basis for jointly discussing reoccurring problems. CGR officials note that
there are some instances for discussion but that this is the initiative of the auditees. In
doing so, the independence of the external audit remains protected, but the knowledge
arising from CGR’s audits is proactively shared and ideally used to inform improvements
in public services.
Periodic engagements with senior officials of audited entities to discuss issues of
common concern are frequent within many SAIs (Table 4.4). For example, the Australian
National Audit Office (ANAO) discusses matters arising from its audit coverage in a
range of forums including audit committee meetings of auditees and through consultation
in the development of the annual Audit Work Programme. The Brazilian Federal Court of
Accounts is currently embarking on a “Public Dialogue”, promoting meetings with
auditees to discuss topics of interest related to public governance. The Auditor-General of
Denmark engages in meetings at least once annually with the permanent secretaries of
ministries and top executives of larger public co-operations. These meetings, which take
place at National Audit Office of Denmark, focus on recent audit findings, future audits
and issues of concern. Representatives of the European Court of Auditors have regular
meetings between senior officials within audited entities. The Auditor-General of
South Africa has an ongoing programme of quarterly interactions with executive
authorities and the related legislative oversight committee to facilitate an understanding
of the key obstacles to clean (unqualified) audits.
Table 4.4. Periodic engagement with senior officials to discuss issues of common concern
by the supreme audit institution in Chile and selected countries
Yes
No
Israel, Korea, Portugal, South Africa, Spain
Chile, Costa Rica, Italy
to Q. 38.
Engaging with internal audit to support effective and efficient audit and non-audit
assignments
INTOSAI “Guidance for Good Governance” notes that co-ordination and
co-operation between SAIs and public sector internal auditors can support effective and
efficient audit and non-audit assignments by both parties (INTOSAI, 2010d). A broad
range of potential modes of co-ordination and co-operation include: i) communication of
audit planning and audit strategies; ii) regular meetings between SAIs and internal
auditors; iii) arrangements for the sharing of information, including consultation
procedures; iv) communication of audit reports with each other; v) organising common
training programmes and courses, and sharing training material; vi) developing joint
methodologies. It may also result in granting access to audit documentation; secondment
or lending of staff (e.g. training on the job); vii) use of certain aspects of each other’s
work to determine the nature, timing and extent of the audit procedures to be performed;
and viii) collaborating on certain audit procedures, such as collecting audit evidence or
testing data (INTOSAI, 2010d, Section 7.1).
However, co-ordination and co-operation may also pose the risks of undermining
confidentiality, independence and objectivity – and these need to be effectively managed.
Risks from co-ordination and co-operation include: i) compromising the confidentiality,
independence and objectivity of audit work; ii) the dilution of responsibilities;
iii) misinterpretation of the findings of the other’s audit work; iv) possible difference of
conclusions or opinions on the same subject matter; v) the possibility that potential
findings of the other auditor may be prematurely communicated, before sufficient audit
evidence exists to support those findings; and vi) not considering constraints or
restrictions placed on the other auditor in determining the extent of co-ordination and
co-operation (INTOSAI, 2010d, Section 5.1).
The CGR has sought to enhance the working practices of internal audit units,
especially at the municipal level. Formally, the CGR has responsibility for guiding the
activities of internal audit units within public entities (Law 10 336, Art. 18). The CGR’s
efforts to enhance the working practices of internal audit units have been supported by the
creation of an online Portal for Internal Audit Units (Portal para las Unidades de
Auditoría o Control Interno). In addition, there is a Council of Government’s General
Internal Auditors (Consejo de Auditoría Interna General de Gobierno, CAIGG) for
public entities in the central administration. Formally, the council does not have legal
recognition, but derives its mandate and scope of activity from its direct dependence of
the President of the Republic. Within this scope, the council may provide policy direction
and tools to internal control units within public entities. In practice, the CGR’s and
CAIGG’s guidance for internal audit units in the central administration overlap and
sometimes establish different obligations and tools for the internal audit units to follow.
The CGR and CAIGG have recognised this issue and are seeking to strengthen their
co-ordination. Moreover, the CGR’s interactions with internal audit units in audit
programming and individual engagements remains limited.

enhancing co-ordination and co-operation with internal audit units of public
entities through individual audit engagements

strengthening co-ordination and co-operation with the CAIGG in order to
streamline guidance for internal audit units.
Enhance co-ordination and co-operation with public entity’s internal audit
units, based on an assessment of the benefits and risks
In Chile, each public entity is required to establish an internal audit unit with a broad
mandate to evaluate the level of economy, efficiency and effectiveness of the use of
public resources and achievement of the institution’s objectives (Law 10 336, Art. 18). As
noted in Chapter 1, the scope of the CGR’s oversight is extensive and includes the
revenue and investment of public funds, some 190 central government service agencies,
24 public enterprises, 8 mixed-ownership companies, 340 municipalities, the public
universities, concessions granted by the government to agencies for the exploitation of
public resources, as well as the powers to examine the use made of public monies by
non-government organisations and private companies. Law 18 695/2006 – the Organic
Law on Municipalities – requires municipalities to establish an internal audit unit, defines
its responsibilities, reporting line and reporting obligations. Moreover, the CGR Organic
Law notes that inspectors, auditors or employees fulfilling the internal audit function are
subject to technical oversight from the CGR (Law 10 336, Art. 18).
Since 2010 the CGR hosts an annual meeting with internal audit units at the national
level to support ongoing communications and institutional relations between the CGR and
internal audit units. The first meeting, held in November 2010, focused on the
independence of internal audit units, mechanisms for co-ordination between the CGR and
internal audit units, training and development needs of internal audit units, and the
development of technical norms for the internal audit function. The 2010 meeting was
attended by approximately 200 officials from central government and municipal internal
audit units (CGR, 2010b). In 2012, a different approach was used and meetings were
organised with internal audit units at the regional level. In addition, 2011 saw the
launching of the CGR Internal Audit Portal and the formulation of CGR technical
guidance on audit chapters and infrastructure investment for the internal audit units, as
well as the basic elements for the design and development of risk matrices (CGR, 2011a).
In 2011, the CGR created an online Portal for Internal Audit Units in order to support
communications and share information with internal auditors in the central and municipal
government. The portal serves both as a means of CGR communication and information
sharing and also a means for discussion and knowledge sharing among internal auditors.
For example, the portal makes available CGR news, legal opinions, court of accounts’
decisions regarding the actions of internal auditors, frequently used norms, accounting
standards, INTOSAI standards, documents of interest and a directory of approximately
1 000 government internal auditors. In addition, the portal includes a discussion forum
structured around the following themes: i) transfers; ii) revenues; iii) procurement;
iv) infrastructure; v) concessions; vi) human resources; vii) institutional functions and
processes; viii) information technology; ix) finance; x) other; and xi) archives.
While there has been good take up of the portal (Figure 4.1), attention is necessary to
ensure that portal users repeatedly return. In this regard, the portal could be used to
provide online training and other forms of learning for internal auditors. The portal could
also be used as a platform for interaction between the CGR and internal audit units linked
to individual CGR audit assignments.
Figure 4.1. Use of the Office of the Comptroller General of the Republic of Chile’s
internal audit portal
Access
Visitors
8 000
7 000
6 000
5 000
4 000
3 000
2 000
1 000
Jun-13
May-13
Apr-13
Mar-13
Feb-13
Jan-13
Dec-12
Nov-12
Oct-12
Sep-12
Aug-12
Jul-12
Jun-12
May-12
Apr-12
Mar-12
Feb-12
Jan-12
0
There is limited co-ordination and co-operation between the CGR and internal audit
units within public entities (Table 4.5). The CGR does not share information on its audit
programming and planning, and vice versa, as this is considered as sharing privileged
information. The CGR does not share information on audit programming and planning as
it wishes for its audits to be characterised by the element of surprise. The CGR may
review reports prepared by internal audit together with other information requested from
auditees. The CGR has no meetings with individual internal audit units, even to develop a
shared understanding of the public entity that they are auditing. The CGR’s interaction
with the internal audit units is limited to the annual meeting with internal audit units
mentioned above or to meetings in the context of audit engagements. The CGR formally
began to share its final audit reports with internal auditors and not just management in
2011 – in line with the CGR making publically available all of its audit reports since
2011.
Table 4.5. Modes of co-ordination and co-operation between the supreme audit institution
and internal audit in Chile and selected countries
Communication
of annual plans/
strategies
Regular
meetings
Arrangements for
the sharing of
information
(including
consultation
procedures)
●
●
o
Brazil
o
●
●
o
●
o
Chile
o
o
o
o
Exploration
Exploration
Country
Australia
Communication
of reports to
each other
Common
training
programmes,
and sharing
of training
materials
Development
of joint
methodologies
●
o
o
Costa Rica
o
o
o
o
o
o
Denmark
●
●
●
●
●
o
European Court
of Auditors
●
●
●
●
●
o
Israel
o
●
●
o
o
o
Italy
●
o
o
●
o
o
Korea
●
●
●
●
●
●
Mexico
..
..
..
..
..
..
Peru
..
..
..
..
..
..
Portugal
●
●
●
●
●
o
South Africa
●
●
●
o
o
o
Spain
●
●
●
●
●
o
Total, Yes
8
10
8
5
6
1
to Q. 47-53.
Strengthen co-ordination and co-operation with the Council of Government’s
General Internal Auditors in order to streamline guidance for internal audit
units
The CGR Organic Law (Law 10 336/2009, Art. 18) states that each public sector
entity (servicios) under the control of the CGR must establish an internal audit unit with a
broad mandate to evaluate the level of economy, efficiency and effectiveness of the use of
public resources and achievement of the institution’s objectives. Moreover, the CGR
Organic Law (Law 10 336, Art. 18) and the Organic Law on the State Financial
Administration (Decree Law 1 263) state that the CGR is responsible for supervising and
guiding the activities of internal audit units within public entities. The role of the CGR in
guiding public sector internal audit is similar to the SAIs of Costa Rica, Denmark, Korea
and Portugal (Table 4.6). In other benchmark countries this function is fulfilled by other
parts of the administration, such as a dedicated in Brazil and Italy, or as a Ministry of
Public Administration in Mexico (Table 4.7). The CGR’s responsibility for supervising
and guiding the internal audit units within public entities is within each relevant external
control unit (e.g. the municipality division oversees internal control units of the
municipalities). The CGR provides advice on specific issues raised through the portal. In
2011, a draft set of guidelines on internal audit were discussed, but have not yet been
formalised.
Table 4.6. Role of supreme audit institutions in co-ordinating public sector internal audit
Yes
No
Chile, Costa Rica, Denmark, Korea, Portugal
Australia, Brazil, European Court of Auditors, Italy,
South Africa, Spain
Notes: Chile: The Office of the Comptroller General of the Republic Organic Law (Law 10 336, Art. 18) and
the Organic Law on the State Financial Administration (Decree Law 1 263) state that the Office of the
Comptroller General of the Republic is responsible for supervising and guiding the activities of internal audit
units within public entities. Costa Rica: The Act on Internal Control assigns a leading (rectory) role to the
Comptroller General of the Republic on internal audits of all public institutions. The rectory is performed by
issuing regulations for internal audits and reviewing internal audit work plans. Denmark: It is clarified in the
Auditor Generals Act (2012) § 9 that the Auditor-General can arrange audit tasks with internal audit bodies in
the ministries or other administrative entities. This paragraph is vividly used and the National Audit Office of
Denmark depends on well-conducted audit of the internal audit entities to ensure a qualified final audit in all its
audit products. The National Audit Office of Denmark also co-operates with the Institute of Internal Auditors
and has hosted two national conferences on “Trends in the Development of Public Audit” and “The Value of
Public Sector Auditing”. The National Audit Office of Denmark has created a website directed at internal
public auditors. These roles are, however, self-assumed by the National Audit Office of Denmark and not a
formal responsibility. Korea: The Board of Audit and Inspection may provide necessary support for the
development of internal audit and inspection work and efficient conduct of audit and inspection work. The
heads of central government agencies, metropolitan governments and provincial governments, and
government-invested organisations shall, in case it is necessary, in order to avoid duplication of audit and
inspection, discuss their audit and inspection plans with the Board of Audit and Inspection. The Board of Audit
and Inspection may, when it is recognised that the head of the internal audit and inspection unit of an
organisation under the provisions of § 2 is markedly negligent of audit and inspection work, recommend his
replacement to the appointing authority or the appointment recommending authority concerned (Board of Audit
and Inspection Act, Art. 30-2). Portugal: Under the law, the internal control departments of the public
administration are bound to inform the court of their activity plans and reports and send it their actions’ reports
whenever they may be of interest to the court. The President of the Court may also meet with the inspector
generals and auditors of the public administration in order to promote the exchange of information on the
activity plans of the court and the internal control departments and the harmonisation of internal and external
control criteria. Members of the court’s staff provide training to public officials on several matters related to
public management, such as public procurement, local indebtedness, public management control, or ethics and
deontology in public services.
to Q. 8.
In the context of internal audit and control, the CAIGG, located under the Ministry of
Finance, was established in 1997 as an advisory body to the President of the Republic to
co-ordinate the internal control and internal audit system.3 The CAIGG is responsible for
proposing policies, plans, programmes and internal control measures for the public
administration and individual public entities to strengthen management practices. The
function of the CAIGG was broadened in 2005 to incorporate promoting integrity and
transparency as well as the prevention of corruption,4 reflecting the government’s
adoption of the Inter-American Convention against Corruption and the OECD
Convention on Combating Bribery of Foreign Public Officials in International Business
Transactions.
The CAIGG is composed of the General Council, Technical Advisory Committee
(Comité de Asesoría Técnica) and Executive Secretariat (Secretario Ejecutivo). The
General Council is chaired by the government’s Budget Director and is composed of
six high-level officials, including the CAIGG Executive Secretary (referred to as the
“Auditor-General”), nominated by the President of the Republic and working
ad honorem. The Technical Advisory Committee is made up of the internal auditors from
every government ministry and is chaired by the CAIGG Executive Secretary.
Table 4.7. Institutions’ arrangements for internal audit within the public administration in Chile and selected countries
Country
Australia
Brazil
Existence of internal audit units within public entities
Chile
Yes
Centralised within Office of the Comptroller General for direct
administration; individual audit units exist for indirect
administration
Yes, internal audit units
Costa Rica
Existence of audit boards/
Existence of separate financial inspection
audit committees
body
Yes
No
No
No
No
No
..
No
No
Denmark
Israel
Italy
Yes, but only in some public entities
Every public body
Yes, provided by independent performance evaluation bodies
No
No
No
No
No
Ministry of Economy and Finance; State
General Accounting Department (central);
territorial accounts offices (regional)
Korea
Mexico
Peru
Internal audit units
Internal control offices
Yes, institutional control bodies – some in the Office of the
Comptroller General and in some public entities
All ministries and most of public sector, except for smaller
entities
Yes
Yes
No
No
No
No
No
No
No
General Inspectorate of Finance, Ministry
of Finance
No
General Control and Audit Office (IGAE) for
central administration, separate general
control and audit offices for autonomous
communities and local authorities
Portugal
South Africa
Spain
Yes
No
Internal audit co-ordination body
None
Secretariat of Federal Internal Control, Office
of the Comptroller General of the Union
(CGU)
Republic (CGR); Council of Government’s
General Internal Auditors (CAIGG)
Republic
National Audit Office of Denmark
None
Independent Commission for the Evaluation,
Integrity and Transparency of Public
Administration (CIVIT); Ministry of the
Economy and Finance; State General
Accounting Department
Ministry of Public Administration
Republic
Internal Audit Co-ordination Council
General Control and Audit Office (IGAE)
Notes: .. = Missing data. Financial inspection is usually understood as an ex post control activity exercised by either inspectors of a centralised control body, who are
independent from the entity they inspect, or inspectors working in a separate unit of the entity they inspect. The aim of the financial inspection is to rectify major irregularities
and dysfunctions and to impose administrative sanctions.
Source: Adapted from European Commission (2011), Compendium of the Public Internal Control Systems in the EU Member States, 2012, European Union, Brussels.
The CAIGG issues technical documents/guidelines relating to the work of internal
auditors within public entities such as audit objectives, audit field work, audit reporting,
audit follow up, as well as the creation, function and workplan of internal audit units. In
addition, technical bulletins provide a summary of information for supporting sound
internal control and specifically issues related to transparency, integrity and corruption
prevention. Ten such bulletins have been issued to date, including a declaration of private
interests held by public officials (May 2011); a declaration of private assets held by
public officials (June 2011); conflicts of interest (July 2011); use of official vehicles
(August 2011); direct deals and contracting (September 2011); incompatible negotiation
(October 2011); guidelines for officials’ training (March 2012), tax fraud (July 2012), use
of air tickets mileage (August 2012) and public tenders (November 2012).5
Box 4.3. Office of the Comptroller General of the Republic of Chile evaluations of internal audit
In recent years the Office of the Comptroller General of the Republic (CGR) has conducted and
commissioned an evaluation of internal audit within the Chilean public sector. The first evaluation was
conducted in 2010, focusing on the compliance of municipal internal audit units with the statutory requirements
contained in the Organic Law on Municipalities (Law 18 695/2006). This law requires municipalities to establish
an internal audit unit and defines the unit’s responsibilities, reporting line and reporting obligations. The second
evaluation was conducted in 2011 to examine the organisation and functioning of internal audit units within
national (central) and municipal governments. The second assessment was outsourced by the CGR to a
consulting company.
2010 evaluation of municipal internal audit units
The 2010 evaluation of municipal internal audit units drew upon a survey of internal audit units’ operations
in 2008 and 2009. The survey covered all of Chile’s 345 municipalities. The evaluation found that only
319 municipalities had created an internal audit unit, either as a dedicated unit or within another office as
permitted by law.
The evaluation found that, of the 319 municipalities that had an internal audit unit, 280 (87%) had created a
direct reporting line between internal audit and the mayor, 242 (76%) had adopted internal rules on the
organisation and function of those units, 238 (75%) had included the internal audit unit in their organisational
charts and 228 (71%) had the director/manager of internal audit formally appointed by mayoral decree. Of the
319 municipalities with an internal audit unit, 271 (85%) reported that their mandate covered all municipal and
related entities, including education, health, cemeteries and enterprises but only 144 conducted audits of their
education and health departments, and of the 53 municipalities where education or health was transferred to a
municipal corporation, only 25 internal audit units performed audits of these corporations.
In terms of municipal internal audit units’ activities, the evaluation found that of the 319 municipalities that
had an internal audit unit, 240 (75%) control financial and budget execution. However, 207 (65%) of the internal
audit units did not audit municipal revenue, 229 (72%) did not audit the procurement function and 175 (55%) did
not audit matters of remuneration and honoraria. Moreover, the evaluation found that 287 of the municipal
internal audit units prioritised the review of payments and decrees to the detriment of other functions. These
other assignments include auditing the internal control frameworks and reviewing of the compliance of economic
and financial operations with regulation and the implementation of control measures to safeguard activities at
higher risk.
In terms of municipal internal audit units’ methods, the evaluation found that of the 319 municipalities that
had an internal audit unit, 305 (96%) had not created a risk matrix to focus and guide their control actions and
optimise the use of their resources, 209 (65%) did not follow up on audit observations in order to verify that
corrective actions had been taken. Moreover, only 248 (78%) of the internal audit units had access to the
information and records necessary for them to effectively conduct their work. In terms of municipal internal
audit units’ reporting, only 223 (70%) issue a quarterly report on the budget, though in 24 cases the reports are
not presented to the municipal council. Moreover, only 203 (64%) produce written reports at the conclusion of
their audit work, though 27 of these units do not present the reports to the head of the audited entity.
Box 4.3. Office of the Comptroller General of the Republic of Chile
evaluations of internal audit (cont.)
In terms of municipal internal audit unit capabilities, the evaluation found that of the 319 municipal
internal audit units surveyed, 233 (73%) of the directors/managers of internal audit had a professional or
technical qualification in line with the function. The average municipal internal audit unit had 2.7 officials,
though 165 (52%) of the internal audit units had only one official. Moreover, 250 (78%) of the municipal
internal audit units had their officials complete the necessary training. However, in 194 (61%) of the
municipal internal audit units, officials had not been trained in their municipality’s computer systems and
96 (30%) officials had not been trained in matters of financial, accounting, budget and legal control.
2011 evaluation of central and municipal internal audit units
The 2011 evaluation of internal audit units in central public entities and municipalities drew upon a
survey of 291 internal audit units from the central administration, state universities and hospitals and
municipalities, supplemented with interviews with officials from 46 of these internal audit units – though the
survey did not indicate if the respondent was the chief internal auditor or a staff member of the unit.
The evaluation found that approximately 53% of all respondents indicated that they had not received
specialised audit training for their position, though 94% indicated that they had an appropriate qualification
(without specifying what that may be). Approximately 92% of all respondents indicated that they were not
supported by any audit software, and 80% indicated that they had not received ongoing training in relation to
government ICT systems. Moreover, approximately 29% indicated that they take on additional management
functions. (Although data were presented on the types of tasks, the results were presented as a proportion of
the total responses, rendering it unclear because of the possibility of multiple responses by individual
respondents.)
Although 90% of internal audit units surveyed have an audit plan, only 53% report using a risk matrix to
prioritise and guide audit work. (However, it is not clear from the survey responses whether this refers to a
risk matrix for audit work or a risk matrix for the use by managers insofar that respondents note that the risk
matrix may have been prepared by the financial officer of the public entity or by the CGR – though the CGR
does not share its risk matrix with public entities.) Approximately 57% do not have an audit manual and 31%
do not have protocols for the written documentation of their audit chapters.
Approximately 55% of internal audit units surveyed do not share their audit reports with external
audiences, with 82% reporting that they primarily report to the CAIGG. Of surveyed internal audit units, 79%
note that they strongly disagreed or disagreed with the statement that they share their findings with the CGR,
with 8% reporting that they always or usually do. Approximately 48% of surveyed internal audit units note
that they strongly disagreed or disagreed with the statement that the CGR has a working knowledge of their
internal audit unit.
Approximately 76% of internal audit units surveyed consider that communications between their unit and
the CGR is poor. Among the primary reasons for this is the lack of formal interactions with the CGR (20%),
communications occur only when the CGR requires information (38%) and the CGR does not discuss their
findings with the internal audit unit (9%). Moreover, 61% of internal audit units surveyed either strongly
disagreed or disagreed with the statement that there are effective mechanisms for communication with the
CGR. Of the audit units surveyed, 62% either strongly disagreed or disagreed with the statement that the
CGR provides technical instruction for the work of internal audit – though it did not explore the possibility
that other institutions, namely the CAIGG, fulfil such a role.
Source: Deloitte (2011), “Estudio sobre organización y funcionamiento de las unidades de control interno a nivel
gubernamental y municipal. Rol de la Contraloría General de la República en dichos organismos [Study on the
organisation and functioning of the internal control unit at central and municipal government levels: Role of the Office of
the Comptroller General of the Republic in these bodies]”, May; CGR (2010), Informe Consolidado Nacional de
Unidades de Control Interno Municipale [Consolidated National Report on Municipalities Internal Control Units],
In 2012, the CGR began working with the CAIGG; previously no such relationship
existed. At present, the CGR is preparing an agreement with the CAIGG to work more
closely together. Underpinning this decision is the recent attention by the CGR not to
overburden internal audit units with different requirements. This work is being led by a
CGR committee comprised of the heads and deputy heads of divisions, with the External
Control Technical Unit co-ordinator serving as secretary.
Communicating with stakeholders other than auditees and internal audit
SAIs are key pillars of democratic governance and play a pivotal role in enhancing
public sector performance, emphasising the importance of the principles of good
governance, transparency and accountability (INTOSAI, 2010e). Their work empowers
the legislature and citizens to hold government accountable by reducing information
asymmetries. However, SAIs do not act alone in supporting good public governance.
should report publicly on the results of their audits and on their conclusions regarding
overall government activities (Principle 7); and communicate timely and widely on their
activities and audit results through the media, websites and other means (Principle 8).
INTOSAI (2010e) “Johannesburg Accord” notes that, in order to provide value and
benefits to society, SAIs should enable those charged with governance as well as the
legislature to discharge their different responsibilities in responding to audit findings and
recommendations and taking appropriate corrective action. The effectiveness with which
SAIs fulfil their role of holding government to account for the use of public money not
only depends on the quality of their work, but also on how effectively they are working in
partnership with the accountability functions of the executive and legislature in making
use of audit findings and enacting change. However, engagement should not seek to
reduce the SAI’s independence, even when it acts as an agent of the legislature and
performs audits on its instructions (INTOSAI 1977, Section 9).
The CGR developed a communication plan to strengthen corporate positioning
among external audiences. As part of this strategy, the CGR has put in place a formal
structure and working procedures to improve the effectiveness of its communication
activities and to create better awareness of its institutional role among its stakeholders.
Although the communication strategy seeks to be aligned with the CGR’s strategic plan,
it has yet to be clearly linked to the CGR’s annual audit programming and does not
clearly identify the institution’s audiences. Moreover, whereas the CGR consulted with
the media in the formulation of the strategy, representatives from the executive and
legislative branches were not consulted.
Moreover, the current communication strategy is heavily focused on media and does
not include reference to the executive or the legislature. The underlying reasons for this
are mixed. On the one side, the CGR notes that the legislature and executive are seen as
habitual users of the CGR’s work; on the other hand, the CGR values its position as an
autonomous entity and its function as the external auditor of the executive. However, if
not managed carefully, engagement with the media can equally affect the independence
and objectivity of SAIs (Bringselius, 2013).
The CGR’s communication activities and efforts to engage citizens are heavily reliant
on the Internet and social media and do not focus on reducing barriers to information. The
CGR’s website is a key instrument to reach its audiences, communicate its activities and
disseminate its findings. In 2010, the CGR made its databases on legal opinions,
jurisprudence and audit reports publically available. The CGR also publishes the agendas
of the Comptroller General and its other senior officials online to enhance
communication. The SAI of Chile is also one of a number of SAIs in OECD and partner
countries that use social media, including Twitter, Facebook and YouTube, to interact
with external stakeholders. Moreover, in 2012 the CGR launched a portal, CGR and
Citizens (Contraloría y Cuidadano), to enable citizens to register complaints and make
suggestions for audits online. However, the CGR could solicit feedback on its website
from users to make it more accessible. Likewise, the CGR could engage its stakeholders
in the design of the website in order to make the content more user-focused and
interactive. Moreover, it could explore using social media to invite and incite interaction
with stakeholders.
In 2008, the CGR and Public Prosecutor (Fiscalia) signed an agreement of
co-operation related to public sector integrity and the fight against corruption. The
agreement included a commitment to use a standardised template by the CGR when
transmitting criminal cases for investigation by the Public Prosecutor and for the Public
Prosecutor to access declarations of public official’s interests that are maintained by the
CGR. In addition, the agreement facilitates the participation of CGR officials, such as
providing information, statements before the judges and participating in criminal trials, in
cases being conducted by the Public Prosecutor. In 2008, the CGR, together with the
Supreme Court (Corte Suprema), the Constitutional Tribunal (Tribunal Constitucional),
the Public Prosecutor and the State Defence Council (Consejo de Defensa del Estado),
also signed an agreement of co-operation aimed to prevent corruption. This agreement
included the sharing of information on different matters related to the prevention of
corruption in the courts and the entities they represent as well as the development of
training activities for their officials.6 As a specific deliverable of this agreement, an anticorruption web portal was launched in July 2013 (www.anticorrupcion.cl).
The CGR has sought to strengthen institutional co-operation with the criminal justice
system to support the enforcement of criminal and corrupt practices identified through
audit work. Moreover, the CGR has formulated internal guidelines to improve the
timeliness of processing requests from the Congress and its members. However, the CGR
has focused limited attention to co-operation with the legislature and central executive
authorities.

linking the communication strategy to annual audit programming, balancing
attention to different public entities

broadening the communication strategy to define audiences and how they access
information on audit activities and findings

focusing specific attention to the Congress, its commissions as well as the
country’s municipal councils

exploring measures to overcome barriers and constraints facing core
stakeholders’ understanding and access to information

undertaking specific measures to overcome barriers and constraints attributed to
the country’s digital divide.
Clearly link the communication strategy to annual audit programming, giving
attention to specific target audiences and the communication mix
The CGR formulated its first communication plan in 2011 to strengthen the
institution’s standing (CGR, 2011b). The plan’s objectives include: i) aligning
communication activities with the institution’s mission, vision and values; ii) reinforcing
the CGR “brand” as a pillar of legality and integrity, excellence and value; iii) increasing
the quality of the CGR communication with its main audiences; iv) strengthening links
with stakeholders through a variety of communication products; v) increasing the
knowledge of target stakeholders about the CGR; vi) creating an image of the CGR as an
institution that is undergoing a process of modernisation. The plan establishes a number
of objectives and targets to be achieved over a period of three to four years. The goals
contained in the CGR’s plan relate to the consolidation of responsibilities for internal and
external communications, the establishment of processes for internal co-ordination, the
alignment of the communication and strategic objectives, and the development of new
products and materials (Table 4.8).
The CGR’s communication plan was formulated drawing upon a content analysis of
media coverage and discussions with representatives of the media and senior CGR
officials. The formulation of the communication plan was the first time that the CGR had
undertaken a content analysis of its media coverage – focusing on the previous six-month
period (i.e. March to September 2011). Previously, the CGR only recorded articles about
itself in the media, collected by a contracted third-party. The content analysis of the
media coverage was conducted by communication consultants. The work revealed that
the CGR’s media profile was generally positive but that its image was one of an
investigator of irregularities in the public administration and a source of valuable data and
information. It also found that the CGR was sometimes viewed as a scapegoat for
shortcomings in the public administration, attributed to its ex ante control of legality, the
toma de razón as it is referred in Chile.
Discussions with representatives of the media sought to solicit opinions and
suggestions regarding improving the CGR’s positioning and to receive feedback on the
communications plan. Formal discussions with representatives of the media have
continued since and the CGR proposes to continue them in the future. In 2012,
26 meetings were held with the media – 20 in Santiago and 6 in different regions – which
were attended by opinion leaders, including 70 directors, editors and reporters. CGR
directors, regional comptrollers and officials in key areas were also involved in the
formulation of the communications plan through interviews and workshops in 2012. The
CGR did not solicit input from representatives of the executive and legislative branches in
the formulation of the CGR’s communication plan. The underlying reason for this was
because the CGR values its position as an autonomous entity and its function as the
external auditor of these entities.
However, the communication plan could be strengthened if it were linked to annual
audit programming and by developing an understanding of specific target audiences. In
recent years the CGR has made changes in annual audit programming to ensure top-down
prioritisation of audit assignments and using a more holistic approach of public entities
and government programmes. Annual audit programming is based on broad definition of
materiality including dimensions of the government’s priorities and social significance of
programmes and not just financial value. The CGR has developed risk indicators to
formulate the scope of individual audit engagements. Audit programming is linked to
resourcing decisions and enables the CGR to know in advance which entities and what
subject will be audited.
Table 4.8. Office of the Comptroller General of the Republic of Chile’s
communication plan targets
Goal
Target
Immediate targets
To adapt the structure and management of the Communications and Public Relations
Department to support the objectives and targets of the Communications Plan
6 months
To transform the Communications and Public Relations Department into an area of value to
the institution (measurable by its positioning and increasing quality of its work)
1 year
To establish and implement job descriptions for officials employed in the Communications and
Public Relations Department
1 year
To establish a system of internal co-ordination among the CGR’s divisions and regional offices 6-12 months
that optimises communication management
To reinforce the core corporate message
6-12 months
To create a strategy to link the Comptroller General with the media, in order to disseminate the 1 year
institution’s strategic objectives
To create materials that bring the CGR and the citizen closer
6-12 months
To create materials that support the CGR “brand”
6 months
To encourage new communication products of value
6-12 months
To raise the standard of the existing communication products
6 months
To establish a system to monitor issues communicated through social networks
6-12 months
Important targets
To align the CGR around the institution’s core message
1 year
To establish a system to co-ordinate and create messages of value from the regional offices
1-2 years
To transform the CGR’s website into an effective channel of communication with citizens, with
clearly differentiated formats, approaches and content for different audiences
1 year
To develop a Media Training Plan for certain second-line CGR officials on matters defined by
the Comptroller General
1-2 years
To create activities of particular interest for CGR units, such as the International Relations and
Co-operation Unit, to disseminate good practices with other supreme audit institutions
1-2 years
To create a specialised unit responsible for institutional events, with unified standards of
protocol and supporting material
1 year
To create a calendar of institutional events and its corresponding resource needs, well in
advance
1 year
To create a culture of planning, follow up and evaluation in the Communications and Public
Relations Department
1 year
Transcendental targets
To establish different format communication products (e.g. digital area, annual reports,
newsletters, social media) for different audiences
2-3 years
To formulate and implement manuals for graphics, protocol, web publication and crisis
management
2 years
To reformulate the Communications Plan according to urgent and important targets already
reached
After 2 years
To have a digital channel with regular programming (e.g. specialised seminars, interviews with
senior officials), open to external audiences
2-4 years
Source: CGR (2011), “Strategic communications plan: Proposal to strengthen corporate positioning in both
external and internal public”, CGR Communications and Public Relations Department, December, unpublished
chapter.
In addition, the CGR has introduced national and transversal audit programmes
(programas nacionales, PNAC, and programas transversales, PTRA, respectively). The
national audit programme focuses on the same subject within a single central public entity
that has activities throughout the entire country. These audits apply the same procedures
in a number of the central public entity’s units spread across the country. A single lead
audit unit prepares the audit plan and the preliminary and final audit reports and partner
audit units play a supporting role and conduct the audit procedures in their respective
jurisdiction. Transversal audits focus on the same subject across a range of centralised
and decentralised entities that share a common hierarchical or financial dependence with
the same central public entity. Each audit unit prepares its own preliminary and final audit
report with a single lead audit unit preparing a consolidated report for the central
government entity.
Broaden the communication strategy to define audiences and how they access
information on audit activities and findings
The current communication strategy does not include reference to the executive or the
legislature.7 The underlying reasons for this are mixed. On the one side, as noted
previously, the CGR notes that the legislature and executive are seen as habitual users of
the CGR’s work; on the other, the CGR values its position as an autonomous entity and
its function as the external auditor of executive. Moreover, whereas the CGR consulted
with the media in the formulation of the strategy, representatives from the executive and
legislative branches were not consulted. The absence of discussion with the executive and
legislature in the development of the CGR’s communication strategy is similar to the
matter of formulating audit reporting guidelines discussed earlier in this chapter.
The CGR could also seek to clearly define its primary and secondary stakeholders and
audiences and how they access information on audit activities and findings. The CGR’s
communication plan does not contain clear institutional definitions of its stakeholders and
audiences. The CGR Communications and Public Relations Department refers generally
to its audiences as all individuals who benefit from, or are affected by, the CGR, making
reference to government officials, regulators, peers, non-governmental organisations,
opinion leaders, counterparts, media and government suppliers. Broad groupings of
audiences are less likely to result in an effective communication strategy. More detailed
definitions of positions within these broad categories and knowledge of their concerns
can make grouping these audiences into categories of primary, secondary and other for
individual audit themes and/or assignments.
Nevertheless, the CGR has many sources of information that can be used to deepen its
understanding of its stakeholder’s interests. These sources of information include:
i) requests for information, special investigations and audit suggestions made through the
CGR’s website, the “Comptroller General and Citizens Portal”, Information Access Unit
and directly to the Communications and Public Relations Department; ii) complaints and
reports made in person through the General Records Office, Assistance to Users Office
(ATUS) and the CGR’s call centre; iii) information administered by the Chief of Staff to
the Comptroller General, who manages requests and co-ordinates meetings with the
Comptroller General from the executive, legislature and other stakeholders; and
iv) interactions with, and activities to monitor, the national media. The CGR could also
explore utilising the knowledge of the CGR’s audit executives, audit supervisors and
auditors – and in the process incorporating knowledge and understanding of stakeholders
in the performance evaluations of these officials.
Focus specific attention to the Congress, its commissions as well as
the country’s municipal councils, in refining the communications strategy
As a part of its oversight functions, the Congress examines the execution of the state
budget and it is common in OECD countries for the legislature to either formally (as in
the case of a discharge procedure) or informally (implicitly) give a political opinion on
the way the executive has executed the budget (OECD, 2002a; 2002b; 2013). Enhancing
the CGR’s communication with Congress can further contribute to this crucial budget
oversight function. In addition, political attention from the Congress can also help to put
adequate pressure on government, if necessary, and contributes to a favourable
environment for follow up on audit observations.
Scholars have identified a number of factors that should enable the Congress to more
effectively participate in accountability and policy making, a function that is weaker in
comparison compared with other legislatures in Latin America given its strong
presidential political system. Chile has a high re-election rate of members of congress,
which translates individual knowledge into institutional expertise. Mean experience of
Chilean deputies has steadily increased from 2.4 years in 1994-97 to 6 years for 2010-14.
Congress’ committees system closely mirrors the structure of the Cabinet, unlike in Brazil
and Costa Rica where there are far fewer legislative committees than executive posts, and
Mexico and Peru where there are far more. The Chamber of Deputies has 24 and the
Senate 21 permanent commissions (Table 4.9).8 Moreover, Chilean deputies belong, on
average, to less than two specialised committees. The budget of the National Congress
almost tripled in real terms between 1991 and 2011 from CPL 33.1 billion and
CPL 90.1 billion with expenditure on personnel almost quadrupling (Saiegh, 2010;
Palanza et al., 2012).
Table 4.9. Permanent committees within the Chilean Congress
Senate
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Chamber of Deputies
Government, Decentralisation and Regional
Development
Foreign Relations
Constitution, Legislation, Justice and Regulation
Economy
Finance
Education, Culture, Science and Technology
National Defence
Public Works
Agriculture
Environment and National Resources
Labour and Social Security
Health, Mining and Energy
Housing and Urban Development
Transport and Telecommunications
Human Rights, Nationality and Citizenship
Maritime Affairs, Fisheries and Aquaculture
[Internal Senate] Reviewing of Accounts
Internal Affairs
Senate Ethics and Transparency
Future Challenges
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
Home Affairs and Territorial Development
Foreign Affairs, Inter-Parliamentarian Affairs and
Latin American Integration
Constitution, Legislation and Justice
Education, Sports and Recreation
Finance
National Defence
Public Works, Transport and Telecommunications
Agriculture, Forestry and Rural Development
Natural Resources, National Goods and Environment
Health
Employment and Social Security
Economy, Promotion and Development
Housing and Urban Development
Human Rights, Nationality and Citizenship
Family
Science and Technology
Fisheries and Maritime Affairs
Micro, Small and Medium Enterprises
Extreme Zones
Citizen’s Security and Drugs
Culture and Arts
Poverty Reduction, Planning and Social Development
Mining and Energy
Internal Regime, Administration and Rules
Source: Adapted from www.diputados.cl and www.senado.cl.
The National Congress has a permanent Special Joint Budget Commission
responsible for oversight and monitoring of the use of budgetary resources by the
executive, as established by the Organic Constitutional Law of the National Congress
(Law 18 918). This special commission involves the members of the Chamber of
Deputies and the Senate’s finance commissions, similar to oversight committees in
bicameral legislatures, i.e. Australia, Brazil and Italy (Table 4.10). Until 2003, this joint
commission was a temporary body established in September each year to analyse and
support discussion of the state budget with the right to continue operations for the sole
purpose of monitoring execution of the Budget Law during the respective budget year
until the next special joint commission is set up and must report on the new draft Budget
Law. A 2003 amendment to the Organic Constitutional Law of the National Congress
made the joint commission a permanent body (Law 19 875).
The Special Joint Budget Commission has five subcommittees covering: i) economy,
planning, finance and state treasury; ii) defence, control, presidency, government;
iii) health, labour, justice, foreign affairs; iv) education, interior, housing, legislative
power; and v) public works, agriculture, transport and mining.
The Special Joint Budget Commission and its five subcommissions are supported by
a dedicated secretariat. This secretariat collects, organises and updates information on
budget execution and the financial management of public entities. The secretariat’s work
is also shaped by “protocols of agreements” between the legislative and executive.
Through these protocols, which have existed since 1997, the executive agrees to
undertake certain actions, e.g. fiscal transparency, public sector efficiency, native forest,
agriculture, regional investment, solid waste treatment, educational subsidies,
employment programmes, support entrepreneurship, mental health, indigenous
development, telecommunications. Topics included in the protocols have often been
incorporated into the Law of State Financial Administration (Bustos, 2011).
However, the secretariat faces a number of challenges that closer co-ordination and
co-operation with the CGR could help to overcome. Among the secretariat’s challenges
are: i) restricted access to budget information, especially one that involves a greater level
of disaggregation (i.e. regional distribution, government programmes, etc.); ii) no
software or information system according to the nature of the work to maintain databases,
provide reports, etc., in an expeditious manner with no legal authority to request
information; iii) lack of staff, both professionals and technical support staff, which
reduces the scope and depth of analysis and excessive dispersion of the studied subjects
prevents staff from specialising in certain areas (Bustos, 2011).
The CGR’s communication with and engagement of the Congress are limited to the
presentation and discussion of the CGR’s annual budget; the presentation of the CGR’s
annual report containing information on budget resources and activities; and attendance
of the Comptroller General in select commission meetings (Figure 4.2). The CGR does
not have any officials permanently located in the Congress nor any officials seconded to
the secretariat of legislature or its commissions.. The CGR does not present major audit
reports or combined analysis of individual audit reports based on common findings,
trends, root causes and audit recommendations – rather all audit reports are available
through the Internet and social media. Moreover, where there is a relationship between
the CGR and Congress it is with the committees and members and not the analytical
support staff for the various committees.
Table 4.10. Legal basis, composition and leadership of centralised and co-ordinating (hierarchical) public financial oversight committees
Country
Australia
Brazil
Chile
Costa Rica
Denmark
Israel
Italy
Korea
Mexico
Peru
Portugal
South Africa
Spain
Name
Joint Committee of Public
Accounts and Audit
Planning, Budget and Oversight
Joint Committee
Special Joint Budget
Commission
Revenue and Expenditure Control
Public Accounts Committee
Referring chamber
Joint
A. Basic information
Establishing
Established
authority
Statutory
1913
Responsible for ex ante
budget oversight
No
Size
16
B. Composition and leadership
Party
Chair
proportionality
Yes
Ruling party
Committee term
3 years
Joint
Statutory
1988
Yes
40
Yes
Voted internally
1 year
Joint
Statutory
2003
Yes
26
Yes
Voted internally
1 year
x (unicameral)
x (unicameral)
Standing
Statutory
1991
1849
No
No
7
6
Yes
Yes
Voted internally
Voted internally
State Control Committee
Committee of Budget, Treasury
and Planning
Special Committee on Budget
and Accounts
Superior Audit Office Oversight
Committee
Budget and National Financial
Statements Committee
Budget Committee
x (unicameral)
Joint
..
Standing
1974
..
No
Yes
..
Yes
..
Voted internally
x (unicameral)
Standing
1948
Yes
..
46 (lower)
+ 25 (upper)
50
1 year
Members 4 years,
Chair 1 year
..
Legislative term
Yes
Voted internally
Legislative term
Lower
Standing
2000
No
30
Yes
Opposition
x (unicameral)
..
2004
No
17
Yes
Ruling party
Legislative term
(3 years)
1 year
x (unicameral)
Statutory
..
Yes
21
Yes
Voted internally
Standing Committee on Public
Accounts
Joint Committee for Relations
with the Court of Audit
Lower
Statutory
1995
No
16
Yes
Opposition
Joint
Statutory
1983
No
45
Yes
Voted internally
Legislative term
(4 years)
Legislative term
(5 years)
Legislative term
(4 years)
Notes: x = Not available; .. = Missing data. Denmark: Committee members are appointed by yhe Danish Parliament, but do not necessarily have to be members of parliament.
Members of the Public Accounts Committee cannot be dismissed during their four-year term of office. The chair is selected based on the member with the greatest seniority,
though the committee may choose a different practice. The powers of the chairperson are limited, because the committee members act collectively. Italy: The committee
members elect the committee chair from among themselves. Portugal: Formally, the committee members elect the committee chair from among themselves. In practice, the
committee chairs are divided proportionally between the parliamentary groups of parties represented in the legislature.
Source: Buzaljko, K., A.M. Marlene, A. Tamasan and F. Verkaart (2010), “Public financial oversight: A comparative analysis of parliamentary committees across Europe”,
Maastricht Graduate School of Government; Parliament of Australia (n.d.), “Committees”, Commonwealth of Australia, www.aph.gov.au/parliamentary_business/committees;
Statsrevisorerne (2012), The Public Accounts Committee of the Danish Parliament, Statsrevisorernes Sekretariat, Folketinget, Christiansborg.
Figure 4.2. Attendance by the Comptroller General in the National Congress’ permanent
committees
20
18
16
14
12
10
8
6
4
2
0
2007
2008
2009
2010
2011
2012
Source: Adapted from CGR (2008, 2009b, 2010b, 2011c, 2012c, 2013b), various Cuenta Pública Contraloria
CGR, Santiago.
In addition to focusing on the Congress, the CGR could also draw specific attention to
the municipal councils (concejo municipal). These councils are responsible for budget,
concessions, local ordinances and public service delivery. Municipalities have the
autonomy to administer their own finances. The sources of municipal finance include
transfers from the regional government in which the municipality is located, local fines
and fees, and the municipality’s participation in the Common Municipal Fund. The CGR
has the authority to audit municipalities (see Chapter 1). Municipal councils are
comprised of six to ten councillors, including a mayor, depending on the municipal
population, that are elected every four years. The councils have far less in the way of
resources compared to the Congress.
Explore measures to overcome barriers and constraints facing core
stakeholders for understanding and accessing information
The CGR’s website is a key instrument to reach its audiences, to communicate its
main findings and to disseminate its products. Since 2007, the CGR has made the agenda
of the CGR’s authorities publically available on the institution’s website. The CGR’s
authorities include the Comptroller General, Deputy Comptroller General, division heads
and regional comptrollers. The agendas include information such as meetings, hearings,
visits and formal events, among others. Since 2010, the CGR has made its databases on
legal opinions (dictamines) and its audit reports publically available. Legal opinions are
specialised judgements on legal matters issued by the CGR which are mandatory for
ministries and services under CGR oversight. Audit reports are the means to
communicate the findings of audit engagements to the corresponding auditees.
Previously, it was necessary to pay to access the CGR’s databases and reports or to
submit a request in person to the CGR to access copies of legal opinions and audit
reports. These changes have resulted in a substantial increase in web traffic to the CGR’s
website, from approximately 5 000 unique visitors each month in the beginning of 2007
to approximately 25 000 unique visitors each month in the beginning of 2013
(Figure 4.3).
Figure 4.3. Office of the Comptroller General of the Republic of Chile’s website traffic
35 000
30 000
25 000
20 000
15 000
10 000
5 000
0
ene-07
may
sep
ene-08
may
sep
ene-09
may
sep
ene-10
May
Sep
ene-11
May
Sep
ene-12
may
Sept ene-13
The CGR could consider engaging and soliciting input from stakeholders in the future
development and updating its website in order to ensure that it is accessible and user
friendly. In April 2012, the CGR’s website was redesigned in order to make it more user
friendly to the general public. This has been complemented by efforts to strengthen
corporate communication among external audiences since 2011 through the
implementation of a communication plan. This plan has sought to: i) raise the quality of
the messages transmitted to the CGR’s main audiences through existing and new
channels (e.g. press notices, Internet, institutional publications); ii) establish links with
stakeholders through a variety of communication products; and iii) increase knowledge of
the CGR among segmented audiences (CGR, 2011b). However, the CGR did not engage
any stakeholders in the revision of its website. The process was done internally. In the
preparation of the future web portal Contraloría y Ciudadano, the CGR has convened
focus group exercises to inform its design.
The SAI of Chile is one of a number of SAIs in OECD and partner countries that use
social media – including Twitter, Facebook and YouTube – to interact with its
stakeholders. Of the benchmark SAIs for this study, only Australia, Brazil, Chile,
Mexico, Peru and the European Court of Auditors use Twitter as a proxy for the use of
social media by government.9 In comparison, central government institutions in many
OECD and key partner countries use Twitter to engage with the public (Table 4.11).
The CGR’s use of social media should be seen in light of the emphasis on social
media more generally in Chile. For example, almost 400 000 “followers” of the
government of Chile (Gobiernodechile) represent over 2% of the population, making it
the second most popular central government institution across the OECD (OECD, 2012a).
The popularity of social media in Chile is influenced by a high share of Twitter users
among the domestic population and the Chilean government’s clear and proactive
strategy towards social media. This strategy consists of several components that provide
information and dedicated assistance to public entities to use social media in engaging
their stakeholders, including: i) a 2010 government circular explicitly encouraging the use
of social media by public entities; ii) embedding the use of social media in the
government’s e-government strategy for 2011-14; and iii) specific assistance on how to
use social media in the government’s digital guide (guía digital) (OECD, 2012b).
Table 4.11. Twitter accounts of government and supreme audit institutions
Country
Centre of government
Australia
ANAO_Australia
..
Brazil
TCUoficial
imprensaPR; blogplanalto
Chile
Contraloriacl
gobiernodechile
Costa Rica
None
..
Denmark
None
..
European Union
EUAuditorsECA
EU_Commission (European Commission)
Israel
None
Israelgov (government); Israelipm (head of government)
Italy
None
..
Korea
None
BluehouseKorea (head of state); PrimeMinisterKR (head of government)
Mexico
ASF_Mexico
PresidenciaMX (head of state); GobFed (government)
Peru
ContraloriaPeru
Prensapcm (cabinet)
Portugal
None
Govpt (government); Presidencia (head of state)
South Africa
None
PresidencyZA
Spain
None
desdelamoncloa
Notes: .. = Missing data. Australia: The Australian government does not have its own Twitter account, but has
an extensive number of accounts specific to programmes and entities, such as AusFamilies and eHealthAus.
Source: Adapted from OECD (2012), “OECD e-Government Project: Social media use by governments: Focus
on Twitter”, GOV/PGC/EGOV(2012)6, OECD, Paris.
Figure 4.4. Twitter activity of supreme audit institutions in Chile and selected countries
Tweets
18 000
16 000
14 000
12 000
10 000
8 000
6 000
4 000
2 000
0
15 807
906
Peru
Followers
14 494
1 475
Brazil
2 503 1 825
1 732 1 694
Chile
Mexico
579
1 260
145 483
European Court of Auditors Australia
Notes: Data accessed 17 July 2013.
Source: Based on a review of the SAI s’ Twitter pages.
To invite and incite interaction, the CGR could choose to “package” content in a way
that makes it easier for users of social media to react and interact. The CGR currently
uses Twitter to communicate the static links to access audit reports and press releases, as
well as information on the agenda of the Comptroller General. Where the CGR uses
hashtags (#) in its messaging, it does so to categorise the types of CGR communication.
The CGR uses #informecontraloria and #agendacontralor to distinguish whether tweets
are related to audit reports or the activities related to the Comptroller General,
respectively. These constitute a relatively weak indicator of interactivity as they only
facilitate the downloading of a report or provide one-way communication. While this
does generate interaction, mostly with journalists and policy communities, reaching
citizens more generally may require different approaches.
Packaging content may be achieved through a broader use of hashtags, mentions,
replies and retweets. For example, hashtags could be used to link its tweets to broader
conversation among Twitter users and communities about public governance issues.
Mentions could also be used to address CGR tweets to specific Twitter channels and their
followers. For example, the CGR’s tweets about audit and special investigation reports
could mention the specific public entities and municipal governments to which they
relate. A CGR tweet regarding the Comptroller General’s participation in a government
seminar could mention the entity which is arranging the event. This does not currently
happen. For example, an April 2012 CGR tweet about a special investigation in Arica did
not link to the Twitter profile of the municipality (@MuniArica).10 An April 2012 CGR
tweet regarding the Comptroller General’s speech at a seminar on transparency did not
link to the Twitter profile of the organising entities (e.g. @Segpres and
@DefensorCHILE).11
Moreover, the CGR could consider adapting content to communicate messages rather
than activities and to provide information on services to citizens. The CGR focuses its
Twitter activity to “repackage” press releases and the agenda of the Comptroller General.
While this does generate interaction, mostly with journalists and policy communities, to
reach citizens more generally, a solution could lie in issuing more statements about
topics. Moreover, the CGR could also use Twitter to raise awareness of digital channels
of interaction, such as the Comptroller General and Citizens (Contraloría y Cuidadano)
portal. This portal, discussed in the following section, enables citizens to register
complaints and to make proposals for audits. Moreover, content on Twitter could be more
aligned with that of the CGR’s Facebook and YouTube channels.
Undertake specific measures to overcome barriers and constraints attributed
to the country’s digital divide
Internet access and broadband connection in Chile is approximately 25% of
households, lower than the OECD average of 67% (Figure 4.5). Broadband is available in
at least 60% of households in four-fifths of OECD countries (OECD, 2012a). Since 2005,
the number of mobile phone subscriptions worldwide (voice and/or data) has doubled,
with particularly strong growth in non-OECD countries where the number has tripled.
The shift to accessing the Internet via a mobile device is a key trend since 2010, and the
evolution of Smartphones has changed the surfing behaviour of individuals. Across the
OECD, 39% of citizens used the Internet to obtain information from the public
authorities’ websites in 2011 (Figure 4.6). However, these statistics are often skewed by
specific areas of the administration, such as the tax administration, and are not always
representative of the public administration as a whole. The gap between Internet
penetration rates among high-income and low-income households is narrowing in some
OECD countries, but remains wide (Figure 4.7).
Consulting and facilitating participation with stakeholders other than auditees and
internal audit

ensuring that responding to the requests of the Congress and citizens does not
crowd out resources for other audit and non-audit assignments

consulting stakeholders throughout the audit cycle, including the design of audit
criteria and the evaluation of audit reports

engaging key executive authorities in discussions about the main challenges
facing good public governance.
Figure 4.5. Internet access and broadband connections in OECD households
2011 or latest available year
Internet
Broadband
% of all households
100
80
60
40
20
0
Korea
Denmark
Australia (a)
OECD34
Israel (a)
Spain
Italy
Portugal
Chile (b)
Mexico (a)
Notes: Internet access at home is via any device (desktop computer, PC, TV, mobile phone, etc.). Broadband
connection stands for the use of technologies such as DSL, fixed wire (cable, fibre, Ethernet, etc.); fixed
wireless refers to satellite, public Wi-Fi, WiMax; and mobile connection to 3G/UMTS, etc. Household refers to
domiciles with at least one person aged 16-74. Australia: Only includes private dwelling households.
Households in remote and sparsely settled parts of Australia are excluded from the survey. Israel: The
Household Expenditure Survey does not distinguish between broadband and other bandwidth Internet channels.
Korea: Internet access through mobile phone, TV and game consoles are also included. Mexico: Households
with Internet access via cable, ADSL or fixed wireless. The statistical data for Israel are supplied by and under
the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to
the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of
international law.
Source: Adapted from OECD (2012), OECD Internet Economy Outlook 2012, OECD Publishing, Paris,
http://dx.doi.org/10.1787/9789264086463-en.
Figure 4.6. Individuals using the Internet to obtain information from the public authorities’
websites in Chile and selected countries
% of all individuals
100
80
60
40
20
0
Denmark
OECD34
Spain
Chile (b)
Portugal
Korea (a)
Italy
Mexico (a)
Note: Data in this figure refer to Internet use in the last 12 months for all countries. Individuals aged
16-74 years.
http://dx.doi.org/10.1787/9789264086463-en.
Figure 4.7. Household Internet access by income in Chile and selected countries
High income (top quartile)
100
Low income (bottom quartile)
80
60
40
20
0
Korea (a)
Denmark
Australia (c)
Spain
Portugal
Israel (b)
Italy
Chile (b)
Notes: Korea: The survey is not organised by quartile. Top income quartile corresponds to income of more than
KRW 300 million, and bottom income quartile corresponds to income of less than KRW 100 million. The
statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use
http://dx.doi.org/10.1787/9789264086463-en.
Ensure responding to the requests of the Congress and citizens does not crowd
out resourcing for other audit and non-audit assignments
In January 2012, the CGR issued internal guidelines to centralise the processing of
requests for special investigations from the Congress and its members received by the
regional offices. The CGR Organic Law states that the institution will give preference to
complaints made or investigations requested by the Chamber of Deputies (Law 10 336,
Art. 1). These requests may come from either of the chambers of Congress or an
individual member of Congress. The CGR does not formally differentiate between how it
processes requests for investigations from Congress or its individual members with those
from an executive authority or the general public. Under the new guidelines, the Cabinet
of the Comptroller General reviews and delegates responsibility for examining for all
special investigations from the Congress and individual members. Following the approval
of the analysis, the Comptroller General signs the response to the Congress, and the
Comptroller General’s chief of staff transmits it with the respective regional comptroller
to respond to the Congress.
In September 2012 the CGR launched a portal – CGR and Citizens – to engage
citizens in the work of the CGR. The portal enables citizens to register complaints and
make audit suggestions through online forms specially designed for this purpose
(Box 4.4). Complaints are statements by which citizens can make known to the CGR
information related to one or more specific events involving possible irregularities
committed by a public official or public entity. Suggestions for audits enable citizens to
provide information on issues or public entities that they would like to see audited and the
reasons why. The CGR and Citizens Portal puts online a service which the CGR
previously provided to citizens in person. Previously, citizens could submit a complaint
or an audit proposal to the CGR’s general office (oficina general de partes) in its
headquarters in Santiago or each of the institution’s 14 regional offices. In addition, the
portal allows citizens to: i) check the status of complaints and audit proposals, using a
number provided to them; ii) review information and statistics regarding the complaints
and audit suggestions; and iii) access frequently asked questions regarding the CGR’s
activities, the difference between complaints and audit suggestions and what entities are
subject to the CGR’s control.
Figure 4.8. Office of the Comptroller General of Chile’s processing of special investigations
requested by members of the Congress
Special Investigations Procedures Required by Parliament
Office of the Comptroller General (Cabinet)
Regional Offices
Parliamentary
Request
Cabinet assess the request and
assignment
Request
Within 5 business
days
Classification of
Request
Sends request to the
Cabinet by email
Cabinet
Decides
?
Designated executor
at central or regional
level
Special investigation
begins
Special Investigation
Report sent, along with
letter of response to
Parliament
Sent via
SISTRADOC
Reviews Special
Investigation report
Within 8 business days
To Regional Offices
REPORT
To Central Office
Warning when it is a
matter of national
attention
Comptroller General
sends response to
Parliament
Chief of Cabinet
distributes copies of
the report to those
involved
Copies of report are
distributed to those
involved
The regional office is
informed that Cabinet has
completed the request
Sends to Cabinet for
distribution
Sends to Cabinet for
distribution
Source: Adapted from CGR (2012), “Informe final: Procedimiento de tramitación de presentaciones de
parlamentarios [Final report: Procedure for responding to parliamentary requests]”, Cabinete del Contralor
General Unidad Técnica Control Externo, CGR, Santiago, January.
The CGR incorporates resourcing for congressional requests for special investigations
and citizen’s complaints and make audit suggestions in its annual audit programming.
This resourcing is allocated through an allocation for Unpredictable Demand (Demanda
Imprevisible, DIMP) for each individual external control unit. For FY 2013, the
maximum allocation for Programmes of Unforeseen Demand was set at 20-45% of total
staff time, depending on the UCE.
Figure 4.9. Office of the Comptroller General of the Republic of Chile’s special investigations
Congress
Other (executive authorities, citizens, internal CGR requests)
100%
80%
60%
2 063
3 799
502
792
2 802
528
40%
20%
233
266
0%
2007
2008
144
2009
156
101
2010
2011
164
2012
Source: Adapted from CGR (2008, 2009b, 2010b, 2011c, 2012c, 2013b), various Cuenta Pública Contraloria
CGR, Santiago.
Figure 4.10. Complaints and audit suggestions received through the Office of the Comptroller
General of the Republic of Chile and Citizens’ Portal (Contraloría y Cuidadano)
Complaints
Suggestions of audits
300
250
200
150
100
50
0
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Consult stakeholders throughout the audit cycle, including the design of audit
criteria and the evaluation of audit reports
INTOSAI (2010a) “Quality Control for SAIs” states that an SAI should establish a
monitoring process to provide management with reasonable assurance that policies and
practices relating to quality control are relevant and adequate and are operating
effectively. Where appropriate, the CGR may consider other means of monitoring the
quality of its work, which may include, but not be limited to: independent academic
review, stakeholder surveys, follow-up reviews of recommendations or feedback from
audited organisations (e.g. client surveys). To effectively do so, the CGR should have
procedures for dealing with complaints or allegations about the quality of the work it
performs. Generally, SAIs should consider whether there are any legislative or other
requirements to make monitoring reports public or to respond to public complaints or
allegations related to the work carried out by the SAI.
Box 4.4. Information that must be provided by citizens when submitting a complaint or an audit
suggestion to the Office of the Comptroller General of the Republic of Chile
Complaints

Identification: first name*, father’s family name*, mother’s family name*, email*, occupation,
telephone number, mobile number, address*, region* and, if acting on behalf of an organisation, the
name and national identification number.

Public service or public entity: region*, public service*, organisational unit.

Period: Indication of the approximate period considered relevant to the complaint or other information
that is considered relevant to the reported period*.

Associated amount: In the event that the complaint involved public resources.

Details of the complaint – selecting one of the following options from a check box menu: quality of
service (calidad del servicio entregado), irregularities in the execution of contracts (irregularidades en
ejecución de contratos), breach of function (incumplimiento de funciones), irregularities in financial
management (irregularidades de orden financier), failure to respond to complaints (falta de respuesta a
reclamos), unpaid receipt of goods/services (adquisición de bienes impagos), irregularities in
procurement (irregularidades en licitaciones), breach of integrity (faltas a la probidad), matters related
to personnel and remuneration (materias relativas a personal y remuneraciones), workplace harassment
(acoso laboral), delivery of unpaid services (prestación de servicios impagos), other, and details
regarding the complaint*.

Supporting evidence: Information (e.g. pictures, documents, etc.) can be attached to support the
proposal.

Involved parties: If information about the people involved in the events described, please identify them
(i.e. first name, father’s family name, mother’s family name, position or other title).
Suggestions for audit

Identification: first name, father’s family name, mother’s family name, email*, occupation, telephone
number, mobile number, address, region and, if acting on behalf of an organisation, the name and
national identification number.

Public service or public entity: region*, public service*, matter* – selecting one of the following options
from a drop down menu: quality of service (calidad del servicio entregado), breach of function
(incumplimiento de funciones), failure to respond to complaints (falta de respuesta a reclamos),
irregularities in procurement (irregularidades en licitaciones), irregularities in the execution of contracts
(irregularidades en ejecución de contratos), unpaid receipt of goods/services (adquisición de bienes
impagos), delivery of unpaid services (prestación de servicios impagos), matters related to personnel
(materias relativas a personal), breach of integrity (faltas a la probidad), workplace harassment (acoso
laboral), other – and details regarding the complaint*.

Period of review: Indication of the approximate period considered relevant to the audit proposal or other
information that is considered relevant to the reported period*.

Reason: Why the entity should be incorporated into the next round of the CGR’s audit planning
activities*.

Supporting evidence: Information (e.g. pictures, documents, etc.) can be attached to support the
proposal.
Notes: * = Compulsory field.
Source:
adapted
from
Comptroller
General
and
Citizens
www.contraloria.cl/NewPortal2/portal2/ShowProperty/BEA%20Repository/Sitios/Ciudadano/Inicio.
Portal,
Box 4.5. Engaging citizens in the selection of audit topics:
The experience of the Korean Board of Audit and Inspection
The Korean Board of Audit and Inspection (BAI) has a long tradition of engaging citizens to shape audit
engagements. For example, in 1971 the BAI established the Civil Petitions and Complaints Reception Center to
receive complaints from taxpayers on the administration’s actions and information concerning the systematic
abuse of public funds. Beginning in the late 1990s a number of reforms were introduced that increased the
relationship between the BAI and citizens. The BAI introduced the Request for Audit on Public Interest in 1996
and the Citizen’s Request for Audit in 2002. In 2003, the BAI made all of its audit reports public available to
enhance transparency in its works. In 2004, the BAI established an ombudsman system for private companies to
report unreasonable difficulties in obtaining permissions/approvals from executive authorities. In 2005, the BAI
established a dedicated investigation team to examine complaints and audit requests from citizens (a second
dedicated investigation teams was also established to examine requests made by the National Assembly).
Policy Advisory Committee and advisory groups
The BAI has a Policy Advisory Committee, which serves as an advisory body for its chairman. The
committee comprises experts from all walks of life who are active in civic groups. They offer advice on the
BAI’s audit direction or on audit-related policies and communicate concerns and suggestions from external
parties. Their ideas are purely suggestions and have no legally binding force. In addition to the Policy Advisory
Committee, each of the BAI’s audit operations bureaus has its own advisory group. The groups’ members are
primarily professors or representatives of respected research institutions who share their professional knowledge
in relation to the BAI’s audits.
Advance Notice Audit System
To encourage citizen co-operation and participation, the BAI is implementing the Advance Notice Audit
System to notify citizens in advance of the scope and timing of planned audits that may have a bearing on their
interests. Using this system, the BAI can receive citizen complaints or information on poor practices of executive
government organisations and reflect this information in its audits. The BAI receives much of this information
through the Internet, which is widely used in Korea.
Request for Audit on Public Interest and Citizen’s Request for Audit systems
Request for Audit on Public Interest and Citizen’s Request for Audit systems enable information to be
received by the BAI on possible irregularities and corruption committed by public institutions. In order to
process a Request for Audit on Public Interest, the request must be signed by at least 300 persons over the age of
19. A Citizen’s Request Audit must also be signed by at least 300 persons over the age of 19. A citizen petition is
provided for in the National Audit Act (Arts. 43-48). This law establishes that those whose rights or interests
have been infringed upon because of illegal or unjust administrative actions taken by public entities subject to the
BAI’s audit may institute an appeal. The BAI will examine the case, communicating the results of its
examination to the individual who has made the claim and the head of the relevant agency. The head of the
relevant agency must take measures according to the BAI’s decision. The individual may also file an
administrative case against the relevant agency by reason of his dissatisfaction with the public entity’s measures.
Civil Petitions Reception and Citizen Auditor System
To address civil petitions that citizens lodge against executive government agencies, the BAI has established
a Civil Petitions Reception function. Civil petitions may be filed with the BAI by letter, fax, e-mail or telephone.
The BAI has a 24-hour, toll-free 188 hotline in place to receive all allegations of fraud, complaints and civil
petitions. About 7 500 reports were filed through the 188 hotline in 2004. Some local governments have
introduced a Citizen Auditor System to address grievances and complaints filed by citizens. A citizen auditor
who is not a public official is appointed and serves as an auditor for a certain period to review petitions. The
citizen auditor conducts audits, if necessary, and notifies petitioners of the audit results.
Source: Adapted from Moon (2006), “Partnership between SAI and CSO – Korean experience: The Korean experience”; BAI
(2009), “BAI”; BAI (2013), “The White Paper of Audit Request and Petition of BAI: BAI communicating with Citizen”
(Korean) www.bai.go.kr.
Engage key executive authorities in discussions about the main challenges
to strategic agility and trust in government
The CGR could engage executive authorities responsible for core management
functions such as budgeting, human resources and regulatory management in discussions
on governance challenges. In addition to the CAIGG, the Chilean public administration
has a number of central authorities responsible for different management systems. These
include the Ministry of the General Secretariat of the Presidency, the Ministry of
Finance’s Budget Directorate, the National Civil Service Directorate and the Ministry of
Interior’s Undersecretariat for Regional Development (Table 4.12).
Table 4.12. Executive authorities within the Chilean public administration responsible
for different management systems
Executive authority
Description
Ministry of the General
Secretariat of the Presidency
(SEGPRES)
Has the legal mandate to enforce the government programme and the main commitments of
the President. The SEGPRES is comprised of the Secretariat of State in charge of making
and co-ordinating functions directly advising the President, the Minister of the Interior and to
each of the ministers, without altering its powers by providing, inter alia, of the information and
political analysis technical requirements for the adoption of appropriate decisions. It shall:
– provide advice to the President of the Republic, the Minister of the Interior and to each of the
ministers, in political, legal and administrative matters, as well as advise the President and
the Minister of Home Affairs and other ministers, where required, in the government’s
relations with the Congress, as well as with political parties and social organisations and
institutions national life, in co-ordination with the General Secretariat of Government
– encourage the achievement of effective co-ordination of the overall governance programme
– act “By order of the President of the Republic”, jointly with other ministries, and through
them, with the departments and agencies of the state administration
– conduct short- and medium-term studies and analysis relevant to policy decisions and for
consideration by the President of the Republic and the Ministry of Interior
– report to the Minister of the Interior regarding the need for innovations in the organisation
and procedures of the state administration
Ministry of Finance Budget
Directorate (Dirección de
Presupuestos, DIPRES)
The Budget Directorate is the technical body responsible for proposing the allocation of
financial resources of the state, guiding and regulating the process of budget formulation, and
regulating and supervising the execution of public spending. The directorate’s mission is to
ensure the efficient allocation and use of public resources in the context of fiscal policy, by
implementing systems and tools of financial management, programming and management
control.
The Budget Directorate’s strategic objectives include:
– estimating public sector revenues and projected performance and optimise the capability of
mobilising resources for the achievement of the objectives of government action
– improving co-ordination within DIPRES in processing bills
– strengthening the budget as a tool for the efficient allocation of public resources, depending
on the priorities of government action, optimising the procedures for formulation, discussion,
implementation and evaluation
– enhancing integration of the control instruments of governance to the budget, in order to
promote the efficient use of public resources
– reporting to the political authorities, public institutions, National Congress and general public
on the allocation and implementation of public sector financial resources and future
prospects.
The Budget Directorate is an agency of the Ministry of Finance and is headed by the Budget
Director. Although formally reporting to the Minister of Finance, the Budget Director is
appointed directly by the President who may dismiss him/her at any time. The position of
Budget Director is generally viewed as the equivalent of a senior ministerial position in the
Chilean government.
Table 4.12. Executive authorities within the Chilean public administration responsible
for different management systems (cont.)
Executive authority
Description
National Civil Service
The National Civil Service Directorate’s mission is to “strengthen the capacity of public entities
Directorate (DNSC), under the in the development and implementation of human resource management policies and
Ministry of Finance
practices in order to increase productivity and quality of goods and services required by
citizens”. The National Civil Service Directorate’s responsibilities include:
– participating in the development of policies to improve state personnel management and
collaborate with public entities to support the implementation of these policies in order to
modernise the state
– promoting reforms and measures to enhance state personnel management; ensuring an
effective and efficient functioning of the senior civil service system
– providing specialised advice on state personnel management issues to public entities
– establishing and administering a database of public officials, including profiles of persons
occupying public management positions and their performance contracts
– designing and implementing training programmes to strengthen the modernisation of public
entities
– supporting the professionalisation of human resource units within public entities; and
promoting reforms and measures to improve state personnel management.
Undersecretariat for Regional
Development (SUBDERE)
The Undersecretariat for Regional Development’s mission is to “contribute to the development
of regions and communities, strengthening their capacity for good governance in line with the
decentralisation process.”
As the unit in charge of promoting decentralisation efforts, it deals with vertical co-ordination.
In this regard, it has a great degree of autonomy to deal directly with different ministries and
sub-national governments on issues under its responsibility. In practice, however, it is
currently difficult for the SUBDERE to act as the national co-ordination unit: the different
initiatives proposed by national ministries and public agencies normally follow a top-down
approach, sometimes without enough consultation and co-ordination with the SUBDERE.
The CGR has limited engagement with central authorities to discuss
whole-of-government challenges and ways to improve public governance. There appear
to be several reasons for this: i) communication of the findings of its various audit
assignments in a way that elevates these findings to the attention of those charged with
governance and the general public; and ii) the CGR’s responsibilities for government
systems.
A key challenge facing the CGR is the communication of the findings of its various
audit assignments in a way that elevates these findings to the attention of those charged
with governance and the general public. The CGR’s stakeholders within the executive,
legislature, as well as representatives of civil society and the media, find it difficult to
articulate the main issues that the CGR has raised regarding specific public entities,
government sectors and/or management functions. To the extent that the CGR identifies
common challenges and risks affecting good public governance, it serves more as input
into the institution’s annual audit planning rather than its external communications. The
CGR currently does not provide a combined analysis of common findings, trends and root
causes at a whole-of-government, sectoral or entity level.
The CGR has limited understanding of government management maturity
frameworks and does not seek to evaluate compliance with them. The CGR’s audits focus
on evaluating compliance with laws and regulations, within which it does not see
government maturity frameworks. Moreover, compliance with these programmes is
audited by internal audit. The Management Improvement Programme (Programa de
Mejoramiento de Gestión) is another programme that aims to strengthen various elements
of public management, including human resource management and public procurement.
The programme defines the level of development, or maturity, for different management
systems and establishes technical requirements for each level, defined in terms of content
and requirements. In the past, the PMG even applied to Internal Audit. Table 4.13
presents a maturity model that was used for this purpose, to illustrate both the rationale of
this approach and how it intended to support a function that is important for the whole
control system in Chile. The CGR could discuss how to further develop maturity models.
Table 4.13. Management Improvement Programme – maturity levels
for internal audit without Chile’s public entities 2001-2012
Level 1
Level 2
Level 3
Level 4
The entity formally creates an
Internal Audit Unit, through
the formal appointment of the
head of the unit, reporting
directly to the head of the
service with objectives
aligned with the strategic
directions of the entity.
The entity, through its Internal
Audit Unit, undertakes a
diagnosis using a Strategic
Risk Matrix (Matriz de
Riesgos Estratégica)
identifying strategic
processes and support,
sub-processes and stages, in
order to prioritise audit
activities and support the
formulation of an Annual
Audit Plan (Plan Anual de
Auditoría).
The institution, through its
implements the annual audit
plan for the period, including:
i) applying audit procedures
according to the methodology
established by the Council of
Government General Internal
Auditors, indicating the
guidelines to be followed to
plan, conduct and report on
the implementation of the
annual audit plans; and
ii) perform the activities
defined in the Annual Audit
Plan, including the audit
categories: institutional,
ministerial and governmental.
The institution reports to the
Council of Government
General Internal Auditors on
corrective and preventive
actions based on the
recommendations made by
the Internal Audit Unit, and a
follow-up report on the
commitments made by the
service.
The entity develops and/or
updates its internal audit
charter, approved by the
head of the service.
Internal Audit Unit, prepares
an Annual Audit Plan for the
following year based on the
diagnosis made and
considering three audit
categories: “institutional”
audits considering the levels
and threat of the risks and
available human resources;
“ministerial” and
“governmental”.
Internal Audit Unit, generates
monthly reports on the
implementation of the Annual
Plan and audits conducted in
their respective programmes,
identifying the audit’s general
and specific objectives,
scope, timing and results.
Internal Audit Unit, develops
and implements a plan for
monitoring of the
recommendations contained
in internal audit reports,
including the subject matter to
be monitored, commitments,
deadlines and responsibilities
linked to the audit
conclusions and the degree
of compliance with this and
other aspects.
Internal Audit Unit, generates
an annual report of the audits
carried out in implementing
the Annual Plan, the outcome
of the work and
recommendations identified.
The institution must meet a
minimum target level of
monitoring to ensure the
reduction of the level of risk in
the management of public
resources.
The entity reports on the
activities of the Internal Audit
Unit, analysing the strengths
and weaknesses of the unit,
identifying specific skills
requirements for the
operation of the unit and
participating in the Regional
and Ministerial Audit
Committee (Comité de
Auditorías Ministeriales y
Regionales)
The institution should
maintain the level of
maturity of the system at
each level.
Source: Based on information received from CAIGG. Note: The PMG’s internal audit module was eliminated
in 2012-13 as most agencies reached the minimum standard, and were absorbed in a “Performance Monitoring
System” introduced thereafter.
Moreover, the CGR also does not systematically engage central authorities in the
development of its own responsibilities. For example, the CGR did substantively involve
the Ministry of Finance’s National Civil Service Directorate (Dirección Nacional del
Servicio Civil) in the development of SIAPER. This directorate was created in 2003 to
support the modernisation of the public sector through co-ordinating, supervising and
proposing measures for strategic workforce management. Strengthened human resource
management internal controls and the availability of data on public officials provided by
SIAPER is closely linked with this directorate’s mandate. The National Civil Service
Directorate’s responsibilities include: i) formulating policies to improve human resource
management in government such as recruitment, career development and performance
evaluation; ii) ensuring the effective and efficient functioning of the senior civil service;
iii) providing specialised advice on human resource management issues to public entities;
iv) designing and implementing training programmes to strengthen the modernisation of
public entities; v) supporting the professionalisation of human resource units within
individual public entities; and vi) promoting reforms and measures to improve human
resource management within the public sector. However, the CGR has invited the
National Civil Service Directorate as a user in the early pilots of SIAPER.
Conclusions
The CGR has a broad range of stakeholders with which it engages throughout the
audit cycle. The CGR has taken a number of initiatives over the past six years to improve
the way in which it engages with its stakeholders. It has revised its audit manuals and
guidelines to standardise interaction with auditees. It has begun to survey auditees to
solicit feedback on the quality and timeliness of its oversight assignments. However,
many auditees view the CGR’s audit engagements as focused on inspection and
investigation of compliance with government regulation rather than a source of
independent and objective information to support good public governance. The CGR has
sought to enhance the working practices of internal audit units, which have been
supported by the creation of an online Portal for Internal Audit Units (Portal para las
Unidades de Auditoría o Control Interno). However, the CGR’s guidance and tools for
the internal audit units overlap and sometimes differs from that provided by the Council
of Government’s General Internal Auditors. The CGR’s engagement with internal audit
units more generally is constrained by concerns over the independence of internal audit
units.
Beyond auditees and internal audit, the CGR has sought to engage with other
stakeholders, including the judiciary, media and citizens. The CGR has sought to
strengthen institutional co-operation with the criminal justice system to support the
investigation of criminal and corrupt practices identified through audit work.
Memorandums of agreement have been signed between the CGR and the Supreme Court,
the Constitutional Tribunal, the Public Prosecutor and the State Defence Council in
relation to corruption prevention and investigation of criminal matters. The CGR
developed a communication plan to strengthen corporate positioning among external
audiences, with a strong focus on engaging the media and citizens. The CGR’s
communication activities are heavily reliant on the Internet and social media. The CGR
also has established new procedures for stakeholders to make complaints and audit
suggestions online. However, the CGR could place specific attention on how to engage
the Congress, its commissions and research staff, central executive authorities responsible
for the formulation and oversight of public management policies and systems.
Many opportunities exist for the CGR to broaden and deepen its engagement with its
stakeholders without undermining its real or perceived level of independence and
autonomy. A number of specific challenges, however, face the CGR. In order to enhance
engagement with auditees and internal audit, the CGR needs to reposition itself not as
simply an inspection and investigation body but as a source of independent and objective
information that can support improvements in good public governance. More broadly, the
CGR could focus greater attention to the legislative branch at the both the national
(i.e. Congress) and municipal level (i.e. councils) and not simply citizens and the media.
Table 4.14 provides a summary of the recommendations made in this chapter.
Table 4.14. Preliminary recommendations matrix: Engaging external stakeholders
throughout the audit cycle
Enhance engagement with auditees in
order to develop a constructive working
relationship, including by:
– broadening the scope of information
communicated with auditees at the
beginning of individual engagements
– notifying auditees in advance of the
initiation of individual audit
engagements
– engaging auditees in formulating
materials communicating the CGR’s
audit standards, processes and
methods
– engaging auditees – as well as other
stakeholders – in reviewing audit
reporting guidance
– formulating auditee strategies to
broaden engagement beyond
individual audit engagements.
The CGR does not provide auditees with
information on the objective of individual
audit engagements and the criteria that
audited entities will be assessed as part
of the formal notice initiating an audit
engagement.
The CGR does not currently make
information publically available regarding
its audit standards, processes and
methods, many of which have been
updated since 2012 as part of its
modernisation reforms.
The CGR has not sought to understand
the usability of audit reports for its
stakeholders as input to revise its audit
reporting guidelines.
The CGR has not formulated auditee
strategies to engage audited entities in a
discussion on weaknesses in internal
control and other issues arising from
audit work.
Increase the awareness and
understanding of the objective of
individual audit engagements.
Mitigate perceptions that the CGR is
only seeking to identify non-compliance
with the legal framework and errors,
without effective pre-audit planning and
intelligence gathering.
Increase awareness and understanding
of – and confidence in – the process and
manner in which the CGR’s audit
engagements are conducted.
Increase the clarity and usability of audit
reports for auditees, based on direct
input from auditees rather than
perceived notions of CGR officials.
Facilitate opportunities for dialogue with
auditees on weaknesses in internal
control, other issues identified in
individual audit engagements and risks
affecting good public governance more
generally.
Enhance co-ordination and co-operation
with internal audit in order to support
effective and efficient audit work,
including by:
– communicating information on the
annual audit programme with audited
entities’ internal audit units, and
periodic information throughout the
calendar year
– holding regular meetings with audited
entities’ internal audit units to share
information and discuss issues of
mutual concerns
– establishing procedures for sharing
information more systematically,
including protocols to transmit relevant
audit reports
– developing common training
programmes and training materials for
audited entities’ internal audit units,
together with the Council of
Government’s General Internal
Auditors.
The CGR does not share information on
its annual audit programme with audited
entities’ internal audit units, or vice
versa, as this is considered as sharing
privileged information.
The CGR does not meet individually with
audited entities’ internal audit units to
develop a shared understanding of the
public entity and the programmes and
funds that they audit.
The CGR and audited entities’ internal
audit units do share audit reports with
one another outside of individual audit
engagements.
The risk of conflicting guidance for
audited entities’ internal audit units from
the CGR and Council of Government’s
General Internal Auditors needs to be
mitigated.
Support the exchange of ideas and
knowledge between public sector
auditors, strengthen their mutual ability
to promote good governance and
accountability, and enhance
management’s understanding of the
importance of internal control.
Promote a more informed dialogue on
the risks facing the public entities
leading to more focused audit
engagements and more useful
recommendations, and better
understanding of the results arising from
each other’s work which may have an
impact on their respective audit
programmes.
Promote more efficient audit
engagements based on more
co-ordinated audit activity and more
refined audit objectives and scope.
Mutual support on audit findings and
recommendations may enhance the
effectiveness of audit engagements.
Table 4.13. Preliminary recommendations matrix: Engaging external stakeholders
throughout the audit cycle (cont.)
Enhance communication with
stakeholders other than auditees and
internal audit, including by:
– linking the CGR’s communication
strategy to annual audit programming,
balancing attention to different public
entities
– broadening the communication
strategy to define audiences and how
they access information on audit
activities and findings
– focusing specific attention to the
Congress, its commissions as well as
the country’s municipal councils
– exploring measures to overcome
barriers and constraints facing core
stakeholders’ understanding and
access to information
– undertaking specific measures to
overcome barriers and constraints
attributed to the country’s digital divide.
The CGR does not have a
communication strategy that is linked to
the institution’s annual audit programme.
The CGR has not developed a clear and
detailed understanding of the
institution’s primary, secondary and
other audiences, with an understanding
of how these different audiences access
and use audit reports.
The CGR focuses its communication
activities on national media outlets and
citizens with limited targeting of
information to the National Congress
and municipal councils.
The CGR places much emphasis on
communicating through the institution’s
website and social media accounts and
has not explicitly taken action to
overcome barriers and constraints facing
its core stakeholders’ understanding and
access to information.
Strengthen the communication strategy.
Support awareness, understanding and
use of audit work in accountability and
decision making processes.
Further interaction online where content
is accessible and packaged in a way
that makes it easier for users to react
and interact.
Consult and facilitate participation with
stakeholders other than auditees and
internal audit, including by:
– consulting stakeholders throughout the
audit cycle, including the design of
audit criteria and the evaluation of
audit reports
– engaging key executive authorities in
discussions about the main challenges
facing good public governance.
The CGR has limited participation of
stakeholders in its audit work in the
registration of complaints and
suggestion of audit topics.
The CGR does not engage with other
stakeholders to systematically
understand the challenges and risks
affecting audited entities, programmes
and funds.
The CGR has limited opportunities to
engage key executive authorities in
discussions about the main challenges
facing good public governance and
management maturity models.
Provide further means of evaluating the
quality of work.
Increase effectiveness of working in
partnership with the accountability
functions of the executive and legislature
in making use of audit findings and
enacting change.
Notes
1.
This definition varies from that contained in INTOSAI (2013) “Fundamental
Principles for Public Sector Auditing”. These principles recognise that public sector
audit engagements involve at least three separate parties: the auditor, a responsible
party and intended users. The auditor refers to the head of the SAI (for example, an
Auditor-General or President) who has overall responsibility for public sector audits
within the SAI’s mandate, and by the persons delegated to carry out audits on behalf
of the head of SAI. The responsible party in the public sector is the institution
responsible for the management of public funds and the exercise of authority in
accordance with the stated premises and decisions of the parliament. The responsible
party differs depending on the organisational structure of the public sector and may,
in certain circumstances, be the legislature or the judiciary rather than the executive.
Depending on the framework of delegations in place, the responsible party may, in
certain circumstances, be an individual or official. The intended users are the
individuals, organisations or classes thereof for whom the auditor prepares the audit
report. In the public sector, the users usually include the legislature as the
representative of the public as a whole.
2.
This includes both identification data and summarised information. Identification data
includes the report number, issuance date, type of report, responsible CGR
division/office and audited entity name. Summarised information includes the
objectives of the audit, the audit scope and sample, the audit conclusion and legal
opinions (dictámen).
3.
See Supreme Decree 12.
4.
See Supreme Decree 147.
5.
The CAIGG issues technical documents/guidelines relating to the work of internal
auditors within public entities. For a list of the technical documents and guidelines,
see the CAIGG website at: www.auditoriainternadegobierno.cl.
6.
“Acuerdo entre la Corte Suprema de Justicia, el Tribunal Constitucional, la
Contraloría General de la República, el Ministerio Público y el Consejo de Defensa
del Estado” [Agreement between the Supreme Court, the Constitutional Tribunal, the
Comptroller General of the Republic, the Public Prosecutor’s Office,(Ministerio
Publico), and the State Defense Council], Poder Judicial, Republic of Chile,
www.oas.org/juridico/PDFs/mesicic4_chl_conv.pdf.
7.
If not managed carefully, engagement with the media can equally affect the
independence and objectivity of SAIs. In engaging with the media, SAIs may be more
inclined to conduct compliance audits, to develop bias in selecting audit areas, targets
and crafting of conclusions; and infringing upon politics and policy making. The
results of compliance audits can be more difficult for auditees to contest and thereby
avoid public criticism and preserve the SAI’s authority, legitimacy and trust. In
addition, compliance audits can be cheaper, quicker and easier to conduct. Bias in
selecting audit areas, targets and crafting of conclusions can come about to ensure that
audit findings are picked up by the media. Hard-hitting reports on behalf of the
taxpayer and citizen are more likely to capture the attention of the media and compete
for news coverage (Bringselius, 2013).
8.
In addition to permanent commissions, the Chamber of Deputies may establish
united, special, mixed and investigatory. Special commissions may be established at
the request of one third of the deputies, and the affirmative vote of the majority of the
other members of the Chamber, in order to study certain legislation or gather
background information on a specific subject. Special commissions are established
for a period of six months, with a possible extension for another single six-month
period. Investigatory commissions may be established to gather information on
certain acts of the government with the agreement of at least two-fifths of the
deputies. United commissions may be established by two or more commissions to
examine a particular case. Mixed commissions are established when a law has been
amended by the “revising chamber” and sent back to the “chamber of origin”. Mixed
commissions are constituted at late stages of the law-making process. These
commissions are intended to suggest the ways and means of resolving the difficulties
encountered by the different opinion of both chambers in relation to the bill. The
deadline for the fulfillment of their tasks will be for up to six months and may be
extended once for such a term. The request for establishing a mixed commission must
include a work programme and specify the purpose of its work.
9.
The Twitter service (i.e. its web, mobile and developer applications) stands out as one
of the leading social networks globally, with half a billion individuals and
organisations of all sorts using the service as of July 2012. The website
www.twitter.com is within the top 10 most visited websites globally, although
geographical variations exist. Twitter “apps” (i.e. mobile phone applications) are
amidst the most downloaded applications for the Android and iOS platforms (OECD,
2012b).
10.
26 April 2013, tweet: #informecontraloria INFORME INVESTIGACIÓN ESPECIAL
20-12 MUNICIPALIDAD DE ARICA SOBRE… http://goo.gl/fb/ChS75.
11.
25 April 2013, tweet: #agendacontralor, Contralor asiste almuerzo por Cierre de
seminario sobre Transparencia, en Palacio La Moneda.
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Publishing,
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Engagement, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264019492-en.
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No. 3,
pp. 7-14,
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of
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nicalapr06.html.
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Santiago.
Washington, DC.
5. THE CHILEAN COMPTROLLER GENERAL OFFICE’S WORK IN PRIORITISING AND ENSURING THE QUALITY OF INDIVIDUAL AUDITS – 259
Chapter 5
The Chilean Comptroller General Office’s
work in prioritising and ensuring
the quality of individual audits
This chapter examines the practices used by the Office of the Comptroller General of the
(SAI) – to prioritise and ensure the quality of individual audit engagements. This chapter
analyses the CGR’s process to prioritise individual audit engagements, guiding principles
for individual audit engagements and quality control system for individual audit
engagements as they cross-cut various moments of the audit cycle. This discussion is
framed by INTOSAI’s “Framework for Communicating and Promoting the Value and
Benefits of SAIs” and various International Standards of Supreme Audit Institutions
(ISSAI) and INTOSAI Capacity Building Committee guidance, including the INTOSAI
“Quality Control for SAIs”, “Fundamental Principles of Public Sector Auditing” and
“Code of Ethics”. The analysis is supported by comparative data from 13 benchmark
SAIs collected through an OECD survey conducted specifically for this peer review.
260 – 5. THE CHILEAN COMPTROLLER GENERAL OFFICE’S WORK IN PRIORITISING AND ENSURING THE QUALITY OF INDIVIDUAL AUDITS
Introduction
This chapter examines the approach of the Office of the Comptroller General of the
(SAI) – to prioritise and ensure the quality of individual audit engagements. In analysing
the CGR’s approach to prioritising the selection of and ensuring quality in its audit work
the chapter examines:

guiding processes for (i) annual audit programming and (ii) individual audit
engagements, including planning, execution and closure


the institutional arrangements for ensuring quality in annual audit programming,
individual audit engagements and follow up.
The analysis is framed by INTOSAI “Framework for Communicating and Promoting
the Value and Benefits of SAIs”, various International Standards of Supreme Audit
Institutions (ISSAI) and INTOSAI Capacity Building Committee guidance, including the
INTOSAI “Quality Control for SAIs” (INTOSAI, 2010a), “Fundamental Principles of
Public Sector Auditing” (INTOSAI, 2013) and “Code of Ethics” (INTOSAI, 1998).
Prioritising ex post audit engagements; audit programming and the audit process
INTOSAI (2013) “Fundamental Principles of Public Sector Auditing” establishes
general principles for public sector auditing and principles related to the audit process,
covering both financial, compliance and performance audit – though it focuses more on
planning and conducting individual audit engagements rather than annual audit
programming. In relation to individual audit engagements, auditors should: obtain an
understanding of the nature of the entity/programme to be audited; consider materiality or
significance throughout the audit process; and develop an audit plan to ensure that the
audit is conducted in an effective and efficient manner.
The CGR’s annual audit programming allows for a combination of top-down and
bottom-up prioritisation of audit engagements prepared before the start of the fiscal year.
Prioritisation draws upon information about the materiality of public entities and
programmes and the risk associated with their macro-processes (i.e. processes that go
beyond a specific unit of a public entity, including procurement, human resource and
financial management). The CGR has adopted a broader sense of materiality
encompassing government priorities (“strategic perspective”), the importance of an entity
or programme for the national social development (“social perspective”) as well as the
characteristics of service delivery (“functional perspective”), and not just the financial
resources used by public entities and programmes. The combination of top-down and
bottom-up prioritisation enables, in principle, attention to be given to
whole-of-government and entity-specific issues.
by:
However, the CGR could improve the prioritisationof its ex post audit engagements

further investing in developing knowledge of audited entities and programmes

ensuring that the terms of the audit have been clearly established and
communicated in order to support efficient planning, execution and effective
quality control of the audit.
Annual audit programming allows for top-down prioritisation of audit priorities
prepared before the start of the fiscal year
The CGR’s annual audit programming is guided by a Planning Matrix (Matriz de
Planificación) that allows for a combination of top-down and bottom-up prioritisation of
audit priorities prepared before the start of the fiscal year. The Planning Matrix includes
information on the public entities and associated macro-processes (i.e. processes that go
beyond a specific unit of a public entity, including procurement, human resource and
financial management) to be audited – as well as the objectives of individual audits. The
Planning Matrix consolidates information from three CGR audit planning streams:
national priorities proposals (Propuesta de Prioridades Nacionales); integral random
audits proposals (Propuesta de Auditorías Integrales Aleatorias, AIA); and individual
external control unit audit planning matrices (Propuesta de Matriz de Planificación por
UCE). External control units refer to the units that conduct ex post audit assignments in
each and every CGR division (i.e. the Administrative Audit Division, the Infrastructure
and Regulation Division and the Municipalities Division) as well as all 14 regional
offices.1
The preparation of the Planning Matrix is guided by a hard resourcing constraint
using assumptions on the total number of auditor hours available and the average number
of auditor hours needed to complete an individual audit engagement (Box 5.1). Flexibility
is built into the annual audit programming through an allocation for Unpredictable
Demand (Demanda Imprevisible) within each individual external control unit’s Audit
Planning Matrix. This flexibility includes the ability to respond to audit suggestions and
requests from the National Congress and citizens, and to alter planned audits based on
new information (e.g. complaints) or justified requests by the relevant unit. Adjustments
need to be defined by May of each year. For FY 2013, the maximum allocation for
Programmes of Unforeseen Demand was set at 20-45% of total staff time, depending on
the external control unit.
National priorities proposals relate to whole-of-government issues and those related
to the management of specific government programmes/portfolios. National priorities
proposals are prepared drawing upon three planning sub-streams: the National
Programmes (Programas Nacionales, PNAC), the Transversal Programmes (Programas
Transversales, PTRA) and the International Loan Programmes (Préstamos
Internacionales, PTMOs). National Programme audits focus on the same subject within a
single central public entity that has activities throughout the entire country. These audits
apply the same procedures in a number of the central public entity’s units spread across
the country. A single lead external control unit prepares the audit plan and the preliminary
and final audit reports and a partner external control unit plays a supporting role and
conducts the audit procedures in their respective jurisdiction. Transversal Programmes
audits focus on the same subject across a range of centralised and decentralised entities
that share a common hierarchical or financial dependence with the same central public
entity. Each external control unit prepares its own preliminary and final audit report with
a single lead external control unit also preparing a consolidated report for the central
government entity. This report for the central government is also prepared in the case of
municipality audits. International Loan Programme audits focus on the implementation of
international loan-financed projects (e.g. projects funded by the World Bank and the
Inter-American Development Bank).
Box 5.1. Office of the Comptroller General of the Republic of Chile’s calculation
of average number of auditor hours for individual audit engagements for 2013-14
In 2012, the CGR conducted a study to update its estimate of the average number of audit
hours for an individual audit engagement. Previously the CGR, with assistance of the
Inter-American Development Bank, estimated that an average of 1 600 hours were necessary to
complete individual audit engagements in 2012. Prior to the 2012 audit programming, the CGR
had not measured the average number of audit hours for individual audit engagements.
The CGR used a number of sources of information to estimate the average number of audit
hours for an individual audit engagement for 2013. This included, the Inter-American
Development Bank’s report that established a standard of 1 600 audit hours for individual audit
engagements (based on data from 2009-10), as well as 2011 data collated by the management
process units in each external control unit and saved in the HEFESTOS system. Recent CGR
management reforms have enabled the standardisation of measurement and collation of
workload indicators across the CGR’s divisions and regional offices.
A number of metrics were used to estimate the average number of hours required for an
individual audit engagement, including:

Analysis of “potential hours” based on the total number of available working hours,
overtime, official holidays, personal leave (permisos facultativos/día administrativo)
and annual leave.

Possible auditor hours available for 2013, calculated on the assumptions of a 47-hour
working week (i.e. 8 hours for Monday-Thursday and 7 hours on Friday), and
comparison with data for 2009-12.

Actual auditor hours in 2011, based on data for each auditor collated by the
management process units in each external control unit.

Officials’ leave for 2009-11, including holidays, personal leave and medical leave.
Gender and age information are collected but not used for calculation purposes.
Information is available by UCE; however, a national standard was opted for.

Parameter for new staff, factoring in the time for new officials to adapt to work
calculated as 25% productivity for the first four months and 100% thereafter.
Based on these variables, and using an econometric model, average auditor hours for
individual engagements for 2013 and 2014 was estimated at 1 750.
Source: CGR (2012), “Final report. Study on the estimation of hours to be included in audit planning,
external control technical units”, CGR, Santiago.
Individual external control unit’s audit planning matrices are linked to the coverage
of each individual external control unit. These matrices include: Metropolitan
Programmes (Programas Metropolitanos, PMET); Regional Programmes (Programas
Regionales, PREG) and External Control Unit Priorities (Prioridades de Unidades de
Control Externo, PUCE). Metropolitan and Regional Programmes are executed by CGR
divisions or regional offices, selected based on their associated risk and relative
importance. The Metropolitan and Regional Programmes are specified after the definition
of the national priorities has taken place. These audit programmes are selected from a list
of options ranked by their relevance and risk.
The Planning Matrix is approved by the Comptroller General, with the three separate
streams of audit planning subject to evaluation by the CGR Planning Committee (Comité
de Planificación). Beginning in 2012, the Planning Committee is led by the Co-ordinator
of External Control Technical Units in co-ordination with the heads of the Administrative
Audit Division, the Regulation and Infrastructure Division and the Municipalities
Division. The work of the Planning Committee is supported by the planning staff (equipo
de planificación) comprised by the external control technical units (Unidad Técnica de
Control Externo) and relevant actors of the external control unit (Unidad de Control
Externo), who provide insight and advice on the services or topics to be audited.
Previously, the planning process was led by the Administrative Audit Division. The
change in responsibility from the Administrative Audit Division to the Co-ordinator of
External Control Technical Units was to ensure a more transversal approach.
The CGR’s annual audit planning process begins approximately six months before the
start of the fiscal year to be audited, and the process lasts for approximately six months.
Figure 5.1 provides an overview of the audit planning process for FY 2013. The process
includes a planning conference (jornadas de planificación) between the External Control
Technical Units Co-ordinator and the external control technical units within each external
control unit. This conference takes place between May and August. The objective of the
conference is to present the framework for annual audit planning. The conference focuses
on the main components and critical milestones for the annual planning process and a
discussion of the lessons learnt from the previous year’s annual audit planning and
execution. The planning conference gives rise to the CGR’s annual instructions for annual
audit planning. Following the issuance of the annual audit instructions, the CGR updates
information on the audit coverage of each UCE, which takes place between June and
August.
Audit coverage refers to the public entities that are under the responsibility of each
external control unit and is defined based on a criteria defined by the Planning
Committee. The CGR defines three levels of coverage. “CGR coverage” (cobertura de la
CGR) refer to public entities that receive appropriations in the Annual Budget Law and
those entities that the CGR provides oversight as defined by specific statutes, e.g. public
companies, municipalities and municipal corporations. “Schedulable entities” (entidad
planificable) refers to public entities that independently administer funds for human
resources, procurement and investment. “Executing units” (unidades ejecutoras) refer to
entities that are dependant on schedulable entities, in which the CGR has authority to
request records and run testing programmes as part of its audit activities.
The preparation of the Planning Matrix and the three separate streams of audit
planning are supported by the Matrix of Relative Importance (Matriz de Importancia
Relativa), the Planning Unit’s Risk Indicators (Indicador de Riesgo por Unidad
Planificable) and the Integrated System for Audit Control (Sistema Integrado para el
Control de Auditorías, SICA).2 The final ranking, which determines the regional and
metropolitan programmes, is obtained from:3

the Matrix of Relative Importance

the Planning Unit’s Risk Indicators.
All benchmark SAIs in this study have a prioirisation process that begins in advance
of the fiscal year as does CGR, with the exception of the SAI of Denmark, which
prioritises audit engagements during the fiscal year. For the vast majority of SAIs, these
prioritisation processes involve materiality or relative importance assessments and risk
assessments based on similar criteria to those outlined for audit planning and execution in
INTOSAI “Fundamental Principles of Public Sector Auditing”. For some SAIs, it also
involves additional considerations including internal and external consultations, relevant
media reports, complaints and parliamentary interrogations (Table 5.1).
Table 5.1. Processes for prioritising ex-post audit engagements in Chile and selected
countries
Entails
Process for
prioritising expost audit
engagements?
Materiality /
relative
importance
Risk
assessment
Other
Australia
●
●
●
●
Brazil
Chile
●
●
●
●
●
●
●
●
Costa Rica
●
●
●
o
..
Denmark
European
Court of
Auditors
Israel
●
●
●
●
during
2
6
Flexible
deadlines
..
●
●
●
●
pre-FY
8
●
●
o
●
Italy
●
●
●
●
Korea
Peru
Portugal
South Africa
Spain
Total yes
..
..
..
..
●
●
o
●
●
o
●
●
o
o
●
●
●
pre-FY
pre-FY /
during
..
pre-FY
pre-FY
x
pre-FY
Country
11
x
10
x
10
x
Occurs at
what stage?
pre-FY /
during
pre-FY
pre-FY
Process
duration? (in
months)
ongoing basis
6
1.5
..
1
4
x
4
7
Notes: FY= fiscal year; ● = Yes; o = No; x = Not applicable; .. = Missing. Australia: Materiality and Relative
Importance Assessments are based on the potential benefits to public administration, public interest, financial
materiality, risks to reputation and service delivery and extent of previous audit and review coverage. ANAO
also takes into account internal and external consultations. Priorities are assessed pre-fiscal year and during,
on an ongoing basis. Brazil: other refers to internal and external consultations. Chile: Other refers to the fact
that prioritization includes suggestions made through the online Citizen Portal (Portal Contraloría y
Ciudadano). Costa-Rica: There are no assigned deadlines to the priorisation process. Denmark; The concept
of materiality includes both financial and non-financial issues and may therefore concern both the size of an
amount and the importance that the Public Accounts Committee, the Danish parliament or the general public
may be expected to attach to a specific issue. Risk concerns issues that may obstruct the agency’s
achievement of its goals and lead to misstatement in the accounts, the annual report or the appropriation
accounting. Other refers to internal and external consultations. European Court of Auditors: Other refers to
internal consultations with policy-specific Chambers, and to external consultations with the European
Parliament. Israel: Materiality and Relative Importance Assssments are based on budgets, impact of issue
area on citizens, complaints, time since previous audit, results of previous audits, complexity, geogaphic
dispersion and resource constraints. Other refers to internal consultations that are held with the legal and
planning departments. Italy: Other refers to internal consultations with members of the Chambers, external
consultations with Paliament, and other relevant sources including media reports and parliamentary
interrogations. South Africa: The Public Audit Act and the Public Finance Management Act requires the
AGSA to carry out financial auditsand audits of compliance and performance information of all national and
provincial departments and public entities, thus no prioritisation is required. Spain: Other refers to internal
consultations, and audits that are requested or required by National or Regional Parliament, or Legislation.
Source: Adapted from unpublished OECD Survey of Benchmark Supreme Audit Institutions 2013.
Figure 5.1. The Office of the Comptroller General of the Republic of Chile’s 2013 annual audit planning process
May
FY-1
June-August
FY-1
Planning
workshop
Updating the
CGR’s audit
coverage
Audit
instructions
August-September
FY-1
October
FY-1
Formulation of
National
Priorities
(PTMO, PNAC,
PTRA)
Evaluation by
Planning
Committee
Approved by
Heads of
Divisions and
Comptroller
General
Proposal of
integral random
audits (AIA)
Evaluation by
Planning
Committee
Approved by
Comptroller
General
Matrix of
Relative
Importance
Ranking
Risk Index
October-December
FY-1
Final MPL
Formulation of
external control
unit priorities
(PMET, PREG,
PUCE)
Approved by
Comptroller
General
Evaluation by
Planning
Committee
Source: Adapted from CGR (2012), Modelo de Planificacion 2013 [2013 Planning Model], External Control Technical Unit, August, CGR, Santiago. Dates are approximate.
266 – 5. THE CHILEAN COMPTROLLER GENERAL OFFICE’S WORK IN PRIORITISING AND ENSURING QUALITY OF INDIVIDUAL AUDITS
A Matrix of Relative Importance is used to determine the materiality of public
entities under the institution’s oversight and prioritising audit work
INTOSAI (2013) “Fundamental Principles of Public Sector Auditing” states that
materiality or significance considerations are relevant to all audit engagements and affect
the determination of the nature, timing and extent of audit procedures as well as
evaluating the results of the audit. In general terms, a matter may be judged material if
knowledge of it would be likely to influence the decisions of intended users. The concept
of materiality recognises that some matters are important, either individually or in
aggregate, and others are not. Materiality is often considered in terms of value but the
inherent nature of characteristics of an item or a group of items may also render a matter
material, this includes regulatory requirements. In addition to materiality by value and by
nature, a matter may be material because of the context in which it occurs. Significance
can be seen as the relative importance of subject matter in relation to policies, strategic
plans, number of citizens or stakeholders concerned, economic magnitude, consequences
for the society, etc. Determining materiality or significance is a matter of professional
judgement and is based on the auditor’s interpretation of mandate and perception of the
information needs of the users (INTOSAI, 2013, § 43).
Each external control unit uses the Matrix of Relative Importance to rank the public
entities within their audit coverage. The Matrix of Relative Importance incorporates
four perspectives – strategic, social, financial and subject – and a total of ten indicators as
of today (subject to continuous revision) (Table 5.2). The strategic perspective captures
the government’s priorities. The social perspective captures the potential importance of
an entity for the community, as perceived and/or efforts aimed at improving the quality of
life of the population. The financial perspective captures the entity’s budget appropriation
and total assets. The subject perspective captures specific functions and expenditure;
currently municipal, defence and infrastructure spending and public companies. Whereas
strategic, social and financial perspectives apply to all entities, specific indicators only
apply to entities which have specific functions and/or expenditure.
Matrix of Relative Importance – beginning 2013 audit year
Perspective
Strategic
Social
Financial
Specific
Indicator
Weight
Entity’s workforce size (Dotación de la entidad)
12.5%
Entity’s budget outturn (Variación presupuestaria)
12.5%
Social programme expenditure (Presupuesto en programas sociales)
12.5%
Social significance (Importancia social)
12.5%
Budget appropriation (Presupuesto de ingresos)
12.5%
Total assets (Patrimonio total)
12.5%
Municipal
Defence (Defensa)
Infrastructure (Infraestructura)
25.0%
Companies (Empresas)
Source: CGR (2012), Modelo de Planificacion 2013 [2013 Planning Model], External Control Technical Unit,
August, CGR, Santiago.
5. THE CHILEAN COMPTROLLER GENERAL OFFICE’S WORK IN PRIORITISING AND ENSURING QUALITY OF INDIVIDUAL AUDITS – 267
The current Matrix of Relative Importance was introduced in FY 2013 to provide a
simpler and more standardised means of defining materiality using clearly defined
information sources. Previously the CGR had three matrices of relative importance, one
for each level of government, i.e. national, regional and municipal. The previous Relative
Importance Matrix for different levels of government had a large number of indicators,
though efforts were made to reduce the number of indicators over time (e.g. from 43
initially proposed indicators to 26 in 2007). However, it was considered that the previous
three matrices did not evaluate the risk exposure of different public entities as the
indicators were not associated with the entities’ business areas and the underlying data
that supported the matrices was taken from different sources (Table 5.3). Moreover, each
UCE provided the data for the different indicators and set the weight of each indicator for
the calculation of the Matrix of Relative Importance. The 26 indicators were associated to
4 different areas or perspectives – financial, operational, legal-normative and other – with
most indicators related to financial and operational areas. Only 2 of these previous
26 indicators – related to a public entity’s budget and assets – were integrated into the
current Matrix of Relative Importance.
Table 5.3. Office of the Comptroller General of the Republic of Chile’s indicators
for assessing entities’ relative importance
Indicators (2007-12)
Indicators (from 2013)
1.
Entity’s budget
1.
Entity’s workforce size
2.
3.
4.
5.
Social programmes total budget
Services’ budget vs total, in percent
Personnel spending vs total spending, in percent
Transfers to individuals
2.
3.
4.
5.
Entity’s budget outturn
Social programme expenditure
Social significance
Budget appropriation
6.
7.
8.
9.
Investment, in percent
Own incomes, in percent
Loans
Entity’s assets vs total, in percent
6.
7.
8.
9.
Total assets
Municipal
Defence
Infrastructure
10. Debt, in percent
11. Spending in goods and services, in percent
12. Income variation
13.
14.
15.
16.
10. Companies
Expenditure variation
Transfers to the public sector
Municipal Fund, in percent
Transfers to education and health, in percent
17. Internal audit functioning
18. Professional or expert advice
19. Number of transactions – Income
20.
21.
22.
23.
Number of social programmes
Number of remuneration systems
Workforce variation
Staff under honorarios, in percent
24. Number of observations
25. Number of legal changes
26. Date of last audit
Source: Information provided by CGR.
A risk indicator is used to determine the risk exposure of individual public
entities in order to guide the planning of individual audit engagements
The risk indicator identifies the public entities and macro-processes that are more
exposed to risk. Risk indicators complement the Matrix of Relative Importance as input
for the planning of audit engagement (Table 5.4). Until 2012, risk indicators varied across
the external control units, each with different data sources, making the process very
resource intensive and inconsistent across the CGR. The risk indicator is based on
two sub-indicators. The first sub-indicator focuses on individual public entities and
includes a set of variables that allow the identification of entities with higher probability
to suffer misuse of public funds or non-legal behaviour. The second sub-indicator is
focused in macro-processes, composed of four different variables and aimed to determine
which macro-processes are more exposed to risk. The data for these sub-indicators come
from the same data sources, many of which are CGR information systems. As indicated
earlier, the CGR continuously monitors, and if necessary updates, the indicators in order
to ensure their relevance.
audit planning risk indicators
Indicator
Sub-indicator
Timing of the last CGR audit of the individual public entity, i.e. the longer the duration since the last
audit, the higher the risk
Accounting information, i.e. budget trends (evolución presupuestaria), budget outturn (ejecución
presupuestaria) and, in the case of municipalities, the number of accounting reports delivered
(cantidad de informes entregados), using information from the CGR’s Accounting Analysis Division
Number of CGR audit objections related to the individual public entity during the previous two years
Number of CGR cases transmitted to the courts related to the individual public entity during the
previous two years
Number of administrative disciplinary procedures, including those relating to matters contained in
Resolution 799/1974
Level of media attention for each public entity using analysis from the CGR’s Communications and
Public Relations Unit
Percent of the entity’s administrative acts that have been challenged in the CGR’s ex ante control of
legality (toma de razón)
Macro-processes
Timing of the last CGR audit of the macro-process, i.e. the longer the duration since the last audit,
the higher the risk
Number of observations based on previous CGR audit and follow-up work
Accounting information – including personnel costs, costs of consumer goods and services, current
and capital transfers, and balance in fund management, debt – using information from the CGR’s
Accounting Analysis Division
Level of media attention for each macro-process using analysis from the CGR’s Communications
and Public Relations Unit
Source: CGR (2012), Modelo de Planificacion 2013 [2013 Planning Model], External Control Technical Unit,
August, CGR, Santiago.
Individual audit engagements are guided by a standardised audit process
that guides audit planning, audit execution and audit closure
The “CGR Audit Methodology” (Metodología de Auditoría de la Contraloría
General de la República) defines the activities and corresponding responsibilities for
individual audit engagements. Although referred to as a methodology, the “CGR Audit
Methodology” is perhaps better described as a standard process. ISSAI uses the term
methodology to describe the nature and extent of the audit procedures for gathering the
audit evidence. Rather, the “CGR Audit Methodology” defines the core activities and
responsibilities of different CGR actors throughout an audit engagement. Individual audit
engagements have three stages: audit planning, audit execution and audit closure.
Figure 5.2 provides an overview of the process and responsibilities. Table 5.5 provides a
summary of the responsibilities of different CGR actors throughout the audit cycle. Audit
planning refers to all of the activities prior to audit field work and for which the audit
executive is primarily responsible. The overall objective of the audit planning stage is to
update the audit team of the entity and subject to be audited and to define specific
objectives and deadlines for the delivery of the audit work. Audit execution refers to all
of the activities, including the confirmation, execution and review of testing procedures
and the preparation of the preliminary audit report. Audit closure refers to audit reporting.
In 2012, the CGR updated its standardised audit process. The main changes in the
audit process include:

reducing the number of steps from 48 to 22 to complete an individual audit
engagement

involving the audit executive in formulating and approving the engagement plan,
including verifying the audit subjects, sample, criteria and testing procedures

involving the external control technical units in the definition of the audit scope
and providing structured information on the auditee’s structures and
macro-processes when reviewing the objective and subject

using internal knowledge of the CGR’s units – e.g. from citizen’s complaints,
disciplinary procedures, media coverage – when performing audit engagements,
which from 2013 onwards will include suggestions made through the new portal
CGR-Citizens Portal (Contraloría-Ciudadano)

using data and procedure analysis software to calculate the necessary statistical
sampling as a minimum for selecting items to be audited

proposing an essential test for each of the materials and/or processes to be
examined in the audit

applying a fixed 95% confidence interval in statistical sampling, with the
assumption of ineffective internal controls and a high residual risk

conducting simultaneous testing of material and substantive controls and, if
deemed necessary, a specific assessment of internal control

defining minimum standards of work and introducing responsibilities of all roles
in the audit engagement

including the supervisor’s actions in the audit process

supporting the generation of a preliminary report in Word format and the audit
plan in pdf.
Figure 5.2. Stages of the Office of the Comptroller General of the Republic of Chile’s
audit engagements
Audit planning
External Control Technical Unit
1.1 Identification of
background information
to be requested from the
audited entity
1.2 Consolidated
information on audited
entity
Audit team and supervisors
Previous activities at the
beginning of MAC
(i.e. integration of work
assignments for the previous
activities phase)
1.6a Propose testing
programme
Audit executive
Senior management
1.3 Review audit objectives
1.4 Review relevant
administrative regulations
1.5 Define roles and
responsibilities of audit team
1.6b Establish testing
programme
1.7 Establish timetables for
audit work
1.8 Audit Plan validation meeting
2.1 Transmit CGR oficio to audited entity indicating information to be
provided and inception meeting with auditees
Audit execution
2.2 Incorporate information on
audtied entity’s internal
processes
2.3 Statistical sampling
2.4 Defining the testing
programme
2.5 Approval of testing
programme (sampling and
criteria)
2.5 Approval of testing
programme (general
procedures)
2.6 Executing the testing
programme
2.7a Preparation of matrix of
observations
2.7b Approval of matrix of
observations
2.8 Review final audit files and
draft preliminary report
2.9a Review and approval of preliminary report
Audit closure
2.9b Issuing preliminary report to
auditee for comment
3.1 Review comments and
responses from audited entity
and incorporate comments into
report, as apprpriate
3.2 Audit team closing meeting
and whether to propose the
initiation of administrative
discipnary procedures
3.3a Review final audit files
and draft final report
3.3b Review and approval
of finalreport
3.4 Issuing final report to auditee
3.5 Feedback and general
assessment of audit work
Source: CGR (2012), “Guía práctica módulo ejecución SICA v.3.0 [Practical guide SICA v3.0]”, CGR,
Santiago, unpublished guidelines.
Table 5.5. Responsibilities for external audit engagements within
the Office of the Comptroller General of the Republic
Role
Position
Responsibilities
Senior management
Head of division,
regional comptroller
– Lead the UCE according to the CGR’s mission and vision, including
planning, monitoring and evaluation of its activities
– Establish operational and management objectives for each business area
in line with the objectives and strategic directions given by the Comptroller
General
– Ensure the quality and timeliness of work through the revision and
approval of preliminary and final reports, in line with CGR’s guidelines and
instructions
Audit executive
Area manager
(committee), heads of
external control
– Manage, support and co-ordinate all actions and audit work for the
corresponding function, maximising efficiency and effectiveness,
according to the plans, guidelines and priorities stated by the senior
management of the CGR
– Provide clear and timely guidance, directives, orders and priorities to its
area supervisors
– Participate in a timely and appropriate way in all instances of the audit
included by the MAC methodology
Supervisor
Financial supervisor,
technical supervisor
– Provide, in a clear and timely manner, the directives, orders and technical
guidelines to auditors
– Provide relevant advice to both heads of area (jefaturas) as auditors
– Provide feedback to the executive in charge so as to auditors regarding
the audit process
– Ensure that the result of the audit adequately reflects the findings and
observations previously agreed with the audit team
Auditor
Financial auditor,
technical (public works)
auditor
– Execute the audit engagements according to the agreed schedule
– Comply with the CGR’s audit procedures, respecting the instructions
established by the corresponding executive and supervisor
– Translate the result of work in the respective product
Analyst of external
control technical
units
Technical Support Unit
– Keep updated information on coverage of their respective divisions and
regional comptrollers
– Develop and propose operational inputs to the audit planning, including
materials, macro, estimated hours, auditors and estimated hours for
unanticipated demand
– Maintain updated information in relation to the matters to be audited,
which shall consider, among others, references, special investigations,
summaries, news in the press, complaints, among others
– Provide audit teams systematised information on services to audit and
any other information relevant to the audit team perform their work
efficiently
– Propose the creation and/or updating of manuals, technical guides and
working methods in general, to be applied in various types of audits
conducted by the Comptroller General
– Conduct training requirements linked to the needs of the respective
divisions and regional comptrollers
Source: Adapted from CGR (2012), “Guía práctica módulo ejecución SICA v.3.0 [Practical guide SICA v3.0]”,
CGR, Santiago, unpublished guidelines.
Audit planning begins with the identification of information to be requested from the
audited entity (step 1.1). This is followed by efforts to consolidate information about the
audited entity(s) in order to give the audit team and audit executive historical information
relevant to the entity(s) as input into the design of audit procedures (1.2). The
consolidated information, prepared by the external control technical units, draws on both
that generated by the CGR’s audit and non-audit work as well as external sources. Based
on the understanding of the entity(s), the audit executive establishes specific audit
objectives (1.3). The audit team subsequently identifies the administrative rules and
regulations related to the audited entity(s) and subject(s) that will serve as the criteria for
audit field work, and the related CGR audit guidelines (1.4). The audit executive will
subsequently define the roles and responsibilities of the audit team (1.5). At this stage, the
audit executive selects the specific topics from which it will develop basic test
programmes, with input from the external control technical units. Each macro-process
will have one specific test (1.6). The audit executive will subsequently establish the draft
timetable for the delivery of the preliminary and final reports, factoring in deadlines for
quality control and submission of the reports to the audited entity (1.7). The audit
planning process in concluded with an audit planning validation meeting between the
external control technical units, the audit supervisor and audit team to finalise the
objectives or the testing procedures, as appropriate.
Audit execution begins with the transmission of an oficio by the CGR to the audited
entity requesting information and scheduling a meeting with the leadership of the audited
entity, and the beginning of the audit field work (2.1). The CGR may give public entities
one day notice prior to the meeting in order to provide an element of surprise and not
allow the entity to prepare its materials in advance. The formal request lists information
that is to be required by the auditee, in general terms, as input for the CGR’s audit work,
and analysed by the external control technical units. Once this step is completed, further
information requests and meetings with the audited entity are conducted by the audit team
and the audit executive. The formal request report does not give details on what is being
audited and the audit timetable as it allows the CGR flexibility to adjust the subject that
will be audited once it has analysed the information that it receives from the entity under
audit. The CGR subsequently incorporates the information requested to revise its
knowledge of the audited entity’s procedures (2.2). The audit team subsequently prepares
its sampling (2.3 – see also Box 5.2) and defines its testing procedures, complementing
those defined in the SICA (2.4) which must be approved by the external control technical
units and audit executive (2.5). Following the execution of the audit testing procedures
(2.6), the audit team prepares a matrix of observations for approval by the audit executive
(2.7). Finally, the audit team prepares the preliminary report (2.8), which is presented for
approval by the audit executive (2.9).
Audit closure begins with the CGR reviewing the official response of, and additional
materials provided by, the audited entity (3.1). The preliminary report is considered
confidential and shared only with the head of the audited entity, until the emission of the
final report. The CGR does not normally inform the audited entity in advance on when
the preliminary report will be prepared. The audited entity is provided with a deadline of
ten days to provide written comment and share additional information or documentation,
though an extension of another five days may be granted by the CGR. Other exceptions
may be considered based on the complexity of the audit (Administrative Order 88/2012).
Comments on the preliminary report are provided only in writing and no meetings take
place between the audited entity and the CGR. Based on the comments, the CGR prepares
its final report. In practice, comments are received on less than 10% of audit work within
the ten working day period. The CGR also has the option of waiting longer for the
director’s comment and additional information. Once the response from the audited entity
is received, the audit team subsequently identifies whether to initiate administrative
disciplinary procedures, trials within the CGR tribunal of accounts and/or whether to
share information with the Public Defender regarding possible breaches of civil and/or
criminal law (3.2). The audit team reviews the final audit files and drafts the final audit
report (3.3) for review and approval by the audit executive and senior management (3.4).
The finalised report is generally submitted to the service director at the same time that it
is made publically available on the CGR’s website. From this publication, all the
documents related to the audit become public, including the preliminary report and the
audited entity’s answer. The final published report includes the signature of the respective
service to confirm that they have received it. At the end of the audit process, the audit
executive conducts an evaluation of the audit process for internal purposes (3.5).
Six dimensions are contemplated: i) appropriateness of hours planned; ii) relevance of the
background information provided by the UCTE; iii) clear definition of activities, as
indicated in the SICA; iv) audit methods; v) sampling activities in accordance with the
estimated time for the execution of the audit; and vi) queries were answered satisfactorily
the UCTE.
Box 5.2. Office of the Comptroller General of the Republic of Chile’s
sampling methodology
In April 2012 the CGR issued a set of guidelines on how to select the sample of transactions to be
examined as part of an audit in order to ensure that auditors are able to select them without any biased
criteria.
The first step before determining which elements should be subject to an examination, as
highlighted by the CGR, is to recognise the importance of establishing the objective or purpose of the
audit. This is revealed by answering what, where and for what purpose the audit is being conducted in
order to identify the scope (whether the audit shall include all or only one part of the elements of the
auditee), the length (the period of time the audit work will take), the variables to be analysed and the
final goal of the audit.
After considering these basic aspects associated with the sample and the purpose of the audit, the
sampling methodology of the CGR follows three steps:
1. Analyse the data: The analysis of the data allows the auditor to determinate whether the
original purpose of the audit for that specific entity is appropriate and corresponds to the data
available. For analysing the data, two computerised tools can be used: ACL, a software
application designed for audit-related analysis, and Microsoft Excel’s automatic sampling
system. These make the analysis of the data possible as they allow the auditor to verify the
data’s integrity/completeness, verify that data items are not repeated (singularity of data),
classify these items based on attributes, classify the variables that will better contribute to the
study, know the main characteristics of the data (i.e. the total number of data items, their
lowest and highest values, their mean), and generate frequency tables and graphs to illustrate
such characteristics.
2. Determine the sample size: To determine the size of the audit sample, the CGR uses two types
of statistical models (or distributions) depending on the characteristics of the data under study.
The Poisson distribution is used when the number of data items to revise exceeds 60 000,
which requires the software ACL to be used. On the contrary, the Normal distribution is used
when the number of items is less than 60 000 allowing the use of the Excel tool.
3. Select the sample: Once steps 1 and 2 have been completed the selection of the subjects to be
audited can be done through two methods: i) simple random sampling, recommended for small
samples (less than 200 items) where all data items have the same opportunity to be selected as
they are selected at random from the original list of potential audited subjects; and ii) stratified
sampling, recommended for large samples (more than 200 items), where items can be
classified in homogeneous groups to then apply the ACL functions to obtain the sample.
Source: CGR (2012), “Guía práctica para la construcción de muestras [Practical guidelines for the preparation of
samples]”, External Control Technical Unit, April, CGR, Santiago.
Continually invest in developing knowledge of audited entities and programmes
The CGR’s prioritisation process, or annual audit programming, entails
comprehensive materiality and risk assessments in line with those suggested by
INTOSAI. To further enhance understanding of the audit context, risk identification and
materiality assessments should be given due consideration throughout the audit process as
well (INTOSAI, 2013).
INTOSAI “Fundamental Principles of Public Sector Auditing” states that, in the
planning of individual audit engagements, auditors should obtain an understanding of the
nature of the entity and programme to be audited. Auditors should acquire a broad
understanding of the subject matter and context, including understanding objectives,
operations, regulatory environment, internal controls, financial and other systems and
business processes. This knowledge can be accumulated by interacting with management,
those charged with governance, other relevant stakeholders and experts and by examining
supporting documents and potential sources of audit evidence (INTOSAI, 2013, § 45).
The CGR may include a request for specific information such as the auditee’s
organisational chart, list of bank accounts used by the entity, username and passwords for
accessing the entity’s information systems, list of the senior management and the duration
of their employment, manual for a description of personnel positions, list of
administrative procedures conducted in the entity and a list of financial transfers.
By investing in developing knowledge of audited entities and programmes, and
potential associated risks, auditors remain at the forefront of understanding the evolution
of public sector entities, prioritising audit engagements such that they remain relevant to
whole-of-government issues and to society.
Ensure that the terms of the audit have been clearly established
and communicated before the audit in order to support efficient execution and
effective quality control of the audit
INTOSAI (2013) “Fundamental Principles of Public Sector Auditing” states that the
planning of individual audit engagements should define the scope, objectives and
methodology to be applied in the audit. The objectives are what the audit is intended to
accomplish. The scope defines the subject matter that the auditors will assess and report
on and is directly related to the objectives. The methodology describes the nature and
extent of the audit procedures for gathering the audit evidence. Planning the audit
includes setting the scope, approach, timing and direction of the audit and defines the
nature, timing and extent of the audit procedures to be performed. During planning,
auditors should assign the appropriate staff to perform the audit and identify other
resources such as subject experts that may be required. The audit should be planned to
reduce audit risk to an acceptably low level for the auditors to obtain sufficient
appropriate audit evidence to support the findings, conclusion and recommendations
(INTOSAI, 2013, § 52).
Moreover, INTOSAI (2013) “Fundamental Principles of Public Sector Auditing”
precise significance and mix of criteria will depend on the objectives of the audit;
reliability, neutrality, understandability and objectivity. Criteria can be specific or more
general, and may be formulated in various ways such as: what should be according to
laws, regulations or standards; and what is expected, according to sound principles and
best practice; to what could be (given better conditions). The criteria should be available
to the intended users to enable them to understand the how the subject matter has been
evaluated or measured.
The CGR’s planning of audit engagements could better define the scope, objectives
and the methodology – as well as criteria to be used for reaching their conclusions in
accordance with the INTOSAI guidance above. The CGR’s audit engagements begin with
formal notice of the beginning of audit work (oficio de de inicio de auditoria) and an
initial meeting with the head of the public entity. The CGR’s formal notice provides
information on: i) the subject and scope to be covered by the audit; ii) whether the audit
includes an examination of accounts; iii) the name of the head/deputy head of division or
regional comptroller in charge of the audit; iv) the names of the auditors; and v) request
for physical space and the information for conducting the audit work. The formal notice
of the beginning of audit work does not include reference to the objective, methodology
or criteria.
Ensuring that terms of audit have been clearly established and communicated in audit
planning helps to support more efficient execution of the engagement. Further, the quality
of the audit is enhanced when planning ensures that auditors are able to obtain sufficient
and appropriate evidence to support the audit findings, conclusions and
recommendations.
Ensuring quality in ex post audit engagements
According to ISSAI 40 “Quality Control for SAIs”, the elements of a system of
quality control implemented by an SAI should include policies and procedures that
address key issues, for example leadership responsibilities for quality, ethical
requirements, ensuring the adequacy and competency of human resources, engagement,
performance and monitoring. These policies and procedures should be documented and
communicated to all auditors.
The Comptroller General is responsible for setting policies and procedures to ensure
the quality of audit and non-audit work, and has established a number of units to support
this goal. In general, the Comptroller General delegates responsibility for quality control
to the institution’s division heads and regional comptrollers. In addition, a number of
specific divisions, units and positions have been created with responsibility for providing
a second level of quality control (e.g. Audit Report Review Unit) and ensuring that there
are appropriately trained officials. Different units focus on quality control for ex post
audit planning, audit reporting, audit follow up, general management processes and
human resource management. In addition, and although not the focus of this section,
these is a unit responsible for quality control of the control of legality assignments,
i.e. the toma de razón (TdR). In July 2013, the CGR published its first Code of Conduct
(Código de Conducta) to establish a framework to guide the behaviour of its officials.
The CGR could improve the quality control of its ex post audit engagements by:

supporting the implementation of ethical guidelines contained in the 2013 CGR
Code of Conduct through training activities and the inclusion in audit manuals
and guidelines.

further improving existing monitoring process designed to provide it with
reasonable assurance that the policies and procedures relating to the system of
quality control are relevant and adequate and are operating effectively
The Comptroller General is responsible for setting policies and procedures
to ensure the quality of audit and non-audit work, and has established a number
of units to support this goal
INTOSAI (2010a) “Quality Control for SAIs” states that an SAI should establish
policies and procedures designed to promote an internal culture recognising that quality is
essential in the performance of all of its work. Such policies and procedures should be set
by the head of the SAI, who retains overall responsibility for the system of quality
control. The head of the SAI may delegate authority for managing the SAI system of
quality control to a person or persons with sufficient and appropriate experience to
assume that role (INTOSAI, 2010a, element 1).
In general, the Comptroller General delegates responsibility for quality and quality
control to the institution’s division heads and regional comptrollers. However, in
addition, a number of specific divisions, units and positions have been created with
responsibility for providing a second level of quality control and ensuring that there are
appropriately trained officials. These divisions, units and positions include:

external control technical units develop ex post audit methodologies, co-ordinate
certification of CGR auditors and provide quality control over audit engagements

Audit Report Review Unit (Unidad Revisora de Informes) to support
improvement in the quality of audit reports, in line with the expectations of the
Comptroller General and its stakeholders

audit follow-up units (Unidad de Seguimiento) to monitor the implementation of
the observations derived from audit engagements and special investigations by
audited entities

management process units (Unidades de Gestión de Procesos) to define
performance goals and performance agreements and redesign internal processes
to strengthen management control and quality.
In addition, the Legal Co-ordination and Information Division (División de
Coordinación e Información Jurídica) provides quality control over the CGR’s legal
opinions (dictámenes) and ex ante control of legality assignments, i.e. the toma de razón
(TdR). The General Secretariat and division/regional administrators also support internal
management and capacity building activities as part of their functions.
External control technical units develop ex post audit methodologies, co-ordinate
the certification of CGR auditors and provide technical support during audit
engagements
In December 2011, the CGR created external control technical units within each
external control unit to enhance the quality, standardisation and efficiency of audit
planning and execution (CGR Resolution 06920/2011). The external control technical
units support the annual audit programming and plan individual audit engagements in
their respective divisions and regional offices. These units collect and update all data
necessary to inform discussions on annual audit programming and propose public entities
and macro-processes to be audited as well as calculate the estimated auditor hours for
individual audit engagements. The external control technical units are also responsible for
updating the audit teams with relevant information about the public entity to be audited at
the beginning of individual audit engagements. Information shared at the beginning of
individual audit engagements may include the results of previous audit engagements and
follow-up activities, as well as applicable norms and jurisprudence to the audit. The
external control technical units report to their respective division head or deputy head,
after consultation with the Comptroller General, or the regional office’s head of external
control (Jefe de Control Externo).
An External Control Technical Unit Executive Secretariat (Secretario Ejecutivo) is
responsible for co-ordinating and ensuring consistency in the activities of the various
external control technical units. The External Control Technical Unit Executive
Secretariat is located in the Cabinet of the Comptroller General. The Executive
Secretariat co-ordinates the promulgation of guidelines for the CGR’s audit work,
including annual audit planning, audit sampling and audit reporting (Table 5.6). The
External Control Technical Unit Executive Secretariat is responsible for the development
and updating of the CGR’s audit software applications, co-ordinating the training and
continuous professional development of the CGR’s audit officials and identifying actions
to advance the design and management of all audit processes performed by divisions or
regional offices. This secretariat is also responsible for ensuring that audit planning is in
line with the CGR’s national audit priorities. Prior to December 2011, there was no
centralised responsibility within the CGR for these functions. Rather, each external
control unit was flexible in adjusting its methods for audit planning and audit execution.
Nevertheless, many external control units used the materials prepared by the CGR’s
Administrative Audit Division. However, in some cases the Administrative Audit
Division’s materials were not adequately catered to the different audit engagements of
other external control units.
audit manuals and guidance
Manual
Month year first issued/
most recent update
Objective
Instructions and templates, if applicable
Practical Guidelines for
Preparing Samples (Guía
Práctica para la Construcción
de Muestras)
April 2012
Improve the preparation of
samples for audit work
Not applicable
Model Report Structure and
Templates (Estructura y
Modelo de Informes)
January 2013
Standardise audit and special – Style guide for CGR audit reports
investigation communications
(e.g. margins, chapter size, font size,
row space, titles format, tables format)
with audited entities and audit
reporting
– Standard cover pages for preliminary
and final audit reports, special
investigations
– Template for preliminary audit report
– Template for final audit report
– Template for notice initiating audit field
work for the head of the audited
entity/municipal secretary
– Template for notice initiating special
investigation for the head of the
audited entity/municipal secretary
– Template for notice issuing final audit
report for the head of the audited
Format of the Follow-Up
Report (Formato Informe de
Seguimiento)
April 2012
Standardise the reporting on – Template for notice of the preparation
activities to follow up audited
of a follow-up report to the head of
entity’s actions to address the
CGR’s audit observations
– Template for the follow-up report
– Instructions for the elaboration of the
follow-up audit report
– Style guide for the CGR’s follow-up
reports
– Standardised definitions of actions
following completion of audit work
Administrative Order 88
June 2012
Standardise key processes
of the audit function (audit,
investigation and audit
reference, ARA).
– Instructions regarding the
methodology, notification to the audited
entity, response times and publication
of audit reports
– Conditions to be considered in the
execution of a special investigation
– Other general provisions on the
completion of the audit function
Source: Based on the CGR’s audit manuals.
In total, there are 62 officials employed in the external control technical units. This
includes three officials in the External Control Technical Unit Executive Secretariat, one
of whom is focused on audit planning and one focused on audit execution. The number of
officials in external control technical units varies according to the size of external control
unit. The external control technical unit within the Administrative Audit Division has
12 officials, the unit within the Infrastructure and Regulation Division has 7 and the unit
within the Municipalities Division has 7 officials. Until 2013, within these external
control technical units, two-thirds of the officials typically focus on technical audit
matters and one-third on management. Today these functions are no longer dissagregated.
External control technical units in regional offices have between one and four officials
each. External control technical unit officials’ professional backgrounds include civil
engineers, commercial engineers (40%), accountants (40%) and public administrators
(20%) with at least one year of experience in audit work at the CGR.
An Audit Report Review Unit supports improvement in the quality of audit
reports, in line with the expectations of the Comptroller General and its
stakeholders
In May 2012, the CGR created the Audit Report Reviewing Unit (Unidad Revisora de
Informes) within the Cabinet of the Comptroller General in order to improve the quality
of audit reports. The unit is responsible not only for audit reports but also reports
stemming from special investigations. The unit reviews approximately 90 audit reports,
special investigation reports and responses to audit suggestions by citizens each month.
The work of the unit is guided by the external control technical units guidance on audit
report structure and model format and the units own review methodology. The unit also
collates data on issues related to audit reports as input to design ad hoc training for the
CGR’s divisions/regional offices involved in audit work where corrections have been
found to be necessary.
Beginning in the middle of 2013, the Audit Report Reviewing Unit began to review
audit reports based on sampling. The unit found that it was not possible to review all audit
reports in a timely manner because of the number of audit reports received. Only 60 audit
reports were able to be reviewed each month, with between 66 and 211 audit reports
received per month between June and December 2012. Further resources in order to
strengthen this work have been requested in the new budget proposal.
The Audit Report Reviewing Unit sampling of audit reports is based on the risk
associated with each external control unit. However, audit reports considered critical
because of the actions arising from the audit and/or media coverage are always reviewed.
The risk associated with each external control unit is based on the number of errors found
in the reports over the previous 18-month period. This was originally calculated for the
period December 2012 to May 2013. The risk levels have been subsequently updated
every three months according to the number of errors found in the reports reviewed each
quarter. The risk is calculated based on the types of errors, with errors having different
weights, depending on their complexity. An average is subsequently calculated based on
the number of reports reviewed to ensure comparability across external control units.
External control units for which there are insufficient records to determine risk levels are
automatically considered as high risk.
Audit follow-up units are responsible for monitoring the accomplishment
of the observations derived from the audits and special investigations
In December 2011, the CGR created audit follow-up units within each external
control unit to ensure that auditees respond to observations and corrective measures
resulting from audit engagements (CGR Resolution 06920/2011). The creation of audit
follow-up units was carried out in parallel to the creation of external control technical
units, discussed previously. Audit follow-up units also develop manuals and technical
guides to be implemented in the follow-up process. These units also provide data to the
external control technical units necessary to inform discussions on annual audit
programming. Specifically, the existence of audit follow-up units allows for the provision
of dedicated staff time and resources for audit follow up. Previously, auditors had to
balance follow-up audit work with audit planning and audit execution. This often resulted
in follow-up activities being neglected. Each audit follow-up unit reports to its respective
division head or deputy head, or the regional office’s head of external control.
An Audit Follow-up Unit Executive Secretariat is responsible for co-ordinating and
ensuring consistency in the activities of the various audit follow-up units. The Audit
Follow-up Unit Executive Secretariat is located in the Cabinet of the Comptroller
General. The Executive Secretariat co-ordinates the promulgation of guidelines for the
audit follow up, monitors the advancement of performance goals for audit follow-up units
in co-ordination with the General Secretariat and proposes improvement measures as
needed. The Executive Secretariat also liaises with the General Secretariat on the
personnel and resourcing needs of the audit follow-up units, such as establishing profiles
for officials employed in audit follow-up units (e.g. experience in external control
function, capacity for synthesis of information; and capacity for generating a high number
of reports in a reduced amount of time); and establishing criteria for the performance
evaluation of officials employed in the follow-up units. However, the Audit Follow-up
Unit Executive Secretariat does not formally evaluate officials employed in audit followup units.
Management process units support actions to define performance goals
and agreements, redesign internal processes to strengthen quality
and management control
In 2011, the Comptroller General passed a resolution to create management process
units in each division and regional office (CGR Resolution 04770/2011). The
management process units seek to: i) support continuous improvements of management
processes to support quality and timely processes and products; ii) enhance efficiency in
line with the model of management by results through the analysis of administrative
procedures; iii) support the re-engineering of processes by designating its responsibility to
specific officials; and iv) verify the appropriateness of the CGR’s tools and informational
systems to support management improvements. The officials employed in the
management process units report to the head of their respective divisions or regional
comptroller, and depend on the Management Process Units Co-ordination Unit (Comité
Coordinación de UGP) within the General Secretariat.
The responsibilities of the management process units include: i) preparing and
monitoring performance goals and agreements between the Comptroller General and
individual division heads and regional comptrollers; ii) monitoring and reporting to the
head of the division/regional office and the General Secretary relevant information
regarding management practices and proposing corrective measures as appropriate;
identifying, proposing and evaluating the redesign of critical processes in their respective
division/regional office; and iii) supporting the improvement of institutional management,
including the collation and analysis of management data and professional development.
Previously these performance indicators focused on quantitative issues, such as work
done, planning of work and how management process units have changed internal way of
working. Beginning in 2013, the CGR proposes to include indicators of quality and
impact more generally.
Some of the functions of management process units already existed prior to their
creation. For example, the external control technical units were responsible for overseeing
the achievement of performance goals. However, a whole-of-CGR approach to
management control did not previously exist. There was no standardised information on
the CGR’s activities and where information did exist, it was often of poor quality and
asymmetrical. Today, information on the work each UGP performs is not only available
in a transparent way, but also used for CGR decision making. Although IADB support
helped to formalise the creation of the management process units, their origins preceded
this support. The first management process unit was created in 2009 in the Bio Bio
regional office.
The Management Process Co-ordination Unit within the General Secretariat is
responsible for: i) co-ordinating operational aspects necessary for the efficient
functioning of the management process units; ii) co-ordinating the meetings of the
management process units; iii) co-ordinating activities to define the goals and
performance agreements; iv) monitoring and enforcing timely preparation of management
reports prepared by the management process units; v) developing consolidated strategic
and operational management reports as required by the General Secretary and/or
Comptroller General; vi) proposing to the General Secretary instruments, tools and
management procedures for continuous improvement of the management process units’
activities; vii) co-ordinating the process of collecting and consolidating information
necessary for preparing the CGR’s annual report (Cuenta Pública); viii) participating in
any work to develop software, tools, processes or internal rules related to the management
process units’ activities; ix) reporting regularly to the General Secretary on the
management and operations of the management process units and providing
recommendations to enhance their functioning; x) reporting to the General Secretary
about the professional requirements of the management process units in terms of training,
software, equipment and logistical support; xi) evaluating the impact of the management
process units’ activities and formulating recommendations as necessary; and
xii) participating in key strategic projects.
In total there are 30 officials employed in the management process units. Each
regional office has one management process unit official. The number of management
process unit officials in the divisions varies. For example, the Accounting Analysis
Division has one management process unit official (the division has a total of 50 staff);
the Municipalities Division has 2 (out of a total of 130 staff). Management process unit
officials are professional administrators or engineers and trained by General Secretariat
before taking up their responsibilities. This includes a mandatory two and a half week
training programme established by General Secretariat. Management process unit
officials are also subject to a probation period during which time they receive support
from another management process unit officials. This is in addition to the routine training
programmes that all CGR officials must undertake when entering the CGR. Whereas
management process units assess the work of their respective divisions/regional offices,
their officials are assessed by the regional comptroller and General Secretariat as part of
the general assessment procedures. All CGR officials are subject to a bi-annual
assessment by their superior and the General Secretariat issues an annual report on their
performance.
The General Secretariat and division/regional administrators to support
internal management and capacity building activities
The General Secretariat’s responsibility is to manage the CGR’s financial, material
and personnel resources. The General Secretariat has a policy to all divisions involved
actively in the General Secretariat’s work, e.g. strategic planning. The General Secretary
also periodically meets with the heads of divisions and travels to the regional offices to
meet with the regional comptrollers.
The General Secretariat has an administrator in each of the CGR’s divisions and
regional offices (administrador divisional and administrador regional, respectively).
These administrators report directly to their respective head of divisions or regional
comptroller but should comply with guidelines established by the General Secretariat.
These administrators are responsible for supporting internal management of personnel,
assets and finances as well as building the capacity of operational, logistical and
administrative staff in personnel, budgeting, procurement and control processes. As part
of this work, they are responsible for collecting and maintaining information for
management and the General Secretariat (e.g. personnel, financial, welfare, housing),
replicating what the General Secretariat does at a divisional level. Hierarchically, they
depend on the head of the division or the regional comptroller. Technically, they depend
on the General Secretariat (CGR Resolution 04850/2011).
The Legal Co-ordination and Information Division provides quality control
of legal opinions and ex ante control of legality assignments
The Legal Co-ordination and Information Division reviews, prior to the Comptroller
General’s signature, the draft legal opinions and TdR. The Legal Co-ordination and
Information Division has the right and obligation to return legal opinions or TdR to the
division that conducted the work if it has a different position. If the division/regional
office agrees with the position of the Legal Co-ordination and Information Division, the
appropriate changes are made. If the division does not agree with the position of the
Legal Co-ordination and Information Division, it may challenge the Legal Co-ordination
and Information Division. In these circumstances, the Legal Co-ordination and
Information Division must prepare a document explaining the disagreement in order for
the Comptroller General to take a final decision.
As part of the CGR’s introduction of management by results, the Legal Co-ordination
and Information Division applied a uniform manual, methodology and tools regarding the
preparation of legal opinions and TdR. The methodology supported the introduction in
2012 of standardised criteria for the Legal Co-ordination and Information Division’s
review of legal opinions and TdR. The new procedures have also enabled the creation of
statistics prepared by the Legal Co-ordination and Information Division, to assist division
heads to be aware of the common errors in their staff’s work in order to strengthen
internal controls. The Legal Co-ordination and Information Division is now undertaking a
process to review how the new guidelines and revision practices are being applied and
what results have been. The CGR is currently undertaking a review of the implementation
of the new procedures led by the Legal Co-ordination and Information Division.
The CGR reports that the new procedures have shortened the time for the review
process and increased the quality of the CGR’s decisions, as measured by a significant
reduction in the number of processes that are sent back to the divisions/offices.
Support the implementation of ethical guidelines contained in the Code
of Conduct through training activities and the inclusion in audit manuals
and guidelines
INTOSAI (1998) notes that a code of ethics is a comprehensive statement of the
values and principles which should guide the daily work of auditors, and is a critical
instrument to support trust, confidence and credibility in the SAI. INTOSAI (2010a)
“Quality Control for SAIs” states that an SAI should establish policies and procedures
designed to provide it with reasonable assurance that the SAI, including all personnel and
any parties contracted to carry out work for the SAI, comply with relevant ethics
requirements.
All benchmark SAIs involved in this study have a code of conduct or code of ethics
for their staff (Table 5.7). The majority of SAIs have codes of conduct designed
specifically for their institution, often built from national codes or international guidance
such as INTOSAI Code of Ethics (ISSAI 30) or IFAC Code of Ethics for Professional
Accountants. The SAIs of Israel and Spain appeal to a code of conduct implemented at a
national level, while the SAI of Portugal has adopted INTOSAI Code of Ethics (ISSAI
30).
Table 5.7. Levels of Codes of Conduct adopted in Chile and across selected countries
Country
SAI specific
Australia
Guide to Conduct in ANAO
Brazil
Código de Ética dos
Servidores do TCU (Code of
Ethics of TCU staff)
Chile
Código de Conducta (Code of
Conduct)
Costa Rica
Denmark
European
Court of
Auditors
Code of Conduct for the staff
members of the General
Comptroller of the Republic
Good Practices in
Rigsrevisionen
Code of Conduct for the
Members of the Court, , Ethical
Guidelines (for Members and
staff)
Israel
Italy
Korea
Peru
..
Code of Ethics for the
Government Auditor and Rules
of Conduct and performance of
the Comptrollership Staff and
the Intstitutions Control Bodies
International
Staff Regulation of the EU
Instititutions
TAKSHIR (Civil Service
Regulations) and Code of
Ethics for State Employees
Code of Conduct for Public
Administration Staff, Code of
Ethics for Magistrates
..
..
INTOSAI (ISSAI 30) Code of
Ethics
Portugal
South Africa
Code of Conduct Adopted
National level
Australian Public Service Code
of Conduct and APES 110
Code of Ethics for Professional
Accountants
Code of Good Practice,
Procedures on Ethical and
Independence Requirements
Code of Ethics for Public
Servants in Spain
Notes: Australia: The ANAO adopts APES 110 issued by the Accounting Professional & Ethical Standards
Board, as a national equivalent to the International Ethics Standards Board for Accountants: Code of Ethics for
Professional Accountants. Compliance with the Australian Public Service Code of Conduct is required by
section 13 of the Public Service Act 1999. Israel: In addition to the Code of Ethics for State Employees, a
number of provisions within State Comptroller Law regulate the conduct of SAI officials. Italy: the
implementation of the Code of Conduct is overseen by the managers for administrative staff, by the Secretary
General (magistrate) for managers and by the Council of the Presidency for the magistrates. The Magistrates
are evaluated by the Council of the Presidency on incorrect behaviours and are put through disciplinary
procedeeings by General Prosecutor of Corte dei Conti where needed. Portugal: Adopted the Code of Conduct
of INTOSAI (ISSAI 30), but has an additional declaration for conflict of interest to be issued with each audit
engagement. South Africa: AGSA's Code of Good Practice is founded on its own Procedures on Ethical and
Independence Requirements, and the International Federation of Accountants (IFAC)'s Code of Ethics for
Professional Accountants and INTOSAI's Code of Conduct. Spain: while the general Code of Ethics for Public
Servants in Spain is applicable to the SAI’s staff, there are also specific prescriptions in the SAI’s Legislation
that reinforce this subject.
Spain
In implementing the Code of Conduct, SAIs should emphasise the importance of
meeting relevant ethical requirements in carrying out their work; the head of the SAI and
senior personnel within the SAI should serve as an example of appropriate ethical
behaviour; the SAI should ensure that policies and procedures are in place that reinforce
the fundamental principles of professional ethics (i.e. integrity; independence, objectivity
and impartiality; professional secrecy; and competence); the SAI should ensure that
policies and procedures are in place to notify the head of the SAI in a timely manner of
breaches of ethical requirements and enable the head of the SAI to take appropriate action
to resolve such matters; and SAIs should ensure that policies and procedures are in place
that reinforce the importance of rotating key audit personnel, where relevant, to reduce
the risk of familiarity with the organisation being audited (INTOSAI, 2010, element 2).
In July 2013, the CGR published its first Code of Conduct to establish a framework to
guide the behaviour of its officials. The code also includes the Comptroller General’s
position on the expected ethical behaviour of the CGR’s officials in specific contexts in
order to reinforce public trust in the institution. The CGR’s Code of Conduct was
prepared with consideration of the Constitution of the Republic, the Constitutional
Organic Law on General State Administration (Law18 575), the CGR Organic Law
(Law 10 336), Law 18 834, general guidelines on the fight against corruption and good
public governance issued by the OLACEFS Special Technical Commission on Public
Ethics, Integrity and Transparency (Comisión Técnica Especial de Ética Pública,
Probidad Administrativa y Transparencia); and the International Standards of Supreme
Audit Institutions on “Code of Ethics”.
The CGR’s Code of Conduct provides guidance and practical examples on:
i) relations between CGR officials; ii) relations with those interacting with the CGR;
iii) conflicts of interest; iv) management of information; v) use of resources; vi) social
responsibility; and vii) security and safety. Box 5.3 provides an example of the guidance
provided by the CGR’s Code of Conduct in relation to conflict of interests. While it is not
explicit, the CGR’s Code of Conduct covers most fundamental principles of professional
ethics as outlined in INTOSAI Code of Ethics (ie. integrity; independence, objectivity
and impartiality; professional secrecy; and competence). The CGR covers the principle of
competency insofar as the Code of Conduct requires auditors to meet high professional
standards and know all applicable procedures, practices, standards and principles.
However, the Code of Conduct does not oblige auditors to update and improve the skills
and competencies required, which is another aspect of the competency criteria. This could
be considered in relation to recommendations in Chapter 3 to further develop the
competency framework to support the institution’s goals.
All benchmark SAIs report that their institution’s ethical requirements are aligned
with those of integrity, independence, objectivity and impartiality, regardless of whether a
benchmark SAI has designed its own Code of Conduct or appeals to national or
international guidance. Fewer SAIs provide explicit guidance on professional secrecy and
competence within their code of conduct. In the case of the SAI of Peru, competency is
covered in the Government Auditing Standards- adherence to which is required by the
Code of Ethics (Table 5.8).
The CGR’s Code is explicit that it covers all CGR officials, irrespective of their
function, position, grade, age or gender. Although not obligatory for non-CGR officials,
the code invites all parties related to the CGR, such as suppliers and external services to
follow the Comptroller General’s guidance. The CGR’s officials are expected to
understand and apply the code as well as the institution’s internal regulations to avoid
improper behaviour and misconduct. Moreover, in the case that a CGR official has any
doubts or questions and specific situations or behaviours, the code states that they should
consult with their immediate supervisor to jointly resolve the matter. The code notes that
matters that cannot be resolved by direct supervisors should be directed to the official’s
respective division head or regional comptroller and subsequently the CGR General
Secretariat.
Table 5.8. Code of Conduct Coverage in Chile and across selected countries
Country
Australia
Brazil
Chile
Costa Rica
Denmark
European
Court of
Auditors
Israel
Italy
Korea
Peru
Portugal
Trust,
confidence
and
credibility
●
●
●
●
●
●
●
●
●
●
Indepedence,
Objectivity
and
Impartiality
●
●
●
●
●
●
●
●
●
●
●
●
..
●
●
●
..
●
●
●
..
●
●
o
..
●
o
o
..
o
Integrity
Professional
Secrecy
Competence
How is the code of
conduct
implemented?
●
●
●
..
●
●
●
o
..
●
Trainings / Induction
Tranings
Trainings
Induction
/ other- workshops
Tranings / otherdeclaration
Trainings / other
..
Trainings / otherdeclaration
/ other- workshops
●
●
●
●
●
South
Africa
●
●
●
o
●
Spain
..
●
●
●
●
Total yes
6
12
12
12
8
Notes: ● = Yes; o = No; x = Not applicable; .. = Missing. Chile: The CGR covers the principle of
competency insofar as the Code of Conduct requires auditors to meet high professional standards and know
all applicable procedures, practices, standards and principles. However, the Code of Conduct does not oblige
auditors to update and improve the skills and competencies required. Israel: Every official must fill in a
declaration form to declare potential conflicts of interest which may arise in the course of fulfilling
professional obligations. It is examined and actioned upon, where needed, by the legal department. Italy:
Corte dei Conti's Code of Conduct also includes transparency and traceability of decisional processes in
compliance with regulations related to the publication of the public administrations’ acts. South Africa:
Although South Africa has adopted IFAC’s Code of Ethics, its Guidelines for Disciplinary Action Applicable
to Specific Transgressions can be read as containing directives for conduct.
Attention is necessary to support the implementation of the code such as through
training and inclusion in audit guidelines. Ethics training is a useful tool for strengthening
ethics and preventing corruption in public entities, including SAIs, if applied together
with other tools as part of a comprehensive pro-integrity policy. As the CGR has a large
workforce to roll out training immediately, several groups could be targeted immediately,
including the leadership and senior officials (i.e. division heads and regional
comptrollers) as well as new officials. Compulsory programmes are advisable for these
target groups. To make the training less formalistic and more practice oriented, and to use
the limited time allocated for ethics training to its best, it is very important to apply
modern training methods and include a combination of lectures, practical tailor-made
case studies and workshops. Training could be evaluated by assessing both the knowledge
received by the participants of the training and to identify ways to further improve the
training. Outputs such as the number of public officials trained are insufficient, as is
commonly reported by the CGR for its other training programmes. However, it must be
emphasised that direct evidence that the training has led to improvement in ethical
behaviour among CGR officials will not typically be available in the short term and
long-term measures are more appropriate.
All benchmark SAIs in this study implement their codes of conduct through either
training or inductions for new staff. In addition to this, the European Court of Auditors
holds workshops in which staff must assess and address ethical dilemmas likely to arise
in the course of their work. To ensure adherance to the national and international codes
for their staff, the SAIs of Israel and Portugal require that each employee must fill in a
formal declaration on potential conflicts of interest. The SAI of Australia commissions
periodic surveys to assess how well codes of conduct and the associated values are
integrated into daily work. Parliamentarians are invited to partake in telephone
interviews, online surveys and hard-copy questionnaires to assess the accessibility,
responsiveness and extent to which information provided by ANAO staff met their needs
(OECD 2013).
Box 5.3. Office of the Comptroller General of the Republic’s
Code of Conduct guidance on conflicts of interest
In July 2013, the CGR published its first Code of Conduct (Código de Conducta) to
establish a framework to guide the behaviour of its officials. The code also includes the
Comptroller General’s position on the expected ethical behaviour of the CGR’s officials in
specific contexts in order to reinforce public trust in the institution. The CGR’s Code of Conduct
includes guidance and practical examples of the expected behaviour in relation to conflicts of
interest.
The CGR’s officials, in the exercise of their functions, must ensure that public interest
prevails in any situation that may give rise to an actual or potential personal benefit to
themselves or others, and to prevent any reasonable doubt about the integrity, transparency and
responsibility with which it is acting.
General behaviour

The actions performed and decisions taken are to be based on responsibilities and duties
of the institution and never for the benefit of the official or another third party.

The processes and actions are regulated based on laws and regulations.

When faced with a potential conflict of interest that could affect the legitimacy of the
CGR’s actions, the matter should be discussed with the official’s direct supervisor based
on the existing regulations.

Encourage a culture of public service, in which situations of conflicts of interest are
properly identified by function and it is known how they might be solved.

If it is known that a colleague has been involved in a conflict of interest, officials are
urged to take it up with their head.

The CGR supports public services in the identification and resolution of a conflict of
interest.
Box 5.3. Office of the Comptroller General of the Republic’s
Code of Conduct guidance on conflicts of interest (cont.)

Personal relationships between officials should not affect the interests of the CGR, as
employment decisions should be based on merit, evaluations, performance, skills and
experience.When making decisions, officials should not privilege or favour family and
friends. Duties should be conducted in an honest and transparent way, contributing to
fulfilling our corporate mission and to the benefit of the citizens.

In a situation of conflict of interest, in which the result of an audit can affect a family
member or friend, an official should raise this with his/herdirect leadership, in
accordance with current regulations.Officials do not accept gifts, benefits or privileges
of any kind, because it could generate some doubt about their actions as an officer of the
Comptroller. Exceptions, according to law, are official donations and protocol.

Officials should not externalise their political opinions through social networks or other
means of mass communication, as it can affect the CGR’s image.
In practice

In a situation where an official’s work corresponds to a case involving a family member,
the official should inform his/her direct leadership to avoid questioning about their
objectivity and independence.

Where an official has developed professional and friendly ties, they do not use the
connections for personal benefit – for example, expediting personal documentation.

When a client is grateful for an official’s work and offers a personal gift, the official
should not accept it, telling the client that their work is a public service and that no
compensation is needed. The official should make their direct leader aware.

If an official decides to invest on the stock market, they should refuse to involve the
company.

An official should avoid expressing his/her political views on social networks,
recognising that it could create social turmoil and affect the image of autonomy of their
workplace.
Source: CGR (2013), Código de Conducta [Code of Conduct], CGR, Santiago.
Externally, the CGR could continue its efforts to support ethics training in the
executive.4 While the CGR is the institution responsible for delivering the main
guidelines on Probity and Public Ethics in Public Administration, the public
administration in Chile has adopted quite a decentralised approach on ethics training with
public officials being trained on values and standards of conduct through programmes
implemented by individual public entities. The individual human resource departments of
public entities develop the contents of the training material. The CGR could also engage
with the Council of Government’s General Internal Auditors (Consejo de Auditoría
Interna General de Gobierno). This council provides guidance on public ethics and
participates in the “Network of Government Institutions for Public Ethics in the
Americas”, together with the United States Office of Government Ethics and the
Canadian Office of the Ethics Counsellor, among others.
Establish a monitoring process to provide management with reasonable
assurance that policies and practices relating to quality control are relevant
and adequate and are operating effectively
INTOSAI (2010a) “Quality Control for SAIs” states that an SAI should establish a
monitoring process to provide management with reasonable assurance that policies and
practices relating to quality control are relevant and adequate and are operating
effectively. In doing so, SAIs should ensure that the results of the monitoring of the
system of quality control are reported to the head of the SAI in a timely manner, to enable
the head of the SAI to take appropriate action. Where appropriate, SAIs should consider
engaging another SAI, or other suitable body, to carry out an independent review of the
overall system of quality control (such as a peer review), as have the SAIs of Denmark
and South Africa, and the European Court of Auditors. Where appropriate, SAIs may
consider other means of monitoring the quality of their work, which may include, but not
be limited to: independent academic review; stakeholder surveys; follow-up reviews of
recommendations; or feedback from audited organisations (e.g. client surveys). SAIs
should have procedures for dealing with complaints or allegations about the quality of
work performed by the SAI. SAIs should consider whether there are any legislative or
other requirements to make monitoring reports public or to respond to public complaints
or allegations related to the work carried out by the SAI.
For most benchmark SAIs, quality control is an integral part of each audit
engagement, yet only 6 SAIs report having a monitoring process to ensure that this
quality control is relevant, adequate and operating effectively. Surveys and independent
peer reviews- conducted by suitable bodies, peer SAIs or academia - are the most
commonly used techniques. The CGR is commissioning an assessment on the value,
impact and relevance of its work. Furthermore, it has begun to survey stakeholders for
feedback and has established procedures for stakeholders to make complaints online. The
SAIs of Australia, Denmark, South Africa and Spain and the European Court of Auditors
similarly take a variety of approaches to quality control assurance, which include those
suggested by INTOSAI (2010a) “Quality Control for SAIs” (Table 5.9). The SAI of
Denmark conducts surveys periodically, as detailed in (Box 5.4). The SAI of Australia
commissions an annual Independent Audit, and has an arrangement with the SAI of New
Zealand for biennial peer review of selected performance audits. In 2013, the Independent
Auditor reported publicly on the topic of Quality Control around Financial Statement
Audits. To ensure follow-up on recommendations and outcomes of surveys, the ECA is in
the practice of sharing survey feedback from audited entities, clients and academics to
relevant audit teams.
Table 5.9. Monitoring processes and techniques to ensure that Quality Control systems are relevant,
adequate and operating effectively
Country
Monitoring processes
exist
Entails
Peer reviews
Surveys
Complaint
Mechanisms
●
Australia
Brazil
Chile
Costa Rica
Denmark
European Court of
Auditors
Israel
Italy
Korea
Portugal
South Africa
Spain
●
o
●
o
●
●
●
x
x
x
●
●
●
x
x
x
●
●
o
●
●
●
o
o
o
o
●
●
x
x
..
x
x
x
..
x
x
x
..
x
●
o
o
●
o
●
Total yes
6
5
5
3
..
Notes: ● = Yes; o = No; x = Not applicable; .. = Missing. Peer Review refers here to reviews conducted by
another SAI or other suitable body, or to an academic review. Surveys refer here to client/auditee surveys and
quality surveys. Australia: In addition to annual and biennial peer review mechanisms, ANAO conducts
auditee surveys, parliamentary surveys and has completed an ASQC1 equivalent internal review of the
Office. South Africa: Audit quality is one of AGSA's key performance measures and primary focus areas.
Policies and procedures are designed to ensure that the quality control system is relevant, adequate, operating
effectively and complies with, and includes an annual quality control review conducted by the South African
Independent Regulatory Board for Auditing.
Box 5.4. Processes to ensure quality control is relevant, adequate and operating
effectively
Rigsrevisionen , the SAI of Denmark, has used a variety of techniques to assess their value
added to audited entities and to the governance system. In 2006, the SAIs of Canada, Norway,
Poland and Sweden conducted a peer review of Rigsrevisionen at its request. The review aimed
to provide parliament, the Public Accounts Commmittee, the government administration and the
public with an external assessment of its ability to provide parliament with objective information
about the government administration. It looked at Rigsrevisionen’s independence, design and
operational effectiveness.
Rigsrevisionen’s financial audit and performance audit work was assessed against
international standards (INTOSAI) and their own internal guidelines in the areas of
independence and competence, planning, data collection and documentation, quality control and
assurance, reporting and follow up. The review highlighted good practices and suggested that
Rigsrevisionen could have further strategic planning, more consistent risk analyses in financial
audits, increased focus on IT audits and a strategy for drawing up recommendations. It also
suggested that performance audits should focus more on economy, efficieny and effectiveness.
Following the review, Rigsrevisionen management created an action plan to address the review’s
suggestions, assigning each area of weakness a task and actor to follow-up on that task.
For three weeks in 2009, Rigsrevisionen had a consultancy firm conduct an independent
client survey on their behalf. The clients included permanent secretaries, director generals,
managing directors of government-owned companies, financial managers, other officials in
central government and members of the Public Accounts Committee.
Rigsrevisionen was most interested in understanding how their clients experienced the
quality of services offered, their working relationship and the usefulness of their audit findings.
The survey identified areas for improvement across four areas- financial auditing (annual audit);
performance auditing (major examinations); coordination, planning and counselling; and
interaction with the Public Accounts Committee. The findings included recommendations to
become more responsive during the audit phase in which memoranda and draft reports are being
prepared, and to raise the competencies of SAI staff to a more uniform level.
Source: Peer Review of Rigsrevisionen, http://uk.rigsrevisionen.dk/about-us/development/, Management’s
action plan to follow up on peer review suggestions http://uk.rigsrevisionen.dk/aboutus/development/managements-action-plan-to-follow-up-on-the-review-suggestions/ , and Summary of
Rigsrevisionen’s client survey, http://uk.rigsrevisionen.dk/how-we-audit/client-survey-2009.
Conclusions
The CGR has demonstrated its commitment to ensuring that audit work is relevant to
strategic, social and functional perspectives and is of high quality, through comprehensive
and careful annual audit programming, updates to the standardised audit process in 2012
and a new Code of Conduct introduced in 2013.
Building on this momentum, the CGR could continue to invest in developing
knowledge about audited entities and programmes. This can occur through both clearer
communication on objectives, methodology and criteria in advance of the audit, and by
leveraging auditee engagement throughout the entire audit process. Not only does this
help to support more efficient execution of the engagement at hand, it acts as a feedback
mechanism for future prioritsation, planning and execution. Furthermore, this helps to
support effective quality control of the audit when informed planning reduces risk to an
acceptably low level such that auditors are able to obtain sufficient and appropriate
evidence to support the findings and conclusions.
Efforts to improve prioritisation, planning and execution of audits are most effective
when coupled with efforts to improve monitoring and quality control. With the
introduction of a new Code of Conduct, the CGR has the opportunity to augment its
quality of work and professional conduct. They can ensure that the requirements outlined
in the Code of Conduct are integrated into the daily work of CGR officials through
trainings, inductions and other activities including workshops and surveys.
The CGR could consolidate current monitoring and quality control processes, and
build on current initiatives to implement independent monitoring mechanisms. This
would help provide management with reasonable assurance that both the conduct of
auditors, and the quality of their work, is held to the standards by which CGR wishes to
govern. The CGR can benefit from an independent and objective evaluation of its
performance, as well as a better understanding of the needs and wants of auditees,
through peer reviews on specific audit work or engagements, or further integrating client
surveys, for example. Acquiring continuous feedback helps to ensure that audit priorities
remain relevant to whole-of-government issues in a dynamic and changing society. Table
5.10 provides a summary of the recommendations made in this chapter.
Table 5.10. Preliminary recommendations matrix: Prioritising and ensuring
the quality of individual audit engagements
Prioritise ex post audit
engagements, including:
– continually investing in
developing knowledge of
audited entities and
programmes
– ensuring that the terms of the
audit have been clearly
established and communicated
in order to support efficient
execution and effective quality
control of the audit.
To remain at the forefront of understanding in the
evolution of public sector entities with a
whole-of-government approach.
To leverage engagement with audited entities by
defining the objective of individual audit
engagements and the criteria that will be used to
assess audited entities as part of its formal audit
planning and future prioritisation
To ensure relevance of audit priorities.
To ensure clear understanding of the
terms of the audit by auditors, as well
as serving as a basis for communicating
this information with auditees.
To ensure that auditors have a clear
understanding of the objectives,
operations, regulatory environment,
internal controls, systems and business
processes involved as well as the
potential sources of audit evidence.
Ensure quality in ex post audit
engagements, including:
– supporting the implementation
of ethical guidelines contained
in the CGR’s 2013 Code of
Conduct through training
activities and the inclusion in
audit manuals and guidelines
– consolidating monitoring and
quality control processes.
The CGR published its first Code of Conduct in
July 2013 in order to establish a framework to
guide the behaviour of its officials. However,
attention has yet to focus on supporting the
implementation of the code such as through
training and inclusion in audit guidelines.
Implementation of the Code of Conduct could be
evaluated by assessing both the knowledge
received by the participants of the training and to
identify ways to further improve the training.
Monitoring processes need further consolidation
and strengthening, in order to to provide
management with reasonable assurance that
policies and practices relating to quality control
are relevant and adequate and are operating
effectively.
To provide reasonable assurance that
the conduct of auditors is beyond
reproach at all times and in all
circumstances as a basis for promoting
trust and confidence in the auditors and
their work.
To provide the Comptroller General and
CGR management with reasonable
assurance that the policies and
procedures relating to the system of
quality control are relevant and
adequate and are operating effectively,
as a basis for evaluating and improving
quality control.
Notes
1.
The external control technical units (UTCE) keep track of the relevant information for
each entity, namely: accounting information, complaints or fiscalisation suggestions
by citizens; revised materials in recent years; press analysis; suggestions from the
audit teams.
2.
SICA supports the definition by the UTCE of the services, programmes and matters to
be audited in an efficient and effective way ensuring quality and the accomplishment
of goals established by the institutional doctrine. For these purposes, SICA uses
parameters and indicators that are entered into the system.
3.
For FY 2013, the weighting of the crossing of the two instruments were the same
i.e. 50% for the Matrix of Relative Importance ranking and 50% for the Planning
Unit’s risk indicators ranking. This weighting may be changed in future years.
4.
The CGR is the institution responsible for delivering the main Guidelines on Probity
and Public Ethics in Public Administration. Through an agreement with
two universities, since 2008 the CGR has been holding an annual Seminar on Probity
and Transparency, involving utilities and municipalities throughout the country. To
date, there have been 25 versions of the seminar, with a total of 3 420 public and
municipal officials, who participated in the different versions, held in each of the
regions. In addition, the CGR has trained over 740 officials in more than 35 activities
on probity and public ethics in the public administration.
References
CGR (2013), Código de Conducta [Code of Conduct], CGR, Santiago.
CGR (2012a), Estudio sobre Estimación de Horas a Planificar [Study on the Estimation
of Hours to be Included in Audit Planning], External Control Technical Unit, CGR,
Santiago, June.
CGR (2012b), “Final report: Assessment of activities and results strengthening
performance-based management project”, CGR, Santiago, June, www.contaloria.cl.
CGR (2012c), “Final report. Study on the estimation of hours to be included in audit
planning, external control technical units”, CGR, Santiago.
CGR (2012d), “Guía práctica módulo ejecución SICA v.3.0 [Practical guide SICA v3.0]”,
CGR, Santiago, unpublished guidelines.
CGR (2012e), Modelo de Planificación 2013 [2013 Planning Model], External Control
Technical Unit, CGR, Santiago, August.
OECD (2013), Brazil’s Supreme Audit Institution: The Audit of the Consolidated YearEnd Government Report, OECD Public Governance Reviews, OECD Publishing,
Paris, http://dx.doi.org/10.1787/9789264188112-en.
“Fundamental Principles for Public Sector Auditing”, International Standards of
Supreme Audit Institutions (ISSAI), 100, INTOSAI Professional Standards
INTOSAI (2010a), “Quality Control for SAIs”, International Standards of Supreme Audit
INTOSAI (2010b), How to Increase the Use and Impact of Audit Reports: A Guide for
Supreme
Audit
Institutions,
National
Audit
Office,
London,
http://cbc.courdescomptes.ma/index.php?id=20&tx_abdownloads_pi1%5baction%5d=
getviewclickeddownload&tx_abdownloads_pi1%5buid%5d=86&no_cache=1.
INTOSAI (1998), “Code of Ethics”, International Standards of Supreme Audit
6. ENHANCING THE TRANSPARENCY AND PERFORMANCE OF CHILE’S SUPREME AUDIT INSTITUTION – 295
Chapter 6
Enhancing the transparency and performance
of Chile’s supreme audit institution*
This chapter examines practices used by the Office of the Comptroller General of the
(SAI) – to improve its transparency and demonstrate its impact. Transparency and
performance are elements for enhancing the CGR’s own accountability – and leading by
example. In examining the CGR’s practices, the chapter examines the institution’s:
i) efforts to enhance transparency of its mandate, responsibilities and operations,
including through the use of the Internet and social media; and ii) approaches to measure
the performance of its internal operations and audit assignments. The analysis is framed
by International Standards of Supreme Audit Institutions (ISSAI), INTOSAI good
guidance and a past UN/INTOSAI Symposium on Government Audit. Specific reference is
made to INTOSAI “Principles Transparency and Accountability” (ISSAI 20), INTOSAI
How to Increase the Use and Impact of Audit Reports: A Guide for Supreme Audit
Institutions and the UN/INTOSAI “Symposium on the Value and Benefits of Government
Audit in a Globalised Environment”. The chapter includes comparative data for the CGR
as well as 13 SAIs collected through an OECD survey conducted specifically for this peer
review.
*
296 – 6. ENHANCING THE TRANSPARENCY AND PERFORMANCE OF CHILE’S SUPREME AUDIT INSTITUTION
Introduction
This chapter examines the practices used by the Office of the Comptroller General of
the Republic (Contraloría General de la República, CGR) – Chile’s supreme audit
institution (SAI) – to improve its transparency and demonstrate its performance.
Transparency and performance measurement help an SAI to demonstrate to government,
citizens and business that it has used its resources effectively, that audit assignments are
carried out according to recognised standards and that there is continuous improvement in
audit function over time (UN/INTOSAI, 2007). External stakeholders are also interested
in the value and benefit of SAIs to ensure appropriate oversight of government
operations, as a means to support efforts to strengthen public institutions (OECD, 2011).
Moreover, given their oversight and accountability role, SAIs must lead by example,
promoting a better understanding of their mandate, responsibilities and strategy and
demonstrating the value that they provide for citizens. SAIs serve as important pillars of
their national democratic systems and play a pivotal role in enhancing public sector
performance, emphasising the importance of the principles of good governance,
transparency and accountability (INTOSAI, 2010a).
The discussion of the CGR’s practices to improve its transparency and measure its
performance should be seen within the broader context of the public sector in Chile. The
government of Chile has increased transparency since the 1990s as part of a process of
administrative reform. Since 2006, the government of Chile has emphasised the principle
of “active transparency”, for public entities to report information on their own initiative
and without the need of any requirement whatsoever.1 The Law on Access to Public
Information (Law 20 285), promulgated in 2009, enforces the citizens’ right of access to
public information and created a Council for Transparency responsible for enforcing the
law. In 2011, the government of Chile joined the Open Government Partnership (OGP) –
a multilateral initiative that aims to secure concrete commitments from governments to
promote transparency, empower citizens, fight corruption and harness new technologies
to strengthen governance. The CGR, as part of an agreement with the Council for
Transparency, supports the review of public entities’ compliance with the Law on Access
to Public Information. The CGR also formally participated in the formulation of the
government of Chile’s OGP action plan.2
The use of performance information in public budgeting in Chile is advanced, and is
part of a broader performance management system, known as the “system of evaluation
and management control”. This system has five components. First, strategic definitions
describe a public entity’s mission, goals, products and beneficiaries and are submitted
annually to Congress as part of the information accompanying the Budget Bill. Second,
performance indicators and goals are incorporated into ministries’ budget proposals that
are reviewed by the Ministry of Finance’s Budget Directorate. Third, impact evaluations
and comprehensive spending reviews are employed led by the Budget Directorate, the
reports of which are sent to Congress and made publicly available. Fourth, a Management
Improvement Programme rewards central government employees with bonuses based on
the organisation’s performance in specific domains. Finally, all public entities must report
on their objectives, management targets and results each year, and which are analysed by
the Budget Directorate and forwarded to Congress. This system aims to improve the
effectiveness of policy making and management throughout central government, to create
performance incentives for public officials and to make the budget results-oriented
(Hawkesworth et al., 2013).
In analysing the CGR’s practices to improve its transparency and demonstrate its
performance, this chapter examines the institution’s:

efforts to enhance the transparency of its mandate, responsibilities and front-line
and back-office operations, including through the use of the Internet and social
media as a necessary prerequisite for accountability

approaches to measure performance to inform internal management
decision making, to facilitate dialogue with its stakeholders and support external
accountability to citizens.
The analysis is framed by International Standards of Supreme Audit Institutions
(ISSAI), International Organisation of Supreme Audit Institution (INTOSAI) good
practice guidance. Specific reference is made to INTOSAI (2010a) “Principles of
Transparency and Accountability”, INTOSAI (2010b) How to Increase the Use and
Impact of Audit Reports: A Guide for Supreme Audit Institutions and conclusions of the
UN/INTOSAI (2007) “Symposium on the Value and Benefits of Government Audit in a
Globalised Environment”. The “Principles of Transparency and Accountability” places
emphasis on transparency of the SAI’s mandate, mission and strategy, as well as the
process and methods used to provide oversight. It also places emphasis on SAIs publicly
reporting on the results of their audit work and their operations, including achieving
economic, efficient and effective management. INTOSAI (2010b) places emphasis on
enhancing the impact of audit work throughout the audit cycle, including before, during
and after the audit. It also draws attention to how engaging stakeholders (i.e. legislature,
media and civil society) in audit work can enhance the impact of SAIs. UN/INTOSAI
(2007) recommends that SAIs develop further performance measures and reporting on
their efficiency, delivery of products and other outputs, timeliness of audit reporting,
obtain feedback on their work, monitor media coverage of audit work as well as staff
satisfaction.
Increasing transparency of institutional responsibilities and assignments
Transparency of the CGR’s responsibilities and assignments serves as a basis for
discussing its performance and supporting its accountability. INTOSAI (2010a)
“Principles of Transparency and Accountability” consider transparency as including the
obligation to report publically on audit findings and conclusions and to facilitate public
access to information about the SAI. Specifically, the principles state that first and
foremost, the legal framework should support SAI transparency and accountability
(Principle 1). In addition, the SAI should: make publicly available its mandate, mission
and strategy (Principle 2); adopt objective and transparent audit standards, processes and
methods (Principle 3); report publicly on the results of its audits and on its conclusions
regarding overall government activities (Principle 7); and communicate timely and
widely on its activities and audit results through the media, websites and by other means
(Principle 8).
The CGR’s legislative framework provides a sound basis for the institution’s
transparency, though this framework can create some confusion regarding the scope of
the CGR’s mandate. The CGR makes information publically available on its mandate,
mission and the types of its assignments through its website and annual report; however,
it does not provide information regarding its audit standards and methods. Beginning in
2010, the CGR made available, free of charge, its audit reports and legal opinions through
its website; previously such materials had to be formally requested. Today, the CGR’s
website is considered one of the most transparent within the national (central)
government. The CGR also communicates timely and widely on its audit findings using
social media and the press. However, the CGR does not produce executive summaries
and other means to increase the ease with which its audit reports can be understood and
used, as discussed in Chapters 2 and 4. Nor has the CGR created any products that
communicate common findings, trends and root causes identified through its audit
engagements. The CGR has a communication (action) plan to strengthen internal and
external communications, but the institution does not have a communications strategy to
ensure its main messages are successfully communicated to its target audiences.
In order to enhance transparency of the CGR’s responsibilities and assignments, the
CGR may consider:

increasing the clarity of the CGR’s mandate as part of current efforts to amend
the institution’s organic law

promoting the transparency of audit standards, processes and methods in order to
facilitate understanding of and build confidence in audit working methods

developing products that combine the findings of different audit assignments and
communicating a broader understanding of government issues

leveraging its communication strategy to support active use of audit work,
defining audiences and identifying how they access this information

undertaking specific measures to overcome barriers and constraints attributed to
the country’s digital divide.
Increase the clarity of the Office of the Comptroller General of the Republic’s
mandate as part of current efforts to amend the institution’s organic law
Chile’s Constitution and the CGR Organic Law (Law 10 336) establish the
framework for holding the institution accountable, in accordance with INTOSAI (2010)
“Principles of Transparency and Accountability”. These principles state that SAI guiding
legislation should establish the terms in which it can be held responsible and accountable.
This legislation should generally cover: i) the institution’s audit authority, jurisdiction and
responsibilities; ii) the conditions surrounding appointment and dismissal of the head of
the SAI (or members of collegial institutions); iii) the SAI’s operating and financial
management requirements; iv) the timely publishing of audit reports; v) the oversight of
the SAI’s activities; and vi) the balance between public access to information and
confidentiality of audit evidence and other SAI information (Principle 1). However, the
CGR Organic Law can give rise to confusion about the institution’s mandate.
Specifically, the Organic Law implies that the scope of the institution’s mandate is
broader than it is in practice. The government of Chile is currently exploring formulating
a new CGR Organic Law and this opportunity could be used to clarity the CGR’s
mandate and organisational structure.
Chile’s Constitution (Art. 98) defines the CGR’s responsibilities and establishes its
organisational independence from the executive, legislature and judiciary. The
Constitution establishes the CGR’s responsibilities as including: i) overseeing the legality
of acts of the public administration; ii) overseeing the revenue received and investment
funded by the state treasury, municipalities and other statutory public entities;
iii) examining and judging the accounts of individuals entrusted with resources of public
entities under the oversight of the CGR; and iv) preparing the general government
accounts (contabilidad general de la nación). The Constitution establishes the CGR as an
autonomous constitutional body and the conditions surrounding appointment of the
Comptroller General, the organisation’s head. The Comptroller General is nominated by
the President of the Republic and confirmed by the Senate for an eight-year
non-renewable term or until mandatory retirement of 75 years of age. Chapter 1 discusses
the CGR’s organisational independence in more detail.
The CGR Organic Law establishes that the Comptroller General has the freedom to
decide the objective and scope of audit engagements and to publish and disseminate the
results and findings. The Comptroller General may report on any other matter related, or
potentially related, to the investment or promise of public funds, insofar as doubts arise
with regard to the correct application of the laws concerned. However, the Comptroller
General may not intervene or report on matters that by their nature are obviously litigious,
or have been brought to the attention of the courts of justice, that are within the sphere of
competence of the State Defence Council (Law 10 336, Art. 6). Audit reports on the
Armed Forces of Chile (Fuerzas Armadas de Chile) are not publically available if they
contain material that is categorised as secret or reserved under the Law 20 285 on Access
to Public Information (Law 20 285) and the Code of Military Justice (Código de Justicia
Militar – Decree 2 226). Chapter 1 discusses the CGR’s functional independence in more
detail.
The CGR Organic Law grants the Comptroller General significant administrative
independence. The Comptroller General has authority to close, merge or create
divisions/units, establishing to whom officials report and assigning to them powers and
assignments, as guaranteed by the CGR Organic Law. The Comptroller General is also
responsible for the allocation of personnel among the divisions and offices of the CGR
and for appointing officials who serve as division heads, regional comptrollers and
prosecutors (Law 10 336, Art. 51). The Comptroller General is free to appoint staff within
the budgetary framework approved by the National Congress’ Joint Budget Committee,
including mobilising short-term expertise through honoraria and other service contracts.
CGR officials are appointed, promoted and removed at the pleasure of the Comptroller
General (exclusiva confianza del Contralor), with complete independence from any other
public authority (Law 10 336, Art. 3). Chapter 1 discusses the CGR’s administrative
independence in more detail.
Balancing this administrative independence, the CGR Organic Law establishes the
obligation that the Comptroller General report annually on the management of its budget
and activities to the President and both houses of Congress. Each of the CGR’s regional
offices – of which there are currently 14 – must also produce an annual report on its
operations for the regional executive (gobierno regional) (Law 10 336, Art. 143). In
practice, these annual reports are also presented to the public. These annual reports are
independent of other reports prepared and released by the Comptroller General, and that
may be brought to the attention of the National Congress, the media or the general public
as deemed appropriate (Law 10 336, Art. 6). The content of these annual reports are
discussed later in this chapter.
The CGR Organic Law states that the institution is governed by the principle of
transparency in exercising its functions and it complies with the provisions of the Law on
Access to Public Information (Law 20 285). Formally, the CGR – as in the case of other
constitutionally autonomous organs such as the central bank, the Public Prosecutor
(Fiscalía), the Constitutional Tribunal and the Electoral Justice – only has the obligation
to comply to the Law on Access to Public Information provisions for “active
transparency”, that is the information that public entities must make publicly available
without requiring any information request from citizens. The CGR has, however,
promulgated its own procedures through which citizens may request information,
including through its institutional website. The exception to this is the information
defined as classified or confidential under the Law on Access to Public Information. If
citizens request information defined as classified or confidential, the CGR notifies those
requesting the information of the reason why information is not being provided through
an oficio.
The CGR Organic Law can give rise to confusion about the institution’s mandate. For
example, the CGR Organic Law states that the institution may audit services, fiscal and
semi-fiscal institutions, autonomous organisations, public enterprises and, in general, all
those public entities established by law, without this affecting the control exercised by
independent regulatory agencies (superintendencia). Moreover, the law states that the
CGR’s audit is independent of that exercised by the Superintendent of Banks
(Superintendencia de Bancos) over the central bank and the Banco del Estado de Chile
(Law 10 336, Art. 16). This suggests that the CGR may audit the central bank and the
Banco del Estado de Chile. The current law also suggests that the CGR may audit the
State Copper Company (Corporación Nacional del Cobre de Chile, CODELCO), which
it may not under other statutes (Decree Law 1 349/1976, Art. 12).
The CGR Organic Law could also be revised to promote transparency and remove
redundant sections – and also reinforce the institution’s independence and agility to react
to changes in the public sector. The current CGR Organic law defines the institution’s
organisational structure, which is no longer followed. The CGR Organic Law states the
institution is has a Legal Department (Departamento Jurídico), Accounting Department
(Departamento de Contabilidad), Inspection Department (Departamento de Inspección),
CGR Prosecutor (Fiscal), Toma de Razón Subdepartment (Subdepartamento de Toma de
Razón), Registration of Public Employees Subdepartment (Subdepartamento de Registro
de Empleados Públicos), Central Accounting Subdepartment (Subdepartamento de
Contabilidad Central), Revenue Control Subdepartment (Subdepartamento de Control de
Entradas), Expenditure Control Subdepartment (Subdepartamento de Control de Gastos),
Public Credit and National Assets Subdepartment (Subdepartamento de Crédito Público y
Bienes Nacionales) and General Secretariat (Secretaría General) (Law 10 336, Art. 2).
The responsibilities of these units are subsequently detailed in law (Law 10 336,
Arts. 33-43).
The government of Chile is currently exploring formulating a new CGR Organic Law
and this opportunity could be used to clarify the CGR’s mandate and organisational
structure – though taking action to ensure the new law does not under undermine the real
or perceived independence of the institution. On 21 May 2013 the President of Chile,
Mr. Sebastian Piñera, indicated that he will send a bill to the National Congress to replace
the current CGR Organic Law in order to support the institution’s modernisation. The
announcement was made as part of the President’s annual speech to the National
Congress that presents an account of the previous year and the government’s programme
for the forthcoming year. The proposal for the CGR Organic Law was agreed with the
Comptroller General and as part of the government’s initiatives to promote a more vibrant
democracy, a stronger state and more independent regions. The bill was announced
together with bills on transparency, lobbying and public sector integrity, and a revision of
the Organic Law of Political Parties for making their structure and financing more
transparent. There was no mention in the President’s speech regarding when the bill on
the CGR Organic Law would be sent to the National Congress.
Promote transparency of audit standards, processes and methods in order
to facilitate understanding of and build confidence in audit working methods
INTOSAI (2010) “Principles of Transparency and Accountability” states that SAIs
should make information publically available regarding their mandate, mission,
organisation, strategy and relationships with various stakeholders, including legislative
bodies and executive authorities. This should include making public the conditions of
appointment, reappointment, retirement and removal of the head of the SAI and members
of collegial institutions (Principle 2). Moreover, the principles state that SAIs adopt audit
standards, processes and methods that are objective and transparent. These standards
should comply with INTOSAI Fundamental Auditing Principles. Moreover, SAIs should
communicate what those standards and methodologies are and how they comply with
them. In addition, when engaging in individual audit assignments, SAIs should
communicate with the auditee, the objective, criteria on which they will base their
conclusions and methodology to conduct their audit work (Principle 3).
The CGR, through its institutional website makes information publically available in
Spanish (the national language of Chile) regarding its mandate, mission, organisation and
strategy. Figure 6.1 presents the current CGR website. A summary version of the Spanish
website is available in English. However, the website does not provide information on the
CGR’s relationship with executive authorities and legislative bodies. Moreover, there is
much duplication of information in various sections of the CGR website. For example,
the CGR mandate appears under the “CGR” (under “who are we”) and “Transparency”
(under “functions and attributions”) tabs; the CGR’s organigram appears under the
“CGR” and “Transparency” tabs; and the regulatory framework appears under the
“Transparency” tab and “Information of Interest” section. The recent establishment of a
new Digital Communications and Strategy Unit will help address these issues.
The CGR could provide general information regarding its audit standards, processes
and methods – as well as procedures to ensure the quality of its work – in order to build
confidence in its audit engagements. Over the past several years, the CGR has updated its
audit manuals as part of its modernisation reforms. Chapter 5 discusses the efforts to
update the audit manuals in more detail. The CGR may wish not only to publish its
manuals but to present them in more user-friendly language for the benefit of its
stakeholders. For example, the Auditor-General of South Africa’s website has a clearly
visible tab on “audit guidelines” which includes reporting and good practice guidance.
The Auditor-General of South Africa publishes its “Audit communication and reporting”,
which explains matters that do and do not affect the audit opinion on financial statements,
as well as a clear chart about communication with those charged with governance and
management throughout the audit cycle. It also includes a glossary of financial audit
terms (Box 6.1). Over time, as the CGR seeks to converge with ISSAIs, the CGR could
also explain how its standards, processes and methods contained in these manuals are
coherent and/or diverge from ISSAIs, as well as future plans to converge with these
ISSAIs.
The CGR could also broaden the scope of information communicated with auditees as
part of individual engagement in order to support constructive working relations.
Specifically, the CGR could provide auditees information on the objective and criteria for
audit work when initiating an audit engagement. This is common practice in benchmark
SAIs (Table 6.1). The omission of the audit objective and criteria in the formal notice
gives an impression that the CGR’s audit work is not focused on risks. INTOSAI (2013)
precise significance and mix of criteria will depend on the objectives of the audit;
reliability, neutrality, understandability and objectivity. Making the criteria available to
the intended users would enable them to understand how the subject matter has been
evaluated or measured (INTOSAI, 2013, § 30).
Figure 6.1. Office of the Comptroller General of the Republic of Chile’s institutional website
Comptroller General, including
history, who are we, strategic
definitions, organigram,
Comptroller General, authorities,
annual report
Regional comptrollers (1 link for each
regional comptroller), including regional
comptroller’s profile, office’s mandate,
regional office’s annual report, address
and contact details
Information: highlights, relevant
legal opinions, latest reports,
document library
Attention and users, including
offices and hours, guided tours,
library, contacts, procurement,
frequently asked questions
Agendas: Comptroller General,
Deputy Comptroller General,
CGR authorities
Search online: legal opinions,
jurisprudence bulletin, legislation,
audit reports, accounting norms,
accounts trials
General accounting: Norms,
procedures, instructions; financial
accounting reports; PMG
accreditation; applications
News banner
News ticker
Portals: SIAPER; UCIS;
ASOC; NICSP; CEPAT;
OLACEFS; INTOSAI
Services: Comptroller and
citizens; electronic tracking of
processes; requests for
information under Access to
Information Law; recruitment;
CGR well-being programme
Intranet for CGR officials
Participation: Comptroller and
citizens; social media; guided
visits; multimedia
Transparency, including
requests for information,
organisational structure,
functions and attributions,
regulatory framework, human
resources, contracts, acts and
resolutions, expenditure, office
hours, institutional relations
Information of interest: Anti-corruption; Regulatory framework; municipal
expenditure reports; CGR annual report; CGR book; electronic toma de razón;
standardised administrative acts; Manual on Regional Planning
Source: Adapted from www.contraloria.cl.
and audit cycle: The example of the Auditor-General of South Africa
The Auditor-General of South Africa has developed and publishes information on “audit
communication and reporting” to support auditees and other stakeholders in undersanding its
financial audit opinions and audit process. The Auditor-General of South Africa website has a
clearly visible tab on “audit guidelines” which includes reporting and good practice guidance.
This information explains what matters do and do not affect the audit opinion on financial
statements, information about the audit process, including the communication with those
charged with governance and management.
Box 6.1. Approaches to raise awareness and understanding of audit reporting and
audit cycle: The example of the Auditor-General of South Africa (cont.)
Modification of the audit opinion
Communication in the audit process
Source:
AGSA
(2011),
“Audit
www.agsa.co.za/Auditguidelines.aspx.
Communication
and
Reporting”,
AGSA,
Develop products that combine the findings of different audit assignments
and communicate a broader understanding of government issues
make public their conclusions and recommendations resulting from the audits unless they
are considered confidential by special laws and regulations. In addition, SAIs should also
report publicly on overall audit outcomes, e.g. the government’s overall budget
implementation, financial condition and operations and overall financial management
progress and, if included in their legal framework, on professional capacity (Principle 7).
Table 6.1. Communication with auditees at the beginning of an audit engagement
by the supreme audit institution in Chile and selected counties
Audit subject
and scope
Responsibilities of
SAI and auditee
for audit work
Lead SAI
contact for the
audit work
Audit plan
and timetable
for audit work
Information and
access needed
for audit work
When SAI will
share preliminary
audit report
●
●
●
●
●
●
Brazil
..
●
●
●
●
●
Chile
o
o
●
o
●
o
Costa Rica
●
●
●
●
●
●
Denmark
..
●
●
●
●
●
European Court
of Auditors
●
●
●
●
●
●
Israel
●
o
●
o
●
o
Italy
..
●
●
●
●
●
Korea
●
●
●
●
●
●
Mexico
..
..
..
..
..
..
Country
Australia
Peru
..
..
..
..
..
..
Portugal
●
●
●
●
●
●
South Africa
..
●
●
●
●
●
Spain
●
●
●
●
●
●
Total yes
7
10
12
10
12
10
to Q. 39-40.
main findings and to disseminate its products. Since 2007, the CGR has made the agenda
of its authorities publically available on the institution’s website. The CGR’s authorities
include the Comptroller General, Deputy Comptroller General, division heads and
regional comptrollers. The agendas include information such as meetings, hearings, visits
and formal events, among others. Since 2010, the CGR has made its databases on legal
opinions (dictamine) and audit reports publically available. Legal opinions are specialised
judgements on legal matters issued by the CGR which are mandatory for ministries and
services under the CGR’s oversight. Audit reports are the means to communicate the
findings of audit engagements to the corresponding auditees. Previously, it was necessary
to pay to access the CGR’s databases and reports or to submit a request in person to the
CGR to access copies of legal opinions and audit reports. These changes have resulted in
a substantial increase in web traffic to the CGR’s website, from approximately 5 000
unique visitors each month in the beginning of 2007 to approximately 25 000 unique
visitors each month in the beginning of 2013 (Figure 6.2).
Figure 6.2. Office of the Comptroller General of the Republic of Chile’s website traffic
35 000
30 000
25 000
20 000
15 000
10 000
5 000
0
ene-07
may
sep
ene-08
may
sep
ene-09
may
sep
ene-10
May
Sep
ene-11
May
Sep
ene-12
may
Sept ene-13
A 2012 Transparencia Chile study found that the CGR’s website is considered one of
the most transparent within the national (central) government (Figure 6.3). The evaluation
was based on an assessment of information provided by public entities on their respective
institutional websites compared to what is required by the Law on Access to Information.
Through the CGR website’s transparency page (Contraloría transparente) information is
also made available on the institution’s organisational structure; functions and attributions
of the divisions of the institution; legal framework established for the functioning of the
CGR; staff under planta, contrata and honorarios, and their salaries; procurement,
including contracts and acquisitions of goods and services made through
hwww.mercadopublico.cl; resolutions, with links to the Jurisprudence Database (Base de
Jurisprudencia) and the audit reports browser (Buscador de Informes de Auditoría); the
budget and its monthly execution; procedures that can be done at the CGR and its
requisites; as well as institutional relations with other entities.
Subsequently, at the end of 2012, the CGR began publishing its internal audit reports
and their results which are available through an audit report search engine on the CGR’s
website. The publication of internal audit reports within the public administration is not
very common. For example, the IIA (2012) conducted survey of 160 public entities in
14 countries, including Australia, Mexico and South Africa, to understand whether they
made their internal audit reports publically available. The IIA survey found that only 14%
made internal audit reports publically available on the Internet.
The CGR Organic Law obligates the Comptroller General to prepare an annual report
(Cuentas Publica) on the management of the institution during the previous year and to
share the report with the President of the Republic and the National Congress, no later
than May each year. The report is to contain: i) a summary of the main activities in the
performance of its functions; ii) a statement of the insistence decrees issued by the
President of the Republic, stating the grounds of representation and the insistence; iii) a
summary of the main doubts and difficulties that have arisen with regard to the
interpretation and application of legal rules and may suggest modifications for the best
and most expeditious functioning of government; iv) a statement of the internal financial
situation of the CGR; and v) other matters which the Comptroller General deems
appropriate to make reference. In addition, each regional comptroller must issue an
annual report for his/her respective offices to be shared with the regional government
(executive) (Law 10 336, Art. 143).
Figure 6.3. Index on access to information through public entity websites in Chile
60
80
100
High level of proactive access to information
40
Medium level of proactive access to information
20
Low level of proactive access to information
0
Civil registry
Internal Revenue Service
Ministry of Public Works
National Bureau of Schools and Scholarships
Undersecretariat of the Interior
National Instituto of Statistics
Corporation for Production Development
Service of Agriculture and Cattle Raising
Chilean Commission for Nuclar Energy
Fund for Solidarity and Social Investment
Sports of Chile
Office of the General Comptroller of the Republic, CGR
Institute of Social Security
Constitutional Tribunal
Consumers' National Service
National Service for Training and Employment
Institute of Agricultural Development
National Comission for Scientific and Technological Investigation
National Forestry Corporation of Chile
Bank of the State of Chile
National Service for Youger People
Undersecretariat of Regional and Admnistrative Development
Ministry of Justice
Senate
Superintendence of Securities
National Bureau of Kindergardens institutions
Undersecretariat of Social Security
National Corporation for Indigenous Development
Ministry of Planning
Libraries, Archives and Museums Office
Superintendence of Casinos and Gaming Houses
National Institute for the Youth
Supreme Court
National Service for Elder People
Emergencies National Office
Transparency Council
Ministry of Mining
Women's National Sevice
National Oil Company
Employment Office
Postal Service
State Defense Council
Superintendence of Health
General Secretariat of the Presidency
Minsitry of Housing and Urban Planning
Ministry of Education
Ministry of Finance
Superintendence of Banks and Financial Institutions
Central Bank
Public Procurement Office
National Council for the Culture and Arts
Railroad State Company
Note: Bank of the State of Chile refers to Chile’s sole State owned bank.
Source: Cid, V., G. Marileo and Emilio Moya (2012), “Calidad del Acceso a la Información Pública en Chile”,
Transparencia Chile.
The CGR could give consideration to the development of specific products that
combine the findings of different audit assignments and provide insight for those charged
with governance within the executive and legislature – as well as citizens and business.
SAIs in a number of benchmark countries seek to achieve this, including South Africa
(Box 6.2). However, care must be taken to enable real analysis of these trends and not
simply the presentation of highlights selected without any clear framework. Moreover, it
is critical that information be presented in a simple and user-friendly manner, giving
consideration to how Web 2.0 technologies can enable information to become more
accessible to all. This can be achieved through enabling components of reports to be
downloaded individually, or stakeholders using data to generate their own reports. The
CGR could produce reports on governance challenges and risks focused on specific
public entities, specific government functions/sectors (e.g. health, education, etc.) or
transversal management issues (e.g. human resources, procurement).
Box 6.2. General Report on the National Audit Outcomes
of the Auditor-General of South Africa
The General Report on the National Audit Outcomes of the Auditor-General of South Africa
(AGSA) summarises the results of the audit outcomes of 671 auditees (162 departments –
including parliament and the provincial legislatures – and 509 public entities). Public entities
include the major public entities, government business enterprises, national and provincial public
entities, constitutional institutions and trading entities that are audited in terms of the Public
Finance Management Act (PFMA), as well as other entities audited in terms of any legislation
other than the PFMA. The audit outcomes of the 135 public entities not audited by the AGSA
are not analysed in this general report. The General Report on the National Audit Outcomes is
presented to parliament eight months after the end of the fiscal year, to facilitate dialogue on the
understanding of the key underlying issues driving these audit outcomes and possible solutions
in this regard.
The report is structured into four parts: i) consolidated analysis of the audit outcomes of
national and provincial governments; ii) audit outcomes of ministerial portfolios; iii) sector audit
outcomes (e.g. education, health, human settlements, public works, social development); and
iv) highlights of provincial audit outcomes. The report is 500 pages in length, though its
structure enables the document to be disassembled into smaller sections in print and electronic
formats. Key to the report’s usability is a traffic light coding used throughout the document to
compare between entities in a single year and to compare changes within public entities over
time (i.e. green = good outcomes/trends; orange = stagnant or little progress; and red = poor
outcomes/trends).
The audit outcomes of national and provincial governments include trend analysis of issues
over the previous several years, key findings arising from the audit of the financial statements,
reporting by auditees against their predetermined objectives and key compliance by auditees
with key laws and regulations. Root causes of audit findings and recommended best practices are
also presented, which is intended to be read together with an analysis of the auditees’ internal
control system. Root causes are the underlying causes or drivers of audit findings, i.e. why the
problem occurred. They are structured around planning, oversight and monitoring; systems and
processes; proper record keeping; and human resource management. Addressing the root cause
helps to ensure that the actions address the real issue or opportunity, thus preventing or reducing
incidents of recurrence as opposed to simply providing a one-time or short-term fix. Compliance
by auditees with key laws and regulations include supply chain management and unauthorised,
irregular as well as fruitless and wasteful expenditure incurred.
The status of the auditees’ internal control system identifies the drivers of audit outcomes,
namely leadership, financial and performance management and governance.
Box 6.2. General Report on the National Audit Outcomes of the Auditor-General
of South Africa (cont.)
Category
Leadership
Financial and
performance
management
Governance
Dimensions
– Provide effective leadership based on a culture of honesty, ethical business practices and good
governance, protecting and enhancing the interests of the entity.
– Exercise oversight responsibility regarding financial and performance reporting and compliance with
laws and regulations and related internal controls.
– Implement effective human resource management to ensure that adequate and sufficiently skilled
resources are in place and that performance is monitored.
– Establish and communicate policies and procedures to enable and support an understanding and
execution of internal control objectives, processes and responsibilities.
– Develop and monitor the implementation of action plans to address internal control deficiencies.
– Develop and monitor the implementation of action plans to address internal control deficiencies in the IT
environment. Establish an IT governance framework that supports and enables the business, delivers
value and improves performance.
– Implement proper record keeping in a timely manner to ensure that complete, relevant and accurate
information is accessible and available to support financial and performance reporting.
– Implement controls over daily and monthly processing and reconciling of transactions.
– Prepare regular, accurate and complete financial and performance reports that are supported and
evidenced by reliable information.
– Review and monitor compliance with applicable laws and regulations.
– Design and implement formal controls over IT systems to ensure the reliability of the systems and the
availability, accuracy and protection of information and to address application systems susceptible to
compromised data integrity (Information systems).
– Implement appropriate risk management activities to ensure that regular risk assessments, including
consideration of IT risks and fraud prevention, are conducted and that a risk strategy to address the
risks is developed and monitored.
– Ensure that an adequately resourced and functioning internal audit unit is in place that identifies internal
control deficiencies and recommends corrective action effectively.
– Ensure that the audit committee promotes accountability and service delivery through evaluating and
monitoring responses to risks and providing oversight of the effectiveness of the internal control
environment, including financial and performance reporting and compliance with laws and regulation.
– It also examines the drivers of: effective human resource management as a driver of audit outcomes;
the use of consultants by some national departments; information technology management as driver of
audit outcomes; and the effectiveness of audit committees and internal audit units.
The analysis also includes attention to the role and impact of key “role players” in terms of
the assurances required from them in relation to their responsibilities. Role players include
assurance providers in national and provincial governments (i.e. senior management, accounting
officers, the audit committee and internal audit); legislative bodies (i.e. the national and
provincial standing committees on public accounts, national and provincial portfolio
committees), executive authorities (i.e. the President and the national ministers at the national
level and the Premier and members of the Executive Council and the provincial level – as well
as the role of co-ordinating institutions).
Source: AGSA (Auditor-General of South Africa) (2013), PFMA 2011-12, Consolidated General Report
on National and Provincial Audit Outcomes, AGSA, www.agsa.co.za.
Establish a communication strategy to support active use of audit work,
defining audiences, identifying how they access information on audit activities
and findings
communicate openly with the media or other interested parties on their operations and
audit results and are visible in the public arena. Moreover, SAIs should issue their audit
reports in a timely manner to maximise their relevance and impact. In order to elevate the
usability of audit reports, the principles encourage SAIs to produce abstracts of audit
reports and court judgements, and the use of other means – such as graphics, video
presentations, press releases – in order to enhance the availability and accessibility of
their content (Principle 8).
The CGR formulated its first plan to strengthen the institution’s communication
systems in 2011 (CGR, 2011b). The objective of the plan includes: i) aligning
communication activities with the institution’s mission, vision and values; ii) reinforcing
the CGR “brand” as a pillar of legality and integrity, excellence and value; iii) increasing
the quality of the CGR’s communication with its main audiences; iv) strengthening links
with stakeholders through a variety of communication products; v) increasing the
knowledge of target stakeholders about the CGR; vi) creating an image of the CGR as an
institution that is undergoing a process of modernisation. The plan establishes a number
of targets to be achieved over a period of three to four years. The targets contained in the
plan relate to the consolidation of responsibilities for internal and external
communications, the establishment of processes for internal co-ordination, the alignment
of the communication and strategic objectives, and the development of new products and
materials (Table 6.2). Although the plan to strengthen the CGR’s communication systems
was developed prior to the promulgation of the institution’s strategic plan, efforts are
underway to align the two. Chapter 4 discusses the formulation and implementation of the
communication plan in more detail.
However, the communication plan is not a communication strategy that seeks clarify
what the CGR wishes its target audiences to “do” as a consequence of receiving the
information on the CGR’s audit work. A communication strategy could help the CGR to:
i) define primary, secondary and other target audiences as well as discern their current
level of awareness, understanding and use of the CGR’s audit work; ii) articulate clear
and measurable communication objectives for each target audience; iii) ensure the
selection of an appropriate communications mix for each target audience; iv) allocate
internal roles and resources for communicating audit work; and v) provide a basis for
evaluating, and learning lessons from, communication activities. The more thoroughly
target audiences are defined and understood, the greater the likelihood of a strategy
succeeding. Broad groupings such as “the legislature”, “the executive” and “citizens” are
less likely to result in a strategy that works. Target audiences may be subsequently
grouped into the categories such as primary, secondary and other. Attention may also be
given to specific audiences, such as those who lack access to information through, for
example, low income, poor education, low literacy levels, disability or geographical
isolation.
As part of the CGR’s communication plan, consideration could be given to using
executive summaries to present audit findings, as well as establishment commitments to
use plain language and exhibits in its audit reports. The CGR reports that its institutional
website audit search engine provides a summary of the objectives of the audit, the audit
scope and sample, the audit conclusion and legal opinions (dictámen).3 While this
supports users of the CGR’s website, it does not automatically benefit other stakeholders
who receive the audit report on paper. Moreover, there is no emphasis on clear and simple
language and the use of figures in audit reports. This is despite much emphasis by the
CGR in recent years to increase the use of its work by citizens. Rather, the CGR’s 2009
and 2013 guidance on audit reporting focuses more on issues of syntax and text
formatting. Reference to the use of exhibits in the 2013 guidance is limited to not
excessively using exhibits. However, it does not explain or provide examples for CGR
audit staff on how to use exhibits effectively.
communication plan targets
Goal
Target
Immediate targets
To adapt the structure and management of the Communications and Public Relations Department to support 6 months
the objectives and targets of the Communications Plan
To transform the Communications and Public Relations Department into an area of value to the institution
(measurable by its positioning and increasing quality of its work)
To establish and implement job descriptions for officials employed in the Communications and Public
Relations Department
1 year
To establish a system of internal co-ordination among the CGR’s divisions and regional offices that
optimises communication management
6-12 months
To reinforce the core corporate message
To create a strategy to link the Comptroller General with the media, in order to disseminate the institution’s
strategic objectives
To create materials that bring the CGR and the citizen closer
6-12 months
1 year
To create materials that support the CGR “brand”
To encourage new communication products of value
To raise the standard of the existing communication products
6 months
6-12 months
6 months
To establish a system to monitor issues communicated through social networks
Important targets
To align the CGR around the institution’s core message
To establish a system to co-ordinate and create messages of value from the regional offices
1 year
6-12 months
6-12 months
1 year
1-2 years
To transform the CGR’s website into an effective channel of communication with citizens, with clearly
differentiated formats, approaches and content for different audiences
1 year
To develop a Media Training Plan for certain second-line CGR officials on matters defined by the
Comptroller General
1-2 years
To create activities of particular interest for CGR units, such as the International Relations and Co-operation
Unit, to disseminate good practices with other supreme audit institutions
To create a specialised unit responsible for institutional events, with unified standards of protocol and
supporting material
1-2 years
To create a calendar of institutional events and its corresponding resource needs, well in advance
To create a culture of planning, follow up and evaluation in the Communications and Public Relations
Department
1 year
1 year
Transcendental targets
To establish different format communication products (e.g. digital area, annual reports, newsletters, social
media) for different audiences
To formulate and implement manuals for graphics, protocol, web publication and crisis management
To reformulate the Communications Plan according to urgent and important targets already reached
To have a digital channel with regular programming (e.g. specialised seminars, interviews with senior
officials), open to external audiences
1 year
2-3 years
2 years
After 2 years
2-4 years
Source: CGR (2011), “Strategic communications plan: Proposal to strengthen corporate positioning in both
external and internal public”, CGR Communications and Public Relations Department, December, unpublished
chapter.
The use of executive summaries, plain language and exhibits are common among the
benchmark SAIs in this peer review (Table 6.3). Executive summaries help to draw
attention to the most important information about an audit in a way that is accurate, clear
and coherent. An executive summary should be able to stand alone as stakeholders may
not read the entire audit report. Stakeholders should be able to grasp easily what was
examined, why it is important, and what was found – even if they read only the main
points. Plain language means avoiding jargon or obscure words, whenever possible, and
explaining any technical or legal terms that need to be used in order to make audit reports
more readable, especially those reports that address complex subjects. Exhibits, including
illustrations, tables, charts or text boxes, can help to attract a stakeholder’s attention and
reinforce key points.
Table 6.3. Practices to support clarity of audit reporting used by supreme audit institutions
Commitment to
use plain language
in audit reports
Commitment to
use exhibits to
present complex
information clearly
and concisely in
audit reports
Style guide for
audit reports
●
●
●
●
●
●
●
●
o
o
Chile
o
o
o
●
o
Costa Rica
●
●
●
o
o
Denmark
●
●
●
●
o
●
●
●
●
o
Israel
●
●
●
●
o
Italy
●
●
●
●
o
Korea
o
●
●
●
o
Mexico
..
..
..
..
..
Peru
..
..
..
..
..
Portugal
●
●
●
●
o
South Africa
●
●
●
●
o
Spain
●
●
●
●
o
Total yes
10
11
11
11
0
Use of executive
summaries to
present main audit
findings
Australia
Brazil
Country
Involvement of SAI
audiences in
formulating/
updating external
audit reporting
guidance
Q. 42-45.
Take specific measures to overcome barriers and constraints attributed to
the country’s digital divide, especially the divide across different socio-economic
groups
main findings and to disseminate its products. Moreover, the CGR is one of a number of
SAIs in OECD and partner countries that use social media – including Twitter, Facebook
and YouTube – to interact with its stakeholders. Only the SAIs of Australia, Brazil, Chile,
Mexico, Peru and the European Court of Auditors use Twitter as a proxy for the use of
social media by government4. In comparison, central government institutions in many
OECD and key partner countries use Twitter to engage with the public (Table 6.4). The
take up of the CGR in social media is relatively high compared to other countries, as
aggregate numbers (Figure 6.4). Benchmark SAIs that are not in the practice of using
Twitter suggest that it is not a part of their communication strategy, as in the case of
Denmark. Others chose to focus selectively on other types of social media including
Facebook or YouTube, as is the case in Portugal and Costa Rica respectively, or on both
like in Israel. While the European Court of Auditors had to overcome internal resistance
to establish its recent Twitter account, particularly around generational differences, work
load and potential reputational risks associated with few followers, the experience thus far
has been seen as positive.
Table 6.4. Twitter accounts of government and supreme audit institutions
Country
Centre of government
Australia
ANAO_Australia
..
Brazil
TCUoficial
imprensaPR; blogplanalto
Chile
Contraloriacl
gobiernodechile
Costa Rica
None
..
Denmark
None
..
European Union
EUAuditorsECA
EU_Commission (European Commission)
Israel
None
Israelgov (government); Israelipm (head of government)
Italy
None
..
Korea
None
BluehouseKorea (head of state); PrimeMinisterKR (head of government)
Mexico
ASF_Mexico
PresidenciaMX (head of state); GobFed (government)
Peru
ContraloriaPeru
Prensapcm (cabinet)
Portugal
None
Govpt (government); Presidencia (head of state)
South Africa
None
PresidencyZA
Spain
None
desdelamoncloa
Notes: .. = Missing data. Australia: The Australian government does not have its own Twitter account, but has
an extensive number of accounts specific to programmes and entities, such as AusFamilies and eHealthAus.
Source: Adapted from OECD (2012), “OECD e-Government Project: Social media use by governments: Focus
Figure 6.4. Twitter activity of supreme audit institutions in Chile and selected countries
Tweets
18 000
16 000
14 000
12 000
10 000
8 000
6 000
4 000
2 000
0
15 807
906
Peru
Followers
14 494
1 475
Brazil
2 503 1 825
1 732 1 694
Chile
Mexico
579
1 260
145 483
European Court of Auditors Australia
Notes: Data accessed 17 July 2013.
Source: Based on a review of the SAIs’ Twitter pages.
The CGR’s use of social media should be seen in light of the emphasis on social
media more generally in Chile. For example, there are almost 400 000 “followers” of the
government of Chile (Gobiernodechile), which represents over 2% of the population,
making it the second most popular central government institution across the OECD
(OECD, 2012a). The popularity of social media in Chile is influenced by a high share of
Twitter users among the domestic population and the Chilean government’s clear and
proactive strategy towards social media. This strategy consists of several components that
provide information and dedicated assistance to public entities to use social media in
engaging their stakeholders, including: i) a government circular explicitly encouraging
the use of social media by public entities in 2010; ii) embedding the use of social media
in the government’s e-government strategy for 2011-14; and iii) specific assistance on
how to use social media in the government’s digital guide (guía digital) (OECD, 2012a).
However, Chile is affected by a substantial digital divide. Internet access and
broadband connection in Chile is approximately 25% of households, lower than the
OECD average of 67% (Figure 6.5). Broadband is available in at least 60% of households
in four-fifths of OECD countries (OECD, 2012a). Since 2005, the number of mobile
phone subscriptions worldwide (voice and/or data) has doubled, with particularly strong
growth in non-OECD countries where the number has tripled. The shift to accessing the
Internet via a mobile device is a key trend since 2010, and the evolution of Smartphones
has changed the surfing behaviour of individuals. Across the OECD, 39% of citizens used
the Internet to obtain information from the public authorities’ websites in 2011
(Figure 6.6). However, these statistics are often skewed by specific areas of the
administration, such as the tax administration, and are not always representative of the
public administration as a whole. The gap between Internet penetration rates among
high-income and low-income households is narrowing in some OECD countries, but
remains wide (Figure 6.7).
Figure 6.5. Internet access and broadband connections in OECD households in Chile
Internet
Broadband
% of all households
100
80
60
40
20
0
Korea
Denmark
Australia (a)
OECD34
Israel (a)
Spain
Italy
Portugal
Chile (b)
Mexico (a)
Notes: Internet access at home is via any device (desktop computer, PC, TV, mobile phone, etc.). Broadband
connection stands for the use of technologies such as DSL, fixed wire (cable, fibre, Ethernet, etc.); fixed
wireless refers to satellite, public Wi-Fi, WiMax; and mobile connection to 3G/UMTS, etc. Household refers to
domiciles with at least one person aged 16-74. Australia: Only includes private dwelling households.
Households in remote and sparsely settled parts of Australia are excluded from the survey. Israel: The
Household Expenditure Survey does not distinguish between broadband and other bandwidth Internet channels.
Korea: Internet access through mobile phone, TV and game consoles are also included. Mexico: Households
with Internet access via cable, ADSL or fixed wireless. The statistical data for Israel are supplied by and under
the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to
the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of
international law.
http://dx.doi.org/10.1787/9789264086463-en.
Measuring performance
should: manage their operations economically, efficiently, effectively and in accordance
with laws and regulations and report publicly on these matters (Principle 6); and make
use of external and independent advice to enhance the quality and credibility of their
work (Principle 9). In managing their operations economically, efficiently, effectively and
in accordance with laws and regulations, SAIs should report publicly on these matters;
assess and report on their operations and performance in all areas, such as financial audit,
compliance audit, jurisdictional activities, performance audit, programme evaluation and
conclusions regarding government activities; measure and report on the efficiency and
effectiveness with which they use their funds; use performance indicators to assess the
value of audit work for the legislature, citizens and other stakeholders; and follow up their
public visibility, outcomes and impact through external feedback (Principle 6).
Figure 6.6. Individuals using the Internet to obtain information from the public authorities’
websites in Chile and selected countries
% of all individuals
100
80
60
40
20
0
Denmark
OECD34
Spain
Chile (b)
Portugal
Korea (a)
Italy
Mexico (a)
Note: Data in this figure refer to Internet use in the last 12 months for all countries. Individuals aged
16-74 years.
http://dx.doi.org/10.1787/9789264086463-en.
Figure 6.7. Household Internet access by income in Chile and selected countries
High income (top quartile)
100
Low income (bottom quartile)
80
60
40
20
0
Korea (a)
Denmark
Australia (c)
Spain
Portugal
Israel (b)
Italy
Chile (b)
Notes: Korea: The survey is not organised by quartile. Top income quartile corresponds to income of more than
KRW 300 million, and bottom income quartile corresponds to income of less than KRW 100 million. The
statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use
http://dx.doi.org/10.1787/9789264086463-en.
The CGR is seeking to enhance its performance framework, going beyond inputs,
outputs and timeliness, to incorporate quality and impact. Internal performance
management tools seek to create internal goals that can be monitored by management,
and for which the achievement of goals results in financial rewards for the CGR’s
officials. More recently, the CGR has begun to solicit input from internal and external
stakeholders through an institutional climate survey and surveys of external stakeholders,
respectively. In addition, the CGR is commissioning work to assess the economic value
created by the institution’s activities. The CGR also participates in a number of INTOSAI
activities related to performance management. This includes the development of a
performance management framework for SAIs together with the SAIs of Brazil, Denmark
and Mexico, and the European Court of Auditors, among others.5 The CGR also
participates in the OLACEFS SAI Performance Evaluation Committee (Comisión de
Evaluación del Desempeño de las EFS) together with the SAIs of Brazil, Mexico and
Peru, among others.6 This peer review is also an initiative to make use of external and
independent advice to enhance the relevance and impact of the institution’s work. The
CGR has also participated in peer reviews of the SAI of Bolivia, Costa Rica and Ecuador.
In order to enhance performance management, the CGR could consider:

developing a logical framework to support the definition and measurement of the
CGR’s performance and feed internal decision-making processes and other
internal reforms

linking management practices to the institution’s strategic plan and budget
formulation

broadening input from the CGR’s stakeholders as part of the institution’s
performance management framework

taking appropriate action so that efforts to measuring the economic value of audit
and non-audit assignments are not the primary driver of institutional reforms

reporting publically on measures of cost-effectiveness, quality and timeliness of
outputs and impact.
Develop a logical framework to support the definition and measurement
of institutional performance and feed internal decision-making processes
and other internal reforms
A logical framework is a matrix that guides performance management (Table 6.5).
There are variations in terminology (for example, some use objectives instead of
outcomes, or aim instead of goal) and structure (for example, some organisations add new
rows to consider more levels of objectives). The content of the framework is frequently
determined as part of broader strategic or budget planning, drawing upon problem
analysis, the development of objectives and indicators, and identification risks and
assumption, which feed into the overall logical framework. As part of the formulation of
the framework, specific attention is given to the framework’s: i) vertical logic as a
hierarchy of objectives – activities deliver outputs, which contribute to outcomes, which
help bring about the overall goal; and ii) horizontal logic showing how progress against
each objective can be assessed (indicators and means of verification) and the external
factors (assumptions and risks) which might affect whether the reaching of the objectives
will contribute to the next level.
In Chile, the logical framework is a core element of each public entity’s performance
management system. The Ministry of Finance’s Budget Directorate requires public
entities to use a logical framework for the development of a strategy statement
(definiciones estratégicas), which is presented in a budget information chapter
(Antecedentes Complementarios Control de Gestión Pública). The Budget Directorate’s
policies require that this statement: i) specify each institution’s mission, strategic
objectives, “strategic products” and clients/users/beneficiaries; ii) link institutional
strategic objectives to “government priorities” and “government programmes”; and iii) be
based on the “logical framework” concepts of outcomes, outputs, processes and inputs.
The Budget Directorate’s guidelines state that “strategic products” must be the goods or
services (i.e. outputs) which serve the institution’s strategic objectives. Expressed
differently, the strategic products are supposed to be groups of outputs with a common
outcome (Hawkesworth et al., 2013).
Table 6.5. Generic logical framework format
Narrative summary
Goal: the overall aim to which
the institution is expected to
contribute
Objectively verifiable
indicators
Measures (direct or indirect)
to show the institution’s
contribution to the goal
Means of verification
Assumptions
Sources of information and
methods used to show
fulfilment of the goal
Important events, conditions
or decisions beyond the
institution’s control necessary
for maintaining the progress
towards the goal
Outcomes (or objectives): the Measures (direct or indirect)
new situation which the
to show what progress is
methods used to show
institution is aiming to bring
being made towards reaching progress against objectives
institution’s control, which are
about
the objectives
necessary if achieving the
objectives is going to
contribute towards the overall
goal
Outputs: the results which
should be within the control of to show if institution’s outputs methods used to show
the institution’s management are being delivered
delivery of outputs
necessary if producing the
outputs is going to help
achieve the objectives
Activities: the things which
have to be done by the
to show if institution’s outputs methods used to show that
institution to produce the
are being delivered
activities have been
outputs
completed
necessary if completing
activities will produce the
required outputs
Resources – type and level of resources needed by the institution
Inputs
Finance – overall budget
At present, the CGR does not use a logical framework in the formulation to guide its
performance management, despite adopting a number of other performance budgeting
tools used by the public administration. The CGR’s use of performance goals follows the
same practices within the public administration. In 1998, the government of Chile
adopted the Management Improvement Programme (Programa de Mejoramiento de la
Gestión) aimed at improving the management of public entities by linking salary bonuses
(on a collective basis) to performance. The programme aims at a gradual fulfilment of the
requirements ISO 9 001:2000, a quality management system designed to help
organisations ensure they meet the needs of customers and other stakeholders. The final
aim is to have a Unique Institutional Quality Management System (Sistema de Gestión de
Calidad Unico Institucional). Consequently, the Management Improvement Programme
currently mostly focuses on internal process rather than externally delivered outputs and
outcomes. If management objectives are achieved, all employees working in the relevant
public agency (services) receive a bonus (Law 19 553/1998). The Management
Improvement Programme uses a set of performance indicators to assess to what degree
institutions perform compared to the set goals. The Management Improvement
Programme has been a driving force for the modernisation of Chilean public entities.
Although based on the same system, the CGR’s performance goals are established
and operated independently of the public administration. Within the administration, the
Management Improvement Programme is the responsibility of a committee of
three ministries: Interior (through the Undersecretary for Regional Development);
Finance (through the Budget Directorate); and the Secretary General of the Presidency.
The committee approves the annual framework programmes, the goals and the evaluation
reports prepared by each agency. The Management Control Division of the Budget
Directorate acts as the technical secretariat.
Rather, the CGR’s performance management is based more on the formulation of
performance goals and performance agreements between the Comptroller General and the
institution’s division heads and regional comptrollers. In 2012, the CGR’s performance
goals included a total of 115 targets: 45 shared across 12 divisions and 70 across
14 regional offices. Achievement of divisions’/offices’ goals is rewarded by a
performance bonus of approximately 10% of a CGR official’s annual salary, paid in
three installments throughout the year. More recently, in 2011, the CGR introduced
performance agreements between the Comptroller General and the institution’s division
heads and regional comptrollers to instill greater institutional change. In 2012, the CGR’s
performance agreements contained a total of 140 commitments: 56 shared across
12 divisions and 84 across 14 regional offices. These agreements focus more on outputs
and the timeliness of the CGR’s assignments rather than the quality of the institution’s
outputs. The preparation and evaluation of the performance goals and agreements are
conducted in parallel and are intended to reinforce one another.
institutional goals and performance agreements
Institutional goals
Performance
agreements
Definition
Official instrument that
defines management
performance objectives
for all CGR staff
Performance agreement
between the Comptroller
General and high-ranking
officials of the CGR
responsible of teams
and/or units
Main goal
Key characteristics
To improve internal
– Defined by law
management according to
– Annual scope
efficiency and efficacy criteria – Associated with pre-existing functional
teams (regional offices, divisions, etc.)
– Linked to the CGR’s institutional
objectives
– Shared amongst all CGR staff at the
beginning of each year
– Continuous monitoring process
– Achievement is associated with a
team-based economic incentive
To complement institutional
– Goals are aligned with the functions and
goals, defining individualised
responsibilities of each division/unit chief
objectives with high-ranking
– Each division/unit chief signs an
officials of the CGR
individual agreement with the Comptroller
responsible of teams and/or
General
units
– It is of complementary nature to the
institutional goals
– It is annual, and shared with all CGR staff
at the beginning of the year
– Continuous monitoring process
– Its achievement is not associated with an
economic incentive
Source: CGR (2013), “Plan Estratégico 2013-2015 Contraloría General de la República, marco estratégico
May.
Link performance management to the institution’s strategic plan and budget
to ensure adequate resources and avoid performance management becoming
a bureaucratic process
The CGR launched its first strategic plan in May 2013, with the plan covering the
period 2013-15 – and covering the last two years of the current Comptroller General’s
tenure. The strategic plan was communicated through the CGR’s 2012 Annual Report and
institutional website (Table 6.7). However, as of August 2013, the CGR was still
formulating operational plans and projects to support the implementation of the strategic
plan. CGR divisions have proposed a number of projects in line with the CGR’s strategic
goals that are currently being reviewed internally by the institution’s senior management.
Once approved, the strategic plan will be included in the annual operating plans, together
with the indicators for assessing the achievement of the strategic objectives. It is critical
that the CGR align and integrate the operational plans and projects with the institution’s
performance management systems and its budgeting processes. Chapter 2 discusses the
formulation of the CGR strategic plan in more detail.
strategic objectives and strategies
As contained in the CGR 2013-15 strategic plan
Strategic objectives
1. Deliver timely,
high-quality and
value-added products and
services
Strategies
1.1 Sustain the quality improvements of institutional products and services targeting different audiences
1.2 Evaluate the impact of key CGR products and services on citizenship and public institutions
1.3 Increase the online coverage of CGR products and services
1.4 Enhance the quality of products and services supporting the operational functions of the institution
2. Strengthen relations with
external stakeholders in
order to increase the
impact of the institution’s
work
2.1 Develop stronger links and measures of mutual collaboration with key CGR stakeholders
2.2 Promote improvements in transparency and integrity in the administration’s use of public resources
2.3 Increase sharing of good practices with international/national organisations to enhance institutional
management
2.4 Understand and enhance citizens’ perception of the management of the institution and its role in the
public sector
3. Standardise and improve 3.1 Strengthen co-ordination among different CGR divisions/offices in order to adopt uniform guidelines
and criteria
institutional processes with
a focus on managing for
3.2 Standardise processes and procedures nationwide for core and support functions
results
3.3 Develop and integrate information systems supporting the institution’s functions
3.4 Increase added-value of CGR management control in order to support internal decision making
3.5 Strengthen capacity and dissemination of internal control to improve internal management
4. Develop competent and
motivated staff with
appropriate skills for the
institution
4.1 Develop an institutional competency framework to increase staff performance and satisfaction
4.2 Support the development of staff competencies and knowledge through effective training
programmes
4.3 Enhance individual performance assessments giving attention to different institutional levels and
responsibility
4.4 Enhance the organisational climate to encourage continuous management improvement
4.5 Enhance leadership skills within the institution and evaluate the role of headships
Source: CGR (2013), “Plan Estratégico 2013-2015 Contraloría General De La República, marco estratégico
May.
The integration of the performance management with strategic planning and the
budget process is considered a common challenge in Chile’s public administration. It
appears that in at least some cases the strategic plans which institutions have developed
and use in their internal management have little to do with the performance management
frameworks. When this is the case, the danger is that the strategy statement becomes little
more than a chapterwork exercise. Similarly, the relationship between outputs and the
budget are not reflected in the budget (i.e. they are not used to classify and approve
expenditure in the budget) (Hawkesworth. et al., 2013).
In the case of the CGR, however, the preparation of performance goals and
agreements is not directly linked to the institution’s annual budget preparation
whatsoever. The formulation of the CGR’s annual budget begins in April of each year
and is concluded in September when the CGR’s budget is submitted to the National
Congress as part of the central government’s budget process. However, the CGR’s
performance goals and performance are formulated in September/October. The
disconnect between the goals and performance agreements gives rise to concern that there
is limited attention to ensure that the performance goals and agreements are set in
accordance with the available budgetary resources. This raises the risk that performance
goals and agreements are not set to drive performance improvements, and that the
performance bonus attached to the achievement of the performance goals can become an
entitlement for CGR officials. In 2012, the CGR’s divisions/offices achieved, on average,
107% of the targets outlined in the performance goals. All divisions/offices exceeded
100% of targets except one which achieved 96% of its targets (Annex 6.A1).
Broaden input from the CGR’s stakeholders as part of the institution’s
performance management framework
The CGR’s Internal Audit Unit is responsible for verifying compliance with the
annual performance goals and performance agreements, as requested by the Comptroller
General. The CGR’s Internal Audit Unit was created in March 1994 by CGR
Resolution 412 in order to strengthen internal control within the audit institution and
foster the application of modern control techniques. The role of the Internal Audit Unit is
to provide assurance of the proper functioning of the internal control, the legality,
efficiency and effectiveness of the institution’s management. In addition to verifying
compliance with the annual performance goals and agreements, the Internal Audit Unit is
responsible for: i) evaluating the functioning of the CGR’s internal controls and
recommending actions aimed to improve them; ii) ensuring that the institution’s activities
are developed in accordance with the approved policies, plans and programmes and
proposing corrective measures or relevant technical studies as necessary; and
iii) verifying the legality, effectiveness and efficiency with which resources are managed
by the institution. The Internal Audit Unit reports directly to the Comptroller General
(CGR Resolution 412/1994, Art. 1).
In 2010, the CGR initiated a study to assess the quality and timeliness of its oversight
processes and to identify ways to enhance its processes and to focus the training of its
officials for 2010-12 (Table 6.8). The objective was: i) to identify the strengths and
weaknesses of current CGR work; and ii) to create a satisfaction index of the CGR’s work
that could be used as a baseline for subsequent evaluations. The study’s methodology
focused on quantitative methods drawing upon data collected through a nationwide
survey of public entities subject to the CGR’s oversight. The survey focused on the
administrative audits, special investigations, legal opinions (dictámenes) and ex ante
control of legality (toma de razón). The online questionnaire was sent to 1 366 public
entities, among which 766 (56%) responded, 21% of respondents were located in
Santiago and 79% in Chile’s 14 regions. Respondents’ profile is that of the head of the
unit corresponding to each one of the categories assessed in the survey (i.e. legal, audit,
jurisdictional). However, no additional information was reported on the respondent’s
profile, which could provide valuable information to contextualise response options.
Table 6.8. Office of the Comptroller General of the Republic of Chile’s survey of auditees
Function assessed
General
Frequency with which the public entity interacts with the CGR
Instances of interaction with the CGR
Administrative audit
Whether the audited entity received a formal notice of the
administrative audit
(a) Interaction of the audited entity with the CGR auditor; and
(b) burden created by the CGR’s request for information
(a) Clarity of final audit reports; and (b) clarity of the language used
in audit reports
(a) Did the audited entity provide comments on the preliminary
report; and (b) were comments incorporated in the final report
General evaluation of the CGR’s audits
Special investigations
Whether the audited entity received a formal notice of the special
investigation
(a) Interaction of the audited entity with the CGR auditor; and
(b) burden created by the CGR’s request for information
(a) Whether a final report was received after the conclusion of the
investigation; and if a report was not issued (b) whether the official
involved received a formal response from the CGR
(a) Clarity of final audit reports; and (b) clarity of the language used
in the audit reports
Legal opinions
(a) Whether the CGR issued a legal opinion when requested; and if
a legal opinion was not issued (b) why a legal opinion was not
issued
(a) Whether the audited entity has asked for a reconsideration; and
(b) whether this was received by the CGR
General evaluation of the CGR’s legal opinions
Toma de razón
Whether administrative acts subject to toma de razón have been
accepted, rejected or retired
(a) Whether the CGR informs audited entity about defects related to
administrative acts; and (b) how the CGR informs the audited entity
about defects
(a) Whether the toma de razón process is accomplished within the
legal deadline of 15 days; and (b) whether reconsiderations have
been accepted
General evaluation of the CGR’s assignments
Response options
5-point scale: Very frequently; frequently; only when necessary;
rarely; no relation with the CGR
Multiple choice: administrative audits, toma de razón, special
investigations, legal opinions, do not know
5-point scale: Always; usually; sometimes; almost never; and never
(a) 4-point scale: 4 being fluid and cordial, 1 being very difficult; and
(b) 5-point scale: 5 being very easy, 1 being very difficult
(a) 5-point scale: Very clear; clear; somewhat clear; less clear; not
clear; (b) 5-point scale: Very clear; clear; somewhat clear; less clear;
not clear
(a) Yes, no; (b) 6-point scale: Always; usually; sometimes; almost
never; never; do not know
10-point scale: 10 being excellent, 1 being very deficient
5-point scale: Always; usually; sometimes; almost never; and never
(a) 4-point scale: Fluid and cordial; normal collaboration; distant and
uncomfortable; indifferent; (b) 5-point scale: very easy, easy, neither
easy nor difficult, difficult, very difficult
(a) 5-point scale: Always; usually; sometimes; almost never; never;
(b) 4-point scale: Always; sometimes; rarely; never
(a) 5-point scale: Very clear, clear, somewhat clear, less clear, not
clear; (b) 5-point scale: Very clear, clear, somewhat clear, less clear,
not clear
(a) A legal opinion was issued, no legal opinion was issued; (b) not
under CGR competence, the topic relates to criminal law, legal report
is missing, other, do not know
(a) Yes, no; (b) Yes; no; do not know
Accepted; rejected; retired
(a) Yes; no; no answer; (b) Multiple choice: By telephone; by
meeting; by email; no answer
(a) Yes, no; (b) Multiple choice: less than 30 days; 30-45 days;
45-60 days; more than 60 days
Source: CGR (2010), “Percepción del desempeño de procesos y servicios de la Contraloría General de la República
[Perception on the performance of processes and services of the CGR]”, Informe final estudio, Facultad de Gobierno,
Universidad del Desarrollo, Santiago.
In April 2012, the CGR conducted an Organisational Climate Survey (Encuesta de
Clima Organizacional) to generate strategic information for the improvement of
institutional management. The purpose of this instrument is to collect shared perceptions
held by officials of the institution in the variables that affect the CGR’s organisational
climate, and aims to be a tool to deliver useful information to management by defining
institutional actions and policies that contribute to organisational results. The
Organisational Climate Survey was completed by 96.7% of staff (95.4% at the central
level and 99% at the regional level). The overall organisational climate was found to be
more favourable at the regional level compared to the central level, and more favourable
among officials under the age of 40 years old at both central and regional levels. This can
be attributed to the opportunities provided by workforce restructuring and the recruitment
of new and younger officials, discussed in the previous section of this chapter. The
organisational climate was also found to be more favourable for technical, administrative
and auxiliary officials compared to managers, professionals, auditors and heads of
divisions/regional comptrollers (CGR, 2012c).
The CGR does not, however, formally assess perceptions of the legislature, as done
by other SAIs, such as the Australian National Audit Office (Box 6.3).7
Box 6.3. Australian National Audit Office’s surveys of parliament
committee members and parliamentarians
The Australian National Audit Office undertakes a parliamentary survey every two years.
The survey provides valuable information that assists it to continue to meet the needs of
parliamentarians and the staff of parliamentary committees. Broadly, the 2011 survey found that
ANAO officials were rated highly by parliamentarians and committee secretaries for their
accessibility, responsiveness and the extent to which advice or information provided addressed
their needs. Survey respondents also valued the work and role of the ANAO, with many
remarking that the ANAO played a vital role in keeping government agencies accountable. The
ANAO attracted high ratings for having integrity as an organisation, with nearly all (98%)
parliamentarians surveyed agreeing with this statement. Further, the ANAO was also perceived to
produce high-quality products and to be independent and non-partisan by the vast majority of
respondents.
The 2011 survey identified some areas where the ANAO could improve and the ANAO has
developed a number of initiatives for 2012-13. The ANAO will develop a communications plan
to guide its engagement with members of parliament. The ANAO will also look to develop a
more concise brochure to outline the objectives and key findings of each performance audit. The
ANAO is also considering other approaches to better express the key themes and findings of an
audit in the report to reduce the complexity in their reports, to the extent practical.
Source: ANAO (2011-2012), The Auditor-General Annual Report 2011-2012, ANAO, Canberra, p. 42-43,
www.anao.gov.au/About-Us/Annual-Reports.
Take appropriate action that efforts to measure the economic value of audit
and non-audit assignments are not the primary driver of institutional reforms
The CGR is contracting a study to assess the value and benefit of the institution’s
functions for the public administration and citizens. The objective of the study is to
measure the direct economic value of the CGR’s current oversight functions and to
evaluate the suitability of certain initiatives that the CGR could implement in the future.
The study was conducted by a team of experienced Chilean economists. The first stage of
this work began in August 2012 identifying the most representative products of the CGR
that were suitable for economic evaluation, and the data and information required. The
second stage of the work includes the implementation of economic evaluation methods
and the generation of concrete estimations of the economic value of the selected CGR
activities. The second stage started in March 2013 and is expected to be finalised in late
2014.
The premise of the study is that, through accomplishing its legal mandate, the CGR
contributes to the economic value generated by public and private entities operating
within the economy. The discussion of the CGR’s added value focuses on four main
dimensions:

ensuring the payment of correct prices by preventing overpricing of materials,
labour and capital in service delivery in the short and long term through toma de
razón (i.e. ex ante control of legality), and by the recovery of public funds
through the tribunal of accounts (i.e. jurisdictional function)

ensuring the provision of correct goods (and services) by preventing excessive
procurement of inputs (i.e. materials, labour and capital) and production of
outputs, and by preventing the misallocation of outputs between beneficiaries
through toma de razón and the audit function

improving government efficiency by creating common criteria and practices
within the public administration such as legal opinions and accounting norms,
and by identifying waste, fraud and corruption of public resources and
sanctioning the responsible officials through the tribunal of accounts

reducing transaction costs by closing information asymmetries within
government and enhancing the transparency of the public entity’s actions to
support decision making and accountability, as well as by preventing the need for
legal action to redress administrative action through the tribunal of accounts.
To estimate the economic impact of the CGR, the study uses a combination of
non-experimental and experimental methods. Non-experimental methods draw upon
existing CGR data and information, but compiling and systematising this data and
information, in order to measure the economic impact of the institution’s instruments.
Experimental methods require a temporary change in the way the CGR performs its
functions so calculations can be made of the economic value added. The experimental
methods are selected in a random way to prevent selection bias.
Both non-experimental and experimental methods are aimed at measuring the causal
impact – and not simply correlation – of the CGR’s functions. For example, it is possible
that based on a CGR ex post audit it is found that public entities subject to toma de razón
have a lower level of irregularities than those entities that are exempt from toma de razón,
implying that public entities subject to toma de razón comply more with the laws and
regulations. In this case, toma de razón would be affecting procedures followed by public
services and having an impact. However, it is also possible that toma de razón is focused
on larger services or those that are more visible to the public, and which have more
resources and better staff, which is what leads them to make fewer irregularities.
Table 6.9. Preliminary framework for measuring economic value
of the Office of the Comptroller General of the Republic of Chile
A. Experimental estimations
a
Economic value of the dissuasive effect of toma de razón on the use of public resources
b
Economic value of the follow-up work to audit recommendations
c
Economic value of prevention in the TdR and audit work
d
Economic value of the dissuasive effect and learning from an audit
e
Economic value of the dissuasive effect on accounting matters
B. Non-experimental estimations
f
Knowledge acquired in public services and the effect of standardised templates (bases tipo)
g
Effect of toma de razón in generating knowledge within public services and incentives throughout the political cycle to
avoid irregularities
h
Effect of toma de razón throughout the political cycle in avoiding irregularities committed by public officials
i
Economic value of the web portal Contraloría y Ciudadano
j
Effectiveness of audit work in preventing irregularities after the implementation of follow-up units
k
Direct and indirect economic value of audit work
l
Direct and indirect economic value of legal decisions
Source: Engel, E., et al. (2013), “Estimación del valor económico del control fiscal superior: El caso de la
Contraloría General de la República de Chile [Estimating the economic value of the supreme audit institution:
The case of the Office of the Comptroller General of the Republic]”, Primer informe de diagnostico, Santiago.
The process of calculation consisted of: i) identifying the CGR instruments that
generate measurable econom

Chile`s Supreme Audit Institution - Contraloría General de la República

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