Enhancing Government Performance, Accountability, and Foresight
GAO-07-1227CG: Published: Aug 26, 2007. Publicly Released: Aug 26, 2007.
This speech was given by the Comptroller General before the Nanjing Audit University of China (NAU) on August 26, 2007. Asia has a long and impressive history. But just as important, Asia's future has never looked brighter. Today, the nations around the Pacific Rim are playing a pivotal role in the world's economy. China, for example, is industrializing at a rapid pace and is now a leading supplier of consumer goods to the United States and many other countries. China is also one of the largest investors in U.S. government debt. Thank you for lending us some of our savings. Most Chinese have a much better appreciation of the importance of savings than most Americans do. As you know, most Americans are great spenders and poor savers. Fortunately, I am not a typical American in this regard. Today, I'd like to speak to you about a role that more supreme audit institutions (SAI) need to add to their portfolio of capabilities. That role has two components: first, providing government officials with more insight into which government programs and policies are working well and which ones are not. Second, providing government officials with foresight about key emerging issues. Such informative and forward-thinking roles should supplement and complement the traditional audit responsibilities of SAIs. Unfortunately, many in today's world, especially in the United States, are consumed with the here and now. Far too little thought is given to what's come before or what lies ahead. Too many individuals tend to focus on their next paycheck. Too many company executives focus on the next quarterly earnings report. Too many politicians focus on the next election cycle rather than the next generation. And too many countries focus on their immediate and sovereign needs while forgetting that we're all inhabitants of planet Earth. It's vital for all organizations to understand the big picture, to learn from the past, and to prepare for the future. We need to actively manage the opportunities and risks that come with change. After all, change isn't necessarily a bad thing. In fact, change is essential for progress and innovation.
Over the years, I've found three elements are essential to maximizing value and mitigating risk. These three elements are incentives, transparency, and accountability. They apply equally to the public and private sectors and can provide a benefit to many areas, from governance systems to tax systems to pension and health care programs. For SAIs, the incentives element requires, among other things, an adequate degree of auditor independence and an adequate level of auditor resources. The transparency element involves a commitment to keeping elected officials and average citizens informed about what SAIs do and how they do business. Finally, the accountability element means that government auditors must have adequate access authority. At the same time, SAIs themselves need to be subject to independent financial audits and external peer reviews in order to "lead by example." SAIs have traditionally been in the oversight business. Clearly, our financial audit compliance reviews and investigations are an important check on waste, fraud, and abuse. Many SAIs also undertake program evaluations and best-practice studies, which are designed to improve government efficiency and effectiveness. At the same time, SAIs may perform a range of additional insight activities designed to help identify which programs and policies work, which ones don't, and possible ways forward. But audit work is only one of a hierarchy of functions SAIs can and should be undertaking. Envision a pyramid with six layers, each describing a mission. At the bottom is the most basic mission every government SAI should hope to achieve--fighting corruption. It's essential that civil servants be honest and committed to the public good. Any government run by corrupt officials anywhere in the world isn't going to accomplish much, other than picking the pockets of its own people. The next level in the SAI pyramid is promoting transparency, which helps to facilitate progress on all fronts. The third level is assuring accountability, and I'd include here efforts like compliance reviews. The idea is that all aspects of government should be accountable to the taxpayer for results. At a minimum, every SAI, whatever its budget, whatever its expertise, should be combating corruption, promoting transparency, and assuring accountability. The fourth level is enhancing government economy, efficiency, ethics, equity, and effectiveness. The fifth level is providing policymakers with options to make government work better by refining programs, consolidating redundant efforts, or adopting best practices. The sixth and final level in the pyramid is foresight, a function more mature and experienced SAIs should consider undertaking: I'm talking about providing policymakers with a focus on the future. I'm pleased to say we're seeing some hopeful signs in several areas that GAO has highlighted. As a result of these and other efforts, we're finally starting to see greater concern about America's long-range fiscal challenges. GAO continues to emphasize the need to take a more strategic, long-range, cross-cutting, and integrated approach to a range of domestic and international sustainability challenges. Increasingly, the process of developing solutions will require collaboration and "partnering for progress." Progress will depend on a willingness to cooperate with others, inside and outside of government, domestically and internationally. I'm happy to say that INTOSAI is making significant strides when it comes to international partnering. It's time that policymakers everywhere focus more on achieving real results today while taking steps to build a better future. In my view, it's the best way to ensure a brighter tomorrow for our countries, our families and citizens, and our planet. And in my view, accountability professionals have the opportunity to lead the way.