This speech was given by the Comptroller General before the Austrian Court of Audit in Vienna, Austria, on June 20, 2006. Natural disasters fall into a category of important issues that know no geographic or political boundaries. And this brings me to my main theme this morning. To successfully tackle these challenges, partnering among nations on both a bilateral and a multilateral basis will be essential. We must join forces with each other and apply our collective knowledge, experience, and expertise to solve shared problems. And, at its heart, that's what this conference is all about. As accountability professionals, our job is to help ensure that aid money is well spent, intended recipients are well served, and funds are protected from waste, fraud, and abuse. Tsunami relief and reconstruction is an important test case for our organizations. By earning the confidence of the international community, we will have a constructive and continuing role to play. This morning, I'd like to talk about the progress we've made in ensuring accountability over disaster relief funds. In particular, I'm going to discuss recent GAO reports on tsunami relief to South Asia and hurricane relief to the U.S. Gulf Coast. Then I'm going to discuss the need for governments and supreme audit institutions (SAI) to join together, share their expertise, and develop new approaches and solutions to complex issues. Finally, I'm going to talk about additional steps we can take to assure the world that donations are being well spent.

A year ago in my speech in Jakarta, I urged the international auditing community to work together to account for the aid money flowing to South Asia and East Africa. I argued three key principles would be essential: incentives, transparency, and accountability. Incentives ensure that public officials follow prescribed procedures and spend funds appropriately. Examples would include segregating relief funds from normal accounts, creating a strong governance structure, establishing strong internal controls, and carrying out risk assessments to monitor and test various activities. Another key incentive is sound procurement standards and regulations, which are particularly important when it comes to contracting activities. Transparency is simply public reporting on the receipt, obligation, and spending of funds. This could take the form of printed reports or even Internet postings. Accountability should encompass the regularity (compliance), economy, efficiency, and effectiveness dimensions. Accountability requires both financial and performance audits of disaster assistance efforts. Both civil and criminal sanctions should be available and be used in appropriate circumstances. At the federal, state, and local levels, a few government agencies came through with flying colors. But many agencies fell far short of expectations. This situation was particularly disturbing given that GAO identified many of the same response problems back in 1993 following Hurricane Andrew. These included shortcomings in vital areas like emergency communications, supplies, and equipment. Many factors contributed to the disappointing results following Katrina, including poor coordination among various levels of government. But inadequate incentives, transparency, and accountability mechanisms were clearly a major factor. Fourth, decision making based on sound risk management approaches is needed to build a nation's response capabilities. Such decision making should take into account current and expected budgetary constraints. GAO did raise concerns about cost increases for materials, labor, and fuel for USAID's infrastructure projects. On the other hand, USAID seems to be taking seriously the need for appropriate incentives, transparency, and accountability mechanisms. Among other things, USAID has increased financial and technical oversight for its tsunami recovery projects. Another goal has been to strengthen accountability at the local level. Whenever possible, individuals in charge of program execution need to think about partnering for progress. SAIs should do the same on both a bilateral and multilateral basis. After all, in the 21st century, we must reach across institutional, geopolitical, and ideological lines to address common challenges. So what is the agenda going forward? Clearly, elected officials should make full use of SAIs to oversee the use of immediate aid--temporary shelter, food and water, and cash. But in the long term, a sustained, coordinated strategy is necessary to ensure that funds are not wasted as roads, clinics, and other infrastructure are rebuilt. To establish effective overall oversight, governments will need to partner with nongovernment organizations, such as private sector audit firms. From tsunamis to droughts, to earthquakes, to global flu pandemics, our world is marked by a dreadful certainty that we can't stop natural disasters. At most, we can hope to get out of harm's way. But it is in our power to prepare for what will happen again at some point in the future.

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