Most countries have audit offices or courts of account which act as the external auditor of government
expenditure. The three main powers of these bodies are to:
- Audit the financial statements of government departments;
- Determine the legality of government expenditure;
- Evaluate the economy, efficiency and effectiveness of policy implementation – performance or value for money audit.
It must be recognised, however, that not all audit offices or audit courts have all these powers, and that the extent and manner of their exercise varies between jurisdictions. But whatever the arrangements, the success of the external auditor depends upon:
- Complete independence;
- Free access to the books, records and staff of government departments;
- The right to publish reports without government censorship.
At the same time, it should be noted that the external auditor neither makes nor implements policy. That is the responsibility of executive government. But the auditor’s recommendations and legal decisions can improve both policy making and its execution. Within this context, the audit office can promote the incorporation of natural capital evaluation into policy making and execution.
5.1 Recommendations to Audit Offices
a. Recommend audit offices to take account of natural capital issues in their audit of financial statements and their determination of the legality of expenditure.
b. Issue public reports on the economy, efficiency and effectiveness of government policies concerning natural capital issues. Many audit offices already do this, and all could do more. Examples of work to date:
- Audit Office of the Ukraine – rehabilitation of the Azov and Black Seas 2003;
- Audit Office of Botswana – performance audit of government fisheries policy – 2005;
- Court of Audit of Brazil – performance audit of government forestry policy – 2004;
- Audit Office of Poland – audit of policy for animal protection and transportation – 1999;
- Audit Office of the UK – performance audit of DEFRA’s organic agri-environment scheme – 2010
c. Where governments have accepted audit office recommendations check that they have been implemented, and report accordingly in public.
d. Join the Working Group on Environmental Auditing of the International Organisation of Supreme Audit Institutions. The Organisation is currently chaired by the Auditor General of Estonia and has some 30 member countries.
e. Provide briefing papers on natural capital issues to Parliamentary committees and, where requested, to individual legislators.
f. Hold conferences on the audit of natural capital issues, open to legislators, civil servants, accountants, academics and others from at home and abroad.
These activities all demand that audit offices should have appropriately trained staff directly employed or on secondment, and that they should be appropriately resourced.