Topic Guide: External Audit and Oversight

In most countries, parliaments have the mandate to approve the annual budget and oversee government expenditures throughout the budget cycle. In particular, parliaments have a key oversight role, normally ensured by the parliamentary public accounts committee, in scrutinising the final audit report after the budget has been executed and following up on the SAI’s recommendations. As an elected body, parliaments can facilitate public engagement with the budget process through consultations with their constituents.  

However, oversight of government finances and operations is performed poorly by parliaments in many countries of the world, especially in developing countries, due to lack of resources, capacity and leverage, inadequate time scales and a non-responsive executive. Parliaments are also often unable to ensure that their recommendations are acted on, and the lack of enforcement mechanisms and incentives to impose sanctions has been identified as a major weakness of the external audit process.

To be fully effective in detecting corruption, legislative oversight requires appropriate parliamentary powers, resources and procedures, good executive accounting, reporting and transparency, skilled parliamentarians, and an independent and vibrant civil society. Initiatives aiming to strengthen the oversight role of parliaments often focus on institutional and technical capacity building. In addition, they can involve a number of measures:

As already mentioned, civil society has an important role to play in supporting and contributing to audit and oversight work and increasingly shows commitment to the oversight process through various social audits and budget monitoring tools. This implies that all budget and audit documents are made publicly available.

Members of parliament often lack the technical capacity to fully play their oversight role due to the complexity of budget processes. PACs can meaningfully contribute to budget oversight, provided they are given appropriate technical, human and financial resources, as well as adequate powers and independence from the executive.

Strengthening the relationship between parliament and SAIs is of decisive importance to ensure effective oversight of government financial operations, for example, with regards to the exchange of information, access to audit reports and follow ups on recommendations.

Parliamentarians also work together to develop and exchange approaches to strengthen their role in curbing corruption in platforms like the Parliamentary Oversight Global Task Force of the Global Organisation of Parliamentarians against Corruption (GOPAC), or the Parliamentarians against Corruption platform of the Council of Europe’s Parliamentary Assembly.