The Swedish National Audit Office (Swedish NAO) has a well-established cooperation and has in various forms partnered with the SAI of Palestine, the State Audit Office and Administrative Control Bureau since 2011. The most recent cooperation agreement was entered into in January 2018 and ran until December 2022. Preparations for continued cooperation are under way.
The purpose of our support is for the SAI of Palestine to gain professional and institutional capacity and capability to conduct audits in accordance with international standards. In this way, the SAI is expected to contribute to open and transparent public institutions, working to create better conditions for citizens and the private sector. According to the evaluation report, the SAI of Palestine has been clear about its objectives, which has led the Swedish NAO to provide requested and relevant support. The cooperation is well-coordinated and the support is well anchored among management and meets the needs of the SAI of Palestine.
The main focus of the cooperation between the Swedish NAO and the SAI of Palestine covers:
- performance audit
- strategic planning of audit operations
- follow-up of the impact of audit findings
- quality control and quality assurance systems
- leadership development
- internal and external communication.
The Swedish NAO’s cooperation with the SAI of Palestine began in 2013. The first phase of the cooperation, which ran from 2013 to 2017, focused on establishing institutional and professional performance audit capability from the ground up. The support has been delivered in several phases with partly different orientations, but it has always included support for the building-up and professionalisation of performance audit.
The SAI of Palestine is a member of INTOSAI and EUROSAI. Its mandate as an independent SAI is relatively broad and covers the audit and control of public funds at central and local level. The SAI may also audit civil society organisations whose activities are funded by international organisations and donors. Compliance audit, financial audit and performance audit are forms of audit that the SAI may conduct. In addition, the SAI may examine issues based on complaints from the public.
The SAI of Palestine is relatively financially independent, but as far as staff recruitment is concerned, they are subject to statutory processes through the General Personnel Council, a government agency responsible for coordinated recruitment to the public sector. It is difficult to fully comply with the law that regulates the SAI’s autonomy in planning, implementation, reporting, communication and follow-up of audit operations. This is due, among other things, to the occupation, the intra-Palestinian conflict and the lack of a parliament. This also limits the SAI’s ability to deliver fully in accordance with its mandate.
According to the 2018 PEFA assessment, the scope and follow-up of external audits has increased. Audit coverage is reported to be around 80–90 per cent and in line with international standards. However, the number of audit reports has decreased from 139 (2017) to 115 (2020).
The SAI’s Degree of Independence
The World Bank’s SAI Independence Index is an index of SAIs’ independence. The index is designed using a ten-point scale where 0 is low and 10 is high. Palestine’s (West Bank and Gaza) 2021 index was in the range 6.0–7.5, placing the SAI in the category of “moderate independence”.
The cooperation for 2018–2021 was evaluated externally in May–September 2021. The following assessment of results is mainly based on this evaluation.
The cooperation is coordinated and the support is well anchored among management. According to the evaluation report, the SAI of Palestine has been clear about its objectives, which has led the Swedish NAO to provide requested and relevant support. The external context, such as the lack of a functioning parliament in Palestine, has influenced cooperation and the ability to achieve the expected results.
The evaluation shows that the Swedish NAO has contributed to the SAI of Palestine’s improvement in identifying relevant audit topics. Their audits are more structured, transparent and aligned to international standards. The evaluation also shows that they have become better at planning their activities.
In 2018, the Swedish NAO initiated support for the SAI’s process for selecting auditees. The process developed was subsequently approved by the Chair of the SAI and applied in the annual plan for financial, performance and compliance audits. Among other things, the Swedish NAO organised workshops to develop a format for communicating the plan. Based on discussions with the Swedish NAO, in 2019 the SAI of Palestine developed a system for planning and monitoring, which was then approved by the Auditor General. According to an interviewed representative of parliament, the annual reports have improved. The SAI’s recommendations are considered relevant and are implemented. The development of strategic planning has improved the conditions for carrying out performance audits.
According to the latest evaluation, the Swedish NAO’s long-standing cooperation with the SAI has contributed to creating good conditions for institutionalisation of performance audit. The SAI now has a mandate to conduct performance audit. The SAI has also created a separate performance audit department and staffed it with both management and staff. The evaluation report also highlights that the Swedish NAO’s support has improved the selection of relevant auditors. Strategic planning has also improved, which has led to enhanced quality control and transparent reports of high quality.
In the cooperation, the Swedish NAO has focused on strategy, planning and follow-up, but also on increasing skills in performance audit. This has led to an increased ability to perform performance audits in a more structured way. An employee at the SAI of Palestine states that their performance audits have led the government to take action.
The SAI also has an established quality control structure in the audit operations. Interviewed employees in the quality assurance team state that the Swedish NAO’s support has led to increased knowledge of quality assurance and quality control. The SAI states that the support has contributed to increased awareness and increased ability to conduct quality assurance. However, due to lack of resources and lower staffing than planned, the number of performance audits produced has decreased. The previous target was to publish 10–12 audits annually, and the current target is 4–6 audits. Both the Swedish NAO and the SAI of Palestine agree that the SAI needs additional support to meet international standards.
A clear result of the cooperation is the improvements in internal and external communication. The evaluation of interviews and documentation shows that upgrades of intranet and media training have been central to this development.
The Swedish NAO has been involved in training managers in leadership and organisational change. Internal communication between different organisational levels was previously perceived as an obstacle by employees, but it has improved. We have also provided technical support to the SAI of Palestine to develop an intranet, and at the end of 2018 it launched an upgraded intranet that the SAI currently manages on its own. The importance of the intranet has also been highlighted by an interviewed employee in the evaluation report, and they emphasise, among other things, the importance of all employees today having equal access to information.
Progress has also been made in external communication, which has created better conditions for the SAI’s reports to have an impact in the media. Among other things, we have supported the SAI with guidelines on how they can handle media and conducted media education with the aim of improving that relationship. According to the evaluation, this has meant that auditors are more involved in media work and that the media better understand auditing, such as the difference between financial audit and performance audit. Interviewed employees confirm this increased awareness among the media and SAI.
Costs of the Swedish NAO's cooperation that are charged to international development cooperation.
Source: Swedish National Audit Office Annual Reports for 2019, 2020 and 2021 and budget for 2022.
Brief Facts about Palestine
Palestine has been occupied by Israel since 1967 and has no control over most of its territory. The illegal settlements and separation barrier on occupied Palestinian land restrict freedom of movement and other rights. The intra-Palestinian split has led to the exercise of power in Gaza and the West Bank by Hamas, which is on the EU terrorist list, and the Palestinian National Authority respectively. The split has also led to Palestine’s lack of a functioning democratically elected parliament since 2006.
Palestine’s development towards democracy and the rule of law is hampered by limited accountability for decisions and actions and widespread corruption. For example, the judiciary is perceived as corrupt by the public in Palestine. President Abbas remains in office, even though his mandate expired in 2009. Since the 2005 presidential elections and the 2006 parliamentary elections, only local elections have been held in Palestine.
Palestine’s economy is characterised by the limitations and challenges of over 50 years of occupation. Growth is mainly consumption driven and dependent on aid. The private sector operates under difficult conditions, but the level of education is relatively good. Entrepreneurship, digitalisation and innovation are becoming increasingly important. High unemployment, especially among young people, is in many ways a serious development problem. Economic conditions have worsened further in the context of the COVID-19 pandemic. Due to increased activity in the West Bank, a smaller economic recovery took place at the end of 2021.
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