OECD Public Governance Reviews : Enhancing Strategic Agility and Public Trust.

354 Pages·2014·13.76 MB·English

by  OECD

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Executive summary a
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Assessment and recommendations e
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Chapter 1. Chile’s supreme audit institution e
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Chapter 2. Supporting strategic agility and rebuilding trust in government w EnhAnCInG StRAtEGIC AGIlIty AnD PublIC tRuSt
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Chapter 3. Fostering strategic agility in Chile’s Office of the Comptroller General
Chapter 4. Engaging Chile’s supreme audit institution’s stakeholders throughout the audit cycle
Chapter 5. The Chilean Comptroller General Office’s work in prioritising and ensuring quality of individual audits
Chapter 6. Enhancing the transparency and performance of Chile’s supreme audit institution
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Consult this publication on line at http://dx.doi.org/10.1787/9789264207561-en. Ru
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ISbn 978-92-64-20687-8
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42 2013 29 1 P

OECD Public Governance Reviews
Chile's Supreme
Audit Institution
ENHANCING STRATEGIC AGILITY
AND PUBLIC TRUST
This work is published on the responsibility of the Secretary-General of the OECD.The
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Pleasecitethispublicationas:
OECD(2014),Chile'sSupremeAuditInstitution:EnhancingStrategicAgilityandPublicTrust,OECDPublic
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3
FOREWORD –

Foreword
Governments need to rebuild trust in public institutions in light of the governance
failures that contributed to the financial crisis and against a background of continuing
economic and social uncertainty. Restoring trust in the ability of governments to regulate
markets, manage public finances and deliver the services that citizens expect is a key
element of a return to sustainable and inclusive growth.

Supreme Audit Institutions (SAI) are evolving to meet the challenges and
opportunities presented by the current policy environment. This requires that SAIs take an
introspective review of their institutions’ own capabilities and performance, in view of
broader public sector modernisation and reforms. This OECD review demonstrates how a
leading SAI can continue to be a relevant source of objective and credible information
and a model institution for accountability and independence in a complex policy
environment.

The Comptroller General of the Republic of Chile (CGR) is at the forefront of this
evolution and has undertaken ambitious initiatives for institutional strengthening,
capacity development, transparency and citizen participation. The CGR has introduced
strategic planning, restructured its workforce and become an exemplary institution with
respect to transparency within the Chilean public sector. The CGR recognises its crucial
role in contributing to good public governance, and has undertaken this review to build on
the momentum – to support ongoing initiatives and to maximise the positive impact of its
work.

The CGR has the opportunity to further strengthen its solid reputation to position itself
as a leader – providing objective and credible information that is widely recognised as
useful for addressing challenges to good public governance. This review recommends
that the CGR reassess its audit functions within its constitutional mandate, to ensure that
its work provides added value in accordance with its current strategic directions. To meet
the goals outlined in the CGR’s 2013-2015 strategic plan and beyond, including
enhancing the ability to respond to changes in the environment in which it works, the
CGR would benefit from further developing its strategic foresight and operational agility.
The CGR would similarly benefit from leveraging engagement with stakeholders across
the entire audit cycle to ensure quality of its audit processes and outputs. This would
foster a better understanding of the functioning, importance and relevance of the CGR
work to a wider audience.

This review, and its associated recommendations, was made possible through close
collaboration with the CGR and consultation with stakeholders from the Legislature, the
Executive, the business community and civil society. The analysis considers existing
international guidance and incorporates the expertise and support of 12 peer SAIs in both
OECD member and non-member countries. This review provides in-depth guidance on
how to further leverage the potential of all SAIs to proactively and effectively contribute
CHILE’S SUPREME AUDIT INSTITUTION: ENHANCING STRATEGIC AGILITY AND PUBLIC TRUST © OECD 2014
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– FOREWORD

to the design, implementation and evaluation of better policies, for better governance, for
better lives.

This review was undertaken by the OECD’s Public Governance and Territorial
Development Directorate, which is a leading international source of policy solutions,
data, expertise and good practice for governments and other stakeholders seeking to
strengthen public policymaking in the face of unprecedented economic, social and fiscal
pressures. This review will inform the development of the Directorate’s state-of-the-art
comparative framework on SAIs and good governance. It contributes to the OECD’s
broader effort to strengthen public governance and rebuild trust, which are important
elements of the Organisation’s “New Approaches to Economic Challenges” initiative.

Yves Leterme
Deputy Secretary-General
CHILE’S SUPREME AUDIT INSTITUTION: ENHANCING STRATEGIC AGILITY AND PUBLIC TRUST © OECD 2014
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ACKNOWLEDGEMENTS –

Acknowledgements
This Review was prepared by the Public Sector Integrity Division of the Public
Governance and Territorial Development Directorate.
Under the direction and editorial oversight of Paloma Baena Olabe and Mario Marcel,
the report was prepared by James Sheppard with contributions from Jorge Mario Vasquez
and Alison McMeekin. Jennifer Allain, Bonifacio Agapin and Sarah Michelson helped to
prepare the document for publication.
Valuable input was provided by senior officials from supreme audit institutions
(SAIs) from selected OECD and partner countries, including Australia, Brazil, Costa
Rica, Denmark, Israel, Italy, Korea, Mexico, Peru, Portugal, South Africa and Spain as
well as the European Court of Auditors. These officials participated in a survey to collect
information and data on their SAI’s organisation, mandate, practices and procedures
against which to benchmark those of the Office of the Comptroller General of the
Republic of Chile (CGR) and peer reviewed the assessment and recommendations in the
chapters of this report. Many also participated in policy dialogues on good practices held
on 8-9 July 2013 in Santiago, Chile.
The OECD also benefited from the opportunity to discuss the methodology of the
peer review with the International Organisation of Supreme Audit Institutions (INTOSAI)
Capacity Building Committee’s Sub-Committee 3 on Promoting Best Practices and
Quality Assurance through Voluntary Peer Reviews held on 13-14 June 2013 in
Bratislava, Slovak Republic.
This report has benefited from contributions from many officials in the CGR, the
government of Chile and representatives from civil society, the media, business and
academia, who were actively engaged throughout the various phases of the review.
Special thanks and recognition for invaluable support, collaboration and commitment
to the review process are extended to Ramiro Alfonso Mendoza Zúñiga (Comptroller
General of the Republic of Chile), Victoria Renée Narváez Alonso (General Secretary)
and Osvaldo Rudloff (Head of International Relations). In addition, thanks are extended
to the members of the steering and working committees set up by the CGR to engage with
the OECD and benchmark SAIs through the process, including Patricia Arriagada
Villouta (Deputy Comptroller General of the Republic of Chile), Ruth Israel López (CGR
Prosecutor), Victoria Renée Narváez Alonso (General Secretary), Patricio Barra Aeloiza
(Head of Accounting Analysis Division), Julio Pallavicini (Head of Legal Division),
Veronica Orrego (Regional Comptroller for Magallanes and Chilean Antartica) and
Rodrigo Vivallo (Head of the Technical Unit for External Control), Pablo Soto (Head of
Co-ordination and Studies Unit, Accounting Analysis Division), Mauricio Rojas
(Management Advisor, General Secretary Division), Erick Latorre (Senior Advisor,
General Comptroller Cabinet), Nicolas Cerda (Head of the Management Process Unit,
Legal Division) and Karla Fernandez (Co-ordinator of Management Process Unit,
General Secretary Division).
CHILE’S SUPREME AUDIT INSTITUTION: ENHANCING STRATEGIC AGILITY AND PUBLIC TRUST © OECD 2014
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– ACKNOWLEDGEMENTS

From the legislative branch of the government of Chile, contributions were received
from a number of senators and deputies from various political parties, and independents.
From the executive branch of the government of Chile, contributions were received from
the Ministry of the Presidency of the Republic (Ministerio Secretaría General de la
Presidencia), the Ministry of Health (Ministerio de Salud), the Ministry of Education
(Ministerio de Educación), the Ministry of Cities and Urban Areas (Ministerio de
Vivienda y Urbanismo), the Subsecretariat of Telecommunications (Subsecretaría de
Telecomunicaciones), the Fiscal Analysis Unit (Unidad de Análisis Fiscal), the Ministry
of Interior’s Subsecetariat of Regional Development and Administration (Subsecretaría
de Desarrollo Regional y Administrativo), the Ministry of Interior’s National Civil
Service Directorate (Dirección Nacional del Servicio Civil), the Ministry of Public Works
(Ministerio de Obras Públicas), the Ministry of Finance’s Budget Directorate (Dirección
de Presupuestos, Ministerio de Hacienda), the Council of General Government Internal
Auditors (Consejo de Auditoría Interna General de Gobierno) and the Ministry of Justice
(Ministerio de Justica). From the judiciary, contributions were received from members of
the Supreme Court, the Constitutional Tribunal (Tribunal Constitucional), the State
Defence Council (Consejo de Defensa del Estado) and the the Public Prosecutor
(Fiscalía). The Council for Transparency (Consejo para la Transparencia) also provided
inputs in the review process.
CHILE’S SUPREME AUDIT INSTITUTION: ENHANCING STRATEGIC AGILITY AND PUBLIC TRUST © OECD 2014
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TABLE OF CONTENTS –

Table of contents
Acronyms .......................................................................................................................................... 15
Executive summary .......................................................................................................................... 17
Assessment and recommendations .................................................................................................. 21
Chapter 1 Chile’s supreme audit institution ...................................................................................... 41
Introduction ........................................................................................................................................ 42
Leadership and organisational structure ............................................................................................. 43
Mandate, mission and functions ......................................................................................................... 47
Independence ...................................................................................................................................... 73
Conclusions ........................................................................................................................................ 80
Notes .................................................................................................................................................. 82
Annex 1.A1 Comptrollers-General of the Republic of Chile, 1927-2013 ........................................... 84
Annex 1.A2 Appointment, tenure and salaries of supreme audit institutions’ leadership in Chile
and selected countries ......................................................................................................................... 85
Annex 1.A3 Organisational independence of supreme audit institutions’ leadership in Chile and
selected countries ............................................................................................................................... 87
Annex 1.A4 Safeguards for the removal of supreme audit leadership in Chile and selected
countries ............................................................................................................................................. 88
References .......................................................................................................................................... 89
Chapter 2 Supporting strategic agility and rebuilding trust in government ................................... 93
Introduction ........................................................................................................................................ 94
Modernisation of the state and its impact on the Office of the Comptroller General of the
Republic ............................................................................................................................................. 95
Leveraging ex ante control of legality and ex ante audit to incentivise good governance ............... 105
Focusing ex post audit on reliability of information ........................................................................ 120
Providing added value products and counsel ................................................................................... 130
Developing products that communicate good practice identified through audit assignments
as input into the development of management frameworks ............................................................. 135
Conclusions ...................................................................................................................................... 138
Notes ................................................................................................................................................ 141
Annex 2.A1 Decrees and resolutions subject to toma de razón and those exempt from toma
de razón by the Office of the Comptroller General of the Republic ................................................ 144
Annex 2.A2 Public sector entity and consolidated government year-end reports in Chile and
selected countries ............................................................................................................................. 148
References ........................................................................................................................................ 153
Chapter 3 Fostering strategic agility in Chile’s Office of the Comptroller General .................... 159
Introduction ...................................................................................................................................... 160
Fostering strategic sensitivity of the evolving external environment and societal demands ............ 161
Enhancing operational agility in order to effectively respond to emerging issues and
expectations ...................................................................................................................................... 178
CHILE’S SUPREME AUDIT INSTITUTION: ENHANCING STRATEGIC AGILITY AND PUBLIC TRUST © OECD 2014
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– TABLE OF CONTENTS

Conclusions ...................................................................................................................................... 199
Annex 3.A1 Participation of the supreme audit institutions of Chile and selected countries in
INTOSAI bodies .............................................................................................................................. 201
Annex 3.A2 Office of the Comptroller General of the Republic’s human resource management
competencies .................................................................................................................................... 203
References ........................................................................................................................................ 205
Chapter 4 Engaging Chile’s supreme audit institution’s stakeholders throughout the audit
cycle ..................................................................................................................................................... 211
Introduction ...................................................................................................................................... 212
Engaging auditees to develop a constructive working relationship ................................................. 213
Engaging with internal audit to support effective and efficient audit and non-audit assignments ... 221
Communicating with stakeholders other than auditees and internal audit ....................................... 229
Consulting and facilitating participation with stakeholders other than auditees and internal audit . 240
Conclusions ...................................................................................................................................... 250
Notes ................................................................................................................................................ 253
References ........................................................................................................................................ 255
Chapter 5 The Chilean Comptroller General Office’s work in prioritising and ensuring
the quality of individual audits ......................................................................................................... 259
Introduction ...................................................................................................................................... 260
Prioritising ex post audit engagements; audit programming and the audit process .......................... 260
Ensuring quality in ex post audit engagements ................................................................................ 275
Conclusions ...................................................................................................................................... 291
Notes ................................................................................................................................................ 293
References ........................................................................................................................................ 294
Chapter 6 Enhancing the transparency and performance of Chile’s supreme audit
institution ............................................................................................................................................ 295
Introduction ...................................................................................................................................... 296
Increasing transparency of institutional responsibilities and assignments ....................................... 297
Measuring performance .................................................................................................................... 314
Conclusions ...................................................................................................................................... 327
Notes ................................................................................................................................................ 333
Annex 6.A1 Examples of performance goals used by the Office of the Comptroller General
of the Republic ................................................................................................................................. 335
Annex 6.A2 Indicators reported in the annual report of the Office of the Comptroller General
of the Republic ................................................................................................................................. 341
References ........................................................................................................................................ 348
Tables
Table 0.1. The interaction between topics and recommendations made in this review ................ 22
Table 0.2. Audit of government accounts by supreme audit institutions in Chile and selected
countries ....................................................................................................................... 26
Table 0.3. Multi-year workforce planning in supreme audit institutions in Chile and selected
countries ....................................................................................................................... 32
Table 1.1. Location of supreme audit institution within government in Chile and selected
countries ....................................................................................................................... 43
Table 1.2. Organisational model of supreme audit institutions in Chile and selected countries ... 44
CHILE’S SUPREME AUDIT INSTITUTION: ENHANCING STRATEGIC AGILITY AND PUBLIC TRUST © OECD 2014