Case

Exploring the role of SAIs in responding to crises: pre-consulting services of the Korean Board of Audit and Inspection

Highlights

  • During this unprecedented crisis, it has become more essential than ever for Supreme Audit Institutions (SAIs) to support the government’s pandemic measures while ensuring integrity in the government’s responses to COVID-19.
  • The BAI assessed possible risk factors associated with the legality, integrity, and efficiency of the government’s response measures and offered risk management guidelines in a timely manner using the innovative approach of BAI pre-consulting.
  • The BAI provided pre-consulting on the development and operation of the Epidemiological Investigation Support System (EISS), enhancing the effectiveness of the “K-Quarantine Model,” which allows a systematic and technology-driven response to infectious diseases.

Addressing the growing impact of the COVID-19 pandemic

After the COVID-19 outbreak, confirmed COVID-19 cases worldwide had surpassed 90 million, with nearly two million fatalities. This unprecedented disease has rapidly translated into an economic crisis, involving declining growth and employment rates and an increase in public debt. The impact of COVID-19 is even greater than that of the 1997 Asian financial crisis or the 2008 financial crisis. In this context, the Korean government has been working to mitigate the health impacts of COVID-19. This includes efforts to establish an advanced quarantine system, the “K-Quarantine Model,” which allows a systematic response to infectious diseases using information and communication technologies. From the early stages of the pandemic, the government procured quarantine products, such as masks, and implemented social distancing policies. In response to the socioeconomic crisis, the government also launched quantitative easing and increased its spending. Tax relief and COVID-19 relief subsidies were provided to affected citizens to compensate for the losses incurred due to the COVID-19 outbreak.

Board of Audit and Inspection’s strategic response to COVID-19

Even though audit plays an essential role in ensuring accountability in government, sometimes audit can impede innovation rather than induce it. Recognizing this, BAI has changed its audit priorities and methodologies to support and oversee the Korean government’s response to COVID-19. For audit activities, the BAI suspended or canceled field audits for almost two months during the early stages of the COVID-19 outbreak. It also shifted focus from field audits to remote audits as an alternative audit approach, adopting methods like verification of documentary evidence, virtual interviews, and remote data analysis.

Along with traditional audit activities, the BAI has actively used its pre-consulting service so that the government ministries can request advice on the risks associated with the legality, integrity, and efficiency of their crisis response measures. Upon requests for consultation from government ministries, the BAI provides guidelines and advice based on the risk assessment results, enabling government officials and other public officers to deliver proactive and creative solutions to the problems at hand.

BAI pre-consulting service and its use during the COVID-19 pandemic

Introduction of pre-consulting service

Before introducing the service, there were concerns that some public officials were reluctant to take risks in providing public services with no precedents to refer to, especially when implementing proactive and innovative approaches to combat emerging challenges. In addition, the existing audit of ex-post control and oversight was inadequate in controlling corruption risks and inefficiencies in advance. To resolve these issues and concerns, the BAI established the pre-consulting service in January 2019.

The service is distinct from the ex-post audit in two aspects. Most times, audits are carried out after the policy formulation or policy enforcement phase. However, pre-consulting is performed during the policy formulation phase and before the policy implementation phase. Moreover, while the ex-post audit stresses the function of oversight and examination, the pre-consulting service focuses on performing risk assessment and providing risk management guidelines. Through pre-consulting, the BAI identifies potential risks that may negatively impact public officials in proactively performing their duties, and assesses the risk tolerance (i.e. acceptable, tolerable, unacceptable, or intolerable) to provide the officials with guidelines for risk management.

Figure 1. BAI Pre-consulting service

Pre-consulting case on government’s COVID-19 response measures

The BAI contributed to containing the spread of the pandemic by performing pre-consulting for the Ministry of Land, Infrastructure, and Transport (MOLIT) regarding the Epidemiological Investigation Support System (EISS).[1] When devising the EISS, MOLIT wanted to use the technology that was created for the smart city Research and Development (R&D) program, and requested the BAI to assess the risks associated with using the technology to develop the EISS: unauthorized use of the technology and personal data breach. Based on its risk assessment, the BAI advised MOLIT to prepare a legal basis regarding access to personal information and to specify technology ownership and technology licenses to prevent ownership disputes regarding the use of the EISS. Through this, MOLIT could enhance the effectiveness of the “K-Quarantine Model” by referring to the BAI’s risk management guidelines on EISS development and operation.

Figure 2. Epidemiological Investigation Support System (EISS)

Risk factors and countermeasures

However, despite the contributions it has made, some concerns have been raised over the pre-consulting service. With the objective of the conventional way of auditing and pre-consulting being the detection and prevention of irregularities, respectively, conflicts of interest between auditing and pre-consulting can occur. The BAI, therefore, established a separate division dedicated to the pre-consulting service (composed of a Director General, Director, and eight auditors). There were also questions as to whether auditors have sufficient knowledge and expertise to accurately comprehend consulting issues to ensure their professionalism. Lastly, there may be cases in which government officials misuse pre-consulting service for personal purposes, such as evading responsibilities, settling civil petitions as a means of bureaucratic inertia, and verifying the illegality or unjustness of a disposition that has already taken place. Considering this, BAI specified that such cases could be excluded from the service.

Embracing change and new values

With the pre-consulting service, the BAI could pursue new roles to cope with emerging risks. What makes the BAI pre-consulting service unconventional stems from the fact that it accommodates the values that were suggested by the INTOSAI Development Initiative (IDI): flexibility, agility, and resilience.[2] The BAI’s pre-consulting service accommodates the value of “flexibility” by conveying its advice to the ministries that have difficulties responding to crises due to unclear regulations or the absence of precedents for judgment. Based on the BAI’s risk assessment, the government departments can create flexible and creative response measures to address emerging challenges. The pre-consulting service also promotes agile government responses as it is conducted during the policy formulation phase and before the policy implementation phase. The BAI helps the government to make quick decisions and enforce policies, thereby enhancing public policy effectiveness. Lastly, the pre-consulting service enhances the resilience of the governance system, as it allows the BAI to cooperate with government ministries rather than perform oversight or have control over their activities. The BAI assists the public officials to better prepare, adapt to, and recover from unforeseen threats.

Figure 3. Pre-consulting service and New Values (F. A. R.)

Conclusion

The BAI’s pre-consulting service creates an environment that stimulates the Korean government to tackle the challenges they face and pursue sustainable recovery in times of crisis. This was achievable because the BAI operated the pre-consulting system, reflecting the new values necessary to respond to unexpected emergencies. We hope that our experience helps SAIs cope with unforeseen risks by establishing innovative audit methodologies and approaches.

About the expert
KIM Kyungho has 26 years of experience working at the BAI for the Division of Public Administration and Security Audit, Daejeon Office, Division of Audit on National Strategic Plans (Director), Bureau of Internal Audit Policy Management (Director General), Bureau of Finance and Economy Audit (Director General), among others.

[1] Under unprecedented situations, the government and the SAI should not only be equipped with new competencies, but pursue new values that will better guide all parties to respond efficiently to the changing environments. In this matter, IDI suggested focusing on innovation of SAIs by going F. A. R. (flexibility, agility, and resilience) as being essential values to pursue, and stressed the importance of staying relevant in the current circumstances.

[2] This system was introduced in April 2020 to expedite contact tracing of the patients suspected of or confirmed with COVID-19. With this system, the government ministry could conduct real-time analysis using data from public and private organizations, including the National Police Agency, credit card companies, and mobile carriers.

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