The Role of SAIs in Responding to Crises

Supreme Audit Institutions (SAIs) have traditionally been associated with retrospective examination of government activities, providing assurance on financial statements and evaluating the performance of completed programmes. However, the increasing frequency and severity of crises, from pandemics to natural disasters and economic disruptions, has prompted many SAIs to explore how they can contribute more actively to crisis response while maintaining their independence and objectivity. The Korean Board of Audit and Inspection (BAI) has pioneered an innovative approach through its pre-consulting services that offers valuable lessons for audit institutions worldwide.

The BAI's pre-consulting model represents a carefully calibrated departure from purely retrospective auditing. Under this approach, government agencies planning major crisis response initiatives can request advance guidance from the BAI on potential compliance and governance risks before committing resources. This is not pre-approval of decisions, which would compromise audit independence, but rather a structured process of identifying risks, highlighting regulatory requirements, and flagging potential issues that could later become the subject of audit findings. The distinction is subtle but crucial for maintaining the BAI's credibility as an independent oversight body.

The pre-consulting approach proved particularly valuable during South Korea's COVID-19 response, where government agencies needed to design and implement emergency spending programmes at unprecedented speed. By engaging with the BAI early in the programme design process, agencies were able to build stronger controls and accountability mechanisms into their crisis response initiatives from the outset, reducing the likelihood of waste, fraud, and mismanagement. Post-implementation audits confirmed that programmes that had benefited from pre-consulting generally demonstrated stronger governance and fewer compliance issues.

The OECD Auditors Alliance has facilitated discussion of the Korean model among member countries, many of which are exploring similar approaches to real-time and proactive audit engagement during crises. The key lesson is that SAIs can add value during crises without compromising their independence, provided that clear boundaries are maintained between advisory and assurance functions.