Integrity
Case
Tackling corruption before it happens: An effective approach to auditing corruption prevention systems
June 24, 2020
Corruption remains a significant threat to the rule of law and to objective, impartial administrations. Auditors rightly focus on exposing corruption: but what can we do to help prevent it from happening in the first place?
Highlights
- Developing a robust methodology lays the foundations for auditing corruption prevention and integrity measures
- Finding the right pace and assessing needs in terms of capacity and skills are essential when establishing a specialised unit to focus on how to audit corruption prevention systems
- Ultimately, auditing corruption prevention systems can help strengthen integrity across the public sector
Through auditing corruption prevention systems, the Austrian Court of Audit (ACA) raises awareness about the importance of developing a systematic approach to preventing corruption in the public sector. As evidenced by the COVID-19 crisis, having preventative structures in place is essential for safeguarding public funds from integrity risks.
The ACA has been performing audits of corruption prevention measures in public sector institutions since 2015. Our work includes audits of compliance management systems (CMS) implemented by ministries at the federal level and by large cities at the local level, with a focus on anti-corruption and integrity issues. We have also conducted audits in areas known to be at-risk to corruption, such as lobbying.
Switching audit focus towards prevention: Developing guidelines for auditing corruption prevention systems
Switching audit focus towards prevention: Developing guidelines for auditing corruption prevention systems
In 2013, the ACA increased its focus on corruption prevention, defining two essential components for auditing anti-corruption and integrity measures: a sound methodology and specialised skills. One reason for this shift is the position of the ACA. As the most independent control and audit institution in Austria, with an audit mandate covering more than 6000 organisations, the ACA can promote awareness of corruption prevention in the public sector.
The ACA developed this methodology based on the core principles for compliance management systems (CMS). The auditing guidelines consist of seven elements that are required when auditing corruption prevention measures and are outlined in the table below.
| Element | Definition | Which audit practices are used? |
| 1. Anti-corruption and integrity culture | Management should act as role models for promoting integrity and create a culture that makes it difficult for corruption to take root | Face-to-face staff surveys; assessing the percentage of senior management that have completed anti-corruption training |
| 2. Strategic aims and objectives | If you don’t find any references to integrity, anti-corruption or core values in the strategic goals of an organisation, this may be a sign that these issues aren’t being taken as seriously as they should be | Reviewing an organisation’s strategic documentation |
| 3. Risk management | The risk management process should be well-documented and should consider corruption and integrity risks, such as acceptance of gifts or conflict of interest | Analysing risk management documentation, including risk assessments and risk registers |
| 4. Preventative programme | Based on the results of the risk assessment, a combination of control measures is necessary to prevent, detect and respond to integrity risks | Assessing indicators such as the maturity level of whistleblower mechanisms and the number of staff who have undertaken integrity training; reviewing compliance mechanisms regarding acceptance of gifts, conflict of interest or secondary employment, for example |
| 5. Responsibility | Qualified compliance or integrity officers should be responsible for setting up and maintaining the corruption prevention system. These officers must have access to, and communicate regularly with, senior management | Looking at the number of compliance officers and their professional background; assessing periodic reporting of these officers to the senior management |
| 6. Communication | Core values and expectations of behaviour should be communicated to partners and external stakeholders as well as to staff members | Checking online for the existence of communication activities and statements from senior management on anti-corruption or integrity |
| 7. Evaluation and improvement | Evaluating if the prevention system is set up properly or should be improved is key | Looking at internal audit reports to see if the compliance management system has already been audited |
Finding the right pace when establishing a specialised unit
The ACA’s second strategic measure was to set up a department of anti-corruption experts to develop skills and expertise for auditing corruption prevention measures. One challenge we faced was that it was difficult to create consensus around a common understanding of anti-corruption and integrity, as well as to reach the same level of professional and specialised education. If you intend to set up a similar department, you should allow a reasonable timeframe for training and co-ordination, instead of going full throttle at the start.
The department has both internal and external tasks. Using the guidelines, specialist auditors conduct crosscutting audits through which they can compare preventive measures implemented by various administrative bodies. The specialist auditors also deliver training and provide guidance to ACA staff on anti-corruption issues. The head of department is also Chief Compliance Officer and is responsible for the compliance and risk management system of the ACA.
Results and impact: Strengthening integrity across public organisations
Our audits at the federal and local level revealed a number of interesting findings, such as:
- Lack of explicit commitment of senior management
- Deficiencies in risk management processes
- Absence of compliance and integrity officers
- Inadequate compliance processes for certain areas such as hospitality or the acceptance of gifts.
An impact of the ACA’s audits is the adoption of minimum standards for Compliance Management Systems at the federal level of the administration. Additionally, the informal network of integrity officers (IBN) chaired by the Austrian Federal Bureau of Anti-Corruption has been strengthened through our audits. Thanks to this initiative, there are more than 150 integrity officers in place that regularly exchange knowledge. These officers have been introduced at all levels of the Austrian administration.
Lessons learnt
It is not only important to reveal corrupt behaviour after the fact, looking for the smoking gun. Public sector auditors occupy a unique position that allows them to assess measures that help prevent corruption and integrity risks from materialising. The ACA’s experience in this area demonstrates how we as auditors can contribute positively and effectively to the strengthening of corruption prevention systems in the public sector.
| About the expert Dr. Rene Wenk is Head of Department for Anti-Corruption, Compliance, Risk Management at the Austrian Court of Audit, former Deputy Director of the Austrian Federal Bureau of Anti-Corruption, more than 15 years’ experience in the fight against corruption; doctoral degree in law, MBA in public auditing. |
The views in this article are the author’s only, and do not necessarily represent the views of the OECD or its member countries.
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Dear Rene:
I liked your article very much. Indeed, having mechanisms such as integrity audits in place is crucial for improving government performance. Something curious is that the 7 elements you list above are also considered by the Self-Assessment of Integrity (IntoSAINT), a tool that can be used by SAIs and public sector institutions in general to assess their own integrity risks and controls. It is great to khow that two different mechanisms such as integrity audits and the IntoSAINT tool share identical approaches, which is truly convenient.
As you conclude, SAIs could play a crucial role at promoting integrity audits in the public sector, as a way to make the most of their mandate.
I’d be eager to further know about the future progress of these interesting audits in Austria.
Thank you very much!
Francisco Parral / SAI of Mexico
Thx Francisco,
Your are absolutely right. Our approach is very similar compared with IntoSAINT. We didn’t want to reinvent the wheel. Our approach is based on existing standards and frameworks and it works quite well.
I hope we can stay in touch and discuss our progress in promoting integrity.
Best regards and all the best from Vienna,
Take care
Rene
Estimado Rene
Muy interesante y valioso tu artículo, muchas gracias por compartir la experiencia y el trabajo desplegado, te comentaré que en Perú recién estamos con el despliegue de las Oficinas de Integridad y la fuerza que se les desea dar, justo a recomendación del informe de la OCDE del Estudio País del 2017.
Sin embargo, mi oficina ya tiene más 7 años de operación dentro de la institución, la SUNAT es una institución que administra tributos y facilita el comercio exterior, aunado a la tarea reciente de fiscalizar insumos químicos; tiene sedes en todo el país y sus procesos son tan diversos en ambos negocios.
Yo estoy trabajando en la oficina desde su creación y he tenido la oportunidad de conocer los diferentes procesos y sedes de mi institución en el país; esto me ayuda con la gestión del riesgo de corrupción.
Últimamente y gracias a la presión de los organismos internacionales a nivel político se le esta dando mayor importancia a la lucha contra la corrupción, y se están fortaleciendo oficinas como la mía; pero nuestros recursos no son muchos, así que contar con la información y experiencia compartida es de gran ayuda para poder conocer más sobre las distintas herramientas que nos permiten prevenir la corrupción.
Muchas gracias nuevamente, saludos desde Lima – Perú.
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