The Supreme Audit Institutions (SAIS) were established with the sole aim to fulfill a financial auditing function i.e. to provide assurance that a government’s financial statements fairly reflect the revenues collected and expenditure incurred, and to determine whether an implementing agency had appropriate authority for transactions undertaken and acted in accordance with relevant laws and regulations.
Over three decades now, the demands on SAIs have expanded to include considerations of how well government bodies perform their work, typically looking at the economy, efficiency and effectiveness of the use of resources and service delivery where citizens and their elected representatives increasingly demand that SAIs go beyond judgments of compliance and accuracy to also evaluate government performance and the value for money obtained through government transactions.
However, in addition to the expanding expectations, SAIs have also been challenged by poor links between the audit function and the exercise of legislative and budgetary power, which the SAIs have found that it was not sufficient for errors identification, possible fraud, or examples of poor financial management, but that it was also necessary to identify ways to ensure that their findings are acted upon by the executive.
Furthermore, decisions about how to allocate public funds between agencies and activities reflect a government’s policy and service delivery goals but decisions about where to spend money are only effective if such money is actually spent as intended and if this money is spent in the appropriate way.
The 1977 Lima Declaration, states that through their work, SAIs should pursue objectives of development of sound financial management, communication of information to public authorities and the general public through the publication of objective reports, proper execution of administrative activities, likewise proper and effective use of public funds.