Proposal for creation of new
Working Group on Audit of
Extractive Industries
SAI India
Comptroller and Auditor General of India
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About Extractive Industries
• Include oil, gas, and mining industries.
• Currently generate about 3.5 trillion US Dollars (USD)
in annual gross revenue, corresponding to around 5
per cent of the global gross domestic product (GDP).
• A great portion of money involved in the extractive
industries is in fact public money.
• About 70 percent of world oil production lies in the
hands of state-owned enterprises.
• Important role for SAIs role in the oversight of these
enterprises, depending on their overall legal
framework and mandate.
Comptroller and Auditor General of India
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Background
• AFROSAI-E and the INTOSAI-Donor Secretariat agreed to
work jointly on the mapping of SAI involvement in audit of
Extractives Industries.
• Terms of Reference for such mapping approved by the
INTOSAI-Donor Steering Committee
– Explore SAI activities, best practices, challenges, and
needs in this regard, including recommendations for a
way forward.
• The study was carried out by the INTOSAI-Donor
Secretariat with support from the AFROSAI-E Secretariat.
• Similarly, several initiatives are currently underway within
INTOSAI, which are of relevance for SAIs in this field.
Comptroller and Auditor General of India
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Background
• A questionnaire drafted by the INTOSAI-Donor Secretariat
and discussed with 25 participating SAIs at an EI workshop
hosted by AFROSAI-E in February 2013.
• Also sent to regional and sub-regional secretariats of
INTOSAI, namely ASOSAI, ARABOSAI, AFROSAI-E and
CREFIAF, and OLACEFS.
• On the basis of the responses, a report being drafted.
• Responses confirm the strategic importance of auditing
Extractive Industries for SAIs
• Responding SAIs also see a clear need to enhance
knowledge and capacity.
Comptroller and Auditor General of India
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Challenges before SAIs
• Technical complexity of the sector
– Lack of knowledge of business processes of extractive
sector
• Lack of capacity within SAIs
• Training and retention of specialised staff
• Mandate limitations
Felt needs of SAIs
• Increased sharing of knowledge and experience
– Better domain appreciation
– Currently, reliance on external consultants
• Acquisition of auditing skills
– Training etc.
– Peer to peer support
Proposal for a
new Working Group
• New Working Group on Audit of Extractive Industries
proposed Industries under the INTOSAI Committee on
Knowledge Sharing and Knowledge Services (KSC).
• Proposal based on informal consultations with the
INTOSAI-Donor Secretariat.
• Could also include a community of practice.
• An institutional anchor in INTOSAI and to carry out
outreach activities.
• The Working Group would also serve as a key partner for
any IDI or regional capacity development initiatives in
this field.
• Support for an international forum already manifest.
Comptroller and Auditor General of India
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Responsibilities
• Promote EI audit within the INTOSAI community
• Gather and disseminate existing information and
knowledge
• Create new knowledge
• Reach out to other stakeholders
• Liaise with other INTOSAI bodies
Way Forward
• On KSC approval, the above proposal would
be presented in the upcoming INTOSAI
Governing Board meeting and XXI INCOSAI
in Beijing.
• We would also then seek candidatures for
chairing the Working Group and hosting its
Secretariat.
Comptroller and Auditor General of India
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Proposal for approval
In-principle approval by the KSC Steering
Committee for the constitution of a new
Working Group on Audit of Extractive
Industries.
Once approved, the proposal will be placed
before the INTOSAI GB and the XXI Congress
for their endorsement.
THANK YOU
Comptroller and Auditor General of India
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