ISSAI 5500
The International Standards of Supreme Audit Institutions, ISSAI, are issued by the
International Organization of Supreme Audit Institutions, INTOSAI. For more information visit
www.issai.org
EXPOSURE DRAFT
I N T O SA I
Introduction to Guidance for Audit
Work on Disaster-related Aid
INTO S AI Pr o f e s si o n a l S t an d ar ds Co m mitt e e
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I NTOS AI
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Introduction to Guidance for Audit Work on Disaster-related Aid
Table of contents
1.
Auditing disasters
2.
The 5500 series of ISSAIs
3.
Disaster-related aid
4.
Sources, types and phases of disaster-related aid
5.
Characteristics of disaster-related aid of special interest to auditors
6.
Using the ISSAIs
7.
Content of ISSAIs 5510 to 5540
8.
Accountability
9.
IFAF: A tool for harmonised reporting
APPPENDICES
APPENDIX 1:
The INTOSAI Working Group on Accountability for and the Audit of
Disaster-related Aid
APPENDIX 2:
Members of the Working Group
APPENDIX 3:
Acknowledgements
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Introduction to Guidance for Audit Work on Disaster-related Aid
1. Auditing disasters
The United Nations reported 30,000 deaths and USD 366 billion of damage caused by 302 natural
disasters in 2011. For the first twelve years of this century, disasters claimed 1.1 million lives and
caused USD 1.3 trillion in economic damage. Governments react to disasters by donating
humanitarian assistance to the victims of disasters. In 2010 they gave USD 12.4 billion. The
Supreme Audit Institutions of the donating governments audit these funds as government
expenditure. SAIs of countries affected by disasters audit humanitarian aid received from
governmental and non-governmental donors, USD 16.7 billion in 2010, as well as the disasterrelated expenditure of their own governments. The growth in the frequency of disasters and in their
human and economic impact over the past three decades has raised the profile of disaster-related aid
for governments and their auditors.
2. The 5500 series of ISSAIs
The 5500 series of ISSAIs provides guidance and best practice on the audit of disaster-related aid.
The structure of the series is as follows:
ISSAI 5500 – Introduction to guidance for audit work on disaster-related aid
ISSAI 5510 – Audit of disaster preparedness
ISSAI 5520 - Audit of disaster-related aid
ISSAI 5530 - Adapting audit procedures to take account of the increased risk of fraud and corruption
in the emergency phase following a disaster
ISSAI 5540 - Use of geospatial information in auditing disaster management and disaster-related aid
ISSAI 5500 contains background material on disaster-related aid, introduces and provides an
overview of the ensuing guidance and indicates how best to use it. ISSAIs 5510 and 5520 cover the
pre- and post-disaster phases. ISSAI 5530 considers the specific risks of fraud and corruption which
arise due to the emergency nature of much of disaster-related aid. ISSAI 5540 presents a tool of
special use for auditing disaster-related aid. Each ISSAI can be used as a source of information,
containing examples of best practice or as guidance in its own right and can be read alone or in
conjunction with the other ISSAIs on disaster-related aid.
3.
Disaster-related aid
Disaster-related aid falls within the broad category of humanitarian aid, which is designed to save
lives, alleviate suffering and maintain and protect human dignity during and in the aftermath of
emergencies. This may include developing disaster prevention and preparedness measures.
Humanitarian aid and action differ in some respects from other forms of foreign assistance and
development aid in that they are intended to be governed by the principles of humanity, neutrality,
impartiality and independence and with the exception of disaster preparedness measures, are mainly
short-term in nature. The ISSAIs on disaster-related aid focus on the humanitarian response to natural
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disasters (earthquakes, tsunamis, landslides, floods, volcanic eruptions, etc.). However, the guidance
can in principle also be applied to all of humanitarian aid, including that donated for and spent on
man-made disasters or disasters which are the result of both natural and man-made hazards (famine,
war, nuclear accidents, terrorist attacks, etc).
4. Sources, types and phases of disaster-related aid
Governments, non-governmental organisations (NGOs), multilateral organisations, private
foundations, trusts, private companies, corporations and individuals donate disaster-related
assistance. Aid can be financial or provided in the form of goods and services donated in kind. It is
donated to assist disaster-related activities, which may be in the immediate post-disaster emergency
phase, the rehabilitation and reconstruction phase or for the purposes of disaster prevention and
preparedness.
The post-disaster emergency phase includes both the individual and local disaster response and the
national and international emergency response:




Rescue, recovery, first aid assistance, evacuation of the injured and burial of the dead;
Emergency assistance and services (shelter, water, medicines etc.);
Emergency food aid for immediate distribution and then for setting up feeding
programmes); and
Coordination of the relief and assistance actions, involvement of the military, protection of
individuals and assuring support services, logistics and communications.
The post-disaster rehabilitation and reconstruction phases include activities designed to restore
basic services and functions and eventually establish levels of services to pre-disaster levels, or
better.
Disaster prevention and preparedness involve learning lessons from previous disasters and acting on
them. They include disaster risk assessment, the installation of early warning systems, contingency
stocks and planning for potential future disasters as well as educating people of the actions to take in
the face of disaster to avoid and reduce their human and economic impact.
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Figure 1 shows the link between the ISSAIs and the different phases of disaster-related aid.
Post-disaster activities
Pre-disaster activities
Reconstruction
-5520
-5540
Rehabilitation
-5520
-5530
-5540
Emergency
Response/ Relief
-5520
-5530
-5540
Mitigation
-5510
-5540
Preparedness
-5510
-5540
Individual Disaster
Response
-5520
-5530
-5540
Figure 1: The ISSAIs and the phases of disaster-related aid
5. Characteristics of disaster-related aid of special interest to auditors
Different risk factors affect the emergency and the non-emergency phases of the disaster-related aid
cycle. The non-emergency phase comprises aid for less urgent rehabilitation and reconstruction
measures as well as disaster prevention and preparedness activities. The circumstances under which
this expenditure is made are normal and internal control systems can be expected to function
normally. For donor SAIs the risk factors associated with the non-emergency phase should not differ
significantly from those identified for development or other overseas aid. For SAIs in countries which
are either affected by disaster or preparing for potential disaster, the risk profile of such expenditure
may be similar to other government expenditure. What is specific to the emergency phase following
disaster is the urgency of the action taken. Large amounts of aid arrive rapidly and must be managed
and distributed quickly to save lives and limit losses. Internal control systems are often not in place or
are not appropriately adapted to such activity. Emergency procedures are introduced and operational
and procedural controls are frequently circumvented or simply ignored in the interest of speed.
Auditors are faced with challenging additional risk factors in these situations.
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6. Using the ISSAIs
The 5500 series of ISSAIs reflects current best practice, includes illustrative examples, and proposes
practical solutions for auditing disaster-related aid. The individual ISSAIs are closely related and
cross referenced including to the guidance on general audit methodology and procedures in the third
and fourth level ISSAIs, especially those on financial audit, performance audit and compliance audit.
As is the case for other INTOSAI Auditing Standards, this guidance is not mandatory and each SAI
should consider the extent to which the guidance is compatible with its mandate. The guidance
builds upon INTOSAI’s Fundamental Auditing Principles and standards promulgated by other
standard setting organisations with which INTOSAI has a cooperation agreement, such as the
International Federation of Accountants.
Depending on the structure of the public sector and the mandate of the SAI, the ISSAIs on disasterrelated aid can apply to audits at all levels of government: central, regional as well as local. Auditors
of private entities such as NGOs receiving and managing public funds may also find the guidance
applicable. Appendix 3 of ISSAI 5520 includes an example of specific guidance for private auditors
of NGOs prepared by the SAI of Chile .
7. Content of ISSAIs 5510 to 5540
ISSAI 5510 recognises the increasing emphasis by governments and international organisations on
reducing the risk of disasters and on reducing their potential impact through adequate preparation.
The SAI of Turkey led the preparation of guidance for auditing disaster preparedness with assistance
from the SAIs of Austria and Kenya. The SAI of Turkey gathered data from a number of INTOSAI
members for a survey it carried out of experiences of auditing disaster preparedness. It also
organised a parallel audit to collect input for the guidance. Thirty five SAIs replied to the survey and
the SAIs of Azerbaijan, Chile, India, Indonesia, the Netherlands, Pakistan, the Philippines, Romania,
Ukraine and Turkey contributed to or participated in the parallel audit.
ISSAI 5520 takes account of the notable features of post-disaster activity, which include large
amounts of resources flowing into disaster-affected areas, where there is pressure to deliver aid
rapidly to individuals in great need. Aid may be disbursed by a number of different actors with
varying levels of experience. There is often lack of coordination and inattention to the accountability
and reporting of disaster-related aid, which renders the establishment of an audit trail difficult. The
SAI of Indonesia took the lead in developing guidance for the audit of disaster-related aid, with
assistance on subtopics from the SAIs of Chile and Peru. The SAI of Indonesia conducted two
surveys and a parallel audit to gather data to feed into the guidance. This ISSAI focuses on the
different phases and activities carried out in the aftermath of disasters, from the emergency phase
through to rehabilitation and reconstruction.
ISSAI 5530 reflects the recognition of the need for guidance on the higher risk of fraud and
corruption in activities carried out during the initial weeks and months following a disaster. The SAI
of the European Union therefore prepared guidance for auditors to consider the increased risk of
fraud and corruption in the emergency phase of disaster-related aid. This guidance expands on ISSAI
1240 in broadening the scope to consider the risk of corruption as well as of fraud. It focuses on the
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phase immediately following disasters, when procedures and controls might not function as they
may normally be expected to do. To assist auditors, the guidance outlines risks and red flags of
which auditors should be aware and provides advice on how to adapt audit procedures accordingly.
ISSAI 5540 presents the use of appropriate tools employing modern technology for managers and
auditors of disaster-related aid across the disaster management cycle. Assisted by experts in the field,
the SAI of the Netherlands prepared guidance on the use of geospatial information and Geographical
Information Systems (GIS) when auditing disaster-related aid. In addition to providing best practice
and guidance on how to use geospatial information for auditing disaster-related aid, this ISSAI
provides a comprehensive introduction to geospatial information and may therefore also be useful
for SAIs conducting audits in areas not related to disasters or disaster-related aid.
8. Accountability
The 5500 series of ISSAIs bears witness to the active role INTOSAI has adopted in encouraging its
members to address the issue of auditing disaster-related aid. Closely related to this is the issue of
better accountability for humanitarian aid to disaster-affected communities and to the taxpayer.
Victims of disasters and donors of aid have in recent years demanded increasingly greater
transparency and accountability over the administration and management of disaster-related aid. In
many cases, Supreme Audit Institutions are well-positioned to promote accountability and
transparency: through their audits, they can identify weaknesses in the existing arrangements and
propose improvements to make disaster-related aid better reported, more accountable and more
effective. In this context, SAIs have reported a need for improvements in the quality of financial
reporting and in the availability of information on flows of disaster-related aid. For improved
accountability and transparency of humanitarian aid SAIs found that it was necessary to obtain:



A global view of the volume of aid which has gone into disasters, of who contributed aid and
of where and on what it was spent;
Consistently reliable and complete information concerning the individual flows of disasterrelated aid to allow an overall picture of the situation to be constructed and
At the same time the reporting requirements for intermediary and implementing organisations
should not constitute an untenable burden.
9. IFAF: A Tool for Harmonised Reporting
Linked to the 5500 series of ISSAIs on disaster-related aid is an INTOSAI-GOV which presents a
tool for harmonised reporting by the managers of disaster-related aid. The tool is called the Integrated
Financial Accountability Framework (IFAF). It consists of tables which permit aid donors,
international organisations, implementing organisations, auditors and other interested parties to obtain
a complete picture of the flow of funds or relief activities for any given disaster as well as to follow
individual aid payments down to the final recipient. The proposed tables are simple to prepare and
understand, standardised, reliable and transparent;
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


Simplicity is derived from the fact that aid donors report their donations by listing the amount
given to each organisation to which they have donated, and aid recipients report the
corresponding amounts as receipts from each donor organisation. Payments are reported by
operational activity unless they are made to an aid agency or other intermediary organisation
passing on funds to other recipients, in which case the payments are reported by recipient;
Standardisation is provided through the agreement of the majority of major donors and
recipients to prepare the tables proposed;
Reliability of the information is assured because the tables are drawn up from the same
accounting system used for producing the organisations' financial statements and are subject to
verification by the external auditor of the organisation concerned. Providing such audits are
carried out on the basis of agreed standard guidelines, the potential exists for funds to be
audited only once (auditors using the work of other auditors);
Transparency is achieved by means of tables that are easy to read and made public alongside
the other reports of each organisation.
IFAF has been tested with different stakeholders in humanitarian aid: with donors, intermediary
organisations and aid implementing organisations. These tests have been successful: organisations
have found it easy to prepare IFAF tables using data already existing in their financial systems.
More information about IFAF is provided in INTOSAI GOV XXXX.
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APPENDIX 1
The INTOSAI Working Group on Accountability for and the Audit of Disaster-related Aid
The interest of SAIs in accountability for and the audit of disaster-related aid has grown recent years due to
the greater interest shown by donors (including taxpayers), the media and disaster victims in the use of
disaster-related funds. Interest turned into action following the experience of SAIs after the disaster which
occurred in South East Asia in 2004. On 26 December, the third biggest earthquake ever recorded struck off
the west coast of Sumatra, Indonesia. It triggered a series of devastating tsunamis along the coasts of most
landmasses bordering the Indian Ocean, killing over 230,000 people in fourteen countries, and inundating
coastal communities with waves up to 30 meters high. It was one of the deadliest natural disasters in
recorded history. Indonesia was the hardest hit country, followed by Sri Lanka, India, and Thailand. The
plight of the affected people and countries prompted a worldwide humanitarian response. In all, the
worldwide community donated more than USD14 billion in humanitarian aid.
This vast amount of aid flowed from many different donors to many different recipients. Arrangements for
the coordination and reporting of the aid were not in place. SAIs and other stakeholders assessed the
situation and found that there was little information on aid flows and that it was difficult to establish an audit
trail. In 2005, INTOSAI decided to contribute its collective auditing experience to the international
community to enhance the accountability for and the transparency of disaster-related aid spending. The aim
was to establish an overview of the tsunami-related aid flows based on the information provided by
individual stakeholders (donors, international organisations, intermediary bodies and recipients) and to
collaborate on the audit of the aid.
In January 2005 – at the meeting of the INTOSAI Finance and Administration Committee – INTOSAI
members discussed a potential INTOSAI initiative to enhance accountability over tsunami aid spending. The
International Conference on Promoting Financial Accountability in Managing Funds Related to Tsunami,
Conflict and Other Disasters took place in April 2005. The INTOSAI Governing Board established the
INTOSAI Task Force on the Accountability and Audit of Emergency Aid in November 2005. The Task
Force recommended that guidance should be prepared on best practice and on appropriate tools for the audit
of disaster-related aid. INTOSAI accordingly set up the INTOSAI Working Group on Accountability for and
the Audit of Disaster-related Aid at the XIX INCOSAI in Mexico in 2007.
INCOSAI in 2007 gave the Working Group the following mandate:
-
To strive for enhanced accountability and transparency of disaster-related aid, in close cooperation
with relevant stakeholders, by addressing the issue of the lack of a single information structure, and
-
To develop guidelines and best practices for SAIs auditing disaster-related aid.
In 2010 the XX INCOSAI commended the work being undertaken and extended the mandate by asking the
Working Group to examine the usefulness of its work for the whole of humanitarian aid.
The Working Group translated the mandate it received into two objectives:
-
Objective A: the development of guidance and best practice for SAIs on the audit of disaster-related
aid, covering the whole of the audit cycle: planning, executing and reporting;
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-
Objective B: the establishment of guidance and best practice regarding accountability for
humanitarian aid. This includes the provision of a clear, transparent and standardised information
tool for stakeholders (an integrated financial reporting framework). The involvement of important
stakeholders (governments, international organisations and aid organisations) was seen as crucial for
developing, testing, promoting and implementing this tool.
These objectives were subdivided into separate tasks for which different Working Group members were
responsible.
Task
1
2
3
4
5
6
7
8
9
10
11
12
13
Description
Responsible SAI
(lead SAI underlined)
Lessons learned from experiences with the International Aid Korea
Transparency Initiative
Harmonisation of accountability standards for aid ECA
organisations: development of HAP Guide as a tool
Harmonisation of accountability standards,
ECA/Norway
financial reporting/agreement on basic
principles for financial reporting and
promotion of single audit addressed to donors
Auditing guidelines for private auditors of aid organisations
Chile
Introduction harmonised reporting and auditing in UN
ECA
Elaboration of guidance for auditing disaster-related aid
Indonesia/Peru
Organisation and coordination of a parallel audit and/or audit Indonesia
feedback on disaster-related aid
Elaboration of the guidance on auditing disaster preparedness
Turkey/Austria/Kenya
Organisation and coordination of a parallel audit and/or audit Turkey
feedback on disaster preparedness
Awareness of fraud and corruption during audits of disaster- ECA
related aid
Integration of the audit guidance documents into one and ECA
possibility of ISSAI(s)
Use of GIS as an audit tool
The Netherlands
Financial accountability information requirements
USA
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APPENDIX 2
Members of the Working Group
Since it was established in 2008, the Working Group has had a membership of between 18 and 22 SAIs with
a balance of representatives from donor and potential aid recipient countries and from a wide variety of
geographical locations. Membership has remained fairly constant over the six years of the life of the
Working Group. In May 2013, the following SAIs were members1: Austria, Chile, China, the European
Court of Auditors, France, India, Indonesia, Jamaica, Japan, Kenya, Korea (Republic of), the Netherlands,
Norway, Pakistan, Peru, the Philippines, Romania, Russian Federation, Sri Lanka, Turkey, the Ukraine2 and
the United States of America.
1
Members include 5 of the top 10 donors and 2 of the top 10 recipients, according to the 2011 Global Humanitarian
Assistance Report.
2
The audit of disaster-related aid has also been addressed by the EUROSAI Task Force on the audit of funds
allocated to disasters and catastrophes, chaired by the SAI of the Ukraine. See
http://www.ac-rada.gov.ua/control/eurosai/en/
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APPENDIX 3
Acknowledgements
The INTOSAI Working Group on Accountability for and the Audit of Disaster-related Aid wishes to express
its appreciation for the contributions made by INTOSAI members, especially those which prepared and
contributed to the guidelines, those which participated in the parallel audits and those which replied to the
surveys.
The Working Group is also grateful for the valuable contributions made by other INTOSAI Working Groups
and Committees and others, such as the Special Representative of the UN Secretary-General for Disaster
Risk Reduction (UN ISDR), the Under Secretary-General of the UN Office for Internal Oversight Services,
the European Commission, Transparency International, etc (to be completed) both for developing and
improving the guidelines and for their input during meetings of the Working Group. See also the individual
ISSAIs for further acknowledgements.