Government audit profession has key role in providing oversight on sustainability reporting in the public sector

The Global Summit convenes Supreme Audit Institutions and key stakeholders from around the world to discuss how (SAIs) contribute to people and planet by engaging in the growing movement on sustainability reporting and oversight

‘SAI audits have contributed significantly to the follow up and review of UN Sustainable Development Goals since 2017. As discussions on sustainability reporting in the public sector gain momentum, it is important for SAIs to provide their perspectives on robustness of sustainability reporting by those charged with governance.’

So reported Ms. Archana Shirsat, Deputy Director General of the INTOSAI Development Initiative (IDI) at IDI’s Global Summit on Professionalisation of SAI (Supreme Audit Institution) Auditors in London, 14-15 November 2023. 

A session on the role of SAIs in sustainability on 14 November heard how comprehensive and relevant sustainability reporting must be accompanied by effective oversight mechanisms. A joint report by IDI, ACCA and IFAC highlighting the need for public auditors to engage and define their role was formally launched at the session at IDI’s Global Summit. 

The report, ‘Preparing for sustainability reporting and assurance: an introduction for the public sector globally’, explores why the public sector should undertake sustainability reporting and the importance of oversight of this information by government auditors. 

Mike Suffield, director of policy and insights at ACCA, said: “We are witnessing a rapidly developing reporting landscape for public sector sustainability reporting. Supreme audit institutions need to be closely involved in the development of that landscape, so they can provide assurance to the public sector and society generally. Supreme audit institutions should not wait to be asked to join in with sustainability. They need to take the initiative to enable the building of trust in the reporting process.”

Comprehensive and relevant sustainability reporting must be accompanied by effective oversight mechanisms. The approach to oversight needs to be appropriate to the type of information being reported on and SAIs with their experience in financial, compliance and performance audit are uniquely well placed to undertake auditing of sustainability reporting.

SAIs also have a system-wide perspective of government performance that is often not replicated elsewhere in the public sector. This enables them to consider approach to sustainable development across different parts of the public sector.

The report identifies six reasons why the public sector should undertake sustainability reporting:

• Advancing sustainable development;
• Supporting an economy-wide perspective;
• Providing information to capital markets and development partners;
• Transparency and accountability;
• Supporting internal decision-making;
• Promoting public trust. 

Both the conference and the report underline that governments and public sector entities need to focus on the areas of greatest impact. And this is where SAIs can really add value. 

Bruce Vivian, principal, accountancy education, IFAC, said: “At IFAC we believe that if sustainability disclosures are to be trusted, they need to be subject to high-quality, independent, external assurance. For the public sector, SAIs have a pivotal role to play in independent oversight of sustainability reporting by government entities, including the provision of assurance to enhance the credibility of this reporting. The work of SAIs can help stakeholders have confidence in reported information for decision-making and accountability purposes, with the ultimate goal of advancing sustainability outcomes in the public sector.”

SAIs can ensure that there is alignment with the overall government plan to reduce emissions and achieve wider sustainability goals and the goals and work of the myriad individual public sector entities.

 Pamela Monroe Ellis, auditor general of Jamaica, said: “The role of the SAI is a unique one. We look across a country’s government and assess whether the systems for promoting sustainability are efficient and effective. As sustainability reporting develops, the engagement of SAIs in the process of developing frameworks and standards is vital.” 

Read the report.