In a complex operating environment where the pace of social changes is accelerating, Supreme Audit Institutions (SAIs) are required to apply a more holistic audit perspective. This includes future consciousness and foresight.
At the beginning of 2019, the National Audit Office of Finland (NAOF) organised a foresight workshop for its Nordic sister agencies. The aim was to open new perspectives to auditors’ traditional way of providing information, to add awareness of the available methods, and to spark a discussion about a modern SAI’s societal role. Today, auditors can also be seen to an increasing extent as experts scanning the future in order to increase the impact of their work.
We are currently building a Nordic Foresight Network Group, which begin its work during the autumn of 2019. One of the issues on the agenda of the kick-off meeting is defining operating methods and shared goals for the network.
Central government needs foresight
NAOF is an independent organisation, which, in accordance with its mandate, audits the legality and appropriateness of the use of central government assets. We provide information primarily to Parliament in order to support decision-making. The audited central government actors also benefit from the audit findings and recommendations, which help them to develop their operations further.
We have a front-row seat to central government. Part of our present role is to assess the comprehensiveness of government operations in order to ensure their impact and appropriateness in the ever more complex operating environment. Foresight activities have not been a very typical approach to constructive audit work. However,
the need to expand and develop SAIs’ role has been recognised. The International Standards of Supreme Audit Institutions, issued by INTOSAI, an umbrella organisation for the external government audit community, serve as the foundation and framework for the operations of SAIs. These standards recognise SAIs’ significance and benefits to society. The standards also lay the foundation for a constructive audit approach, which involves future consciousness and utilisation of foresight information.
A SAI can provide foresight information and an overall picture
Even traditional audit work recognises the long time horizon and preparing for it. In addition to – and also by means of – our core functions, i.e. audit and monitoring, audits can raise forward-looking perspectives and standpoints. By paying attention to certain phenomena, for example, it is possible to prevent certain risks in the future or support desired developments.
SAIs have a unique opportunity to get an overall picture of the management of central government finances across the whole administration. This makes it possible to provide extensive, well-grounded and substantial information. In OECD’s publication Supreme Audit Institutions and Good Governance (2016), OECD Secretary-General Angel Gurría states that SAIs have untapped potential to go beyond their traditional oversight role and contribute evidence for more informed policy-related decision-making.
The OECD publication states that a SAI can help public administration to improve its processes by the information it provides in three different ways:
by its systematically built opinions and its audit work (oversight),
by sharing its short-term visionary knowledge (insight), and
by encouraging the public administration to identify and assess risks and trends in the long term (foresight).
In practice, a future-conscious SAI can, within the scope of its basic duty, identify future paths and encourage the audited entities to take possible forthcoming trends and risks into account.
Foresight requires goal-oriented operations
A SAI cannot oblige public administration to practise foresight. However, audits can assess the audited entities’ ability to foresee, their concrete foresight activities, or the ambition with which they have identified, defined or even categorised alternative futures. This can mean, for example, an audit question that aims at finding out whether the auditee has considered the future in the audited issue, or whether the auditee has practised foresight based on different methods or prepared for different scenarios.
At NAOF, we have discussed, for example, whether a SAI should provide foresight information itself, require central government actors, i.e. the audited entities, to provide it, or perhaps apply different methods of futures studies in its audits. The Nordic Foresight Network Group will focus on these fundamental issues with stronger, international resources.
The OECD publication highlights the same issues: SAIs concrete approach to short-term and long-term foresight is to pinpoint cross-cutting problems and to forecast policy implications and medium and long-term risk. Based on audit findings and the available overall picture, SAIs can determine what works well in public administration and what does not.
All in all, foresight should not be a stand-alone, method-dependent operation. Instead, foresight can serve, for example, as orientation or inspiration or as an approach or a perspective to expand our thinking and observations to cover a broader horizon of phenomena.
It takes a brave, visionary and determined mindset to systematically start implementing future orientation in audit work. It also requires loyalty to the agency’s core function, i.e. auditing, which serves as a cornerstone of independence and credibility. In any case, future consciousness can be a relevant element that supplements audit work and helps us to meet the diverse challenges posed by the changing environment and to continue to provide relevant information for the support and development of central government.
The text is based on my article “Tulevaisuustietoisuus valtiontalouden tarkastusviranomaisen toiminnassa” (“Future consciousness in the work of a Supreme Audit Institution”), published in the Futura journal 1/2019 of the Finnish Society for Future Studies.