INTOSAI Development Initiative

Supporting effective, accountable and inclusive Supreme Audit Institutions

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Launch of new paper on the role of SAIs in auditing IMF emergency funding


Today IDI launches its paper on the role of SAIs in auditing IMF emergency financing. The paper was co-authored by staff from IDI and the IMF Legal Affairs Department in 2020 whilst the COVID-19 pandemic unfolded. It benefited from considerable input from IMF staff.

In response to COVID-19, the IMF disbursed over US$110 billion in emergency financing to 85 countries. These one-time disbursements were without the IMF’s usual ex post conditionality. Instead, they relied on country commitments in Letters of Intent designed to address vulnerabilities to fraud and corruption through safeguards, including audits of the use of emergency finance by the country’s SAI.

The paper notes that, in most cases, IMF emergency finance is used by member countries as budget support. It is mingled with other revenues (including loans) and used as part of the general budget, which is within the mandate of the SAI to audit. As a result, SAIs and the IMF have a shared goal: to enhance transparency and accountability in the use of emergency funds and ensure SAIs contribute to good financial governance and addressing corruption. To achieve this, SAIs and the IMF need to strengthen mutual understanding, dialogue and cooperation, especially on issues such as SAI independence and IMF commitments, conditions and monitoring.

Further, as emergency finance is budget support, the IMF is not curtailing SAI independence by imposing on the SAI a requirement to audit the use of ring-fenced IMF funds. Rather, the IMF needs there to be a strong and independent SAI which is suitably resourced to deliver on its core mandate to audit the use of all public funds, while recognising the enhanced risks around the use of emergency finance. Additionally, SAIs should live the ‘Value and Benefits of SAIs’ principle of responsiveness by adjusting their audit plans to reflect emerging risks and remain relevant to stakeholder expectations. Finally, the findings from such audits should feed into broader oversight and follow-up systems, as well as those for sanctioning and referral of suspicions of corruption to appropriate investigative and law enforcement agencies.

Given this broad agenda, the paper acknowledges the extent of challenges currently faced by SAIs, covering independence, mandate, resources and operations, and how these have been exacerbated by the crisis. It recognises that short term safeguards need to be accompanied by longer term support to enable SAIs to play their role more effectively. And finally, it notes how INTOSAI bodies, peer SAIs and development partners can contribute to this area, as can the IMF through integrating SAIs into its broader policy dialogue, monitoring and future programs including conditionality.

Download the paper here