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Sustainable Development Goals (SDGs), seem to be everywhere, and of increasing interest to government auditors. I’ve recently conducted training programmes on the topic, for example, in the Supreme Audit Institutions (SAI) of Bhutan and Kuwait. I have found that it is useful to go to the conceptual roots of sustainable development in order to fully understand the SDGs.
SDGs are broad global goals. Governments are key players in implementing them, but they cannot achieve the goals by themselves. They need to involve all stakeholders. This is not possible without transparency and a participatory approach –core elements of good governance.
The concept of governance can help us to focus on the multiple actors and networks that reach beyond government. It involves both horizontal and vertical links. Horizontal perspective brings together not only various government sectors, but also cooperation with citizens, NGOs, and business sector.
Vertical links connect central government, to global, regional, and local actors and can be very significant. (Consider the different climate policies of the Federal Government of USA and the State of California.)
The dynamics work in the other direction too. Seeking to achieve sustainable development can drive efforts to improve governance. One of the public sector governance issues concerns silos, and the difficulties to make cross-sectoral links. Here sustainable development can be a valuable tool in making interconnections. For instance, the Swedish feminist foreign policy shows how it is possible to mainstream gender perspective into any policy area.
As another example, the European Court of Auditor’s (ECA) landscape review on energy and climate pointed out that climate change will affect EU citizens in many ways, including increased incidence of droughts and flooding, forest fires, effects on food production, damage to private and public infrastructure and demands for greater protection, changing health risks, impacts on employment, migration etc.
Sustainable development is, by definition, concerned with the long-term. Applying the sustainability concept, can help public sector bodies focus on the future and on change. Should we ask whether governments have long-term risk assessments? When we make our assessments and recommendations as auditors, do we consider long-term enough? From a sustainable development perspective, next year or even the mid-term plan is simply not enough.
INTOSAI has urged SAIs to audit the preparedness of governments to implement SDGs, conduct performance audits on individual SDGs, assess and support the SDGs 16 and 17, and act themselves as role models of transparency and accountability.
Several SAIs around the world have published audits on preparedness. They conducted these audits perhaps at an unusually early stage of the national SDG process, both as a way to support the national SDG process, and to set a benchmark for further audits.
These audits have drawn attention to weak governance structures, missing national strategy or implementation plan, insufficient transparency and involvement of stakeholders, missing indicators, data or reporting, and a lack of financing. They have made recommendations on drafting national strategies, creating clearer governance structures, establishing communication and engagement strategy, analysing how sector policies could contribute to the SDGs, and setting up monitoring and reporting systems. They involve a big push on providing a cross-sectoral perspective but, so far, less impact on the long-term perspective.
Sustainability reports are one place where accountants and auditors can address sustainable development. In 2013, we finalised in the INTOSAI Working Group of Environmental Auditing a project on sustainability reporting, with the valuable support of Gillian Fawcett (formerly of CIPFA). At the time of the project, integrated reporting was developing fast. It calls for organisations to disclose sustainability information with the financial information, instead of reporting non-financial information separately.
Sustainability reporting has developed in the private sector, but we noticed that increasingly public sector organisations, too, disclose their sustainability information. This is a challenge to the government auditors, as they have to consider whether they give an assurance to sustainability reporting, and what kind of skills this would need.
A crucial question for governments is how to match SDGs to the budget (see my colleague Peter Welch’s article on this). The sustainable development discourse suggests is that integrating sustainability information with budgets and financial reporting are the way to go.
Please join me and the rich line-up of speakers at the CIPFA International Conference in Abu Dhabi, 23 to 24 September 2018, as we debate these issues together and discover how effective governance is at the heart of delivering sustainable development goals.
This article will appear in Public Finance Magazine.