Institution Building with Limited Resources: Establishing a Supreme Audit Institution in Rwanda

Abstract

Abstract:This study is about institution building with limited resources. Through a case study of the establishment of a supreme audit institution (SAI) in Rwanda, we examine the tensions between institutional first-best benchmarks and local operational constraints in a developing country institution-building process. More specifically, our aim is to investigate the potential tradeoffs between the programmatic ideal of SAI independence and operational constraints in terms of staff capacity in the development of a supreme audit oversight function in Rwanda.Drawing on data from document studies and key informant interviews, the empirical results suggest that capacity constraints -within the institution as well as among its major stakeholdersnegatively affect important aspects of SAI functional independence, but also that there are arguments for compromising the programmatic ideal of SAI independence in order to effectively tackle operational constraints in terms of staff capacity.JEL classification: D02, H83, O16, O55.

Organizing the Audit Society: Does Good Auditing Generate Less Public Sector Corruption?

“…These results resonate findings from previous research that stress the importance of skills among the officials conducting controls for the controls to have a positive impact. In developing countries, often facing problems with corruption, it is particularly important to have auditors with appropriate skills and education for the auditing agency to fulfill its assignment (Gustavson, 2014; Isaksson & Bigsten, 2012).…”

“…To illustrate; if a SAI do not have the expertise to identify acts of misbehavior for personal gain in complex organizations-acts which most often is hidden in paper trails so that outsiders do not easily find out about them-its work would be quite toothless as a tool to reduce public sector corruption. Moreover, it can be noted that a lack of professional expertise creates more dependency on the auditee and it limits possibilities to take a critical stance toward the information obtained in the audit process (Isaksson & Bigsten, 2012); it also has a negative impact on the trustworthiness of the auditors' assessments, opinions, and reports (Flint, 1988). It is therefore plausible to assume that SAI's need to be staffed with skilled employees given the appropriate resources to conduct meaningful investigations of fraud and bribery in public authorities.…”

“…Furthermore, the capacity of the agency, in terms of the auditors’ expertise and skills, has been demonstrated to affect its ability to fulfill its assignment. In developing countries in particular, capacity constraints in terms of lack of education and expertise among auditors place strict limitations on how auditing agencies in these countries operate (Gustavson, 2014; Isaksson & Bigsten, 2012). A reason for the mixed results could be the lack of an overall theoretical framework establishing what may constitute “good auditing” of the public sector.…”

“…The creation of specific auditing agencies builds on the notion that officials working for these agencies are better able than ordinary citizens and politicians to control financial transactions and the ethical conduct of agents in very complex organizations such as contemporary public administrations. Scholars also argue that professionalism among officials conducting oversight activities generates better outcomes in terms of improving performance of the auditees (Boyne et al, 2002; Gustavson, 2014; Isaksson & Bigsten, 2012). In addition to controlling the public sector, auditing also builds on recommendations to the auditee with the aim of improving its performance (Reichborn-Kjennerud, 2013).…”

In It for the Long Haul? Post‐conflict Statebuilding, Peacebuilding, and the Good Governance Agenda in Timor‐leste

“…This is central to our case, with Rotberg () asserting that land rights were a leading cause of disputes in Timor. A focus on developing anti‐corruption mechanisms and related transparency and audit mechanisms, including various ostensibly independent anti‐corruption agencies and audit agencies, with an array of powers, including investigatory and criminal. This reflected renewed international focus on moral probity (Blunt, ; Isaksson and Bigsten, ).…”