Report by Colin Breed, UK, on the challenges for reforming accountability mechanisms – a parliamentary perspective, Amman 4-5 November 2014.

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PUBLIC FINANCE MANAGEMENT AND AUDIT IN JORDAN
Role of Audit Bureau in Jordan
Colin BREED
Amman, Jordan
4-5 November 2014
We have seen in recent years a greater focus on the governance of countries, whether in mature democracies, developing countries, elected dictatorships and oppressive regimes.
This has been greatly aided by the international internet and social media networks. Never before have the ordinary members of the public had such access to the operations of governments and their elected politicians and as their initial curiosity is satisfied there is inevitably a greater desire to know more and more and to have a greater say on who and how they are governed.
I was a member of the UK Parliament for 13 years and retired in 2010 but during that time I experienced an unprecedented increase of interest by my constituents in the current issues of the day. When I started I might receive 10 e mails a week, when I left I was getting 150 a day. Now with Facebook and Twitter things are even busier.

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The media interest and their treatment of politicians brought about in the UK a Freedom of Information Act which led to the biggest scandal in the UK Parliament for very many years that relating to MP’s expenses as the media where able to obtain hitherto unpublished information.
The governance of countries today remains high on the agendas of the media and therefore the public. Whether that is in an African 3rd world country, or Hong Kong or even the European Union. The media and the public demand more and more information, explanation and holding their governments or administrations to account.
It is in this often frenzied atmosphere that politicians will increasingly be called upon to justify their decisions, explain their actions and demonstrate their personal commitments to what the public are seeking. The information explosion cannot be contained or ignored.
Again, whether we are speaking about developed or under developed countries or those that are rich or poor it is usually the stewardship of the resources of a country that most attracts attention and is most often the subject of investigation and criticism.
In the UK and most western advanced countries it relates mainly to the use of the public’s taxes but in Iraq it relates to the use of “the peoples oil”. In both scenarios the public is becoming more demanding and more cynical of politicians.
Most advanced countries now have increasingly sophisticated audit operations and systems, not only because its Governments need to demonstrate probity but to ensure that future financial decisions are made upon robust financial information. It is also vital for Parliaments to undertake one of their primary duties that of holding the executive to account. Without such information scrutiny becomes impossible.

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I believe it is a given that any country wishing to be part of the international community must show it is abiding by International Standards of behaviour and in this case of International Auditing Standards. Even in the most advanced countries this will require constant attention as new financial instruments come to the market, new forms of taxation are imposed and the effects of globalisation becomes more apparent.
The international business community is also very interested in the governance of countries in deciding where to expand overseas. The legal, financial and governmental systems are uppermost in their minds when making new overseas investment decisions.
Aid Agencies are increasingly requesting proper audited accounts from those countries receiving considerable sums of aid monies, as their public donors want to be assured their money is going to fund the right projects and not into individuals’ bank accounts. This also applies to Government Aid as well which is now coming under public scrutiny.
The large Western Banks having had their own scandals around false accounting, fraudulent manipulation of data and having to be bailed out by public money are under greater scrutiny than ever before.
So what does this mean for the immediate future of good governance?
Firstly, there is no going back, the pace of change will increase and there will be no place to hide. Whether it is mature government incompetence or fraudulent misuse of funds in a 3rd world country the current insatiable appetite for accountability, transparency and probity will only get more intense.
My personal experience is shaped by both my work as a UK Member of Parliament where I was a member of the Treasury Select Committee, and in the last 6 years working with the Iraq

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Parliament, where I was advising the Finance Committee which to say the least is a fairly broad spectrum.
However, there are a number of principles which apply to both systems. I want to flag them up but not go into any detail as this is probably better done through a question time, but I am sure they are all well known to you.
 Independence
 Transparency
 Trust
 Communications
 Ethical
 Factual
 Legal
These will all mean different things to different audit organisations dependent upon how far down the road to International Standards of Auditing they have progressed, but all are important and need constant review.
Clearly it is more difficult in some countries where the controls are weak, the political environment is hostile, the internal capacities are insufficient and the development of IT is in its infancy.
The challenges are greater in some administrations than others but the goals are the same but my experience has been that where there is a real motivation to improve these areas of financial governance and controls help is available the public is supportive and often very patient and a country’s standing in the international community is enhanced.
This leads to greater inward investment opportunities, which will improve economic performance. It will provide new ways of meeting and delivering public services and ultimately enable greater stability and security for all.

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These are the greatest goals in a world of turmoil and instability and therefore I very much hope that our deliberations in the next couple of days will enable us to progress further along this road towards an Audit system which delivers not only work recognised as meeting the high standards required but will underpin and strengthen the good governance of this country.