Europaudvalget 2016-17
EUU Alm.del Bilag 877
Offentligt
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J
OURNAL
European Court of Auditors
N
o
09
September 2017
 EUU, Alm.del - 2016-17 - Bilag 877: Rapport fra Den Europæiske Revisionsret september 2017
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PRODUCTION
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3
TABLE OF CONTENTS
04
05
08
Editorial
The ECA strategy for 2018-2020 : Fostering trust through independent audit
By Andreas Bolkart and Gaston Moonen, Directorate of the Presidency, ECA
Bringing governments closer to citizens
and business – ACCA event hosted by the ECA
By Lazaros S. Lazarou, ECA Member
11
15
17
20
22
30
37
How to select an audit task - the ECA’s new programming procedures
By Sandra Diering, Directorate of the Presidency, ECA
Towards a more continuous dialogue
By Mark Rogerson, Directorate of the Presidency, ECA
Communicating with the press and stakeholders – in & beyond Brussels
By Damijan Fišer, Directorate of the Presidency, EC
ECA in social media: the challenge of being on every screen
By Juan Blanco Arellano, Directorate of the Presidency, ECA
Text mining: making sense of unstructured data
By Zsolt Varga, Directorate Translation and Language Services, ECA
Strategic challenges in audit : private and public sector experiences
By Gaston Moonen, Directorate of the Presidency, ECA
Towards implementing harmonised public sector standards in Member States:
following a slow moving train?
By Peter Welch, Directorate Sustainable use of natural resources, ECA
39
FOCUS
Special reports N° 11/2017
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Meaning and purpose
4
Strategy is the central theme of this Journal. Which course do we want to set for the
future? Or which course do we have to sail in order to survive the upcoming storms? These
are questions all organisations face and have to decide upon, either with reason and after
research, or haphazardly. For the ECA, as a public institution, and even more so as a public
audit institution, there is another, even more important question: with which course can
we add the most value to society, particularly the European Union?
During the past year the ECA has been through a soul searching exercice to ind the best
focal point and objectives for our new strategy. To ind such a point is crucial because,
as a saying goes,
what is the use of running if you are not on the right road?
We are in
the business of providing assurance - be it whether rules have been complied with or
performance or intended efects have been achieved. For this the ECA chose as purpose
“Fostering trust through independent audit“ (see page 5).
But what is the meaning of this strategy; what does it imply? Only when an auditor is
trusted he or she can be relevant for society. So credibility is key and this requires, irst
and foremost, an identiiable adherence to a number of values. This is highlighted by ECA
Member Lazaros S. Lazarou (see page 08) when he speaks about bringing governments
closer to citizens and «ethical conscience». The latter may be self-evident for many of
us within the ECA but what counts is how EU citizen see us in the light of values such
as objectivity, integrity and moral courage (see page 30). These values make the audit
profession and they form the guidance for implementing the four strategic objectives the
ECA identiied in its 2018-2020 Strategy.
After strategy comes planning and Sandra Diering ills us in on how the new programming
procedures help to translate objectives into concrete audit topics, addressing the
strategic objectives (see page 11). Some of the actions that are and will be undertaken to
implement the third strategic objective
Get clear messages across to our audiences,
relate
to the ECA being active in social media (see page 20), establishing a more continuous
dialogue about ECA products (see page 35) and increased eforts to communicate in and
beyond Brussels (see page 17). The fourth strategic goal is
Gear our organisation to our
products,
including exploiting technology to innovate audit work. How this can be done
can be read from page 22 onwards.
However beautiful a strategy may look on paper, in the end what counts are results. After
adoption the real work actually starts, and each and every ECA staf member may now
assess how he or she can contribute to implementing the new strategy. In that wey we can
all give an individual meaning to how we reach the ECA’s common purpose: contribute to
fostering trust in the EU.
Gaston Moonen
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The ECA strategy for 2018-2020 :
Fostering trust through independent audit
By Andreas Bolkart and Gaston Moonen, Directorate of the Presidency, ECA
5
As a public institution the ECA has to reassess regularly how to increase its relevance for the European
citizen and add value. In accordence with good practice the ECA draws up multi-annual plans and sets
strategic objectives. The ECA has recently published its strategy for the upcoming three years. What are the
main drivers for its strategy and which objectives have been set for the 2018-2020 period?
Strategy development: a participatory process
As the EU’s external auditor, the ECA’s mission is to contribute to improving EU inancial
management, to promote accountability and transparency and to act as the independent
guardian of the inancial interests of the citizens of the Union. The ECA warns of risks, provides
assurance, indicates shortcomings and successes, and ofers guidance to EU policymakers and
legislators on how to improve the management of EU policies and programmes and ensure that
Europe’s citizens know how their money is being spent.
To implement its mission, achieve strategic change and provide broad orientation, the ECA has
been using multi-annual strategies since 2008. The 2008-2012 strategy was followed by the 2013-
2017 strategy and the 2018-2020 strategy was adopted by the Members of the ECA and shortly
after published in July 2017.
The strategy development was led by a working group consisting of the ECA Members President
Klaus-Heiner Lehne, Danièle Lamarque and Alex Brenninkmeijer (chair) as well as Secretary-
General Eduardo Ruiz Garcia. The group was supported by Andreas Bolkart and Gaston Moonen.
We used the INTOSAI Development Initiative’s strategic planning handbook
The preparatory work for the new strategy started with a forward looking analysis of our
environment. This included current and expected future major EU policy trends, developments in
EU inancial management as well as the developments in our professional environment, such as
new audit methods and technology.
The strategy development process relied heavily on consultation, both internal and external.
Externally the Court reached out to Members of the European Parliament, EU Member
State representatives, the European Commission, sister organisations and non-institutional
stakeholders such as academics, think-tanks, NGO’s and also the private audit ield. Issues
stemming from our regular contacts with stakeholders, such as in the context of the annual
discharge of the European Commission, or the annual audit planning exercise, were also
considered.
The strategy was discussed among ECA Members – including at the Members’ 2016 annual
seminar - and during three rounds of focus group discussions with ECA staf. The participation in
these groups was open to everybody and advertised internally. Additionally, there was an internal
exposure period of the draft strategy document.
“Trust“ as a focal point
In its new strategy the ECA identiies 2018-2020 to be a crucial period for the European Union
with pivotal decisions to be taken. The aftermath of the inancial crisis, migratory pressure on EU
borders, the international security situation and the challenges of climate change have an impact
on the way the EU is governed at regional, national, intergovernmental and supranational level.
Developments in overall EU policy, its funding - also in view of Brexit -, EU inancial management
and the ECA’s professional environment pose formidable challenges but also opportunities for
the ECA.
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The ECA strategy for 2018-2020 : Fostering trust through
independent audit
continued
6
Successfully addressing the challenges of the Union will require clear, reliable and accessible
information for the EU citizen on what has been achieved with EU money and other interventions.
People need to be able to see that the EU acts with integrity, applies the rule of law, spends
taxpayers’ money carefully, is clear about its objectives and achieves the results it has promised.
Failure to demonstrate to EU citizens that common challenges are met and positive results are
achieved with EU money and EU action causes a risk that the trust of citizens in the EU may be
diminished.
The ECA believes it is well placed to help address these challenges and opportunities of EU
governance and appropriate spending of EU funds. Through its independent audits the ECA can
provide insight into what works and what does not work in EU spending and EU action, help EU
citizens decide if EU institutions deliver results for them and thereby contribute to fostering trust
in the EU. To do so, ECA audits also need to relate to the concerns of its ultimate stakeholder, the
European citizen. Ultimately the EU is not about igures, but about people.
ECA strategic goals for 2018-2020
To seize new opportunities and enhance its service to EU citizens the ECA has identiied four
strategic objectives:
Goal
1:
Improve the added value of the Statement of Assurance
in the context of today’s
EU inancial management. Positive developments in the management and control systems
give the ECA the opportunity to take a fresh look at the Statement of Assurance (SoA). The ECA
annually provides an opinion on the reliability of the EU accounts and the legality and regularity
of the underlying transactions. For the 2018-2020 SoA approach the ECA will, while remaining
in full accordance with international public-sector audit standards, assess the options of using
the legality and regularity information provided by auditees, including the corrective action
they have taken. This would lead to a reduction in the ECA’s own direct testing of payments
and increase the cost-efectiveness of its SoA work. In this context the ECA will consider a wider
renewal of its Annual Report.
Goal 2: Increase the focus on the performance aspects of EU action.
Besides assurance on
compliance another major question for most EU citizens is whether EU spending and action
led to tangible results and whether impact was achieved in an eicient way. In assessing
performance the ECA will focus for example on: the added value of action at EU level compared,
where feasible, with action at other levels; providing rapid answers to pressing and targeted
questions on EU action; promoting good examples and practices of the way EU funds and policies
are implemented, providing insight into geographical diferences to promote mutual learning;
assessing the quality of prevention and detection systems against fraud and corruption with EU
funds.
Goal 3: Get clear ECA messages across to the audiences of the ECA.
The ECA can only manage
to contribute to trust in the EU through its products if it reaches its stakeholders, ranging from
political oversight authorities like the European Parliament, to EU citizens directly. Speciic actions
foreseen for better reaching out are: formulate consistent key messages and identify horizontal
issues based on indings in many areas and streamline them into the entire ECA product range;
increase eforts to create a compelling narrative, with a clear structure and avoidance of jargon,
with the audit evidence gathered and data analysed; communicate better on planned and
ongoing work and create brieing products to maximise impact of ECA work.
Goal 4: Gear the ECA organisation to ECA products.
Following its recent reorganisation making
the ECA more lexible and more focused on audit, the ECA aims to use its renewed organisation to
achieve the above-mentioned three goals. This means for example: better beneit from its staf’s
knowledge by improving links and exchanges between staf but also with expert communities
outside the ECA; exploit the opportunities ofered by technology for innovation in audit work,
like optimizing the use of
big data
and mass text analysis; when planning audit work, be more
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The ECA strategy for 2018-2020 : Fostering trust through
independent audit
continued
7
responsive and lexible to developments in the European Union, while taking into account the
ive broad priority policy areas the ECA has established for 2018-2020.
What is next?
At the ECA, the implementation of the 2018-2020 strategy has already started. A technical
working group chaired by the Secretary General is currently working on a speciic proposal to
implement goal 1 concerning the SoA. The ECA College will discuss this proposal in the autumn
of 2017 and, if adopted, the revised approach will be implemented starting with the work for the
2018 SoA.
Regarding all four strategic goals, the ECA has adopted an action plan that identiied speciic
activities and assigns responsibilities to all parts of the organisation. Work on these activities has
already started or is scheduled for the next year. Furthermore the ECA will use its annual work
programming cycle to plan, execute and monitor the implementation of its strategy.
The 2018-2020 strategy also serves to inluence the mind-set of the people at the ECA to consider
how each individual can contribute to achieve the strategic objectives. It will depend on each
and every one’s contribution to
transform the strategy into a tangible
reality.
Helping the EU perform better
2017 marks the 40
th
anniversary of
the ECA. Through its SoA, its reports
on performance of EU programmes,
its opinions on proposed legislation
and its attention for possible
risks the ECA has contributed to
signiicant improvements in EU
inancial management over the
past decades. As the EU’s external
auditor it applies and promotes
accountability, transparency,
professionalism, integrity, impartiality
and responsiveness. This has enabled
the ECA to play a key role in the EU
accountability process and stimulate
a learning government. To continue
to do so the ECA has recalibrated
its strategic objectives to provide
insight and understanding in complex
EU processes. By revealing what
works and what does not work in EU
spending and EU action the ECA helps
to improve the way the EU functions
and is understood. This in turn will
contribute to fostering trust in the EU’s
ability to address current and future challenges. With the
implementation of its new strategy the ECA aims to enhance
its added-value for policy-decision makers and EU citizens.
ECA Strategy 2018-2020 in a nutshell
See for the text of 2018-2020 Strategy:
http://www.eca.europa.eu/Lists/ECADocuments/STRATEGY2018-2020/STRATEGY2018-2020_
EN.PDF.pdf
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Bringing governments closer to citizens and
business - ACCA event hosted by the ECA
By Lazaros S. Lazarou, ECA Member
8
This is an ECA Journal version of an article written for Accounting and Business (AB), the
member magazine of the Association of Chartered Certiied Accountants (ACCA). In AB’s
special
“
ethics“ edition Lazaros S. Lazarou FCCA
1
(ECA Member) looks at the work of the
European Court of Auditors (ECA) and the role of ethics in building public trust across the
EU’s institutions. What will drive auditors, whether certiied accountants in the private sector
or public sector auditors, in the future? Lazaros S. Lazarou probes into commonalities and
mutual learning and looks forward to an upcoming ACCA event in Luxembourg.
Lazaros S. Lazarou, ECA Member
ACCA event hosted by the ECA
On 26 September 2017 the ECA hosts the ACCA event
Bringing governments closer to citizens and
businesses in a digital age through ethics and trust.
The event builds on ACCA’s report
Professional
accountants – the future: 50 drivers of change in the public sector
2
.
Published in late 2016, the report
rightly indicates that
professional accountants are generally viewed as the ethical conscience of
organisations and as a result they carry a particular responsibility for ensuring that trust in government
organisations is maintained at all times
3
.
The ACCA event explores two themes: “digital transformation challenges & opportunities“ and
“ethics, integrity and accountability of public sector“.
The Association of Chartered Certiied Accountants (ACCA) is a global body for professional
accountants. Active in both the public and private sectors, it has has almost 200.000 qualiied
members and close to 500.000 students in 180 countries worldwide. At its upcoming event on 26
September 2017, hosted by the ECA, ACCA will raise questions such as how to rebuild damaged
public trust and what role public sector accountants can play in this process. A recent ACCA global
study explored which emerging drivers of change might have the biggest impact and which skills
will be required for the next ten years.
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ACCA event hosted by the ECA – Bringing governments closer to citizens
and business
continued
9
ECA 2018-2020 strategy
The two themes are key elements of the ECA’s 2018-20 strategy,
Fostering trust through
independent audit.
The public sector and its auditors, including the EU and the ECA, face
legitimate questions. The ECA is well placed to address the challenges and opportunities
of EU governance and the appropriate spending of EU funds and therefore, through
independent audit, to help EU citizens decide if they can trust EU institutions to deliver results
for them. As the EU’s external auditor, the ECA has a three-part mission:
−
to contribute to improving EU inancial management
−
to promote accountability and transparency
−
to act as the independent guardian of the inancial interests of EU citizens.
We warn of risks, provide assurance, indicate shortcomings and successes, and ofer guidance
to EU policymakers and legislators on how to improve the management of EU policies and
programmes and ensure that Europe’s citizens know how their money is being spent.
Transparency and accountability
While the public sector difers from one country to another, a common aspiration is to serve
the public and protect the public interest. The aims and consequences of public sector
actions are driven by circumstances, resources and (political) choices. As such, ethics is at
the root of trust in the public sector
4
. Transparency and full accountability are key elements
in ensuring ethical behaviour, providing options for the wider public to uncover possible
unethical behaviour.
As the ethical conscience of organisations, professional accountants and the ECA as auditors
should make it their mission to maintain ethical values. In its 2018-2020 strategy the ECA
emphasises its core values of accountability, transparency, professionalism, integrity,
impartiality and responsiveness.
In recent years the ECA has vigilantly overseen how EU rules and procedures on compliance
audit have been applied in EU spending. However, following rules is not enough. Spending
taxpayers’ money should beneit the community as a whole, and value for money is as
important if not more important. So the ECA has steadily increased its work on reporting
on the “EU-added value“, through its performance audit work. In coming years we will
strengthen our annual reporting on performance and information on EU action in member
states and regions.
In applying its 2018-20 strategy, the ECA plans to focus further on assessing the performance
of EU action by:
−
−
−
−
−
−
improving our assessment of added value
taking a broader view of EU action
providing rapid answers to pressing and targeted questions
better comparison of methods and results
increasing the impact of our recommendations on achieving improvements
providing insight into EU action against fraud and corruption.
Our scrutiny of EU action can increase trust in the EU only if we manage to communicate our
indings and recommendations clearly. So in our upcoming annual report, to be published 28
September, we use less technical language where possible and a more visual presentation.
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ACCA event hosted by the ECA – Bringing governments closer to citizens
and business
continued
10
European Commission governance
In 2016 we published a special report on governance at the European Commission (SR
27/2016). This also addressed the follow-up of internal and external audit work and
recommended that the EC establish an audit committee with a majority of independent,
external members and expand its mandate to cover risk management, inancial reporting
and the work and results of ex post veriication units and audit directorates.
We will continue to address high-level governance and ethical topics, as for example in
planned work on conlict of interest and ethics in EU institutions.
Ethics is at the basis of public-sector work including that of independent auditors. As
auditors we help citizens by providing assurance on information they receive. The ECA’s
2018-20 strategy aims to foster trust through independent audit. ACCA’s reports and events
help us to make this happen.
Endnotes
1 Lazaros S. Lazarou, Dean of Chamber V and Member for the Annual Report, is a Fellow of
the Association of Chartered Certiied Accountants (FCCA). ACCA’s AB magazine published
a background interview with Mr Lazarou in its 2017 January issue (http://www.accaglobal.
com/uk/en/member/member/accounting-business/2017/01/interviews/lazaros-lazarou.
html)
2
http://www.accaglobal.com/gb/en/technical-activities/technical-resources-search/2016/
december/50-drivers-of-change-in-the-public-sector.html
3
Professional accountants – the future: 50 drivers of change in the public sector,
page 23.
4 See for example Anthony Harbinson’s introduction to the closing panel of ACCA’s
2017 Public Sector Conference: “How
to limit corruption in public services and the role for
accountant.“
http://www.accaglobal.com/content/dam/ACCA_Global/Technical/pubsect/
how-to-limit-corruption-in-the-public-services-anthony-harbinson.pdf
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How to select an audit task - the ECA’s new
programming procedures
By Sandra Diering, Directorate of the Presidency, ECA
11
With our 2018-2020 strategy just adopted the challenge will be select concrete audit topics
which ensure that the new ECA strategic objectives are realised. The ECA work programme
is the instrument to do so on an annual basis and early 2017 new programming procedures
were adopted to facilitate meeting the new strategic challenges. What has changed and how
does the process work?
Introduction
Our main role as the EU’s external auditor is to verify that EU funds are spent in
accordance with the relevant rules and achieve the intended objectives. In order to fulil
this obligation, it is essential that we identify and select relevant audit tasks and time
them to maximize their impact.
The programming process helps us identify, select and plan audit tasks. It translates the
higher level objectives of the multiannual strategy into operational objectives in the
form of audit tasks. The inal product of this programming process is the Annual Work
Programme (AWP).
In January this year we adopted new programming procedures, which were to be applied
for the irst time for the Annual Work Programme 2018. The new procedures relect the
changes already introduced at organizational level with the ECA’s reform, which came into
force in January 2016.
The new procedures also take into account the recently adopted ECA strategy for the
2018-2020 period, which explicitly states that “our agility and innovative capacity depend
on how we steer our future work. In planning our work, we will make this process not only
more responsive to the needs of our stakeholders but also more lexible so as to be able
to react to developments in the Union.”
In this article we would like to explain the changes introduced in the context of the ECA’s
programming, illustrate the reasons for these changes and inally conclude by some
relections on the irst year of applying the new procedures.
What has changed in the process and why
The main objectives of the new programming procedures were to
adopt the AWP earlier,
to systematically
involve our main stakeholders,
to
increase the lexibility
of the
process and the
potential impact
of our work and, inally, to
save time and resources
when drawing up the AWP.
In order to achieve these objectives, a number of changes have been introduced at all
stages of the programming process:
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How to select an audit task - the ECA’s new programming procedures
continued
12
The basic approach
The new programming process is still an annual process but represents a move away
from the decentralized system of recent years towards a coordinated
more centralized
approach
with one single work programme for the whole ECA instead of individual work
programmes for each audit chamber.
However, we are convinced that the wider perspective at central ECA level needs to be
complemented by the speciic knowledge and expertise of the audit chambers in order
to develop its full potential. The way we understood and designed it, programming is
therefore, by its very nature, still very much a
cooperative process,
with the diferent
audit chambers being consulted and actively involved at all stages (e.g. chambers suggest
audit ideas, which are relected in the selection as well as in the detailed planning of
individual tasks for the AWP).
The main reason for changing the approach was to ensure a well-balanced portfolio for
the ECA as a whole with the ultimate objective of increasing the potential impact of our
work. Furthermore, the elimination of work programmes at diferent levels should save
time and resources.
Priorities and risk review
The ECA strategy is the basis for the programming, as it deines the general direction and
strategic objectives of our work. More speciically the new strategy for the 2018-2020
period deines ive
priority areas
for the ECA’s work in the coming years:
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How to select an audit task - the ECA’s new programming procedures
continued
13
Consequently, the annual identiication of priorities, which was an integral part of the
programming exercise in previous years, is no longer needed.
The next step in the programming process is an analysis of the risks in the diferent
policy areas. As from the 2018 programming exercise, the policy and risk review has
been replaced by standardized ECA-wide
policy scans.
Policy scans are an analysis of a
policy area, taking into account risks, materiality, recent policy developments and current
or recently inalized work by the Court or other relevant actors. They also indicate any
speciic issues which might be relevant for future audits. Policy scans are updated on an
annual basis by the audit chambers responsible.
The standardization of the risk review in the form of policy scans ensures consistent
quality of assessment throughout the ECA and allows risks to be compared across
diferent policy areas.
Audit ideas and Proposed Audit Tasks (PATs)
The selection of audit tasks is based on
Proposed Audit Tasks (PATs).
A proposed audit
task builds on the policy scan for the policy area concerned. It is a relatively detailed
assessment of the main characteristics and risks of the audit area and the reasons for
carrying out the task.
With the new programming procedures, we have not changed the basic concept of the
PATs. However, we have introduced “Audit
ideas”
as an additional step in the process.
Audit ideas only state the potential audit subject and very briely summarize the main
reasons for including the task in the AWP. They are considerably shorter than the fully
elaborated PATs.
As only a certain number of audit ideas are then selected to be further expanded into
PATs, the additional step avoids spending time on drafting a large number of proposals,
only very few of which can be selected for the AWP.
From the selection of audit tasks to the Annual Work Programme
Among the PATs we subsequently select those which, on the basis of their potential
impact and alignment with the ECA’s priorities, are considered
high priority
or
priority
and should therefore be included in the AWP.
High priority tasks are, by deinition, of particular importance and often reply to the key
concerns of our stakeholders. The new procedures therefore provide for these tasks to
be brought forward so that the result of the work can be published before the end of the
AWP year.
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How to select an audit task - the ECA’s new programming procedures
continued
14
The fact that we have to provide the best reply we can to the key concerns of our
stakeholders means that the
European Parliament
(EP) discharge decisions and the
suggestions received from the diferent EP committees are an important factor in
the selection of audit ideas and PATs, together with the feedback received from other
stakeholders, such as the general public. In particular, we already engage in an exchange
of views early in the year with the EP’s Conference of Committee Chairs (CCC) and
systematically analyse their suggestions for potential audit subjects.
With the new programming procedures we have also tried to promote a
wider variety
of products
by identifying the most suitable type of product (special reports, landscape
reviews or brieing papers) for all the tasks included in the AWP.
To increase its relevance we also changed the
focus of the AWP
from “tasks to be started
in the AWP year” to “tasks to be inalized in the AWP year” as we believe that, especially
for our external audience, it is more important to know which products they can actually
expect in a given year than which tasks will be started.
General simpliication measures
In order to facilitate and speed up the planning process as well as the actual selection of
tasks, we introduced
standard templates
for almost all steps in the process (policy scans,
audit ideas, AWP). In addition, the resource planning for all tasks not directly related to
audit is now based on
lat rates,
which are used consistently throughout the Court.
Finally, we considerably
shortened the actual AWP document
by only including
information which was essential for deciding which tasks should be carried out or
information which was important for the AWP as a planning tool.
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Towards a more continuous dialogue
By Mark Rogerson, Directorate of the Presidency, ECA
15
A key goal of the ECA’s 2018 – 2020 strategy is to get clear messages across to our
audiences. One of the ways identiied to achieve that goal is to “establish a more continuous
dialogue about our products”. Mark Rogerson, the ECA spokesperson, enlightens us what
actions have recently been undertaken or are foreseen to longer capture the attention of
the diferent audiences we serve regarding an audit done by the ECA.
It is certainly the case that during the last few years, the amount of media coverage and
social media comment devoted to our special reports has increased signiicantly. This is not
just a coincidence; it is partly a result of our more targeted approach to communications via
press and social media and also thanks to our choice of audit topics, which are attracting
greater public interest. But up to now we have only really had one opportunity with each
report to publicise it in the media, build awareness among relevant industry stakeholders
and generally raise the proile of the ECA – namely, on the day of publication. So we do
have a dialogue about our special reports, but it is a relatively short one.
How to get more leverage from an ECA report
With this in mind, we have been looking at ways to “leverage” the efort that goes into our
special reports: how can we achieve more publicity from the same body of work, over a
more extended period of time, without increasing the workload of the audit teams? As a
result we have launched a pilot exercise which includes two new strands of promotional
activity, to be used on a selective basis:
•
•
irstly, we have begun announcing the start of audit tasks which we believe will be
of particular public interest;
secondly we will soon be publishing “ECA Audit Briefs” on a selection of our newly-
started audits. The Audit Briefs will provide background information about the
audits based on information already publicly available.
This selective approach is in line with our move away from a “one-size-its-all” approach
to media handling and is largely made possible by our computerised database of press
and stakeholder contacts (the SMS). As with the decision whether or not to hold press
or stakeholder brieings in Brussels, the scale of our media activity is determined by the
communication value of the publication; while the SMS allows us to target the information
we send out very precisely.
Building a story around an audit instead of a publication
Of course, our planned audit tasks are already set out in the Annual Work Programme (AWP)
just before the start of each year. The AWP is useful to MEPs, journalists and many other
stakeholders in providing an overview of our upcoming activity. But it is easier for the
media to build a story round a particular announcement about a particular audit. And it is
further evidence of the increasing interest in our work that for many journalists the mere
fact that the ECA is to look at a particular subject is intrinsically newsworthy.
So far, we have issued press releases announcing the start of several audits, including anti-
Radicalisation measures, Broadband and Air Quality, with attendant social media activity.
All generated a good level of coverage and as well as raising awareness they prompted
responses which have allowed us to further build our database of interested journalists and
stakeholders. This in turn helps ensure a more continuous dialogue.
The “start” of an audit is taken to be the adoption of the audit proposal – the Audit Planning
Memorandum (APM) - by the Chamber concerned. The press release is drafted by the
DOP communications team in close collaboration with the reporting Member and their
private oice as well as with the audit team, in the same way as we already do for special
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Towards a more continuous dialogue
continued
16
reports. There will be times when the identities of the countries to be visited for an audit will have
communication value, for example because of high levels of public interest in these countries about
the audit topic. In such cases, we can publicise the names of the countries in their national media,
once the relevant SAIs have been informed.
Creating new brieing products
The second strand of this leveraging exercise involves making use of the comprehensive factual
information on our audit topics contained in our APMs. Our new “ECA Audit Briefs” will provide
background about the audit policy area and may also include information on our risk assessment,
explaining why we consider this subject to be relevant and why we have selected the speciic
Member States to be visited during the audit. They will not divulge any details on our audit
approach nor will they comment on any expected outcome of the audit.
The Audit Briefs will be around 12 to 15 pages long and will be designed as reference documents
for all those interested in the particular policy area. They will also include a section in which
interested parties are invited to contact the audit team via a dedicated and task-speciic email
address. This is aimed at encouraging the more interactive approach envisaged in the strategy and
may also produce helpful suggestions during the audit.
The publication of the Audit Briefs will usually follow some time after announcements of upcoming
audits, once the APM has been adopted by the Chambers and the audit has been notiied to the
Member States and/or audited bodies. A template has been designed to give a consistent look and
feel to the Audit Briefs and a number are already being drafted. The irst two Briefs – on Broadband
and Air Quality – are expected to be published during September/October.
Taken together, these two new activities will also allow us to engage with our audiences more
extensively and to achieve a more balanced presence in the press and on social media throughout
the year.
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Communicating with the press and
stakeholders – in & beyond Brussels
By Damijan Fišer, Directorate of the Presidency, ECA
17
The ECA communicates the institution’s work to the EU’s citizens through the press and
other media. And as of recent, also through increased and increasing communication
with the various public interest groups such as Non Governmental Organisations
(NGO). The ECA’s press oicer Damijan Fišer updates us on how the ECA reaches out to
the media and which new activities have been undertaken or are foreseen to get ECA
messages better across to its audiences.
Increasing media outreach across the EU
The European Union boasts a linguistically and interest-wise diverse media landscape with
countless media outlets across the 28 Member States. All major titles – be it broadcast,
online or classic paper (i.e. the threatened, yet resilient breed) – have their representatives
in Brussels. These correspondents follow the work of the European institutions and report
back home on the EU. Brussels is one of the largest international media centres, claiming
just under 1500 journalistes and other media from almost 500 diferent outlets, according
to a research.
In addition to maintaining, and possibly upping the level of contact with the EU
correspondents, our aim is also to increase our outreach in the Member States themselves,
so that we can be in direct contact not only with their capitals, but also on the regional
and local level. This in turn will enable us to communicate practical value of our work to
the citizens who do not necessarily read the Politico, the Financial Times or the Frankfurter
Allgemeine, but for whom our work may be equally important and who may not
necessarily have been aware that the EU has an external auditor to safeguard its inances.
ECA President Lehne, NIK President Krzysztof Kwiatkowski
and ECA Member Wojciechowski at a press brieing in
Warsaw in February 2017
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Communicating with the press and stakeholders – in & beyond Brussels
continued
18
Meeting the press: personal contact and brieings
While we issue a press release or publish an online communication, such as a media
advisory, for most of our publications, and get them to the journalists, we are aware that
these alone cannot substitute for a personal contact. We thus ensure our permanent press
presence in Brussels, largely through the spokesperson, where we talk regularly to the
journalists from the main media covering our work: we have established regular contacts
among those and we regularly meet and guide them through our upcoming outputs, for
example, advising what reports are coming up in the next quarter. This is a very useful
and appreciated practice: it gives the journalists a heads-up, while it allows us to gauge
their interest in a particular report in the pipeline and to approach them in a targeted and
trusted manner closer to the publication date. We may follow this up with an advance
insight into the report’s content and examine options for a further contact, for example
through a one-on-one meeting or an interview with the ECA Member responsible for the
report around the publication date.
In Brussels, in the International Press Centre, we also hold most of our press conferences
(typically for the annual report) and more technical, background brieings (on our special
reports). Located in the Residence Palace, near the HQ of the European Commission,
almost adjacent to the Council of the EU and a stone’s throw from the European
Parliament, the centre hosts a number of media outlets, so we literally go where the press
are.
The journalists are under perennial time pressure and on unceasing quest for stories,
and we need to compete for the attention our messages may get with all the above
sources and others. The journalists also have a varied interest in our reports and diferent
journalists may cover diferent subject areas. We thus aim to target our communications
and contact, so that we mainly reach out to those we think might be interested in our
reports, based on research or previous coverage. Furthermore, we aim to ield the teams
for our brieings composed mostly of the auditors who have actually carried out the
spot checks themselves, in the Commission and the countries audited. This ensures
the information provided does not end at a more high-level presentation by the ECA
Member, but actually gets down to the nitty-gritty and the journalists can get the answers
to their questions from the real experts in the ield. And not least, they can put a face
to the EU auditors who did the ground work on the report, while the auditors get to be
part and parcel of the communication process and feeling the value of their work being
communicated, eventually, to the citizens.
Stakeholders meetings: reaching out to the civil society and interest groups
We aim to complement our personal contact with the journalists by reaching out to civil
society - in particular to NGOSs - and industry representatives, who are often an interested
party for our reports. We do this through the stakeholders meeting, organized in parallel
with the press brieings. While the stakeholders experts can relish the opportunity to
hear the messages directly from the ECA Member and a team of auditors, as well as from
other experts attending the meeting, we in turn get to hear their views, which we can take
into account in any follow-up activities and also to get the visibility of our work via their
(often widely followed) communication channels. Started as a pilot in 2016, we now hold
stakeholders meetings on a regular basis for the reports we expect will stimulate a useful
discussion and feedback. This year, for example, we have held stakeholders meetings
for our reports on EU’s revenue mobilization in Africa, control of EU’s isheries, refugee
hotspots, and others. Building on the satisfying results we obtained, we aim to extend the
practice to also cover the audits we are yet to carry out, in an attempt to scope the public
interest and the perceived issues.
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Communicating with the press and stakeholders – in & beyond Brussels
continued
19
Press visits – a new ixture of the press programme
Luxembourg may not be attracting the international press corps in same numbers as
Brussels, but we regularly receive the journalists also at our premises. Our annual “Spring
presser” on our activity report, for example, has become a standard ixture in the
Luxembourg press programme.
A new point on the Brussels press agenda is the annual visit to the Luxembourg-based
EU institutions, a joint efort by the ECA together with ive other bodies in Luxembourg,
Organized for the fourth consecutive year this June, the visit was attended by some 50
Brussels-based correspondents from 15 countries. The purpose of the visit was to deepen
their knowledge of the institutions’ activities, directly through on-the-record presentations
and Q&A sessions with their top management and in most cases indeed with the president.
At the ECA, they could learn more about the challenges and opportunities of the work of
the EU auditors directly from the ECA President Lehne, but also about our audit process:
presenting our special reports on food waste and on human traicking, ECA Member
Bettina Jakobsen explained our audit process in-depth and showed the breadth of the audit
subjects we cover. In the remainder of the visit, the journalists also had an opportunity to
talk to other ECA Members.
Brussels-based journalists visit the ECA for an on-the-record Q&A session, Luxembourg, 28 June 2017
As we aspire to communicate more and better directly with the media organisations and
journalists in the Member States, we are looking forward to welcoming end of this month,
together with other Luxembourg-based EU bodies, a visit of the journalists working in the
countries themselves. We see this as an excellent opportunity to establish further contacts
with the press across the EU, to help better explain the role of EU auditors and the value of
our work for citizens.
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ECA in social media: the challenge of being
on every screen
By Juan Blanco Arellano, Directorate of the Presidency, ECA
20
They say if you are not online, you do not exist. But no matter how many social media
you are involved in – if you do not have a good strategy behind, you risk becoming
invisible. Below Juan Blanco goes into the current ECA activities on social media and
what the ECA can aim for also in the light of the recently adopted 2018-2020 strategy.
ECA’s place in the social media galaxy
The ECA history on social media started
on 15 March 2012
with our irst tweet. This
was barely three years after the EU pioneer on Twitter: the
European Parliament.
From
then on, we have widened our presence to the current main social media channels –
LinkedIn
(where 7.766 people follow us),
Facebook
(1.966),
YouTube
(633) and our latest
incorporation:
Instagram
(128). In addition to our 5.202 followers on
Twitter,
it leads us to
a sum of over 15.000 ECA followers on social media. A modest count if we compare it with
the 798.000 followers the
European Commission
have on Twitter only, but to be fair, still a
quite respectable number that will no doubt grow in the near future.
We do need to increase the size of our audience but, as we state in our new ECA strategy,
“…the EU is not about igures but about people.“ Unless we are able to
convince
EU
citizens that what we are doing is essential for them, we will fail.
One strategy for a continuously changing world
Social media is a highly changing environment full of
trending topics,
hypes and viral news
that – surprisingly for many- often sets the world’s agenda, especially for mainstream
media. Therefore, the importance of being online is essential to take part in the discussion
and be able to ind a place within the current afairs. Not being present on social media is
like, for a company, having the opportunity to place an ad for free on a newspaper’s front
page and not taking advantage of it. But how can we reach the audience if each of us is
able to create our own personal newspaper? As we state in our new strategy, this aspect
has become even more important today as many information sources are competing for
the attention of policy makers and implementers - something that is especially afecting
social media.
If there is a necessary aspect that remains unchangeable in this ever-changing
communication world, that is
trust
– especially now that we live in the era of fake news
and hoaxes. Besides communicating our indings and recommendations clearly, to build
up this trust we need to be a constant and reliable source of information, concurring with
our recently increased range and quantity of our products. In order to achieve this we
recently turned our social media strategy from an ad-hoc frequency into a daily planned
schedule that - in a timely manner - aims to ind the opportune content to be shared with
each speciic audience.
A good example of this could be the recent publication of our
corporate video on
Facebook
using the restricted audience feature: depending on the language users
had previously selected on this platform, they were able to see the video in their own
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ECA in social media: the challenge of being on every screen
continued
21
language. As a result, not only did we receive some engagement from followers that were
idle due the fact they previously did not get any information in their mother tongue, but
we also earned some new
likes
thanks to those who shared the videos on their timelines
with audiences yet unknown to us. This “post optimisation” brings me to our strategic
objective to make our publications more accessible and interesting. If we are to increase
our impact and connect better with citizens, we need to make it easy for them to have
the full information at hand on their favourite device, not just a headline and a link to our
website. We cannot just wait for them to come and visit our webpage - perhaps they will
never do so.
To reach out like this, the new ECA strategy foresees that we will produce “derivatives
of our reports tailored for key stakeholder groups”. Social media is not one of those
particular groups – it is all of them. There are as many ways to reach these audiences as
our imagination lets us wander: sharing related content on
international days,
providing
contextual information
to the latest public debates, putting
a human face
on a sometimes
hidden activity like auditing, and many more ideas. We have already put some of them in
place in the last few months and we intend to keep doing it in the future. But to do so, we
need to rely on the potential of ECA Members and staf on social media.
Social media is simply and only about people
“Our internal organisation will put our staf, technology and knowledge to full use for the
beneit of our products”, asserts the latest ECA strategy. But how does it work for social
media? Only on LinkedIn nearly 900 ECA staf are already present. How many people
could we reach if they had 1,000 followers each? Then start conceiving the impact of this
approach on other social media handles.
Both staf and readers are invited to like and follow the ECA’s social media proiles. One of
our challenges now is to provide staf with targeted and attractive material to share it.
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Text mining: making sense of unstructured data
By Zsolt Varga, Directorate Translation and Language Services, ECA
22
In its 2018-2020 Strategy the ECA aims to better exploit technology to bring innovation in its
audit work to facilitate auditing and present audit indings better in its reports. New IT tools
give more options to reveal in big data and open data correlations, network or mass text
analysis and data visualisation. But what does this concretely mean and how does this work?
Zsolt Varga, translator and expert in text mining, takes us into the deep, revealing what new
possibilities are ahead and how they can make sense for the work of the ECA.
Structured and unstructured data
image credit:
IBM
Somewhere around 80% of all potentially usable business information may originate in
unstructured form. Only a small portion of all data in the world is residing in structured
and organised databases. The main diference between text documents and data stored in
databases or spreadsheets is that the latter is structured, thus it can be directly “understood“
and manipulated by machines. Free-form textual data on the other hand contains lots of
information that had been previously hidden from computers, as it was computationally
too “expensive“ to analyse. Also, the biggest diference between text and numbers is that
texts are language-speciic, while numbers are universal. Even though some information
contained in texts – geographical names, names of organisations and persons, references to
other documents – is language-independent to a certain degree, in most cases we still have
to take into account the diferent grammatical structures and preixes/suixes of diferent
languages.
What is text mining and why do we need it?
Statistical text mining is the processing of unstructured textual information, extracting
meaningful numerical data from the text, often by using complex machine learning models.
In the recent years the ECA’s textual output has been on the rise, reaching several thousand
pages per annum. The number of input documents that needs to be processed during
audits is increasing even more sharply. While the amounts of information that we are dealing
with would not be considered big data by volume1, the high number of pages makes it
impractical, if not impossible for auditors and analysts to manually search for information
and/or manually scan all available documents to choose the ones most relevant to their
work.
In order to extract meaningful information from text, irst we have to understand what
textual data sources we have, what types of data we want to extract and what the purpose of
the information collection is. Using text mining in support of a performance audit requires a
diferent approach than analysing our own reports for the purposes of identifying country-
speciic recommendations or topics. Text mining in audit is quite a diverse ield, ranging from
1 Data may be considered
big data
because of several reasons (the 3Vs): Volume, Variety, Velocity. See
https://
en.wikipedia.org/wiki/Big_data#Deinition.
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Text mining: making sense of unstructured data
continued
23
simple word cloud visualisations through reference network graphs to complex text analysis.
The latter could include for example contract audit, information extraction from reports
or source code analysis to identify irregular operations in program logic and database
transactions.
Understanding machine learning and data mining
The traditional statistical approach is to take samples, analyse them and extrapolate the
results to the population while developing and testing hypotheses. On the contrary, data
mining deals with the whole population, and a data mining algorithm does not have any
ideas or hypotheses to test. What it does have, however, is huge processing power and
access to the entire dataset, so it applies fairly complex mathematical models and/or simply
tests a very large number of possible correlations within the data. Data mining, artiicial
intelligence and machine learning all refer to the same broad concept of teaching the
machine how to mimic human thinking.
One way of teaching the machine is by showing examples in order to learn a general rule. For
example we can create a sentiment analysis algorithm by showing a computer thousands of
sentences that have been previously manually classiied by human operators as containing
positive/negative emotions, or we could also create a credit rating algorithm by inputting
the parameters of defaulted and fully paid back loans. This is called supervised learning.
However, the opposite approach, called unsupervised learning, is just to give the machine all
the data and let it igure out structure and meaning by itself. This method also allows us to
discover previously hidden patterns in the data. However, these “hidden“ patterns are merely
correlations, thus further human professional judgement is required to validate them and
establish eventual causality.
Example of data mining involving structured numerical data in support
of an audit
The ECA used visual data analysis (VDA) techniques to spot undervalued
imports of textiles and shoes from China, by using a scatter plot of data
originating from a customs surveillance database (see SR 24/15 on VAT
fraud). This technique allowed the audit team to eiciently analyse
approximately one million rows of structured numerical data and select
suspicious transactions using visual data analysis by identifying outliers.
Transaction network analysis using graphs can also contribute to the
identiication of a fraudulent chain.
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Text mining: making sense of unstructured data
continued
24
The
ECALab
2
within the Court is currently experimenting with the possible use of such
association mining for performance audits (what impact certain input parameters and
circumstances have on the efectiveness and outcome of EU action). Another example is
automatic text classiication and text summarisation where the computer tries to igure
out the topic, keywords and the key points of documents without human intervention,
regardless of the language the document was written in.
Text mining at the ECA
The ECA occupies a special position within the audit community. Even though we are a
public institution auditing public spending, just like national Supreme Audit Institutions,
our audit work is not conined to one country, but covers all EU spending in all Member
States and a number of third countries, which makes us similar to private sector audit irms
auditing multinational operations spanning several countries and legislations.
Our information needs also relect this duality (in addition to numerical inancial data we
also need to process a large number of oicial text documents in diferent EU languages),
thus of-the-shelf IT products often do not provide the functionality we are looking for.
Commercial data mining software usually focuses on problems such as credit analysis,
customer attrition, client segmentation, fraud detection and social media analysis. Such
software can be successfully used for the analysis of simple texts i.e. for the processing of
insurance claims, examining tweets and social media messages and also for well-structured
tasks carried out on complex documents, such as fraud and plagiarism detection. However,
our line of work mostly requires us to process external documents in several diferent
languages concerning a multitude of complex topics and to keep track of information
contained in our internal documents that are usually irst drafted in English or French, and
then translated into all oicial languages.
The ECA has been actively experimenting in the ield of text mining; there have been several
internal oral and written presentations. The
ECALab
is currently exploring the use of open
source libraries and IBM’s Watson cognitive services, and a practical training/workshop is
planned in Q4 2017 for technically minded colleagues. This article provides a non-exhaustive
overview of our research results.
Text visualisation
Top 150 terms in 2014
Top 150 terms in 2015
Top 150 terms in 2016
One of the most widely used forms of statistical text analysis is text visualisation. The word
clouds in the above igure show the most frequently occurring terms in our special reports
published in 2014, 2015 and 2016, respectively. The most frequently used keywords are
displayed larger and highlighted in diferent colours. There is a visible trend of changing
focus from projects to the member states and the Commission, and then inally to the
Commission only (at least on the textual level in our published documents). Word clouds can
also serve as veriication about the intended message versus the actual content of uments.
2 The
ECALAb
is an internal team consisting of members from diferent business areas (IT, audit, and language
services) with the objective of exploring new, innovative technologies and methodologies.
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Text mining: making sense of unstructured data
continued
25
Network analysis
Cross-reference network of ECA special reports between 2013 and 2016
Network analysis in the context of data mining usually refers to social network analysis.
However, social media analysis is not so relevant for the ECA audit work; in the context
of our actual audits we are more interested in the relations between beneiciaries and
relevant entities. Another useful application of network analysis is the visualisation of the
interconnection between documents in the form of graphs. A graph is an abstract data type
that contains nodes (vertices) and their interconnections (edges). A node in the graph can
represent a document, a person, an organisation, etc., while the edges can represent any
type of connection, e.g. document references or personal connections. The above example
shows the comprehensive cross-reference network of ECA’s special reports published
between Q1 2013 and Q1 2017.
T
his graph contains a lot of information: node sizes relect the number if incoming
references, meaning that large nodes are those reports which other reports point to; wider
lines mean that the given reference is repeated several times in the text; the diferent colours
indicate SRs published by diferent chambers or whether a document is an Annual Report
or an Opinion. However, it should be noted that it is not the number of connections that
really counts. A graph metric called
betweenness centrality
measures how much inluence
a node has on the transfer of knowledge and information through the network. In this
respect
SR 21/2015 Risk Review
followed by
SR 19/2016 Financial Instruments
are the two
main “knowledge brokers“: they connect distant topics and the works of our separate ECA
Chambers. On average, Chamber II and III produce the most highly interconnected reports,
while reports from Chamber I and II contain the highest number of references to other ECA
reports
3
. As far as ECA Opinions are concerned, OP 1/2012 on CAP and OP 2/2004 on Single
Audit are the most cited in SRs.
3 The follow-up reports also contain a lot of references, but they constitute only a small percentage of our output.
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Text mining: making sense of unstructured data
continued
26
Entity recognition/ information retrieval
The above example with the graph also showcases two further text mining methods,
“named
entity recognition“
and “information
retrieval“
that were used for identifying Special
Report references and extracting their numbers. Entity recognition refers to locating
and classifying named entities in the text into pre-deined categories such as persons,
organizations, locations, etc. Simply put, it identiies whom a document is about. It allows
us for example to determine which audit documents mention certain beneiciaries,
operational programmes or contain references to a certain document. It also allows us
to identify which are those speciic reports that mention certain countries, organisations
etc. However, this task is not as trivial as it seems, as references are usually not consistent
and there are certain logical relations between named entities that need to be taken into
account
4
.
Information retrieval is the science of searching for information in a document and/
or searching for documents themselves in order to reduce information overload. An
experimental tool is now available so that ECA auditors and cabinet analysts could search
for speciic information in a large document corpus, e.g. Audit Planning Memoranda,
SRs/Annual Reports/Opinions or external reports in the form of keywords or
regular
expressions
5
.
Text summarisation
Automatic text summarisation aims at reducing a text document to a summary that
retains the most important points of the original document. However, the main diference
between manually written summaries and automatically generated abstracts is that
the summarisation algorithm can only take whole sentences from the original text,
while human authors can rephrase and rewrite sentences, and/or create an entirely new
summary from scratch
6
.
Even though automatic summaries are not necessarily “it for publication“, they can be
nevertheless very useful for processing source documents for audits and for summarizing
external reports. Certain implementations of advanced summarisation algorithms even
allow us to provide a percentage value, thus auditors can request e.g. 5% summaries of
a group of documents to have an overall idea of their content, and then pick the most
relevant ones for further detailed analysis. Automatic summarisation is mostly language
independent and uses a fairly complex mathematical background to identify the
important topical sentences.
4 Take for example the relationship between countries, federal states and regions. If we want to aggregate
data on a country level, the names of German states and countries of the UK in the text should be considered
as references to the Federal Republic of Germany and the United Kingdom, respectively.
5 A regular expression is a sequence of characters that deine a search pattern, for example
(?i)((?<=annual
report\s)[\w\s]+\d{4})|(\sAR\s+\d{4})
searches for Annual Report references, identifying all non-case-sensitive
occurrences of
“
annual report
“
followed by any number of words and ending with four digits, or
“
AR
“
followed by a space and four digits. It has a fairly complicated syntax, but allows for very powerful and lexible
multi-document searches, taking into account word context and diferent word forms.
6 One of the very few exceptions is Google’s
Textsum
algorithm, but it requires a special licensed corpus and
computing capacities beyond what is available at the ECA.
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Text mining: making sense of unstructured data
continued
27
Sentiment analysis
Sentiment analysis of the summary of SR 34/16 Food Waste
Sentiment analysis of the summary of SR 21/15 Risk Review
Sentiment analysis refers to the use of natural language processing to identify emotions
and subjective information. Generally speaking, sentiment analysis aims to determine the
attitude of the author or the overall contextual polarity of a document. In the context of
the ECA’s work, sentiment analysis could be used on news articles about the Court and its
activities, and also as a veriication tool about the tone of our reports (executive summaries).
Another possible use case is to evaluate the general tone of free-text ields in audit-related
or internal on-line surveys. The igure above shows the results of a sentiment analysis
done by IBM Watson, a cognitive system speciically developed for natural language
understanding. Sentiment analysis ofers interesting insights, but as mentioned before when
discussing machine learning, human professional judgement is required before its results
are used in production.
7
Sentiment analysis is also language dependent, and thus it does not
give consistent results across diferent language versions of the same text.
Text classiication/topic modelling
In machine learning and natural language processing, a topic model is a type of statistical
model for discovering the abstract “topics“ that occur in a collection of documents. Topic
modelling is a frequently used text mining tool for the discovery of hidden semantic
structures in a text body. Similarly to automatic summaries, it could be a potential tool for
processing and grouping input documents, but could also be very useful for categorizing
our own reports.
There are two types of document categorisation, supervised and unsupervised. As already
indicated earlier, supervised machine learning methods rely on a human-trained sample
dataset
8
. However, even if we do not have pre-determined categories, we can still resort to
using an unsupervised method to classify documents. The igure below shows the topics
and the keywords identiied by an unsupervised model in ECA special reports published
between 2010 and 2016. These are abstract “topics“ that need to be manually labelled
based on the key topic words identiied, and professional judgement is necessary to give a
meaningful name to the topics. However, as the example shows below, the automatically
selected topic words already ofer strong guidance about the topics and their interrelations.
Adding a time dimension to such classiications can also provide us meaningful information
about how the topics in certain document collections (e.g. Special Reports, Operational
Programmes, Annual Activity Reports) change over the years and across programming
periods.
7 For example in the case of the executive summary of SR 2/15 Waste Water it misidentiied the main emotion in
the text as
“
disgust
“,
because of the waste water related expressions used throughout the text.
8 The European Commission’s
JRC Eurovoc Indexer
(available at:
https://ec.europa.eu/jrc/en/language-
technologies/jrc-eurovoc-indexer)
is a good example for a supervised classiier. It has been trained on the basis
of manually classiied document collections and further ine-tuned by experts to automatically assign EuroVoc
descriptors to documents.
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Text mining: making sense of unstructured data
continued
28
Topics and keywords ideniied by an unsupervised LDA classiicaion model in the corpus of SRs published between 2010 and 2016
Changing trend in the distribuion of topics in ECA SRs published between 2010 and 2016
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Text mining: making sense of unstructured data
continued
29
Practical considerations and the way forward
Text mining, as the name implies, is a data analysis approach that is best suited for analysing
large amounts of textual data. As some text mining methods (entity recognition, sentiment
analysis and classiication) are probabilistic by nature, the more data we have for training our
machine learning models, the more accurate results we will get. The recent technological
breakthrough in natural language processing and computing capacity now allows us to tap
into the domain of unstructured textual data and discover previously hidden patterns and
correlations. However, text mining tools still require considerable linguistic and IT skills to
achieve proper results and the ECA’s special information needs require customised solutions.
Still, text mining can already help us better organise and enrich the knowledge we already
have within our organisation and in our internal documents. It also ofers eiciency gains
when processing audit-related input documents, so that auditors can focus on high
added value tasks rather than spending their time on manually searching and classifying
information. In addition, using text mining methods to gather numerical data can save a lot
of time when creating visualisations involving information contained in text documents, as it
alleviates the need for the intermediary step of manually collecting and extracting numbers
into spreadsheets.
We are still in the experimenting and prototyping phase, but the
ECALab
is actively
exploring possibilities to provide text mining services to our staf in a user-friendly and
organised manner in the – hopefully near – future.
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Strategic challenges in audit : private and
public sector experiences
By Gaston Moonen, Directorate of the Presidency, ECA
30
When designing its 2018-2020 strategy the ECA had an open
ear to external views and advice. Meetings were organised with
stakeholders, sister organisations and also private audit irms to
tap in to their corporate strategy development and views how
to implement it. During two recent meetings organised on 12
and 28 June it became clear that the ECA was not out of sync
regarding its strategic orientations. On the contrary: conceptual
thinking on public trust, ethical values, credibility, value driven
and fact inding, adding value, courage and risk volatility turned
out to be essential and would be the most readable words in a
word cloud (see also page 28).
Richard Chambers
Guarding the public trust: a speciic mission
On 12 June guidance based on extensive experience from overseas was presented by
Richard Chambers,
President and Chief executive oicer of the Institute of Internal Auditors
(IIA), residing in the USA and also the organisation issuing the CGAP awards, also received
by some ECA auditors. Having served in both the private audit world (PWC) and public
sector (Tennessee Valley Authority, US postal Service, US army Pentagon) his presentation
“Guarding the public trust: are you up for the challenge?“ touched upon the key role of an
auditor, be it public or private: providing assurance whether things work well or not.
Richard Chambers pointed out that through assurance trust is built and in this respect
government auditors- internal or external - have unique characteristics compared with
the corporate or on non-proit sector. He considers government auditors as a breed
apart because of the unique challenges, which is expressed in irstly the speciic mission
government auditors have, which is guarding public trust; secondly the broad group
of stakeholders one has to serve, being institutions, citizens, media; and thirdly in the
comprehensiveness government auditors have to approach their audit topics compared
with corporate sector auditors, which requires a highly methodological approach. Since the
work of government auditors is far more visible than in the corporate world the credibility to
be maintained is high.
Since missions of the public sector auditee are so diverse, resulting in many diferent
operations and risks, the knowledge required from government auditors is high. While in the
private sector shareholder value in inancial terms often deines the success in government
success factors are much broader and deined in much wider outcomes instead of outputs,
which is often a much harder task for government auditors to establish. Richard Chambers
highlighted that the mission of each government auditor is to reinforce the accountability
of government towards its citizens - a very special role and also challenge that government
auditors face.
Richard Chambers identiied a number of challenges particular for now and the next few
years, like iscal stress, output pressure for elected executives, pressure for auditors to
demonstrate added value and identify risks. The latter are, particularly for governments, very
volatile, ranging from cyber security to geopolitical instability and crisis response, and are
not as often identiied, quantiied and mitigated as risks identiied in the private sector. In
government the focus is often on political risks instead of operational risks. Here auditors
have to be agile and step in as champions pleading for risk management.
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Strategic challenges in audit : private and public sector experiences
continued
31
Success factors for government auditors
What constitutes success factors for government audit organisations? According to
Richard Chambers independence, objectivity and credibility are very much interlinked. If
government auditors want to be trusted advisors, they need to have several characteristics,
starting with ethical resilience, courage, objectivity and proiciency but also diplomacy and
inesse. In addition audit can play a role in assessing and auditing culture, trying to ind
the root causes for scandals. Often auditors will see that if within an organisation there is a
culture where ends justiied the means and lack of accountability, scandals may easily arise.
For auditors there is an increased expectation, for instance from bank regulators, to look at
issues like culture. Government auditors have moved from an era of hindsight to insight and
ultimately they need to provide foresight, with perspectives about the future, speaking also
in terms of possible risks and risk levels.
Enduring lessons learnt on the audit trail
Richard Chambers identiied the following “enduring“ lessons he learned while on the audit
trail:
•
•
•
•
•
government auditors are auditing in the theatre of politics where for an auditor
“doing the right thing“ by being credible, independent, objective and courageous, is
crucial for survival;
ensure that your own glass house is shatter proof before throwing stones;
everyone loves a watchdog until it barks;
you can be right a 1000 times but you cannot aford to be wrong once;
little stones can cause the biggest waves: audits with immaterial indings can be
frontpage news because citizens and taxpayers resonate with waste on a diferent
level than many in the audit ield.
Audit as a service to society: deining our role as private and public auditors
Triggered by discussions he had in the Netherlands and elsewhere with leaders of both
public and private sector organisations Alex Brenninkmeijer decided to bring together some
players who stand out when speaking about pioneering on strategic development in the
audit world. On 28 June, in a session open to all ECA staf, three leaders in audit, be it in very
diferent areas, gave food for thought:
Peter van Mierlo,
CEO of PwC Netherlands,
Anton
Colella,
CEO of the Institute of Chartered Accountants of Scotland (ICAS) and
Manfred Kraf,
director-General of the Commission’s Internal Audit Service (IAS).
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Strategic challenges in audit : private and public sector experiences
continued
32
Adding trust to the system
Alex Brenninkmeijer put on the table the fact that accountants are regulated by a charter,
forming the foundation for the trustworthiness of accountants. This was the beginning of
the development of accountancy in Scotland and the Anglo-Saxon world. Relecting on trust
and how it can be fostered in society is very important, the more since it is under pressure in
many areas of the society, be it from citizens, consumers, or taxpayers. Alex Brenninkmeijer
underlined the need for reliable information as a basis for human interaction and building a
society. Auditors can add trust to the system by providing reliable information.
Accountancy as an evolving profession
According to Peter van Mierlo the accountancy profession is on a cross roads: if
an accountant’s role is to put trust into the system but society starts to question
the accountants credibility you have a serious problem! Nowadays this goes
particularly for private sector auditors and requires some structural changes
from the profession. About 15 years ago the focus was on the words in the audit
opinion: if the words were right the accountant had done a good job. Then
society wanted to receive more information to see what is behind the opinion,
so more information was given on the audit ile behind the opinion. A third
development was the divergence in the thinking of the auditor and society
about the role of the auditor in the detection of fraud. Like Richard Chambers
Peter van Mierlo believes there needs to be more comprehension on both sides
what the role of the auditor is in detecting fraud and how to act upon it.
Peter van Mierlo identied a lot of criticism towards the profession, underlined
by another critical report the Dutch market authority for inancial markets
(AFM) to be published soon. The more reason for Peter van Mierlo to lead his
organisation to become purpose led and value driven. The profession, at least
in the Netherlands, has tried to solve many questions from the inside, from their
own view with own knowledge, often starting with the question: is it within the
law? For Peter van Mierlo here lays an important challenge: changing how the
profession thinks.
Why the need for a purpose and values
With a faster changing world the need for a higher level of assurance increases. Society does
not want snapshots anymore from certain situations but expects the auditor to play a certain
role. So the behaviour of the auditor needs to change to respond to that expectation. But
auditors are slow to realise this and pick this up, despite the multitude of regulation to steer
the profession into another direction, be it in the EU or in the USA, or the barring of several
big audit irms to conduct audits in certain parts of the world or in certain business areas.
This shows that society is angry with auditors and will only get more angry if auditors do not
change their behaviour. Therefore purpose led, value driven. What does that mean? If PwC
wants to undertake work it should always ask: does it contribute to the purpose PwC stands
for? Value driven means that an organisation deines a number of behaviours you can relate
to and try to optimise across the organisation.
Other reasons to become purpose led and value driven: irstly the need to have a northern
star: an organisation that can be trusted to say as it is. Only when an auditor is trusted he
can be relevant for society. For Peter van Mierlo the only relevance an auditor can bring
is putting trust into the system, so credibility is key. Secondly, interest in the profession
is decreasing and the profession needs to remain attractive for new talent, characterised
Peter van Mierlo
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Strategic challenges in audit : private and public sector experiences
continued
33
also by diversity – male/female and diferent cultural backgrounds, thereby getting more
perspectives in your team. Thirdly, companies that have a purpose and are value driven
perform better, creating societal value.
Working through four stages
Peter van Mierlo deined four levels or stages to give more contents to purpose led and
value driven:
•
•
•
•
deine a new strategy with these terms;
deine actions how you want to become purpose-led and value driven and
implement these actions;
ask your stakeholders after a certain period whether PwC, or the ECA if you want,
have actually implemented its new strategy, namely becoming purpose led and
value driven. Here it becomes interesting;
success rate in convincing the auditor’s clients to become also purpose led and
value driven.
He clariied further the meaning of purpose led and value driven by taking the diferent
perspectives of the actors you have to deal with: yourself, the organisation you work for, the
stakeholders of that organisation, your client, the client’s stakeholders, and inally society.
Looking through these diferent perspectives -
lenses
as Peter van Mierlo called them - do
not give you similar answers and the audit sector would beneit substantially trying to use
these diferent perspectives in their audit work.
Why are values so relevant? To change behaviours and subsequently change what people
think requires a culture of self-awareness, self-relection and willingness to be vulnerable.
These characteristics are not exactly at the core of being an auditor, often to the contrary,
according to Peter van Mierlo. Such change also requires an understanding of personal
values and what do you stand for. Within PwC a global survey was held regarding personal
values, values related to the organisation people work in and certain values they would like
to see in the future. 150.000 people participated and it turned out that to be successful as
organisation you need a good mix of diverse values, like acting with integrity, working with
care, working together, making a diference.
PwC on a journey
PwC is on a journey towards transformation which will take several years and Peter van
Mierlo himself leads several value workshops. The irst step is to get people knowledgable
about the challenges and the second step to apply it. The journey does not have a goal
and does not have an end because you will never get there: transformation is a continuous
process. A challenge will be to get the Anglo-Saxon world on board with this. Overall Peter
van Mierlo indicaded that he met an interested ear but also scepticism about the possibility
of achieving a transformation. However, he feels that now the world starts to believe that
PwC, and the private audit sector as such, might become purpose led and value driven and
gain credibility.
Alex Brenninkmeijer raised the question of whether the business model in the private
audit sector was still a viable one: the way private sector auditors make money is more and
more seen as problematic, also underlined by the critical reports issued by regulators in
some countries. The more he found it laudable to get an inside view in the journey PwC is
undertaking.
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Strategic challenges in audit : private and public sector experiences
continued
34
Charter given to serve a purpose
Anton Colella, a former teacher and regulator, is for several years now CEO of
the oldest accountancy body in the world, ICAS, which was given a charter by
Queen Victoria. This charter was given to serve a purpose without time limits.
This charter was given to serve the nation, so not to serve a business but for the
public good. According to Anton Colella, after a long litany of crisis, nowadays
citizens in many nations do not trust power. Recent events did not help, like was
visible in the UK how corners were cut in observing ire regulations in a terrible
ire in London earlier in June. Although traditional power is no longer respected
Anton Colella noted that accountants are still near the top in surveys on trust,
despite scandals or corporate failures.
The premise for the ECA is: do people trust you, do people trust the opinions
issued by the ECA. In the UK media there is the persistent belief that the ECA
has never been able to sign of the EU accounts, with consequences for trust.
However, according to Anton Colella, the ECA cannot create trust into EU
institutions because of its audit work, its questioning etc. Trust has to come from
the institutions themselves: the leaders, employees, strategy, transparency and
execution of plans for society need to be delivered by these institutions.
Being a professional for life
When Anton Colella was speaking with the director of health in his city he was told:
accountants save more lives than doctors. This, the director told him, because accountants
ensure that money gets to the right places. Anton Colella believes in profession: a word
whose origins go back to the Christian monks in the Middle Ages who made their profession:
their vow, their oath. When you join a profession you make an obligation, a vow, for the rest
of your life. Anton Colella introduced for ICAS a public oath which will remains with them
till death. He gave the example of a gravestone he saw, with the deceased’s name and CA
behind it: chartered accountant. Apparently those two letters deined the life of the one
buried.
As chair of the Global Accounting Alliance and having 1.2 million members, Anton Colella
speaks for many audiences of what it means to be a professional today. Being a member of a
profession transcends who is your employer. With people changing employer more regularly
it will be important to have young people who become an accountant to have a value system
that lives with them regardless who they work for or where.
Quaere verum
Trust in the accounting and auditing profession does not start with the ECA or any other
audit employer. Anton Colella beliefs that trust begins with yourself. Personal and ethical
leadership is and should be the the deining characteristic of every accountant or auditor
in whatever culture, nature, nation, age, society or business. Individuals have the power
to transform their organisations, be it PwC or the ECA. This by living the promise made.
For auditors the leading purpose is: quaere verum – seek the truth. The challenge is also:
what do you do when you ind the truth. Seeking it is one thing but what then. Anton
Colella challenged the ECA audience to come up with the ive ethical principles that govern
accountants and auditors. After some initial hesitation the ECA audience identifed almost
all of them: objectivity, integrity, professional competence, conidentiality, professional
behaviour.
Anton Colella
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Strategic challenges in audit : private and public sector experiences
continued
35
The key question is whether you live these principles. Anton Colella found these principles
to be right but nowadays sometimes trivialised. For example, integrity is often used but little
understood. He believes that any accountant living these values requires a new ingredient:
moral courage. Trust will only be won by man and woman of courage. In Anton Colella’s view
without the accounting and auditing profession today the fundamental foundations of the
global markets would collapse.
Tone in the ECA?
Is the ECA trusted as an organisation, is the ECA trustworthy? As auditor does the ECA
understand its audience? Anton Colella underlined that audit and audience have the same
origins and it is important for an auditor to listen. He urged to be careful not to forget the
audience when doing the audit. Very important is to communicate the message of what the
auditor does and the why, what and how of what you do as auditor.
For Anton Colella the tone in an organisation is important. What is the tone in the ECA? Does
the ECA applaud courage? The tone at the top is often used to explain organisations and
blame leaders. But it is also the tone at the middle and the tone at the bottom that makes
an organisation work. So he encouraged creating a community of courage, a community of
truth in where if one part of the ECA stands up in a courageous moment of truth, the rest of
the ECA community stands with them. As auditors with a profession one is bound together
by common values and a common purpose you will have to stand together. According to
Anton Colella society in the end depends on good, honest and courageous auditors.
Creating the Internal Audit Service to bring back trust
After Alex Brenninkmeijer highlighted the link between being a professional
and the “why“ of our work he requested Manfred Kraf of the IAS to elaborate on
the why in his organisation, the IAS. For Manfred Kraf the main reason for the
creation of the IAS was the lack of trust in the European Commission, after the
fall of the Santer Commission. The creation of the IAS was one of the irst actions
building a new Commission. He elaborated on where the IAS is now, underlining
that it is independent under the EU Financial Regulation, put directly under the
irst Vice President Timmermans.
Issuing annually over 50 reports the IAS recommendations are key and their
acceptance and implementation rate by the Commission services are very
high. Issues covered by the IAS range from the staf burden as a result of
the migration crisis, the governance of the European Commission, after the
special report published by the ECA, or IT governance. 50% of the IAS audit
engagements go to identifying how systems identify and correct errors, 12%
goes to IT issues, 11% to better regulation topics and 6% to issues related to
inancial instruments. As internal auditor the IAS presents reports to the College
of the Commission but also gives an internal audit report to the European
Parliament and the Council. So now conclusions and recommendations are
discussed with the external stakeholder.
Quality review and courage
The IAS also gives an overall opinion on inancial management, arriving currently at a
qualiied opinion. This due to reservations identiied by Directors-General of several
Commission services. These reservations are included in the annual activity report and
therefore in the public realm. Looking back Mandred Kraf showed a timeline of “creativity“,
Manfred Kraf
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Strategic challenges in audit : private and public sector experiences
continued
36
presenting innovative steps replying to lack of trust, following also the criticism the ECA
ventilated almost twenty years ago. He explained the shift from a then inancial controller to
bringing inancial responsibilities directly to the management of a directorate-general, with
the IAS executing a quality review, requiring courage to call a spade a spade.
IAS aims for the future
Where does the IAS want to go in the future? For Manfred Kraf the three line defense
model – irst line management, second line inancial controller and risk manager, and third
line the internal auditor providing assurance on the quality of the irst and second line of
defence – will continue to be the core concept, with a strong central internal audit function.
The IAS will further aim to integrate innovative audit practices and improve the Commission
performance, also through the identiication of best practices and objective advice. Another
important development will be the single audit concept, enhancing the coordination
between the internal and external auditor to better make use of the audit work executed, if
feasible through the adoption of a memorandum of understanding.
Manfred Kraf announced that the IAS will organise a conference in October with the
title “Innovation and creativity in internal audit,“ looking into issues related to new audit
technology, innovation in auditing, developments in organisational culture, and the latest
techniques on behavioural auditing. The IAS will aim to become a pro-active line of defense,
within the Commission and having a tangible impact on its activities. The idea is to have a
seat at the top table in the Commission to provide trusted advice to those taking decisions.
This in full compliance with international standards, like the international professional
practices as adopted by the IIA.
While the prime stakeholder for the IAS is clearly the Commission the IAS also will listen to
ideas issued at the level of the European Parliament, Council and citizens. But also internally
it will be important for Manfred Kraf to listen to young auditors in his organisation since,
refering also to what Anton Colella had said, the tone in all layers makes the music. Manfred
Kraf wants to innovate through evolution with consecutive and directed steps, taking into
consideration that the top level of an organisation has to buy in what an internal auditor
brings forward.
Covering diferent angles
So while Peter van Mierlo showed us the journey PwC wants to undertake, focusing on
how the right attitude can be found to reply to societal needs, Anton Colella brought in
the professional element of a chartered accountant, being an oath to society and not to
a company or other interests. Another issue is whether the ECA as such can raise trust by
itself among citizens or is it more the EU institutions themselves who have to do that? An
inluential player in that respect for the Commission will be the IAS, led by the internal
auditor of the Commission, Manfred Kraf, who explained how he works on bringing trust to
the system called the Commission.
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Towards implementing harmonised public
sector standards in Member States: following
a slow moving train?
By Peter Welch, Directorate Sustainable use of natural resources, ECA
37
In the July/August edition of the Journal a case was made for
public sector accrual accounting and questions were raised on
what the E of European Public Sector Accounting Standards
(EPSAS) can mean. Peter Welch has attended a recent meeting
where the current state of afairs on EPSAS was discussed and
ills us in on where the EPSAS project currently stands and how
it changes the auditor’s work environment.
The ECA has followed the Commission’s moves to promote harmonised public sector
accounting standards in Member States since the Commission published its report on
subject in March 2013. The ECA produced a letter commenting on proposals on publication,
provided two speakers at the inaugural conference in May 2013, responded to the public
consultation on possible governance arrangements, organised its own conference on the
subject in January 2016 (see
http://www.eca.europa.eu/en/Pages/Workshop-on-public-
sector-accounting.aspx).
It has attended – as an observer – the various meetings on the
issue organised by our neighbours at Eurostat here in Luxembourg, and by the task force
on this topic of the Contact Committee of the Supreme Audit Institutions of the EU (most
recently in Paris in June). The journey has been fascinating and enlightening, but not always
fast moving.
Working with IPSAS
One reason for our interest and expertise in this area is our own experience of working with
the International Public Sector Accounting Standards (IPSASs). We worked through the
transition from the previous ad-hoc accounting rules applied by the European Commission
to the period of full compliance with IPSAS. This revealed the value of using proper,
independently-determined, accruals standards. No one – I believe – would want to go back
to the partial presentation of assets and liabilities of the balance sheets of the 1990s.
Of course this experience does not replicate the situation in EU Member States. Most
Member States have relatively sophisticated accounting frameworks. These are often
already based upon IPSAS (Estonia provides a leading example). In some cases they are
based on commercial standards (IFRS in the UK, commercial law in some other Member
States). In practice, work produced for Eurostat indicates that the choice of accounting
framework is not the most signiicant factor in harmonisation: accruals accounting
frameworks resemble each other quite closely.
Working towards EPSAS
The original prospectus put forward in the Commission paper was an approach in which the
existing 32 IPSAS standards for accruals accounts would be divided into three groups: those
that might be implemented with no adaptation; with adaptation (or selectively); standards
needing amendment.
The paper the Commission produced for public consultation in late 2013 did not develop
this approach further, but sought to assess support for governance arrangements similar to
those applying for statistical accounts (see ECA SR 12/12), for a set of EPSAS .
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Towards implementing harmonised public sector standards in Member
States: following a slow moving train?
continued
38
The most recent statements from the Commission point to a gradualist, consensual
approach. For example, in a reply to a parliamentary question in March of this year, the
Commission said that a “progressive and voluntary approach to EPSAS seems the most
appropriate way forward, focusing irstly on increasing iscal transparency in the short
to medium term and then on ensuring comparability between and within Member
States in the medium to the longer term. Improved transparency is being promoted by
encouraging accruals and IPSAS implementation and by supporting accruals reforms in
Member States.”
Slow ride with a heavy cargo
This may not have been the fastest ride imaginable, but the process has been fascinating.
Eurostat have promoted much contact between accountants and standard setters from
the diferent Member States and from the international standard setters. There have been
extensive contacts between IPSASB and both Commission and Member States. Indeed
Eurostat hosted the most recent meeting of IPSASB here in Luxembourg, and members
of IPSASB from around world told me how much they appreciated the discussion with EU
representatives, and the diferent discussion papers produced as part of the EU process.
Currently several Member States are moving towards adoption of IPSAS – with some
support from the EU budget (Portugal, Cyprus, Hungary and Malta). Many others already
have accruals accounts. It is hard to predict how much support there would be for the
eventual adoption of a strictly European equivalent. A small but inluential number of
Member States are opposed to the use of accruals and question whether there is a Treaty
basis for legislation on this issue.
Beyond these basic concerns, some diicult technical issues lie ahead:
•
There are some notable examples of bodies which produce accruals accounts in
most respects, but which fail to include all provisions (for example for pension
obligations) on the balance sheet. It is diicult to see how this could be tolerated
under any European framework.
In general speciic bodies provide inancial accounts and Member States provide
statistical accounts. While some countries (UK, New Zealand) provide inancial
statements covering the whole of the public sector, it is more often the case that
accounts are not consolidated where the bodies concerned are legally independent.
The ambitions of the EPSAS project, as well as its role in iscal monitoring, point to
a “whole of public sector” solution. This raises a host of conceptual and practical
challenges.
Harmonisation and the application of best practice are both desirable qualities for
future inancial reporting. Unfortunately they may enter into conlict. Some Member
States would worry that the adoption of EPSAS might represent a step back from
the high level of accounting they have already achieved.
•
•
Some efects clearly noticeable
All this said, the project to look at the harmonisation of public sector accounts is already
leading to improved inancial reporting, to international harmonisation on speciic issues,
and a clearer and more useful communication with international standard setters. For
auditors, the discussion and debate around diicult standards, and the chance to compare
diferent solutions for the application of standards represents a valuable resource –
enhanced by discussions with fellow auditors in the Contact Committee taskforce.
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FOCUS
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Focus
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Special report
N° 11/2017
The Bêkou EU trust fund for the Central African Republic:
a hopeful beginning despite some shortcomings
The Bêkou EU trust fund for the Central African Republic, the irst managed by the
European Commission, was launched in 2014, to aid one of the world’s least developed
countries. We assessed the justiication of the fund’s establishment, its management
and the achievement of its objectives so far. Despite some shortcomings, we conclude
that the choice to set up the fund was appropriate in the given circumstances. Its
management has not yet reached its full potential in three respects: coordination
amongst stakeholders, transparency, speed and cost-efectiveness of procedures, and
monitoring and evaluation mechanisms. But it has, overall, had positive achievements
to date. Our recommendations should help improve the design and management of
this and other EU trust funds.
Click here for our full Special Report
Published on
31August 2017
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ISSN 1831-449X
EDITION HIGHLIGHTS
05
The ECA strategy for 2018-2020 : Fostering trust
through independent audit
Towards a more continuous dialogue
Communicating with the press and
stakeholders – in & beyond Brussels
ECA in social media: the challenge of being on
every screen
15
17
20
Cover:
ECA College in session in January 2017, discussing strategy issues
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