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Accountability Challenges in the 21st Century: 

International Consortium on Governmental Financial Management: 
19th Annual Conference and Training: 
Miami, Florida: 

The Honorable David M. Walker: 
Comptroller General of the United States: 

May 2, 2005: 

Accountability Environment: 

The credibility of auditing and financial reporting has suffered in the 
last several years as a result of the accountability failures in the 
provide sector.

Forces that lead to the corporate scandals and audit failures includes: 
* Individual and corporate greed; 
* Inadequate corporate governance systems; 
* Ineffective regulation and oversight of the accounting and auditing 
profession; 
* Inadequate accounting/reporting standards; 
* Audit-related expectation gaps; 
* Financial managers and advisors working to achieve certain reporting 
results and focusing on the legal form versus the economic substance of 
the transactions; 
* Unreasonable and inappropriate executive compensation arrangements; 
* Auditors and financial professionals doing what was minimally 
required and actively fighting tighter standards; 
* Confusion over whom the auditors work for; 
* Auditors delivering services to clients that impaired their 
independence.

While the recent failures have been concentrated in the private sector, 
the entire profession has been affected and steps need to be taken to 
modernize the profession and related standards and practices for the 
21st Century.

How Do We Move Forward?

Good governance and accountability are critical: 
* in the private sector to promote efficiency and effectiveness in the 
capital and credit markets, and overall economic growth, both 
domestically and internationally; 
* in the public sector for the effective and credible functioning of a 
healthy democracy, and in fulfilling the government’s responsibility to 
citizens and taxpayers; 
* in both sectors to support a healthy economy that provides economic 
opportunities and benefits to citizens. 

Sorting out the needs and effective and appropriate governance and 
accountability mechanisms for different sectors and types of 
organizations and on an international scale will be critical.

GAO’s Work to Modernize the Accountability Profession: 

GAO is actively working to modernize and transform the accountability 
profession, both inside the government and in the private sector, and 
to lead by example in this area. 

* Definition of success in financial management: clean opinion, no 
major weaknesses in controls or compliance, and financial systems that 
produce timely, accurate and useful information for management; 
* Opinion on system of internal control; 
* 2003 revision of Government Auditing Standards; 
* Creation of the U.S Auditing Standards Coordinating Forum (i.e., GAO, 
PCAOB, ASB); 
* Coordination with accountability organizations around the world 
(e.g., INTOSAI); 
* Modernization of the accounting/reporting and audit models; 
* Assure appropriate treatment of restatements by auditors and others; 
* Monitor implementation of the Sarbanes-Oxley Act, including providing 
suggestions for possible actions by the PCAOB and the SEC in connection 
with the internal control reporting requirements under Section 404; 
* Consider whether reform elements similar to those in Sarbanes-Oxley 
make sense for the federal government. 

The Federal Financial Audit Environment: 

The federal financial audit environment is evolving: 
* Closer to an opinion on the consolidated financial statements of the 
U.S. government (CFS), but DOD is the key challenge; 
* GAO, as the auditor of the CFS, needs to be able to use the work of 
the auditors of the agency financial statements; 
* Agencies need to meet accelerated due dates, maintain unqualified 
opinions, and address their internal control and financial management 
system deficiencies; 
* More timely financial and performance reporting should not come at 
the price of less reliable reporting. 

Selected Federal Government Reporting Challenges: 

Financial and Performance Reporting: 
* long-range fiscal challenges (e.g., per capita burden, 
sustainability, intergenerational impact); 
* “trust funds” (e.g., restricted vs. unrestricted revenues, intra-
governmental obligations); 
* DOD assets, liabilities, and contingencies; 
* performance reporting; 
* Summary annual report.

Audit Reporting: 
* system of internal control; 
* financial vs. performance vs. other information; 
* Restatements;
* Beyond “going concern” opinions (e.g., broken business model). 

Selected Government Accountability Issues: Leading by Example: 

Definition of success in financial management: 
* Clean opinion on financial statements; 
* No major control weaknesses; 
* No major compliance issues; 
* Systems that produce timely, accurate, and useful financial and 
management information. 

Scope of audit: 

* Internal controls (current); 
* Compliance matters (current); 
* Performance and projection information (future). 

Additional issues: 
* FASAB restructuring; 
* Accelerated and enhanced financial reporting; 
* Enhanced performance and accountability reporting; 
* Summary annual report; 
* Audit/financial management committees; 
* Auditor independence. 

Rebuilding Public Trust: 

For any system to work, it must address three fundamental issues. * 
First, provide incentives for people to do the right thing. * Second, 
provide transparency to help assure that people do that right thing. * 
Finally, have effective accountability mechanisms if people don’t do 
the right thing.

Restoring public trust will require that every participant in the 
corporate reporting supply chain embrace and live by the following core 
concepts*: 
1. A spirit of transparency—stop playing games with financial and 
performance data. Use full disclosure. 

2. A culture of accountability—management staff, boards, auditors, and 
stakeholders. High quality, unbiased information to support decision-
making. 

3. People of Integrity—commitment to individual integrity.

Selected Key Concepts: 

Public Servants:
* Public servants hold a public trust and have an obligation to do what 
is in the collective best interest of all (i.e., greater good) versus 
what is in the narrow interest of a few (i.e., special interests).

SAIs, CPAs, CAs:
* Certain accountability professionals are in the “trust business”. As 
a result, they should lead by example and do what is right versus what 
is arguably acceptable.

Corruption:
* There should be zero tolerance for corruption although it will never 
be zero. The key question is: What happens when corruption exists and 
is exposed? 

Three Key Elements for Success: 

Incentives; 
Transparency; 
Accountability: 

Contributing Elements: 

Contributing Element: Incentives; 
Government Examples: 
* Rule of law; 
* Professional Civil Service; 
* Checks and balances. 

Contributing Element: Transparency; 
Government Examples: 
* Financial disclosure; 
* Free press; 
* Due process. 

Contributing Element: Accountability; 
Government Examples: 
* Oversight Mechanisms; 
* Enforcement of laws; 
* Independent judiciary. 

Contributing Element: Incentives; 
SAI Examples: 
* Independence; 
* Resources. 

Contributing Element: Transparency; 
SAI Examples: 
* Protocols; 
* Public reporting. 

Contributing Element: Accountability; 
SAI Examples: 
* Enforcement of access rights; 
* Peer review. 

[End of table]

Composition of Federal Spending: 

[See PDF for image] - graphic text 

3 pie charts with 5 items each. 

1964: 
Defense: 46.0%. 
Social Security: 14.0%. 
Medicare & Medicaid: 0%. 
Net interest: 7.0%. 
All other spending: 33.0%. 

1984: 
Defense: 27.0%. 
Social Security: 21.0%. 
Medicare & Medicaid: 9.0%. 
Net interest: 13.0%. 
All other spending: 30.0%. 

2004: 
Defense: 20.0%. 
Social Security: 22.0%. 
Medicare & Medicaid: 29.0%. 
Net interest: 7.0%. 
All other spending: 32.0%. 

Source: Office of Management and Budget. 

[End of figure] 

Federal Spending for Mandatory and Discretionary Programs: 

[See PDF for image] - graphic text 

3 pie charts with 3 items each. 

1964: 
Discretionary: 67%; 
Mandatory: 26%; 
Net Interest: 7%. 

1984: 
Discretionary: 45%; 
Mandatory: 42%; 
Net Interest: 13%.

2004: 
Discretionary: 39%; 
Mandatory: 54%; 
Net Interest: 7%.

Source: Office of Management and Budget.

[End of figure]

Fiscal Year 2004 Deficit Numbers:

On-Budget Deficit; 
-$567 Billion; 
-4.9% of GDP. 

Off-Budget Surplus; 
$155 Billion;* 
1.3% of GDP.

Unified Deficit; 
-$412 Billion; 
-3.6% of GDP. 

* Includes the $151 billion Social Security surplus and a $4 billion 
surplus for the Postal Service. 

[March 2005] 

[End of table]

Selected Fiscal Exposures: Sources and Examples 2005[A]: 

Type: Explicit liabilities; 
Example (dollars in billions): Publicly held debt ($4,297). 

Type: Explicit liabilities; 
Example (dollars in billions): Military and civilian pension and post-
retirement health ($3,059). 

Type: Explicit liabilities; 
Example (dollars in billions): Veterans benefits payable ($925). 

Type: Explicit liabilities; 
Example (dollars in billions): Environmental and disposal liabilities 
($249). 

Type: Explicit liabilities; Loan guarantees ($43). 

Type: Explicit financial commitments; 
Example (dollars in billions): Undelivered orders ($596). 

Type: Explicit financial commitments; 
Example (dollars in billions): Long-term leases ($39). 

Type: Financial contingencies; 
Example (dollars in billions): Unadjudicated claims ($4). 

Type: Financial contingencies; 
Example (dollars in billions): Pension Benefit Guaranty Corporation 
($96). 

Type: Financial contingencies; 
Example (dollars in billions): Other national insurance programs ($1). 

Type: Financial contingencies; 
Example (dollars in billions): Government corporations e.g., Ginnie 
Mae. 

Type: Exposures implied by current policies or the public's 
expectations about the role of government; 
Example (dollars in billions): Debt held by government accounts 
($3,071)[B]. 

Type: Exposures implied by current policies or the public's 
expectations about the role of government; 
Example (dollars in billions): Future Social Security benefit payments 
($4,017)[C]. 

Type: Exposures implied by current policies or the public's 
expectations about the role of government; 
Example (dollars in billions): Future Medicare Part A benefit payments 
($8,561)[C]. 

Type: Exposures implied by current policies or the public's 
expectations about the role of government; 
Example (dollars in billions): Future Medicare Part B benefit payments 
($12,384)[C]. 

Type: Exposures implied by current policies or the public's 
expectations about the role of government; 
Example (dollars in billions): Future Medicare Part D benefit payments 
($8,686)[C]. 

Type: Exposures implied by current policies or the public's 
expectations about the role of government; 
Example (dollars in billions): Life cycle cost including deferred and 
future maintenance and operating costs (amount unknown). 

Type: Exposures implied by current policies or the public's 
expectations about the role of government; 
Example (dollars in billions): Government Sponsored Enterprises e.g., 
Fannie Mae and Freddie Mac. 

[A] All figures are for end of fiscal year 2004, except Social Security 
and Medicare estimates, which are as of January 1, 2005.

[B] This amount includes $845 billion held by military and civilian 
pension and post-retirement health funds that would offset the explicit 
liabilities reported by those funds.

[C] Figures for Social Security and Medicare are net of debt held by 
the trust funds ($1,687 billion for Social Security, $268 billion for 
Medicare Part A, and $19 billion for Medicare Part B) and represent net 
present value estimates over a 75-year period. Over an infinite 
horizon, the estimate for Social Security would be $11.1 trillion, 
$24.1 trillion for Medicare Part A, $25.8 trillion for Medicare Part B, 
and $18.2 trillion for Medicare Part D. Source: GAO analysis of data 
from the Department of the Treasury, the Office of the Chief Actuary, 
Social Security Administration, and the Office of the Actuary, Centers 
for Medicare and Medicaid Services.

Revised 3/29/05

[End of table]

Current Fiscal Policy is Unsustainable: 

The “Status Quo” is Not an Option: 

* We face large and growing structural deficits largely due to known 
demographic trends and rising health care costs. 
* GAO’s simulations show that balancing the budget in 2040 could 
require actions as large as: 
- Cutting total federal spending by about 60 percent or
- Raising taxes to about 2.5 times today's level. 

Faster Economic Growth Can Help, but It Cannot Solve the Problem: 

* Closing the current long-term fiscal gap based on responsible 
assumptions would require real average annual economic growth in the 
double digit range every year for the next 75 years. 
* During the 1990s, the economy grew at an average 3.2 percent per 
year. 
* As a result, we cannot simply grow our way out of this problem. Tough 
choices will be required.

The Sooner We Get Started, the Better: 

* Less change would be needed, and there would be more time to make 
adjustments. 
* The miracle of compounding would work with us rather than against us. 
* Our demographic changes will serve to make reform more difficult over 
time. 

The Way Forward: 

* Implement new accounting and reporting approaches and new budget 
control mechanisms for considering the impact of spending and tax 
policies and decisions over the long term.

* Develop new metrics for measuring the impact of policies and 
decisions over the long term (e.g., key national indicators to measure 
our Nation’s position and progress over time and in relation to other 
countries).

* Reexamine the base—question existing programs, policies and 
activities.

We Need a Multifaceted Approach to Close the Long-Term Fiscal Gap: 

Policy:
* Restructure existing entitlement programs; 
* Reexamine the base of discretionary and other spending.

Operations:
* Reassess and revise how the government does business (e.g., 
management, planning and operational issues); 
* Consider who should provide government services (e.g., sourcing 
strategy). 

21st Century Challenges Report: 

* Report was issued February 16; 
* Based on GAO’s work for the Congress; 
* Provides framework and questions to assist in reexamining the base; 
* Covers entitlements & other mandatory spending, discretionary 
spending, and tax policy and programs. 

Twelve Reexamination Areas: 

Mission Areas: 

Defense.
Education & Employment. 
Financial Regulation & Housing. 
Health Care.
Homeland Security.
International Affairs.
Natural Resources, Energy & Environment.
Retirement & Disability. 
Science & Technology.
Transportation.

Crosscutting: 

Improving Governance; 
Reexamining the Tax System. 

Generic Reexamination Criteria and Sample Questions: 

Relevance of purpose and the federal role: Why did the federal 
government initiate this program and what was the government trying to 
accomplish? Have there been significant changes in the country or the 
world that relate to the reason for initiating it? 

Measuring success: 
Are there outcome-based measures? If not, why? If there are outcome-
based measures, how successful is it based on these measures? 

Targeting benefits: 
Is it well targeted to those with the greatest needs and the least 
capacity to meet those needs? 

Affordability and cost effectiveness: 

Is it using the most cost-effective or net beneficial approaches when 
compared to other tools and program designs?

Best practices: 
Is the responsible entity employing prevailing best practices to 
discharge its responsibilities and achieve its mission?

Illustrative 21st Century Questions: 

Can intermodal solutions to the needs of modes such as freight, air, 
and passenger rail service be effectively carried out within the 
framework of the existing trust funds and other transportation programs 
or is another model needed?

How should the historical allocation of resources across services and 
programs be changed to reflect the results of a forward-looking 
comprehensive threat/risk assessment as part of DOD’s capabilities-
based approach to determining defense needs?

How should the federal government update its compensations systems to 
be more market-based and performance—oriented?

Which tax incentives need to be reconsidered because they fail to 
achieve the objectives intended by the Congress, their costs outweigh 
their benefits, they duplicate other programs, or other more cost-
effective means exist for achieving their objectives?

Is the federal government effectively informed by a key national 
indicator system about the position and progress of the nation as a 
whole—both on an absolute and relative bases compared to other 
nations—as a guide to helping set agency and program goals and 
priorities?

Key National Indicators:

WHAT: A portfolio of economic, social, environmental and security 
related outcome-based statistics that could be used to help assess the 
nation’s and other governmental jurisdictions’ position and progress.

WHO: Many countries and several states and localities have already 
undertaken related initiatives (e.g., Australia, New Zealand, Canada, 
United Kingdom, Oregon, Washington, and Charlotte).

WHY: Development of such a portfolio of indicators could have a number 
of possible benefits, including: 
* Serving as a framework for related strategic planning efforts; 
* Enhancing performance and accountability reporting; 
* Informing public policy decisions, including much needed baseline 
reviews of existing government policies, programs, functions, and 
activities; 
* Facilitating public education and debate as well as an informed 
electorate.

WAY FORWARD: Consortium of key players led by the National Academies 
domestically and related OECD efforts internationally.

Transformation: Webster’s definition: 

An act, process, or instance of change in structure appearance, or 
character.

A conversion, revolution, makeover, alteration, or renovation

The Case for Change: 

The U.S. federal government is on a “burning platform,” and the status 
quo way of doing business is unacceptable for a variety of reasons, 
including:

* Past fiscal trends and significant long-range challenges; 
* Rising public expectations for demonstrable results and enhanced 
responsiveness; 
* Selected trends and challenges having no boundaries; 
* Additional resource demands due to recent terrorism events in the 
United States; 
* Government performance/accountability and high risk challenges, 
including the lack of effective human capital strategies.

GAO’s High-Risk List: 2005: 

Addressing Challenges in Broad-based Transformations: 

High-Risk Areas: Protecting the Federal Government's Information 
Systems and the Nation's Critical Infrastructures; 
Year Designated High Risk: 1997. 

High-Risk Areas: Strategic Human Capital Management[A]; 
Year Designated High Risk: 2001. 

High-Risk Areas: U.S. Postal Service Transformation Efforts and Long-
Term Outlook[A]; 
Year Designated High Risk: 2001. 

High-Risk Areas: Managing Federal Real Property[A]; 
Year Designated High Risk: 2003. 

High-Risk Areas: Implementing and Transforming the Department of 
Homeland Security; 
Year Designated High Risk: 2003. 

High-Risk Areas: Establishing Appropriate and Effective Information-
Sharing Mechanisms to Improve Homeland Security; 
Year Designated High Risk: 2005. 

High-Risk Areas: DOD Approach to Business Transformation[A]; 
Year Designated High Risk: 2005. 

High-Risk Areas: DOD Approach to Business Transformation[A]: DOD Supply 
Chain Management (formerly Inventory Management); 
Year Designated High Risk: 1990. 

High-Risk Areas: DOD Approach to Business Transformation[A]: DOD Weapon 
Systems Acquisition; 
Year Designated High Risk: 1990. 

High-Risk Areas: DOD Approach to Business Transformation[A]: DOD 
Business Systems Modernization; 
Year Designated High Risk: 1995. 

High-Risk Areas: DOD Approach to Business Transformation[A]: DOD 
Financial Management; 
Year Designated High Risk: 1995. 

High-Risk Areas: DOD Approach to Business Transformation[A]: DOD 
Support Infrastructure Management; 
Year Designated High Risk: 1997. 

High-Risk Areas: DOD Approach to Business Transformation[A]: DOD 
Personnel Security Clearance Program; 
Year Designated High Risk: 2005. 

Managing Federal Contracting More Effectively: 

High-Risk Areas: DOE Contract Management; 
Year Designated High Risk: 1990. 

High-Risk Areas: NASA Contract Management; 
Year Designated High Risk: 1990. 

High-Risk Areas: DOD Contract Management; 
Year Designated High Risk: 1992. 

Management of Interagency Contracting; 
Year Designated High Risk: 2005. 

Assessing the Efficiency and Effectiveness of Tax Law Administration: 

High-Risk Areas: Enforcement of Tax Laws[A, B]; 
Year Designated High Risk: 1990. 

High-Risk Areas: IRS Business Systems Modernization[C]; 
Year Designated High Risk: 1995. 

Modernizing and Safeguarding Insurance and Benefit Programs: 

High-Risk Areas: Medicare Program[A]; 
Year Designated High Risk: 1990. 

High-Risk Areas: HUD Single-Family Mortgage Insurance and Rental 
Housing Assistance Programs; 
Year Designated High Risk: 1994. 

High-Risk Areas: Medicaid Program[A]; 
Year Designated High Risk: 2003. 

High-Risk Areas: Modernizing Federal Disability Programs[A]; 
Year Designated High Risk: 2003. 

High-Risk Areas: Pension Benefit Guaranty Corporation Single-Employer 
Insurance Program[A]; 
Year Designated High Risk: 2003. 

Other: 

High-Risk Areas: FAA Air Traffic Control Modernization; 
Year Designated High Risk: 1995. 

[A] Legislation is likely to be necessary, as a supplement to actions 
by the executive branch, in order to effectively address this high-risk 
area.

[B] Two high-risk areas-Collection of Unpaid Taxes and Earned Income 
Credit Noncompliance-have been consolidated to make this area.

[C] The IRS Financial Management high-risk area has been incorporated 
into this high-risk area.

[End of table]

Transformation: A New Model for Government Organizations: 

Government organizations will need to:

* Become less hierarchical, process-oriented, stovepiped, and inwardly 
focused;

* Become more partnership-based, results-oriented, integrated, and 
externally focused;

* Achieve a better balance between results, customer, and employee 
focus;

* Work better with other governmental organizations, non-governmental 
organizations, and the private sector, both domestically and 
internationally, to achieve results;

* Focus on maximizing value, managing risk and enhancing responsiveness 
within current and expected resource levels.

Keys to Making Change Happen: 

* Commitment and sustained leadership (e.g., leading by example and 
“tone at the top”);

* Demonstrated need for change (i.e., burning platform);

* Start at the top and with the new people (transformation takes 7+ 
years);

* Process matters (e.g., employee involvement) – Don’t fight a two-
front war;

* 15-percent rule;

* Identifiable and measurable progress over time;

* Communication, communication, communication;

* Figure out what’s right versus what’s popular;

* Patience, persistence, perseverance to pain before you prevail. 

Key Transformation Elements:

* People;
* Process;
* Partnerships;
* Technology;
* Environment.

The most important of the five is PEOPLE—an agency’s human capital. 

Transformation is about CREATING the future rather than PERFECTING the 
past. Effective HUMAN CAPITAL strategy is key to any SUCCESSFUL 
transformation effort.

GAO: Leading by Example: 

Mission and vision clarification; 
Core values: accountability, integrity, reliability; 
Strategic planning; 
Organizational realignment; 
Definitions of success; 
Multi-tasking and matrix management; 
Procurement, contracting, and acquisition; 
Human capital;
Information technology; 
Knowledge management;
Financial management;
Client service/external agency relations and protocols; 
Enhanced products and services; 
Risk-based approach to engagements; 
Constructive engagement with agencies; 
Partnering with other accountability and “good government” 
organizations; 
Peer reviews.

GAO's Strategic Plan:

[See PDF for image] - graphic text:

Serving the Congress and the Nation: GAO's Strategic Plan Framework:

Mission:

GAO exists to support the Congress in meeting its constitutional 
responsibilities and to help improve the performance and ensure the 
accountability of the federal government for the benefit of the 
American people.

Themes:

* Long-term Fiscal Imbalance; 
* National Security; 
* Global interdependence; 
* Changing Economy; 
* Demographics; 
* Science and Technology; 
* Quality of Life; 
* Governance; 

Goals and Objectives:

Provide Timely, Quality Service to the Congress and the Federal 
Government to Address Current and Emerging Challenges to the Well-Being 
and Financial Security of the American People related to:

* Health care needs and financing; 
* Education and protection of children; 
* Work opportunities and worker protection; 
* Retirement income security; 
* Effective system of justice; 
* Viable communities; 
* Natural resources use and environmental protection; 
* Physical infrastructure; 

Respond to Changing Security Threats and the Challenges of Global 
Interdependence involving:

* Emerging threats; 
* Military capabilities and readiness; 
* Advancement of U.S. interests; 
* Global market forces; 

Help Transform the Federal Government's Role and How It Does Business 
to Meet 21st Century Challenges by assessing:

* Roles in achieving federal objectives; 
* Government transformation; 
* Key management challenges and program risks; 
* Fiscal position and financing of the government; 

Maximize the Value of GAO by Being a Model Federal Agency and a World- 
Class Professional Services Organization in the areas of:

* Client and customer service; 
* Strategic leadership; 
* Institutional knowledge and experience; 
* Process improvement; 
* Employer of choice; 

Core Values:

* Accountability; 
* Integrity; 
* Reliability; 

Source: GAO.

GAO Strategic Plan 2004-2009.

[End of strategic plan framework]

INTOSAI’S Strategic Plan: 

INTOSAI Strategic Plan: 2005-2010: 

Overview: 

INTOSAI is an autonomous, independent, professional, and nonpolitical 
organization established to provide mutual support; foster the exchange 
of ideas, knowledge, and experiences; act as a recognized voice of 
supreme audit institutions (SAIs) within the international community; 
and promote continuous improvement among diverse member SAIs.

Vision: 

Promote good government by enabling SAIs to help their respective 
governments improve performance, enhance transparency, ensure 
accountability, maintain credibility, fight corruption, promote public 
trust, and foster the efficient and effective receipt and use of public 
resources for the benefit of their peoples. 

Strategic Goals: 

Goal 1: Accountability and Professional Standards: Promote strong, 
independent, and multidisciplinary SAIs by (1) encouraging SAIs to lead 
by example and (2) contributing to the development and adoption of 
appropriate and effective professional standards.

Goal 2: Institutional Capacity Building: Build the capabilities and 
professional capacities of SAIs through training, technical assistance, 
and other development activities.

Goal 3: Knowledge Sharing and Knowledge Services: Encourage SAI 
cooperation, collaboration, and continuous improvement through 
knowledge sharing, including providing benchmarks, conducting best 
practice studies, and performing research on issues of mutual interest 
and concern.

Goal 4: Model International Organization: Organize and govern INTOSAI 
in ways which promote economical, efficient, and effective working 
practices, timely decision-making, and effective governance practices 
while maintaining due regard for regional balance and the different 
models and approaches of member SAIs.

Core Values: 

Independence; 
Integrity; 
Professionalism; 
Credibility; 
Inclusiveness; 
Cooperation; 
Innovation. 

[End of figure]

Selected Success Measures

* Results;
* Clients/customers;
* People;
* Partnerships.

Annual Performance Measures (1998 and 2004): 

Performance measure: Financial benefits (billions); 
FY 1998 (Actual): $19.70; 
FY 2004 (Actual)*: $44. 

Performance measure: Other benefits; 
FY 1998 (Actual): 537; 
FY 2004 (Actual)*: 1197. 

Performance measure: Past recommendations implemented; 
FY 1998 (Actual): 69%; 
FY 2004 (Actual)*: 83%. 

Performance measure: Return on investment (ROI); 
FY 1998 (Actual): 58:1; 
FY 2004 (Actual)*: 95:1. 

Performance measure: Financial benefits per employee (millions); 
FY 1998 (Actual): $6.10; 
FY 2004 (Actual)*: $13.70. 

Performance measure: Timeliness; 
FY 1998 (Actual): 93%; 
FY 2004 (Actual)*: 97%. 

*All of the FY 2004 performance measures are records, except timeliness 
which tied the record set in FY 2003.

[End of table]

International Peer Review Team: 

* Australia;
* Mexico;
* Norway;
* South Africa;
* Canada;
* Netherlands;
* Sweden.

Peer Review Results: 

Clean Opinion.

Global Good Practices: 
* Strategic planning process; 
* Audit risk assessment; 
* Agency Protocols;
* Use of experts;
* E.A.G.L.E;
* Report design.

Other Observations: 
* Distinguishing between audit and non-audit services; 
* Strengthening reporting; 
* Reviewing the quality assurance system for further efficiencies; 
* Streamlining the documentation requirements; 
* Making the inspection program more efficient.

Key Concepts in the Accountability Profession: 

* Public vs. personal interests; 
* Recognizing the difference between the floor (e.g., law, accounting 
standards) and the ceiling (e.g., principles, values); 
* Doing what is right vs. what is acceptable; 
* Economic substance vs. legal form; 
* Being concerned with both fact and appearance (e.g., independence); 
* Using judgment vs. completing checklists; 
* Recognizing that continuing improvement in today’s rapidly changing 
world is essential; 
* Trust is hard to earn, but easy to lose.

Key Leadership Attributes For Success: 
* Courage;
* Integrity;
* Innovation.

[End of slide presentation]