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„Rethinking Sustainability and the challenges
of Supreme Audit Institutions”
SÁNDOR NAGY
UNIVERSITY OF SZEGED, HUNGARY
Structure of the Prezentation:
I. Context and current issues (SD & SAIs)
II. My contribution: Rethinking SD – Sustainability
in Complex Adaptive Systems
III. A possible categorization of governance
functions in the light of complexity management
and SD
IV. New tasks and challenges of SAIs
I. Main challenges of SAIs regarding SD




- to increase social impact of SAIs by responding SD
issues (ISSAI 12; ISSAI 5130)
- to meet the audit challenges regarding the UN
Post-2015 Development Agenda & Implementation
of the 2030 Agenda for Sustainable Development
- New aspects for auditing by:
(1) Rethinking of sustainability, esp. in the field of (2)
value creation & public value creation aspects, (3)
complex adaptive systems thinking & intelligent
adaptivity
I. Context and current issues (SD & SAIs) (1)
- United Nations Summit on Sustainable Development
2015, New York, 25-27 September 2015.
Focusing on the following topics:
- Implementing the 2030 Agenda for Sustainable Development
- Engaging all stakeholders including citizens
- Putting in place a robust follow-up and review mechanism
- Effective fiscal policies, an integrated and coherent approach to
policy making
- Monitoring of progresses, and increasing of accountability
and transparency
- Innovative and non-traditional sources of financing
Context and current issues (SD & SAIs) (1)
- United Nations Summit on Sustainable Development
2015, New York, 25-27 September 2015.
Focusing on the following topics:
- building resilience to shocks and disasters, and will require
appropriate risk management plans and strategies, together
with strong social protection frameworks
- National, international level cooperation
- Public finance can be used as a catalyst to mobilize both
foreign and domestic investments. In this regard, new
partnerships are needed between the public and private
sectors.
Context and current issues (SD & SAIs) (1)
- United Nations Summit on Sustainable Development
2015, New York, 25-27 September 2015.
Focusing on the following topics:
- effective, accountable and inclusive institutions that are
transparent and free of corruption
- the SDGs must be integrated into national plans and
strategies, supported by sound monitoring and review
frameworks. The important roles of parliaments and local
authorities need to be recognized and enhanced
- capacity building for sustainable development
Context and current issues (SD & SAIs) (2)
„The Independent Oversight Role of Supreme Audit
Institutions in Implementing the Post-2015 Development
Agenda”
- The panel considered how the independence of SAIs and related
capacity-building needs as well as the improvement of public
accounting systems could be instrumental in implementing the
post-2015 development agenda.
- Contribution of Mr. Moser (INTOSAI) - lack of legal, financial
and organizational independence of SAIs from governments, the
lack of a comprehensive mandate to audit government
performance, and the lack of possibilities to provide a formal
audit opinion on government accounts
Context and current issues (SD & SAIs) (2)
„The Independent Oversight Role of Supreme Audit
Institutions in Implementing the Post-2015 Development
Agenda”
- the importance of “intangible infrastructure, such as
good governance and effective institutions
- collaboration among SAIs at the national, regional, and
international levels
- need for indicators for the implementation of SDGs at the
international level
- Moving towards more responsive & high quality
performance audits
They are posing new challenges for SAIs!
II. Rethinking SD – Sustainability in Complex Adaptive Systems
Some special features of the sustainability should be considered by
policy making or auditing:
1. It is about processes and the dynamic of the systems
embracing the value creation activities
2. Effective and efficient (creative, innovative) responses on
sustainability problems could emerge mainly from
bottom-up processes/dynamic with the assistance of a
strong top-down (governmental) supportive, motivating,
enabling and regulatory activities. The accountability and
scrutinity mechanisms also play a vital role. (SAIs!)
3. Sustainability on global or on macro level emerge from the
activities, engagements and cultural attitudes of agents
on micro level.
Some special features of the sustainability should be considered by
policy making or auditing:
4. This notion can be interpreted only in wider context. The
isolated/separated discussion of sustainability questions does
not produce relevant answers! Complexity and integrated
view is required.
5. „The future is born today” – we should focus on todays’
work & challenges taking into consideration of the
commonly accepted goals & visions. (e.g. UN’s SDGs)
6. Active/proactive role of agents/institutions and strong
motivations would be needed to internalize (to recognize
its importance and place it into everyone’s strategy) & to
implement sustainability strategies.
7. Creativity and innovation is vital to solve SD problems!
A possible approach
for SAIs to conduct
relevant performance
audits (PAs) regarding
sustainability issues of a
specif project,
organization or a
policy making. Audit
questions can be: (1) 3E
aspects, (2) public value
creation and its
contribution to public
welfare or SD
A possible approch
for SAIs to conduct
landscape reviews
relating sustainability
and the risks and the
emergent patterns on
every level of analysis
Lessons from the complex systems
approach/thinking
- WE HAVE TO UNDERSTAND (!):
(1) driving forces/basic rules inducing self-organization
in the system
(2) system dynamics, feed-back mechanisms,
(3)long term thinking, holistic/integrated view („big
picture”) is essential
III. A possible categorization of governance functions in the light of
complexity management and SD
Source: Own construction based partly on Uhl-Bien et. al (2007)
IV. New tasks for SAIs complementing ISSAI 5130
They have vital and crucial role in the FEEDBACK
PROCESSES by reporting their audit findings and by
producing relevant, timely, credible and objective
information to Parliaments and to wider society.
And by detecting harmful self-organizations and its
patterns on micro – and macro level (e.g. corruption, rentseeking behaviour etc.)
Conduct high quality Performance Audits dealing with
sustainability issues
Produce „landscape reviews” reflecing on the processes and
conditions of SD from the aspects of systems thinking, and
reveal all possible risks dangering the SD on state or federal
level4. We need to foster intelligent watchdog functions
of SAIs! (One possible framework was presented above)
Some Challenges ahead and some Proposals
(1) Short term interests of decision makers vs. the essential
long term dimensions of Sustainability
(2) How to create knowledge about the auditing the
sustainability issues
(3) The proposed New financial instruments/cooperations
(PPP, etc.) – avoid accountability gaps in the public finance
management system
(4) Using public value creation aspects in order to foster
synergies by their performance auditing
Thank You for your kind attention!
E-mail: [email protected]
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Transformations. In: Ambio Vol. 31., No. 5, August 2002, Royal Swedish Academy of Sciences.
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Economics for Sustainability: Insights from a series of research seminars. University of Leeds, december 2010.
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GILBERT, N. (2005): The "enabling state?" from public to private responsibility for social protection: pathways and
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Development.
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VAN DER
Useful Definitions relating my topic (1):
SLOW VARIABLES: A variable whose rate of change is slow in relation to the timescales of
ecosystem service provision and management, and is therefore often considered constant.
(Stockholm Resilience Centre, 2014)
SCALE: Extent and/or resolution of a process or analysis, or the level of organization of a
phenomenon or process, e.g. field, farm, region, country. (Stockholm Resilience Centre, 2014)
ECOSYSTEM SERVICES: The benefits that people obtain from ecosystems, including direct
products (e.g. water, crops), processes that regulate environmental conditions (e.g. floods,
climate), as well as recreational, aesthetic and spiritual benefits. (Stockholm Resilience Centre,
2014)
SYSTEM SERVICES (VALUE CREATION): All the feelings, perceptions and benefits that people (and
other living creatures (flora and fauna) or other agents: organisations, companies, civil
organisations) obtain from the „LANDSCAPE of living and value creation”, including (1)
direct products and services, (2) processes, regulations, interventions, feedback mechanisms
and audit activities which affect the conditions for value creation. (S. Nagy (2015) on the basis
of Stockholm Resilience Centre, 2014)
A RESILIENCE APPROACH to sustainability focuses on how to build capacity to deal with
unexpected change. This approach moves beyond viewing people as external drivers of
ecosystem dynamics and rather looks at how we are part of and interact with the biosphere.
(Stockholm Resilience Centre, 2014)
Useful Definitions relating my topic (2):
SUSTAINABILITY: can be defined as an emergent structure/pattern on macro-level, which
originates from value creation processes/system services and such combination of
factors/resources could develop or emerge, which on a long term could contribute to a higher
level of adaptivity (innovation/knowledge based „intelligent” adaptibility), resilience of a
given system. On the basis of sustainability processes the sustainable socio-ecological systems
can be realized. (Resilience approach of sustainability placed into the complex adaptive
systems thinking)
SUSTAINABLIE DEVELOPMENT (SD): It is such a quantitative, but mainly qualitative change
(process), which basically influenced/shaped by human planning or involvment and in the
same time it meets the criteria (the dimensions of sustainability filter) of sustainability.
Nowadays the intangible components play an important role. (S. Nagy 2015)
INTOSA WGEA (2013)