The Working Group on Public Debt (WGPD) in Brief

The Commission on Audit of the Republic of the Philippines took over as Chair of the Working Group on Public Debt (WGPD) in 2017 from the Auditoría Superior de la Federación of Mexico, chairperson of the WGPD for more than 2 decades. SAI Mexico, being the first SAI chair of this WG, is accredited for having laid the foundation of what this WG stands for today: transparency, accountability, and commitment towards ensuring proper reporting and sound public debt management.

The smooth transition process that took place between the SAIs of Mexico and the Philippines demonstrated a strong spirit of collaboration and cooperation. This process paved the way for SAI Philippines to initiate some changes in the WGPD’s organization and structure. In its first annual meeting as Chair in 2018, the WGPD presented a revised mission and vision statements, mandate, Terms of Reference, and Meeting Handbook, after securing comments and suggestions from its members.

In view of the changes introduced, the WGPD Workplan 2017-2019 was accordingly finalized after consultation with its members. It likewise developed its Workplan for 2020-2022, the key activities of which are in accordance with the key strategies provided in the WGPD’s Strategic Plan covering the period 2017-2022.

The WGPD has grown in membership: from 27 SAIs in 2017 to 37 in 2019. It has also maintained a network of experts on public debt, with total number of 74 as of 2019. Over the past 2 and a half years, the WGPD has seen a renewed spirit of cooperation and commitment among its members: its membership has grown and Project 2.9 was (details of which are discussed in the following section) completed in 2019 by dedicated Task Teams comprised of experienced auditors from 20 member-SAIs and some experts on public debt, thus producing a global product -- guidance materials known as GUID 5250.

Despite having faced several challenges along the way, the WGPD has vowed to always be ardent in its quest for new knowledge in order to make it relevant to its members and to the international audit community. This quote from the philosopher Socrates aptly describes the WGPD’s zealous desire to search for knowledge: “The only true wisdom is in knowing you know nothing.

FIPP approves GUID 5250 Endorsement Version produced by the WGPD

December 2019 marked an important date in the history of the WGPD. The FIPPapproved the endorsement version (EV) of GUID 5250 known as “Guidance on the Audit of Public Debt (GUID 5250 EV)”.

GUID 5250 was among the projects committed by the WGPD as its own contribution for the realization of INTOSAI Stategic Goal 3, Objective 1, on “Improved development, updating and adoption of audit guidance andcontributions to the INTOSAI’s Framework for Professional Pronouncements (IFPP) for the performance of independent and high-quality audits of public debt and reporting thereon.

Following the Due Process of the INTOSAI Framework of Professional Pronouncements (IFPP), the development of a GUID shall pass through four stages, namely, initial assessment and development of project proposal (Stage 1), development of exposure draft (Stage 2), development of endorsement version (Stage 3), and final endorsement (Stage 4).

The work on Project 2.9 entailed two phases: the first is the development of the guidance materials while the second focuses on the withdrawal of public debt (PD) ISSAIs. Since the approval of the WGPD’s project proposal in 2017, the task teams’ extensive process of development involved the review of eight existing ISSAIs on public debt, formulation of a framework or outline to better encapsulate the three audit streams (financial, performance, and compliance audits), comparison of activities per audit stream recognizing commonalities and distinctions, reference to latest materials and literature regarding public debt and the audit thereof, and four levels of quality review stages, within and among the Project Group, the PSC (FAAS/PAS/CAS), andthe FIPP. The materials initially produced by Project 2.9on “Consolidating and aligning the audit of public debt with ISSAI 100,” may be used by the SAIs as the primary document on, or at the least, a substantial reference in their conduct of the audit on public debt.

The GUID 5250 EV shall be presented to the Governing Board (GB) at the 74th GB Meeting, for final pronouncement, in a report by the Knowledge Sharing Committee. The WGPD Chair will supplement such report with an oral presentation before the GB and once approved, the GUIDbecomes part of the IFPP on the date it takes effect, and will be referred to as GUID.

Together with the conclusions drawn as basis for the approval and the Disposition Table, the approved Endorsement version of the GUID 5250 are available to view at www.issai.org. Currently, the Endorsement version is in the process of translation into the five INTOSAI official languages.
The WGPD has initially started to work on phase 2, with the mapping of the existing PD ISSAIs for the purpose of identifying which provisions have been covered in GUID 5250 and looking at other relevant and useful provisions that have not been covered in GUID 5250. Consequently, the WGPD shall analyse and propose the development of non-IFPP guidance documents or materials on important subjects related to those provisions not covered in the GUID 5250. Once these non-IFPP guidance documents or materials have been identified and developed, the existing PD ISSAIs shall be formally withdrawn as ISSAI documents.

WGPD keeps ties with partners and stakeholders for strong collaboration

One of the WGPD’s objective as indicated in its Work Plan 2020-2022, under Strategic Goal 1, is “wider exchange of knowledge, experience, information sharing and collaboration among the WGPD members, partners, and stakeholders.” Thus, the WGPD, represented by its Technical Working Groupand auditors from some member-SAIs participated in various information-sharing and capacity-building activities (CBA) on public debt management, through collaboration with, among others, the UNCTAD, DMFAS Advisory Group, the Philippine National Economic Development Authority (NEDA) and the World Bank. These CBAs are seen as opportunities to gain knowledge – in theory and in practice – on current public debt management guidelines and practicesfor the (a) WGPD in furtherance of its capacity-building thrust and the (b) member-SAIs in particular for their own institutions’ public debt audit activities.

Among these CBAs participated in are the following:

WB eLearning Course on Debt Management Performance Assessment (DeMPA). Through the WGPD and upon the invitation of the World Bank, WG members were encouraged to take active part in the virtual sessions facilitated by the World Bank. The virtual course, which ran from 3 February to 6 March, 2020, aimed at providing knowledge on the revised DeMPA tool, a set of indicators for comprehensively assessing debt management performance in developing countries. The eCourse focused on the scope, coverage and rationale behind the 14 DeMPA debt management performance indicators (DPIs), the inter-linkages between the indicators, and the DeMPA scoring methodology.

Twelfth Debt Management Conference of the UNCTAD and the DMFAS Advisory Group.

This is a UN-facilitated biennial forum, which tackled development and issues on debt and its management. Following the Conference and the two-day Debt Management Financial Analysis System (DMFAS) Advisory Group Meeting, the United Nations Conference on Trade and Development (UNCTAD) Secretary-General adopted the Advisory Group’s conclusions, which include recommendations from SAI Philippines, in its capacity as the WGPD Chair, on the following areas:
 Under Best Practices, the WGPD recommended to DMFAS user countries: (1) regular public debt management audits (compliance and performance) and external evaluations; and (2) work collaboratively with national SAIs; and
 Under Capacity Development: the WGPD (1) highlighted the need for DMFAS to provide debt management training for auditors. The WGPD envisions to expand its collaboration to a greater number of stakeholders and institutions to accomplish the activities set in its WorkPlan 2020-2022.

Conclusion

The Guiding Principles on Foreign Debt and Human Rights which the United Nations adopted recognizes the indispensable role of SAIs as regards public debt management. It therefore behooves the SAIs to conduct periodic public debt audits in view of transparency and accountability in the management of resources and in deciding future borrowings. As borrowings increase by leaps and bounds in most countries, a significant portion of the SAIs’ audit work has to be dedicated to public debt audit. Hence, SAI Philippines maximizes its position as Chair of the WGPD by putting priority on key activities and projects in its Workplan thatemphasizes on sound public debt management to ensure the independence and quality of public debt reports through the adoption of international standards and envisioning the improved capacity of the auditors and the SAI community in general.