Thesis Proposals of the Chairwoman of the Accounts Chamber of the Russian Federation Tatiana Golikova for the speech on the topic: "Relevance and influence of the results of application of the automated system of the remote performance of external public audit on SAIs’ audit activity"
Slide . The Title
Good afternoon, thank you for the opportunity to speak in front of such a distinguished audience. The Accounts Chamber gives a high value to the automated processes for the external state audit. To enhance efficiency, we developed and implemented information-analytical system of remote external state audit (to make this presentation sound simple I will use the term "information system").
Slide 1. Remote audit and control capabilities, the necessary legal framework and conditions for it
Remote audit allows to conduct a continuous monitoring and control of organizations - objects of audit and control activities, respectively, to deliver information about their activities and promptly respond upon the occurrence of relevant events, in contrast to frequency of information obtaining provided only on the basis of control and expert-analytical activities when visiting the objects of audit and control.
When conducting the remote audit, a part of the control actions is provided automatically in the information system in contrast to manual control during the control actions when visiting the object of control.
Most of the information, which is being operated in the activity of our inspectors, is available via the information system. It became possible thanks to the deep integration of information system with external information systems, including systems of Federal bodies of State Authorities.
In terms of integration, the Accounts Chamber is provided with full access to the data of external information systems, as well as the possibility of direct transmission of these data to the information system for further processing. Integration with external information systems is directly connected with the possibilities offered by current legislation. In this sense the Federal law "On the Accounts Chamber of the Russian Federation" provides us with a broad base, which allows obtaining information about the composition and data structures of external information systems, and implementing the connection to them with the help of specialized hardware and software systems.
However, at the present moment some of the Federal bodies of State Authorities lack information systems and technologies developed at a sufficient level, which, respectively, does not allow conducting remote audit and control of their activities. One of the ways to change the situation was the legislative amendment in the terms of granting the Accounts Chamber the authority to provide Federal Executive Authorities with the recommendations concerning the composition and procedure of forming the data of Federal state information systems.
Slide 2. The purpose and the goal of creating an information system
Information system was developed and implemented for the activities on preparation and directly conducting the state audit and control activities. The information system provides the ability to the inspection staff to search for and to obtain all the necessary information on activities of control objects, including source documents, to identify automatically the violations in their activities and to use the results of the automatically generated analysis reports.
Information system allows increasing the efficiency and validity of decision-making at the stage of formation of the inspection plans and planning of activities of the Accounts Chamber as a whole.
Slide 3. Principles and approaches required to create information system
When creating the information system we applied such a principles and approaches that were most effective in carrying out the state audit and control on the basis of remote access to external information systems.
We proceeded from the following:
1) Information system uses to the full the data directly proceeded in information systems of federal state bodies (that is, using the information system, users work with data and information in the information systems of federal state bodies);
2) Under the cooperation with federal state bodies we take measures to ensure the availability of necessary data and information required by the Accounts Chamber in information systems of federal state bodies, and made sure that they implement necessary analytics required by the Accounts Chamber;
3) The Information system of the Accounts Chamber receives data from information systems of federal state bodies (that is, the data is transferred to the Chamber of Accounts) only for the following:
- automated detection of violations;
- formation of analytics that is impossible to realize in information systems of federal state bodies (e.g.: the formation of analytics is carried out on the basis of external information systems of different state bodies).
Thus, the information system is able to provide its users with all data from the information systems of federal bodies in online mode. At the same time, the Accounts Chamber when creating an information system doesn’t to bear significant budgetary expenditures and it doesn’t take much time to implement the remote audit information system technology.
And in terms of audited entities, there are no costs to be borne by the Accounts Chamber for the remote audit.
Slide 4. Main functional capabilities of information system
The basic functional capabilities of the information system are presented on the slide. I would like to draw attention to some of its functional features.
Information system has developed a search mechanism which in addition to the standard set of tools (basic search, advanced search, search by subject headings) provides the User with the ability to use algorithms of the search of violations for automated detection of violations committed in objects of control.
So, we have developed about 80 algorithms, i.e. automated types of violations, which provide invaluable help to the inspectors when inspecting the activities of control objects. Automated detection of violations is performed without any participation of the Accounts Chamber staff. For example, the use of such algorithms in the analysis of the official site of the unified information system in the procurement area allows you within minutes to compile statistics on the systematic violations of the venues for the forthcoming inspections. At the same time, the Accounts Chamber constantly conducts activities to increase the number of types of automatically detected violations
The information system also offers Users the opportunity to use the results of the analytical reports generated by the system in automatic mode. For example, the system generates analytical reports in the field of public procurement, achievement of the targets of state programs, expenditures and revenues of the Federal budget.
The information system has the capability of comparing the data contained in the various external information systems of Federal bodies of State Authorities. This is important because the detection of discrepancies or contradictions in a potentially similar data is a sign of a breach.
Slide 5. Statistics of expansion of functional capabilities of the information system
The slide shows some figures describing the current status of the information system. In just two years of system functioning (launched in May 2015) it has managed to achieve a significant increase of indicators, which determine efficiency of information system.
So, at this point of time the information system is connected to 130 external information systems; 30 federal authority bodies provide the data required for system operation.
The work to develop the effectiveness of the information system, including the expansion of its functionality is carried out on a regular basis. Currently we are working on adding to the capabilities of the information system an option of semantic text analysis in order to search for occurring violations (it is planned that the system will have this option already at the start of 2018). Automated semantic analysis of texts in search of violations has undoubtful benefits to the activities of the Accounts Chamber, as it means a substantial optimization of business processes.
For example, the use of semantic analysis of texts of government contracts and documents for work performed will allow inspectors to automatically identify the facts of nonconformity in the composition of works that were to be performed to the actual ones.
Slide 6. Users information support
Support of information system is organized in such a way as to receive effective feedback from its Users. You can see the main points on the slide.
Due to the fact that the information system has a large amount of information obtained from external information systems; the system has 4 ways of providing information support (as shown on this slide), so the inspectors of the Accounts Chamber could use the information effectively.
Slide 7. Statistics on work results of the Accounts Chamber in 2016
The slide shows the key indicators that the Accounts Chamber has reached following the results of activity in 2016. Please pay special attention to the number of identified by us violations. So, from 4,000 violations identified by the Chamber of Accounts during inspections, 600 of them were revealed automatically using the information system and in other words were revealed through the external information system, with the help of above mentioned algorithms. The indicator shows how truly significant the contribution of the information system is to the operational activities of the Accounts Chamber.
Slide 8. Automated detection of violations
This slide provides a real example of the violation of state contract date taken from the information system and detected by the Automated Deviation Detection System during the public procurement. The system is able to provide the User with all necessary information, including electronic documents.
If we need to conduct a report based on the activities of the various Federal authorities it shall be realized through the information system by transmitting and processing information from their respective information systems.
Slide 9. Analytical reports construction
The information system, as I mentioned earlier, has a well-developed analytical component, allowing inspectors to significantly save time and rationally plan their work. I would like to draw your attention to the following aspect: The information system using analytical component generates its own interim database with all required information.
The information systems of the audited entities contain a large amount of data to which the Accounts Chamber has full access. However, sometimes for the proficient work such a comprehensive data is not required. Therefore, that interim database formed by our system can easily change configuration and adapt to current needs. This slide shows an example of a formed database with all necessary information (particularly interesting information from two sources, from the Federal Tax Service server and the Unified Budget System Portal server, which is used in the analytic report generated by the information system and saved on the server of the Accounts Chamber).
Slide 10. Process optimization for querying, receiving, and storing data
The slide shows an example of how to form analysis reports based on the data provided by the official website of the Unified Information System in the procurement area. The information system selects only data needed for the reports. The rest of the data shall be saved on the source server of the relevant public authority.
Slide 11. Storage, search and access to reports and documents
The information system also allows storage, search and display of documentation necessary for inspections. Using the system, our inspectors can find any particular document by selecting specific options in the filter for this document.
The information system provides access to tens of thousands of documents. The user sets the necessary parameters on the basis of which he is provided with the necessary documents (an example is shown on the slide). The main parameters for selecting the required documents are the following:
- the organization that formed the document;
- the organization about which information is presented in the document;
- the subject to which the document relates;
- type of document, reporting;
- level and name of the budget;
- the reporting period.
Thus, the inspector might not even know where exactly the information is saved in the external information system, but he will find and get access to it by selecting required filter options.
Slide 12. Search and access to primary data (documents)
As was mentioned earlier, through the information system the Inspectors are able to work directly with primary data from the information systems of federal state bodies. For example, users work with paysheet documents, formed during the execution of the federal budget, accounts for the supply of goods, works and services.
In other words, the information system eliminates the need for the inspectors to waste their time on sending requests for primary data from the audited entities.
Slide 13. Process optimization for querying, receiving, and storing data
Among other things, the information system addresses the challenges of optimizing the process of querying, receiving, and storing the data.
Taking into account the fact, that the Accounts Chamber now uses that information system, having full access to electronic documents posted in the information systems of federal state bodies, the process of filling out requests for information by the inspectors has become obsolete.
In doing so, it is invaluable for the Accounts Chamber to receive electronic information on the Internal Financial Audit conducted by the federal state bodies. The Internal Financial Audit report is automatically compared to the external state control indicators of the Accounts Chamber and is further analyzed and assessed in order to determine and implement subsequent remedial measures by the public authorities for improvement.
Slide 14. Algorithm of audit with the Information system
As I said before, we are looking for the ways to improve the information system on an ongoing basis. And one of the ways to modernize the system is to automatize the standards of State Auditing and Control activities adopted by the Accounts Chamber.
Since 2018, it is planned to implement the actions established by the standards of state audit and control, with the use of an information system and data processing of information systems of federal public authorities.
Slide 15. Risk-based approach to the activities with the IAS of RESA.
The information system gives the opportunity to apply a risk-oriented approach to audit activities. In other words, receiving information on certain parameters of the audited entity, the inspectors might in a more substantiated way decide on the definition of the item and the object of control.
Those parameters are the following: : (1) The number of violations by the audited entity over past periods; (2) The amount of funds allocated to the audited entity in the current period; (3) The number of violations in the area of activity during past periods; (4) The amount of funds allocated to the area of activity in the current period; (5) The number of violations detected automatically.
Slide. Thank you for your attention!
In conclusion, I would like to point out that we are focusing on the wider distribution of best audit practices, including optimal approaches to automated work processes for the external public audit body. We have formulated draft proposals for the development of international standards of remote audit and control with application of IT-technologies. The proposals were based on the analysis of our experience in development, implementation and maintenance of the Accounts Chamber Information System. The proposals were sent to the International Organization of Supreme Audit Institutions (INTOSAI), and I hope that our colleagues will find them useful.
Thank you for your attention!