The Good Financial Governance in Africa programme promotes transparency and accountability in public financial management and is implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) and the European Union (EU). Its objective is to foster Good Financial Governance in Africa, more specifically to equip decision-makers in African public finance to use region-specific services, products and further education to improve financial governance.
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Daniel Domelevo is a busy man. The former World Bank expert has only recently taken up the job as Ghana’s new Auditor-General with the objective to make a difference. The context is favourable: the country’s new government made the fight against corruption a priority and is emphasising on the importance of achieving the Sustainable Development Goals. He knows that this is his opportunity to position the Supreme Audit Institution (SAI) as a change actor. A change actor delivering for the Ghanaian people.
Together with other members of the African Organisation of English-speaking Supreme Audit Institutions and GIZ’s Good Financial Governance in Africa Programme, Mr Domelevo has prioritised the auditing of Public Financial Management (PFM) systems, as a way to achieve the Sustainable Development Goals. “Every PFM system aims at ensuring public resources are strategically allocated, at ensuring fiscal discipline and public service delivery. Yet, until now we have not looked holistically at whether current public financial management practices allow us to achieve these objectives” he explains during the opening speech attended by about 40 committed senior officials from his office.
Edmond Shoko from AFROSAI-E highlights the ground-breaking nature of the tool, which would allow Supreme Audit Institutions to enhance their contribution towards better service delivery “Public Financial Management matters for achieving the Sustainable Development Goals. Achieving the SDGs requires that funds are allocated according to the National Development Plans, and that these allocated funds are efficiently spent. It requires compliance with public financial management legislation, and good coordination between the different stakeholders in the PFM chain. This effective coordination is however rarely in the focus of auditors, as they tend to audit entities separately.” PFM systems are made of a multitude of processes. Current audit reports often identify weaknesses in individual processes, without however giving an understanding of how these processes are inter-dependent. The objective of the new tool developed jointly by the Good Financial Governance in Africa Programme and AFROSAI-E is to allow auditors to get to the root cause of problems and to engage with auditees on their weaknesses and developmental areas. The results of the tools will also allow policy makers to understand which problems occur where and which ones need to be urgently addressed.
Auditing Public Financial Management Systems holistically has become a priority for AFROSAI-E and GIZ, who in October 2017 brought experts together in Pretoria to devise a tool that would facilitate the auditing of the overall systems. It aims at making audits more impactful, by identifying risk areas. It also aims at making sure that the information gathered by auditors is communicated in a way that allows policy-makers to quickly grasp which weaknesses need to be addressed. In addition to SAI Ghana, the Supreme Audit Institutions of Mozambique, Kenya, Zimbabwe and Uganda have been instrumental in developing a first prototype tool. Three experts from that group have joined the mission in Accra to share their experience: Nancy Gathungu and Domenic Kamenyi from SAI Kenya, as well as Rodrigues Machelene from SAI Mozambique.
The tool assesses two types of entities: on the one hand core PFM entities, such as the Finance Ministry, the Revenue authority and Parliament. They are considered core entities because they are fundamental to organise and shape public finances. Their decisions have an impact on how the spending Ministries, Departments and Agencies (MDAs), function. The MDAs operate within the framework of laws and budgets adopted by Parliament, follow instructions from Finance Ministry, and receive revenue from the Revenue authority. The tool allows to assess and compare the effectiveness of public financial management processes in each entity and to understand how processes in one entity influence results in another one. For example, if funds are released late at the level of the Finance Ministry, this can have an impact on the ability of the Ministry of Education to purchase school books and jeopardise the timely start of the school year. Not looking holistically at all stakeholders of public finances only gives a partial understanding of the problem, and sometimes does not allow for understanding the root causes.
The results of the piloting in Ghana will allow to further refine the tool and make it more user-friendly. When Mr Domelevo leaves the Workshop to head to his next meeting, the auditors start their work scrolling through excel files. For many the numerous questions are confusing, as they have never looked at public finances from a holistic perspective. However, with the help of Edmond Shoko and his colleagues, they quickly realise that it’s not necessarily about collecting more information, but about identifying the relevant information in existing reports. Vibrant discussions erupt, as the auditors sit in groups to assess their respective MDAs, realising that they in fact know much more than they thought, “That’s exactly what we want – we want them to look at their work with different eyes. We want to change the status quo” says Edmond Shoko, while looking at his busy agenda. After the second Workshop in Mozambique in April, he’ll travel to Kenya in July.