Reality check: External Auditing
Supreme Audit Institutions (SAIs) assess how governments manage their financial resources. Does government follow the relevant rules? Do investments provide “value for money”? Could schools, hospitals and other public services be financed as planned, and has the quality of delivered services improved? By auditing public spending, SAIs promote the accountability, effectiveness and transparency of public administration and contribute to the achievement of the Sustainable Development Goals (SDGs).
Serious challenges for auditors
SAIs often lack independence from the executive and have to work with constrained financial and human resources. The important role of these institutions is not always publicly recognised, and there is a lack of follow-up action on their recommendations.
Building up combined strength: Supporting AFROSAI, its members and its organs
The main partner of GIZ’s Good Financial Governance (GFG) in Africa programme in the area of External Auditing is the African Organisation of Supreme Audit Institutions (AFROSAI), an Africa-wide network aimed at promoting the exchange of ideas and experiences among member SAIs. The programme supports AFROSAI and its subgroups for English- and French-speaking countries, its technical committees on Capacity Building, Human Resources, Finance and Audit, and its working groups on Extractive Industries, IT Audit, and Environmental Audit by providing strategic, technical and organisational expertise and advisory services.
The AFROSAI General Secretariat, based in Yaoundé, Cameroon, has been assisted by GIZ in all aspects of its organisational development since 2014. The successful coordination of AFROSAI’s organs is key in achieving the priorities the organisation has set in its Strategic Plan 2015‒2020, developed with the support of the programme:
- Capacity building of members
- Knowledge management and sharing
- AFROSAI, model organisation
The GFG in Africa programme supports AFROSAI in all three strategic priorities. It also interacts with AFROSAI organs to strengthen the effectiveness of the network as a whole.
An outstanding feature of the Strategic Plan is the explicit focus on gender equity as a topic to be dealt with in capacity building. AFROSAI has developed a Gender Strategy focusing on supporting women to rise to decision-making positions, the establishment of gender mainstreaming in SAIs, and gender as a topic or criterion in audits. The Women Leadership Academy (WLA), developed by AFROSAI and GIZ, has a unique human capacity development format that aims at strengthening women in their leadership skills, strategic thinking, and project and change management. During the course of the 2016 pilot edition the participants implemented a strategic reform project in each of their SAIs to address a relevant challenge. At the end of 2016, the implementation of the respective projects was evaluated. Participants delivered a presentation and answered questions posed by a jury. For further information on AFROSAI, please visit www.afrosai.org.
Filling the toolbox: Useful products for members
The subgroup of AFROSAI for English-speaking countries (AFROSAI-E) was supported in developing a toolkit for collaboration between SAIs and the parliamentary Public Accounts Committees (PACs). The toolkit contains practical information and guidance on how to improve this relationship, which is crucial to ensure that the recommendations of the audit reports are made known and implemented. Through technical cooperation, the programme supports the organisation in planning and implementing training events and workshops for the rollout of the toolkit and country-specific action plans to address individual SAIs’ challenges.
The SAI-PAC tool is being translated into an e-learning module. This will make it easier for new countries to join the process and for already participating ones to broaden and consolidate its effects. SAIs from seven countries (Botswana, Ghana, Nigeria, Rwanda, South Africa, Sierra Leone and Tanzania) have each selected one major metropolitan area and are receiving guidance on how to conduct audits via distance mentoring and e-learning. The audits started in June 2016.
Furthermore, the GFG in Africa programme and AFROSAI-E are preparing a new campaign focusing on SAIs’ public communication with media and citizens. Increasing public attention and participation can help to enhance the relevance and impact of the SAIs’ work. As SAIs face very different environments, the project will not deliver a handbook, but rather a guided process for these institutions to develop a communication roadmap according to their individual needs. For further information on AFROSAI-E, please visit www.afrosai-e.org.za
Learning by doing: Joint environmental audit on Lake Chad
The programme has provided support to the landmark process of a joint environmental audit on the drying up of Lake Chad. This audit was executed by the SAIs of the bordering countries ‒ Chad, Cameroon, Niger and Nigeria ‒ under the guidance of AFROSAI. The results, published in a Joint Environmental Audit Report, including a set of practical recommendations for policy-makers, were submitted to the Chadian and the Nigerian presidents, as well as to the Lake Chad Basin Commission. This is the first joint environmental audit in the region – an example of how SAIs can contribute to better management of global public goods.
Building on the experience of the Lake Chad audit, AFROSAI’s Working Group on Environmental Auditing (WGEA) is planning to implement several other cooperative audits on major environmental challenges.
In 2015 and 2016, Illicit Financial Flows (IFFs) from Africa have been a major emerging issue for AFROSAI, which has been defining the roles that SAIs could play in combatting such outflows. With the support of the programme, AFROSAI is currently designing a coordinated audit on corruption as a driver of IFFs, making the network visible as a topic driver in international debates concerning the entire continent.
Building capacity: Advisory services and study tours
International conferences and study tours are part of the capacity-building activities within the area of External Auditing. The programme supported AFROSAI in advising the president of the SAI of Burkina Faso on ways to strengthen the institute’s independence and extend its mandate.
Auditing for sustainable development
Implementing the United Nation’s Agenda 2030 and achieving the Sustainable Development Goals (SDGs) is at the core of Germany’s and the European Union’s development cooperation. In order to support the implementation of the SDGs in Africa, the Good Financial Governance (GFG) in Africa programme supports the African Organisation of Supreme Audit Institutions (AFROSAI) in ensuring that supreme audit institutions (SAIs) on the continent develop the necessary capacities to contribute to the SDGs.
What can SAIs do to contribute to the SDGs?
SAIs have considerable potential to make an important contribution to the implementation of the SDGs. They are key players when it comes to controlling the efficient and effective use of public funds. Particularly in Sub Saharan Africa the performance of government and administration is often insufficient, hampering the delivery of badly needed public services such as health or education. The potential of African SAIs to improve the performance of the public sector through audits and evaluations was however not fully exploited in the context of the Millennium Development Goals (MDGs).
In 2016 SAIs from across Africa started reflecting on their responsibility to contribute to the SDGs. In their discussions they emphasised that in order to remain relevant in the future, they needed to focus on improving public financial management systems so that funds can efficiently and effectively be used towards reaching the SDGs. SAIs can contribute to the SDGs in different ways 1) by assessing the preparedness and readiness of government systems to implement the SDGs 2) by controlling the performance of key government programmes that contribute to the SDGs 3) by contributing to SDG 16 (Goal 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels) and assessing the effectiveness of their public financial management systems 4) by reporting on their own performance.
The GFG in Africa programme supports pilot activities in the following areas:
- Promote awareness of the SDGs and the potential role of SAIs
- Develop a reporting framework to assess the effectiveness of public financial management
- Promote professionalisation of public sector accountants and auditors in order to enhance transparency and effectiveness of public institutions in line with SDG 16
- Support audits of the sustainable management of global environmental assets
An example of an environmental audit is the panned cooperative audit of the Congo Forest Basin.
The Supreme Audit Institutions of Cameroon, the Central African Republic, Chad and the Democratic Republic of Congo sign a memorandum of understanding on the cooperative audit of the Congo Basin Forest. (Photo © AFROSAI)
In February 2017 the SAIs of Cameroon, the Central African Republic and the Democratic Republic of Congo signed a memorandum of understanding in Yaoundé, Cameroon in which they agree to undertake a major coordinated audit on the sustainable management of the Congo Basin Forest. The Republic of Chad signed the agreement, as an associate member, and the Republics of Congo and Gabon are also expected to participate. The project was launched jointly, because in addition to the national forest management frameworks existing in each country, there is a sub-regional governance framework with a dedicated organisation, the Central African Forests Commission (COMIFAC).
The objective of the SAIs is to verify whether systems are effectively put in place to allow for sustainable forest management. For this, the auditors will receive support from experienced environmental auditors and scientific experts that will help them to identify and understand the main threats to the forest, as well as assist in assessing the data they collect. During the course of the project, the auditors will meet on several occasions to discuss the shared methodology and receive training in performance auditing in order to ensure the project meets the international standards of the profession. This project is in line with the ambition of the Agenda 2030 to promote international cooperation for the preservation of global public goods. The Congo forest audit is a case in point: it focuses on the management of an ecosystem that allows tens of millions of people to survive. Beyond that, it is potentially the climate of the whole planet that can be affected by the uncontrolled exploitation of the Congo Basin Forest.
This short documentary portrays examples in South Africa and Sierra Leone that show how auditors, through innovation, can contribute to improving environmental management at local level.