Enhancing the Capacities of Audit Institutions in African Countries

1. Enhancing the Capacities of Audit Institutions in African Countries Dr. Shehu Salihu Muhammad CAFRAD, Tanger, Moroco, ssmuhammad@cafrad.org

2. Introduction • A number of interrelated issues are addressed. • Why is the work of the office of the Auditor-General important? • Challenges in the context of national and the global economic crises • How is the capacities of audit bodies to be enhanced to effectively confront crises and mitigate future occurrence? • Imperative of partnership of stakeholders in the quest for redressing Africa’s economic crises

3. Critical role in the development process • Checking excesses by determining whether expenditures of public bodies are in accord with set rules and guidelines. • ensure value for money • promote prudent use of resources, and help create thereby an efficient, dynamic and self-reliant economy • Avert crisis, promote stability • help improve citizens’ trust in, and support for government and its institutions.

4. Role of Audit cont. • Trust increases likelihood of individuals to conform to rules (Jacob and Daigneault, 2007:37-38), just as dissatisfaction can lead to disenchantment, loss of confidence, and erosion of the legitimacy. • Where principled, incorruptible and dedicated, Auditors can tell public office holders where their powers begin and end • However, where they compete with them in the diversion of public funds, they could not check any one's excesses. On the contrary, they would only remain the willing tools of public officials.

5. Context and challenges • growing public expectation to key bodies of government – efficient service in return for loyalty, taxes, and votes. • Yet, states’ ability in Africa to provide minimal conditions for development weak. • Development virtually non-existent for the bulk of the citizenry. • Corruption is deep rooted, and is the norm in many countries. • office holders seen as appropriating more than their due share of common resources

6. Context and challenges cont. Public functionaries at all levels of govt have some of the worst records of non adherence to financial guidelines in incurring expenditure. Difference among countries probably only in terms of degree of non adherence • Conflicts often occur within and between audit and related bodies. • Where there is no competitive condition of service, and work environment poor, where there is a sense of “colleagues” being unfairly treated in order to favor chosen ones, unconnected to merit and seniority, civility is eroded, and conflict, hidden or open, take center stage. • Public confidence to attend to the above seems to be waning.

7. Above compounded by the global economic crisis, under which is witnessed: • reduced in-flow of resources - both FDI and remittances; capital flight; reduced credit lines, increased unemployment; and so on. • Foregoing brings to the fore for effective institutions to help exit the crisis and lay a sound bases for sustainable development. • Capacity is one such requirement.

8. Conceptual clarification • Capacity building defined as the "process of developing and strengthening the skills, abilities, processes and resources that organizations …need to survive, adapt, and thrive in the fast-changing world." (Ann Philbin, 996). • An all-encompassing concept concerned with overall ability of an organization to perform Raises questions on • human resources development – leadership development, technical and organizational skills, and personal and professional development • Improvement of mission, strategy, program development and implimentation • resource availability and financial development

9. Conceptual clarification cont. • presence of an enabling environment with appropriate policy and legal frameworks, • strengthening of managerial systems, etc. • Is a long-term, continuing process, involvid an array of stakeholders Possession of requisite capacity is a necessity if Audit departments are meet current and future challenges. • In this paper, broad issues connected to enhancing capacity are addressed. • They range from issues connected to equipment and work processes, independence and funding of audit institutions, to need of training, legal and regulatory reforms to enable audit departments at all levels confront the challenges of development

10. Enhancing the capacity of Audit Institutions Equipment and work processes • What is the state of equipment and the work environment? • Effective and efficient performance must not be expected in the context of lack of, or shortage of performance tools – offices, furniture, ICT, computers, vehicles, etc. • Organizational development – are the management structures, processes and procedures clear, adequete? • Do the above exist in such a way as to meet challenges and expectations of the public? • Is there effective management of relationships within and between the different audit departments at all levels and the various sectors they deal with?

11. Enhancing capacity cont. Independence • Independence of the Auditor’s office must be assured. • Powers over appointment and removal from office must not be solely located in the executive. • Operational independence also key. • Yet, it is no longer news to hear of interference by especially the executive in such matter as recruitment, placement, sanctions, award of contracts and so on. • Auditor-General’s office need be in charge of recruitment, training, promotion, and discipline of its staff to enhance its independence. • Yet, if we are succeed, the auditors work must not be the interfered with

12. Enhancing capacity cont. Funding issues • the starving of audit bodies of needed resources have negative implications for gigantic tasks • Yet, effective implementation of the work of auditors requires that adequate resources are made available. • Audit shouldn’t rely on the executive for funds. • Direct funding enhances independence • Presence of mechanisms for efficient and transparent use of funds necessary

13. Enhancing capacity cont. Conditions of service • Issues of contention here are the apparent lack of appropriate work environment and poor condition of service. • The wages of an average employee of audit office can hardly guarantee the satisfaction of his/her basic needs. • Yet, he is to ‘ensure’ that all functionaries of government and MDAs comply with the relevant financial regulations. • Optimal performance must not be expected in an environment devoid of basic infrastructures and working tools. • As Maslow argued, meeting workers’ basic needs is a prerequisite for efficient performance

14. Enhancing capacity cont. Human capacity • Skilled personnel is required to to analyse development needs, design and impliment strategies and policies, deliver services, and monitor results • Human capacity is about the holistic process of equipping individuals with the understanding, skills and access to information, knowledge and training to perform effectively. • Concerns individual leadership development, technical and organizational skills, as well as personal and professional development • Entails recruitment of qualified and competent personnel. • Entails ability to attract and retain efficient personnel • Rigorous attempt to orient and prepare new staff for tasks ahead. • Training is an important part of a comprehensive human resource development.

15. Enhancing capacity cont. Training as an instrument of capacity development • Billions spent by governments and partners in the developing countries • Audit staff must be continuously trained and retrained • Necessary given the context of: 1. scarce resources, 2. growing public demand for efficiency, and 3. an environment ridden with corruption. • Serve to improve their professional calling and competence • help improve or develop new competences and efficiencies of individuals and audit bodies.

16. Enhancing capacity cont. But what kind of training? . • For training to be meaningful, it must be timely, and appropriate (based on capacity gap survey, employer driven) • Expectations from individuals to be defined, as also benchmarks. Measurement of performance at intervals after the training is completed. • Need be cost effective, and capable of producing results. A $1million program worth the cost if it results in …saving millions in previously mismanaged funds (Nelson, 2006:1). • Long-term systematic approach to training more effective than short term generic one. • Most important thing is the obtaining the desired impact. Training as a favour to ‘chosen ones’ or for its sake does no good to the system.

17. Enhancing capacity cont. Legal and regulatory changes where necessary important to enable audit departments at all levels to enhance their capacities. • Do existing regulations enable Audit bodies have access to information that will objectively enable them carry out their work? • Are sanctions provided for falsifying records, or refusal to furnish relevant information? • Is available information relevant, authoritative, accurate, and reliable? • Are they able to process and analyse such?

18. Imperatives of partnership cont. • Raising capacity is a collective task of all stakeholders – the audit departments, governments, professional bodies, Media, CSO, Development partners, etc. Each must be up and doing The public expect much from governments and its institutions, and legitimately so. • Citizens’ loyalty, taxes, votes, and other forms of support are assured if performance is effective and efficient. • Trust will further be assured if the public has access to information that will enable them hold public officials to account.

19. Imperatives of partnership cont. Political leadership and Audit reports outcome • Are appropriate actions taken in regard to auditors’ findings? • Do findings guide/shape future public policy? • No one is encouraged by non imposition of sanctions. • diminishes zeal, render auditor’s work useless • Encourage a culture of impunity. • Provide: guidance, leadership by example, competitive salaries, conducive work environment, funding, equipment, and so on.

20. Imperatives of partnership cont. Auditor-General’s office • Do staff perform their tasks professionally and efficiently, displaying such traits as personal discipline, dignity, integrity, equity, fairness, courtesy, and avoiding conflict of interest? • Are org. goals attained? Are rules, guidelines, and best practices heeded to? • Is audit report produced timely as should? • Is it disseminated widely, and on time to enable citizens to hold government to account?

21. Imperatives of partnership cont. Donor agencies to step-up • funding, • monitoring of capacity programs’ outcome Media and NGOs to emphasize: • timely release, analysis, access, publicity of audit reports. • Promote execution of appropriate actions • Raise awareness and support for independence, funding, etc.

22. Concluding remarks • Perhaps more than ever before, there is need for governments that work better, costs less and connect better with the citizens that they are designed to serve. • An enhanced audit is therefore necessary to meet this challenge. • Auditors can only meet this challenge if they perform their tasks professionally and efficiently, and with the full support of all stake-holders. • As public officers, auditors would neither be supported nor respected if they are seen to partner with corrupt elements and build empires for themselves while ignoring the basic needs of citizens.

23. Thank you for listening Dr. Shehu Salihu Muhammad Expert in Strategic Management, Reform of Public Services and State Institutions, African Training and Research Centre in Administration for Development (CAFRAD) P. O. Box 310, 9001, Tangier, Morocco Tel. +212 539 32 27 07, +212 656 05 79 93 (private) Fax (212) 539 32 57 85 E-mail: ssmuhammad@cafrad.org Web site : www.cafrad.org