PRESENTER - T. CHIKONKO Assistant Director - Copperbelt Province

1. THE ROLE OF OFFICE OF THE AUDITOR GENERAL (OAG) IN THE MANAGEMENT AND ACCOUNTABILITY OF PUBLIC RESOURCES IN ZAMBIA. PRESENTER - T. CHIKONKO Assistant Director - Copperbelt Province

2. MANAGEMENT Life is all about management. Although in the corporate world, management has several definitions, I just want to refer to two major ones: • the act of getting people together to accomplish desired goals and objectives, or • the process of getting activities completed efficiently and effectively with and through other people to gain the best return on all resources. Unfortunately, the role of OAG in management of public resources may not be very obvious. However, it comes out as an off shoot of the effect that the office has on accountability.

3. ACCOUNTABILITY • To be held accountable means that you are required, whether by law or custom to provide a statement of your actions to those with a legitimate interest. • The parliamentary system contains the BEST CHECKS to ensure that a government remains accountable in all its actions.

4. ACCOUNTABILITY CYCLE • Every year, the Minister of Finance and National Planning presents the national budget which, among many other issues, sets out the needs of government and how they would be met. • Based on the Budget, Government collects revenues, borrows funds and receives grants from cooperating partners. • The funds raised are given to Ministries, Provinces and other spending agencies (MPSA) according to the approved budget. • Ministries & Provinces have Accounting staff employed by government to carry out the Accountability duties in accordance with the Public Finance Act of 2004

5. ACCOUNTABILITY CYCLE (continued) • In a private company, Managers and Directors are required to account on their stewardship to the shareholders through the presentation of audited financial statements, • In the same way, Governments account on their stewardship to the tax payers, by providing audited financial statements. • This Government proof of accountability is achieved through the work of the Office of the Auditor General (OAG).

6. ESTABLISHMENT/MANDATE Article 121 and 122 of the constitution of Zambia establishes Office of the Auditor General – headed by the Auditor General (AG) who is appointed by the President and ratified by National Assembly. These articles: • Confer duties, responsibilities and rights of the AG, • Prescribe tenure of office of the AG, • Allows for enactment of other laws – Public Audit Act Cap 378 - empowers the AG to audit statutory bodies, departments and private entities that receive government grants. The office does not belong to any Ministry.

7. MISSION STATEMENT Office of the Auditor General exists in order to provide quality audit and related consultancy services to Government and other institutions in order to PROMOTE ACCOUNTABILITY and value for money in the MANAGEMENT of public funds and other resources for the benefit of SOCIETY.

8. GOAL/OBJECTIVE STATEMENT • The goal of the office is to increase the scope and coverage, and improve the quality of audit services in order to contribute to the ENHANCEMENT of ACCOUNTABILITY in the MANAGEMENT of public resources. • The objective of the OAG is to conduct independent, timely and cost effective audits to ENHANCE optimal collection and utilization of resources by those entrusted with the responsibility to collect or to spend.

9. TYPES OF AUDITS PERFORMED • Previously only Financial and Regularity audits were conducted. • Now other types of audits such as Forensic, Performance and Environmental Audits are carried out. However, here on the Copperbelt, I only coordinate Financial and Regularity audits.

10. AUDIT PROCESS Auditing History: Auditing comes from a Latin word called “Audire” which means to “Hear”. In the middle ages owners of property entrusted it to others to manage. Once in a while they would go & “hear” how managers of their properties had performed. However, this has evolved in modern days and is now described as “An independent examination of and expression of opinionon a set of financial statements.” Owners now appoint financial specialists to go through the records maintained by managers of property and report to them. And during each audit exercise, auditors in the OAG: • Examine records and ask questions to SATISFY THEMSELVES whether the ACCOUNTABILITY PROCESS set up within the institution is being adhered to, • Discuss their findings with the auditee throughout the period of the audit, • Brief the management staff at the end of the audit & issue an Audit Inspection Report which should be responded to within 1month. • In cases where we suspect that financial crimes have been committed, management is advised to report to relevant law enforcement agencies.

11. AUDIT PROCESS….. • At the end of 1 month, all unresolved paragraphs are compiled in a Draft Audit Reference Sheet (DARS), signed by the Director of the directorate that audited the institution. • Two weeks later if issues have not been resolved a Draft Annual Report Paragraph (DARP) is issued informing the Controlling Officer that the contents of the document will be a paragraph in the Auditor General’s Annual Report. • A DARP is signed by the Auditor General.

12. AUDIT REPORTS • Earlier on I stated that the Minister of Finance and National Planning presents the Budget to National Assembly. The constitution also requires that the Minister lays before the National Assembly, the audited Financial Report – The ACCOUNTABILITY REPORT, nine months after the end of the fiscal year. • It is the responsibility of the Auditor General to audit this Financial Report before the Minister presents it to the National Assembly. • Thereafter, the Auditor General submits her/his Annual Report, not later than 12 months after the end of the financial year, to the President who causes it to be laid before the National Assembly.

13. AUDIT REPORTS…… • Other types of reports are submitted in the same manner and are tabled in the National Assembly as soon as they are ready. • Through the Annual Audit Report the Auditor General informs the public (who are the shareholders) of the results of her/his audit on public finances. One English man said that “the Auditor General is not a BLOOD HOUND but a WATCHDOG of the public purse”. So his/her role ends in reporting to Parliament. • It is therefore important that members of the public takes keen interest in the Auditor General’s report as it tells them how tax payers’ money has been spent by those entrusted with the responsibility to do so.

14. PUBLIC ACCOUNTS COMMITTEE(PAC) The National Assembly hands over the Auditor General’s Report to PAC. • This is a general purposes committee of the National Assembly. • It consists of nine(9) members, eight(8) from the back bench and the ninth member is the honourable Minister of Finance and National Planning (Ex-Official). • Its Chair person traditionally belongs to an opposition party.

15. FUNCTIONS OF PAC To examine the accounts showing the appropriation of sums granted by the National Assembly to meet the public expenditure. To examine the reports of the Auditor General on the accounts of the Republic. To report on their findings, observations and recommendations to Parliament.

16. PAC RELATIONSHIP WITH OFFICE OF THE AUDITOR GENERAL The committee largely bases its work on the reports of the Auditor General on the accounts of ministries, departments, as well as parastatals and other institutions receiving government funds.

17. CONCLUSION The role of the OAG is to PROMOTE ACCOUNTABILITY and value for money in the MANAGEMENT of public funds and other resources for the benefit of SOCIETY. www.ago.gov.zm

18. I REST MY CASE! ANY QUESTIONS????