Somalilandsun- What are the problems of Somaliland’s national audit office and their possible solutions?
Below is a piece by Mohammed Dahir Ahmed detailing the difficulties prevalent at the Somaliland Auditor General Office and route towards rectification
Somaliland people did a fantastic job in their efforts of maintaining peace and tranquility and holding democratic elections, which is being acknowledged regionally, and globally as beacon of stability in the troubled horn of Africa and Africa’s best-kept secret.
However, democracy does not equal to elections but it encompasses free and fair elections, holding up the rule of law, free press, protection of human rights, and the provision of financial accountability. I agree “Rome was not built on one day” and the achievement of the above-mentioned benchmarks will be on gradual bass. Nevertheless, it is apparent that our elected Parliament and society did not give the same weight of importance to financial accountability of the executive branch of the government as they gave to the press, elections, and human rights protection.
Financial accountability is holding into account the executive branch of the government into how they manage the public money by the parliament through the opinions, reports and advice given by the country’s auditor general. Then it is very obvious that the role of the auditor general’s office is very essential in ensuring that the public money is spent as intended, not siphoned of, spent prudently, and is been obtained value for money.
On of the most important roles of the Parliament is to hold the government to account for its use of taxpayer’s money. To do this effectively, parliament need objective and fact based information about how well the government raises and spends public money. Independent and forthright reports tabled in Parliament by the Auditor General assist Parliamentarians and the public to have a better understanding of the performance of public sector agencies.
It is a fact supported by renown institutions such as the World Bank and Organization for Economic Development and Cooperation (OECD) that a country’s effective and efficient management of its resources and the adaptation of sound principles of corporate governance is a pre_ requisite for a country’s economic development as well as the attraction of foreign direct investment (FDI) and bilateral and multilateral development projects. Countries with reliable and robust auditing and monitoring systems are therefore better placed to attract investments vis-à-vis those that do not.
The Role of The Auditor General
International Organisation of Supreme Audit Institutions (INTOSAI ) has categorized the functions of the auditor general as follows:
1.Conducting both regularity and performance audit.
The regularity audit, which is expressing an opinion on the presentation of the financial statement in accordance with accepted accounting principles includes:
? Attestation of financial accounts of accountable entities, involving examination and evaluation of financial records and expression of opinions on the financial statements.
? Attestation of financial of the government administration as a whole.
? Audit of financial systems, transactions including, and evaluation of compliance with applicable statutes and regulations.
? Audit of internal control and internal audit functions.
? Audit of the probity and propriety of administrative decisions within the audited entity and
? Reporting of any other matters arising from or relating to the audit that the auditor general should be disclosed.
The Performance audit is concerned with the audit of economy, efficiency, and effectiveness and includes:
? Audit of the efficient utilization of human, financial and other resources including examination of information systems, performance measures and management arrangements and procedures followed by audited entities for remedying identified deficiencies and
? Audit of the effectiveness of the performance in relation to the achievement of the objectives the audited entity and audit of the actual impact of activities compared with the intended impact.
2. Audit every year the statement of account (which may include both financial and performance information) of each public sector entity, and to issue an audit report on those statements.
3. To make at least one report to parliament each year on any matters arising from the auditor-Generals powers, duties and functions.
4. To make advice on issues related to good governance,accountability,ethical practices,anti-corruption programs, effective risk assessment and management, internal controls, sound budgetary processes, IT information technology systems development and operation, project management, program evaluation and other areas affecting the effectiveness, efficient and economy of operations. In addition, government auditor may provide such services as control and risk assessment workshops, training in areas such as fraud awareness, performance measurement, control design, or provide advice on audit implementation.
The institution, which has that importance mentioned above regrettably exists in word only in Somaliland and does merely any of the above functions.
Problems of The National Audit Office
The problems crippled this institution cannot be counted in numbers but the most important of those problems includes among others:
1. Lack of Independence.
The appointment and dismissal of the auditor general should not be in the hands of those they are auditing (The executive branch of the government) otherwise they cannot inspect, examine and report something which their ultimate boss is not happy with. This problem currently prevails in Somaliland. Independence is the cornerstone of public sector audit, and therefore to properly discharge his responsibilities the Auditor General must be free from pressure, influence, or interference from any source that may erode that independence. The ambiguous relationship between the auditor general and the executive branch of the government further exacerbates the lack of independence of the auditor general since the executive government is a client of the auditor general but also determines funding levels. Audit offices confront difficult in their quest for independence when they remain part of the civil service
2. Lack of Competent Personnel
As it happens most of the time this position is appointed for individuals whom lacks the necessary education and experience, which further exacerbates the problem.
Junior staff does not receive regular workshops and trainings, which does not seem in the eyes of their boss something of such importance.
3. Lack of Organizational Hierarchy
Staff seniority, which is very essential as far as staff supervision and review is concerned, is lacking. This results lack of reliability of the audit carried out by regional staff or staff dispatched for regular audit undertakings.
4. Lack of Sufficient Resources.
As it was expected, this office was supposed to have sufficient budget to carry out its operations suffiently. The fact of the matter is that the government attaches little importance as far as this office’s operations is concerned as a result it receives insufficient budget from the government. This has resulted that staff does not have the necessary vehicles, computers and the office space. It is very unfortunate that the Ministry of Houses of Parliament, which is still unknown what it does as far as the national interest of the country is concerned, receives incomparable attention and support.
5. Lack of Public Awareness of the Importance of the National Audit Office
Although our people call this office “Hantidhawraha Guud” which literally means “General Protector of Resources” which is a good name in my opinion. The public does not understand what its functions,responsibilities,Powers and Importance is which has resulted the little attention it receives from the media,public,politicians and the parliamentarians visa-visa other institutions such as the electoral commission. However this is a very important institution as a vehicle for fighting corruption,advising government and Parliament in the soundness of policies and proceduries adopted by government agencies. As we are all aware of, the currently elected parliament had a serious difficulties in understanding, relying on, comparing the government prepared annual accounts. The main cause of this difficulties was the fact that the annual government accounts were not audited or audited by unreliable and unindependent audit which has resulted that the Parliament Economic affairs Select Committee conducts their own audit and verification which consumed from them sterling time to analyse and question the government finance minister any concerns which they had. In order this committee works fruitfully it is paramount that we have a functioning, independent,reliable and trustworthy auditor general which its advice
is beyond doubt.
6. Scope Limitation
The auditor general does not have access to all agencies and departments of the government such as the port and customs of Berbara, the records of staff at the Ministry of defence, tax and revenue receipts from Total, hard currency transfers from the central bank, registary of government fixed assets and properties, records of individual business persons granted tax exemptions or concessions. This is only the tip of the iceberg but the areas, which the scope of limitation extends to is countless.
8. Incapable Government Chief Accountant
The government’s chief accountant’s incapacity to record transactions, classify, summarize, consolidate properly and accurately, and present on time for audit further exacerbates the difficulties, which the auditor general faces in his job. The problems of the chief accountant’s office are too many but few of those are lack of sufficient funding and properly trained staff, lack of computerized database, and lack of compliance with acceptable accounting and finance standards.
1. Civil society organizations (CSO) especially the print and electronic media can bring reports of auditor general closer to the people and therefore have a key role in raising the profile of audit offices in the quest for good governance
The different media oultlets can play a lion share in promoting the public’s awareness as far as the importance, powers, responsibilities, are concerned.
2. Staff at office of the auditor general should be trainined using different mechanisms such as workshops, seminars, virual web training (Somaliland intellectuals may help), exchange visits in other countries (UNDP may facilitate as it does for lawyers).
3. Government should allocate enough budgets to this office. When the parliament is in the process of budget approval, they should demand from the government to allocate fair budget to this office.
4. The person who should hold this office should be in a good standing as far as his behaviour is concerned. In addition he should have the necessary qualification and experience in order to perform his job effectively and efficiently.
5. The office should seek membership in regional, contentinatal, and global government organizations such as the International Organisation of Supreme Audit Institutions (INTOSAI).
6. Parliament should pass the “Audit Services Act” which will shed light on the powers, roles, responsibilities, and functions of the auditor general’ office.
7. The Constititution says only the president may dismiss the auditor general. Parliament should clarify the circumstances on which the president can dismiss on, which can be legally if the auditor general either becomes incapable mentally or physically or misbehaves.
8. The integrity of the audit offices should be upgraded by enhancing its moral authority and its credibility in the eyes of the public.
9. The credibility of the audit offices would be significantly enhanced if public officers exposed for wrongdoing in its report is appropriately sanctioned.
10. Audit office need to be supported by effective parliament committee to ensure
That government take such report seriously and thus check corruption and impunity.
11. Audit report should be broadcasted in the electronic and print media then culprits can be “named” and “shamed” serving as warning against impunity for those in public office.
12. Information and communication technology (ICT) should be used to ensure efficiency, speed, and reliability in the audit output.
13. Introduction of local Area Network (LAN) in the longe run can facilitate the exchange of information amongst the central offices and its branches at regional and sub-national levels.
14. Introduction of the integrated financial management system (IFM) software is a step in rationalizing the management of financial data to enable the easy trace of financial information.
16. Independence of this office should be upgraded in areas of recruitment of staff, budgeting autonomy, as well as ensuring attractive conditions of service for personnel who work in the audit office.
17. The capacity of the Parliament Committee, which works with the national audit office, should be enhanced by sharing experiencing with other nation’s parliamentary committee as well as training members of this committee and engaging with local and external Somaliland professionals.
18. In conclusion, independence of the audit office should be safe guarded every day and all the time.
WRITTEN BY MOHAMMED DAHIR AHMED IN 2008, SOMALILAND TIMES