DEVELOPING CAPACITY OF NATIONAL AUDIT INSTITUTIONS:

OPPORTUNITIES AND CHALLENGESFinancial Management Africa Region (AFTFM)

May 3, 2006

Introduction: SAIs in the Africa Region

• Three different traditions and approaches of Government Audit– Francophone countries– Anglophone countries– Lusophone countries

• Uneven capacity

Existing initiatives in the Africa Region

• Joint WB-AfDB SAI strategy

• Capacity building programs

• Africa Action Plan

• PFM Capacity Building Strategy

• Country FM Plan

SAI Strategy

• Joint strategy with AfDB

• The Strategy focuses on:– Strengthening the capacity of:

• Regional organizations

• Individual SAIs

– The roles of WB and AfDB in the capacity strengthening activities.

Capacity building programs

• Funding through investment lending– CAPACITY BUILDING PROJECTS:

• Malawi: Specific Investment Credit to strengthen institutions for budget implementation and oversight

• Tanzania Accountability, Transparency and Integrity project• Nigeria: Economic Reform & Governance Project

• Funding through IDF GRANT – Support to SAIs in Burkina Faso/Cape Verde/Guinea/Senegal

• TWINNING ARRANGEMENTS : Guinea/France• INDIVIDUAL COUNTRY DIALOGUE• PEFA Workshops – events that focus on external audits

Africa Action Plan

• The AAP includes an initiative on strengthening PFM in 20 countries

• A main component of the PFM is External Audit.

PFM Capacity Building Strategy

• Still at the draft stage

• Being developed in collaboration with internal and external partners

• A major focus area is external audit

Country FM Plan

• CFMP in place for each active borrowing countries

• CFMP for each country discusses the approach to strengthening SAI capacity

Remaining Challenges• Political will to reform SAI and strenthen their

capacity• Inadequate financial and human resources• Weak link between SAIs and Parliament• Creating of more auditing bodies and weakening

existing ones vs. reinforcing existing SAI• Weaknesses in the broader PFM context in which

SAI operates (Accounting, internal controls, IFMIS, etc.), e.g. the quality of audit is affected by the quality of the financial information

Remaining Challenges (contd)

• Balance between regularity audit vs. performance audit

• Limited use of risk-based approach

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