Transversal. Activity Report. Presented at the AFROSAI-E Governing Board meeting in Cape Town, May 2015

Transcription

1 Transversal 2014 Activity Report Presented at the AFROSAI-E Governing Board meeting in Cape Town, May 2015

2 2 Transversal Activity Report 2014 Contents FOREWORD... 4 EXECUTIVE SUMMARY... 5 CHAPTER INTRODUCTION... 8 INSTITUTIONAL CAPACITY BUILDING FRAMEWORK (ICBF)... 9 The new SAI-Performance Measurement Framework (SAI-PMF) AFROSAI-E DEVELOPMENT TOOLS CHAPTER METHODOLOGY CHAPTER SAIS ASSESSMENT AGAINST THE FIVE DOMAINS IN ICBF Averages for the domains within ICBF Performance on domains from 2010 to CHAPTER SAIS ASSESSMENT AGAINST THE STRATEGIC IMPERATIVES CHAPTER Strategic imperatives related to the five domains in ICBF Performance along six strategic imperatives: Independence of SAIs Human Resources Quality Assurance Performance Audit Use of IT in Audit Communication GENERAL PERFORMANCE OF THE SAIs New focus areas Timeliness and audit coverage Size and composition of audit staff Financial Resourcing of SAIs CONCLUSIONS Progress seen in the strategic areas for

3 FOREWORD 3 APPENDICES Appendix 1: AFROSAI-E INSTITUTIONAL CAPACITY BUILDING FRAMEWORK (ICBF): A GENERIC FORMAT OF THE INSTITUTIONAL PERSPECTIVE Appendix 2: Country Level Presentations Angola Botswana Eritrea Ethiopia Ghana Kenya Lesotho Liberia Malawi Mauritius Mozambique Namibia Nigeria Rwanda Seychelles Sierra Leone South Africa South Sudan Sudan Swaziland Tanzania Uganda Zambia Zimbabwe Appendix 3: Quality Assurance Questions average for all countries per question Appendix 4: Quality assurance questions compared to quality assurance visits Appendix 5: Number of auditors in the region... 68

4 4 Transversal Activity Report 2014 FOREWORD AFROSAI-E plays a facilitative role in empowering member Supreme Audit Institutions (SAIs) to optimize their audit performance through sharing information and supporting them toward better performance in executing their mandates. The desire is to make a difference in the performance of SAIs through supporting them in their capacity building interventions. During the 2006 Governing Board meeting the Auditors General adopted the Institutional Capacity Building Framework (ICBF) as a self-assessment guidance tool to member SAIs as well as a benchmark for regional development that would assist the member SAIs to reach the level of audit performance necessary to fulfill their mandates. The ICBF is used by the SAIs to report on own performance. It also provides the opportunity to consolidate the performance of member SAIs on a regional level. The ambition to improve and consolidate the performance of the SAIs is reflected in the targets set for the strategic imperatives in the AFROSAI-E Corporate Plan for 2010 to These targets are continually reviewed based on the results from the Transversal Activity Reports. However, the goal is that as many SAIs as possible will reach level 3 and above of the ICBF. The ICBF is now a well-accepted and understood tool in the region. Its adoption by the AFROSAI-E Auditors General has stimulated a spirit of constructive competition amongst the SAIs with a positive impact on the development activities in the region. Whilst the challenges are ambitious it is certainly within the capability of all SAIs to continue improving their performance and thus facilitate public service accountability throughout the region. The progress made by SAIs is visible and will eventually demonstrate the impact of their work in the years ahead by means of improved accountability, transparency and governance in the region s public sector. It is with great joy and pride that the six strategic imperative set at the beginning of the strategic period have been achieved satisfactorily. However, there are still development gaps that we believe will be addressed in the next strategic period of For the first time in the history of the Transversal Activity Report this year s report was prepared by a team of two resource persons, Dr Wilfred Marube of SAI Kenya and Mr Lawrence Z.E. Chinkhunda from SAI Malawi and Mr Gorden Amon Kandoro, the AFROSAI-E Senior Manager responsible for institutional strengthening and capacity building who was the team leader. This Transversal Activity Report was presented at the AFROSAI-E governing board meeting in Cape Town, South Africa in May Time was given for comments from the SAIs until the end of June Wessel Pretorius Chief Executive Officer AFROSAI-E Secretariat

5 EXECUTIVE SUMMARY 5 EXECUTIVE SUMMARY This transversal activity report for 2014 is compiled from the self-assessments by 23 out of the 25 member-sais in the AFROSAI-E region. Both the surveys questionnaire and this activity report is premised on the Institutional Capacity Building Framework (ICBF) with focus on the strategic imperatives that agree upon by the Governing Board. The response rate for 2014 was 92% meaning that 23 out of the 25 member countries responded to the survey. The results presented in this report are primarily based on the responses provided by the 23 member SAIs. However, the results are moderated by quality assurance support visit reviews by the Secretariat to eleven member SAIs, as well as the 2014 AFROSAI-E Integrated Annual Report. This year is the last of AFROSAI-E s five-year contemporary strategic plan ending December Based on the achievement of 2.5 level and above of the ICBF, it is concluded that most the targeted development targets set in 2009 have been achieved. The critical step needed is the establishment of mechanisms to maintain and ensure continuous achievement of higher levels of development in the next strategic cycle to enable the region to achieve the overall target. Although remarkable progress has been made the overall objective position of 70% of the member- SAIs achieving level three and above of the ICBF has not been achieved. There are still weak areas that require further developments. For example, the alignment of the strategic and operational/business planning level and the ability of SAIs to clearly link operations to their strategic plans still require attention. However, in our view this observation raises several questions because there are different dimensions and reasons that can be used to explain the differences. For instance, in the domain of independence and the legal framework of SAIs the weak link has been observed to be in the slow progress in operationalizing SAIs legal frameworks that include among others the setting up of robust follow-up of audit recommendations mechanisms and annual reporting on SAIs performance in the public arena. The improvements observed in this report also highlighted a further need to develop communication strategies; strategies for planning and managing financial and human resources; the development of quality assurance strategies; the continued development of performance audit; and developing processes to enhance timeliness in reporting. Although the human resource imperative ratings have improved compared with the previous period, the report observes that the human resource division/unit as a strategic partner and facilitator of the SAI s development requires further alignment with other SAI functions. For example, on operational levels these weaknesses are observed in the lack of effective appraisal systems, ineffective deployment and use of time recording systems as tools for performance management.

6 6 Transversal Activity Report 2014 Another weak link was on whether or not there is specific management and leadership development programmes in place that encourage the professionalization of the various SAI disciplines. Conclusions Considering the overall observations and analysis of the self-assessments the following conclusions have been made: Independence In the AFROSAI-E member SAIs should focus more towards the attainment of financial and administrative independence under appropriate oversight without the involvement of the executives. As such SAIs are encouraged to use UN resolutions to lobby both the executive and legislatives structures in their respective countries to obtain and maintain independence. Secondly, the Secretariat should assist SAIs to operationalise their independence by developing a regional toolkit with a framework to guide them on how to influence the development and implementation of primary and secondary legislations. Human Resources SAIs and the Secretariat should continue to develop and implement human resource management tools like organizational development policies/plans, performance management systems and time recording systems to assist in the achievement of higher development levels. Secondly, SAIs should continue to focus on the establishment of management and leadership development programme to improve the capacity of their management teams. Thirdly, SAIs should also start to invest in the professionalization of their staff in order to ensure the development of capable organisations. Communication Communication is a cross cutting issue in any organization which should be treated as a strategic channel for the implementation of the SAI s development goals. Given the important value of communication it is recommended that robust external and internal communication policies and strategies be developed, implemented and monitored at senior management level of the SAI. Quality Assurance This is an area that needs to be focused continuously given that the quality control aspects for the audit disciplines are evolving. For example, quality control aspects of especially HR, management and communication apart from the audit disciplines are also necessary to focus before the SAI can achieve quality audit services. Quality Assurance is a continuous activity and there is still a need to focus on the quality assurance issues in the different parts and on the different levels of the SAIs

7 EXECUTIVE SUMMARY 7 Performance Audit Together with continuous training and development of performance auditors there should be deliberate prioritization in the development and implementation of quality control management systems focusing on the audit review skills necessary for performance auditing and enhancing recruitment, training and retention for auditors and managers with a wide mix of different professional backgrounds. Use of IT in Audit There has been satisfactory progress in the development of this imperative. However, there is still room to develop this imperative even in the next strategic period. As such there is need for development not only in the area of knowledge and skills for IT auditing but also in the innovative and creative use of the same. It is also clear that there should be an intensive focus on the development and implementation of comprehensive IT strategies and IT support systems that are aligned with the IT development landscape.

8 8 Transversal Activity Report 2014 CHAPTER 1 INTRODUCTION The Lima declaration (ISSAI 1) of 1977 endorsed at the INCOSAI meeting in Lima, Peru, provides a strong foundation for supreme audit institutions (SAIs). Subsequent standards have been developed since then, focusing on different areas. Of late, a set of new internationally agreed standards for SAIs have been developed and continue to be developed. The development of International Standards for Supreme Audit Institutions (ISSAIs) is a result of cooperation between INTOSAI member SAIs through the Professional Standards Committee, and endorsements at the triennial International Congress of SAIs (INCOSAI) where each attending member has one vote. These standards are built on the expectation that member SAIs would adapt and adopt them based on their unique context and legislative realities of their environments. In the AFROSAI-E environment an Institutional Capacity Building Framework (ICBF) was developed for the same purpose to assist in the effective implementation of the ISSAIs. As the number of international standards increase the AFROSAI-E institutional capacity building framework is continuously amended to align with these ISSAIs. This Transversal Activity Report has its starting point in the AFROSAI-E Institutional Capacity Building Framework. The AFROSAI-E Institutional Capacity Framework was developed to help SAIs enhance their capacity through operationalizing and adopting the various ISSAIs. It summarizes the different standards and regulations into key areas a SAI needs to focus on to succeed in its operations and development. It is put together from an organizational perspective rather than from the specifications made in the standards. The purpose is to assist the SAIs in identifying their strengths and weaknesses to be able to allocate the resources in an efficient and effective way. This transversal activity report is part of capacity building through the ICBF framework. It gives a cross sectional and longitudinal view on how SAIs have performed and progressed with the ICBF framework the last twelve month reporting period. The report aims to facilitate the analysis by providing the members of AFROSAI-E with information from an institutional perspective on the status of their development and that of the public sector auditing in the region through selfassessments made by the member SAIs. This provides a platform for broad comparison within the region and could be of benefit for benchmarking among members SAIs as well as use by AFROSAI-E development partners and other key stakeholders including the donor community. The activity report is further an important instrument for the governing board and its executive secretariat to monitor the development in the region against agreed objectives and activities in the corporate plan. AFROSAI-E s enabling role to better support its members in the execution of their mandates, is as well enhanced by the information provided in the activity report.

9 Institutional capacity building framework (ICBF) 9 INSTITUTIONAL CAPACITY BUILDING FRAMEWORK (ICBF) The AFROSAI-E Board adopted at its annual meeting in 2006 an institutional capacity building framework as a basis for the development and the strategic planning of the regional organization. The framework has its roots in a capability model developed in 2001 and updated in The Institutional Capacity Building Framework consists of five development levels, level 1 to 5, and five institutional development areas or domains: Independence and Legal Framework, Organization and, Human Resources, Audit Standards and Methodology and finally Communication and Stakeholder. Each domain contains a number of elements as shown in appendix 1. The ICBF is primarily a tool for the SAI to support its endeavors to reach level 3 and beyond in the best possible way and not only an instrument for assessment as most of the other capacity building models. The objective is to help the SAI focus on how it can improve its results and thereby its position in relation to its counterparts in the INTOSAI community. Thus, the ICBF can be used as a tool to improve the performance of a SAI. The idea is to enhance the possibilities to develop the SAI in its different branches in parallel. That is; the different lines of business and objectives in the institution (strategic management, core business and corporate services) can be linked to support each other. This is especially important when it comes to the linkages to the strategic plan. Different divisions operational plans and practices are as well linked to the overall strategic plan and the idea of where the SAI is heading in its work. Further, in the ICBF, the institutional perspective in a SAI is based on, and consists of, the following five areas or domains as shown in Table 1: Independence and legal framework Organization and management Human resources Audit standards and methodology Communication and stakeholder management An illustration of the development levels of the institutional capacity building framework (ICBF) is presented in table 1. Each domain in the framework is composed of a number of issues or topics, here called elements (see appendix 1). These are seen as the elements needed to build a sustainable institution. The elements in the framework are common for all levels, although the quality differs. A guideline has been developed to assist the SAIs to assess their position in accordance with the indicators developed for each element in the Framework, to help the SAIs to position themselves on the right development level. 1 AFROSAI-E: A good practice guide to enhance the independence of Supreme Audit Institutions (SAIs) in English-Speaking African countries, 2005.

10 DEVELOPMENT LEVEL 10 Transversal Activity Report 2014 Institutional Capacity Building Framework (ICBF) INSTITUTIONAL PERSPECTIVE Communication Independence Organization Audit Standards Human and and and and Resources Stakeholder Legal Framework Methodology Level OPTIMIZED LE VEL Level MANAGE D LE VEL Level EST ABL I SHE D LE VEL Level DEVELOPI NG LE VEL Level FOUNDI NG LE VEL Table 1: The five levels and the institutional perspective on each level in the AFROSAI-E institutional capacity building framework The five domains are divided into five development levels which include; the founding level; the developing level; the established level; the managed level; and the optimized level (See Table 1). Further each level has indicators that require to be fulfilled before the SAI can claim to have achieved the said level of development. Currently, in the AFROSAI-E region, this is achieved through a self-assessment questionnaire which members SAIs are expected to respond to annually. The new SAI-Performance Measurement Framework (SAI-PMF) On a similar dimension AFROSAI-E participated in the development of a new assessment tool kit Performance Measurement Framework (SAI-PMF) for measuring the performance of SAIs. The development of this tool is being spearheaded by the INTOSAI Development Initiative (IDI) in cooperation with selected member SAIs from the INTOSAI community. Of significance though is the fact that the SAI-PMF has a lot of similarities with the ICBF and is partly based on this work made in AFROSAI-E. The current draft version of the SAI-PMF is in the pilot phase of its development and will be presented for endorsement in 2016 during the International Congress of Supreme Audit Institutions (ICOSAI) conference. In the meantime, the ICBF will remain parallel with the development of SAI-PMF. Efforts are already underway to align the ICBF to the SAI-PMF version in line with the requirements of ISSAI 12. As a self-assessment tool, the ICBF is expected to complement the SAI-PMF and will provide a simplified version of the same for the SAIs in the region. As such, in the aligned version the ICBF will continue to provide a good tool for sustainable follow-ups in the AFROSAI-E region. AFROSAI-E DEVELOPMENT TOOLS In supporting the development of SAIs in the region, the AFROSAI-E Secretariat produces different kinds of developmental capacity building tools. The work comprise the development of course

11 AFROSAI-E DEVELOPMENT TOOLS 11 materials, delivery of workshops and support visits of different types, like quality assurance review visits or management development program (MDP) rollout and follow-up visits. The Secretariat s work also involves the development of different materials like manuals, guidelines and other tools developed and provided for the region. The following tools and guidance materials were developed and launched during 2014: The regularity audit e-learning module; Exposure Draft of the Performance Audit Manual; Guidance on Report Writing; Exposure Draft on Audit of Fraud and Corruption (second draft); Exposure Draft on Forensic Auditing; and Guideline on Audit of Environmental Impact Assessment (EIA) Studies. During the 2014 Governing Board in Addis Ababa, AFROSAI-E in partnership with the Swedish National Audit Office launched the Executive Leadership Development Programme (ELDP). This programme s main goal is to support the establishment of professional, relevant and competent top executive teams at SAIs in the region to lead their organisations towards full compliance with international standards for public sector auditing. The recruitment process for the first group to participate in this programme will commence in Details of this programme are addressed in the 2014 AFROSAI-E Integrated Annual Report. Further, as part of its institutional development support the Secretariat assisted four SAIs to customize and rollout the Development Programme (MDP). In addition, two regional workshops were delivered to assist those SAIs that were at different levels of rolling out the programme at the SAI level. To further strengthen and build the pool of regional MDP champions, a third Facilitation Skills workshop was held. A more detailed presentation of the production can be found in the AFROSAI-E s Integrated Annual Report for the year The development of SAIs in the region is not only based on resource persons from the member SAIs, but is also materially dependent on support from institutional partners. AFROSAI-E is working with experts from its institutional partners together with member SAIs who are willing to support their counterparts at regional and bilateral events. In view of the need to strengthen this model of working relationships, AFROSAI-E is organizing resource persons into different networks in order to enable the building of capacity within the different strategic imperatives

12 12 Transversal Activity Report 2014 CHAPTER 2 METHODOLOGY This report has been derived from the 2014 self-assessment survey feedback received from member SAIs, based on the five ICBF domains. This report provides a broad overview on how the region has progressed and developed based on the ICB frame work. Suffice to say that the AFROSAI-E corporate plan came to an end in December 2014, and therefore this report will reveal how the SAIs have developed on within the five ICBF domains and the six strategic imperatives for this strategic period under review. The questions used in the survey are aligned to the ICBF framework, ISSAIs and best practices. Lessons learnt from previous surveys were also captured and helped shape the questions to be used in this survey. It must be appreciated that the survey is based on self-assessment and thus could be a product of perceptions on performance by the individual SAIs. However, to mitigate on this, the ICBF guide was shared with various SAIs to help them internalize the application in order to come up with a more objective judgment on their ranking. Further, the validity of the results could also be compromised by the possibility of different people answering the questions over the years 2010 to Moreover, the averaging of the questions under each domain and imperative for period under review may also blur the true development level of the SAI. To mitigate against these weaknesses, results of the eleven quality assurance support visits by the Secretariat were used to interpret and develop conclusions under each domain and strategic imperatives. Response rates Over the years the numbers of countries responding to the survey have varied. For instance, in the year 2011, 20 of the then 23 AFROSAI-E members responded to the survey, while in the year 2012 it was 21, and in 2013 it was 24 out of the 24 members SAIs. In 2014 we had 23 out of 25 members SAIs responding (See Table 2). Year Number of SAIs who responded Table 2: Number of SAIs responding to the survey over the years

13 METHODOLOGY 13 The 25 th member (SAI Sudan) was accepted during the 2014 Governing Board meeting in Addis Ababa, Ethiopia. A 92% response rate is a positive trend as members have been forthcoming in providing us with required feedback. As can be seen in the table that, since 2006, the number of SAIs responding have more than doubled. Structure of the report Over the strategic period, the AFROSAI-E Institutional Capacity Building Framework and its six strategic imperatives were used as the basis for structuring this report. The data is presented in two forms, that is, aggregated averages on clustered responses from SAIs and a more detailed analysis on key issues on the six strategic imperatives. These strategic imperatives are derived from the five domains in the ICBF framework. Thereafter the report moves into conclusions and recommendations.

14 14 Transversal Activity Report 2014 CHAPTER 3 SAIS ASSESSMENT AGAINST THE FIVE DOMAINS IN ICBF Introduction The survey as earlier mentioned was based on the five domains and depicts how various SAIs are performing in the region against the Institutional Capacity Framework. This will be looked at in terms of regional performance as a whole, and individual SAI performance against each of the domains. The individual SAI performance is captured in appendix 2. Averages for the domains within ICBF The self-assessment on the domains ranges from level 0-5. As can be observed from the results of the self-assessment, SAIs are doing well towards achieving the target on independence and Legal framework. Generally speaking, on average over the last five year period there has been a marginal movement towards the targeted level 3. More work still needs to be done in Organization and, Human Resources, Audit Standards and Methodology and Communication & Stakeholder, as we strive to get the SAIs to level three in those domains DOMAINS 0.00 Independence & Legal Framework Organization & Human Resources Audit Standards & Methodology Communication & Stakeholder Figure 1: Average self-assessed level for the region - Comparison between domains years 2010, 2011, and It is necessary to depict how SAIs self-evaluation across the five domains and how they compare with each other. This would help individual SAIs make decisions on benchmarking and other forms of SAI to SAI engagement as a way of fostering improved performance. This is shown in the figures below addressing each domain separately. Independence and legal framework This domain addresses itself to criteria that include among others: constitutional and legal framework; financial/managerial/administrative autonomy and appropriate human, financial and

15 Angola Botswana Eritrea Ethiopia Gambia Ghana Kenya Lesotho Liberia Malawi Mauritius Mozambique Namibia Nigeria Rwanda Seychelles Sierra Leone South Africa South Sudan Sudan Swaziland Tanzania Uganda Zambia Zimbabwe Level SAIS ASSESSMENT AGAINST THE FIVE DOMAINS IN ICBF 15 material resources; independence of Head of SAI and staff of SAI; SAI has a broadly sufficient mandate; have mandate and discretion to discharge its function through access to information; have mandate and discretion to discharge its function through discretion of selection of audit topics; there is freedom to decide on content, timing of audit reports and to publish and disseminate them; have mandate to a direct submission of reports to Parliament; effective follow up mechanisms on recommendations; SAI reporting on its activities and use of resources; Parliament or an oversight body appoints the SAIs external auditors. Results on this domain in 2014 among the 25 SAIs are captured in figure SAI Comparison on Independence & Legal Framework SAI Figure 2: SAI Comparisons on Independence and Legal Framework domain (2013 figures were used Angola and Mozambique) Under this domain from the above figure it can be seen that the majority of countries have achieved or about to achieve level 3 in the independence and legal framework domain. More than 60% of the SAIs have reached the target of level 3 and above. It is also apparent that more than two thirds of the SAIs are above level 2.5. A more detailed analysis is given under chapter four of this report Organization and management Organization and is the second domain in the institutional capacity building framework and covers important issues concerning how the SAI is run and organized. The key aspects of organization and management are based on organization planning processes and their implementation, thus integrating both strategic and operational levels of the organization. The domain covers leadership and direction, strategic planning, annual operational planning,

16 Angola Botswana Eritrea Ethiopia Gambia Ghana Kenya Lesotho Liberia Malawi Mauritius Mozambique Namibia Nigeria Rwanda Seychelles Sierra South Africa South Sudan Sudan Swaziland Tanzania Uganda Zambia Zimbabwe Level 16 Transversal Activity Report 2014 organization of the SAI, internal control system, use of resources and code of ethics and its monitoring. The performance for this year under review is presented in figure SAI Comparison on Organisation & SAI Figure 3: SAI comparisons on organization and domain (2013 figures were used for Angola and Mozambique) The overall picture from this domain shows that only a handful of SAIs have been able to achieve the established level of 3 with 24% of the SAIs at this level. It is significant to note that about 32% of the SAIs are below level 2.5. Human Resources This domain comprises aspects that include a Human Resource and professional development policy, development plans, management of personnel, training aspects with monitoring and evaluation mechanism and capacity to train staff. An overview on how SAIs have performed in this domain in 2014 is presented in figure 4.

17 Angola Botswana Eritrea Ethiopia Gambia Ghana Kenya Lesotho Liberia Malawi Mauritius Mozambique Namibia Nigeria Rwanda Seychelles Sierra Leone South Africa South Sudan Sudan Swaziland Tanzania Uganda Zambia Zimbabwe Level SAIS ASSESSMENT AGAINST THE FIVE DOMAINS IN ICBF SAI Comparison on Human Resources SAI Figure 4: SAI comparisons on Human Resources domain (2013 figures were used for Angola and Mozambique) It may be observed that Human Resources is still a challenge as majority of the SAIs are below level 2.5, with only 24% being at level 3 and above; and 40% below level 2.5. Audit standards and methodology This domain has the following key elements that include: SAIs developed and implemented annual audit plans, audit manuals that are aligned and compliant with international standards linked to a training programme and reviewed and updated regularly, quality control measures and quality assurance, audit techniques such as electronic working papers and Computer Assisted Audit Techniques (CAATS), implementation of the SAI communication strategy for the audit process with the auditees, SAI communication with relevant experts, professional bodies, relevant journals, internal audit and other public sector audit institutions; SAI reporting ensuring of follow up of previous recommendations, user friendly and standardised structures of reports with materiality considerations. In 2014, SAIs in the region performed on this domain as presented in figure 5.

18 Angola Botswana Eritrea Ethiopia Gambia Ghana Kenya Lesotho Liberia Malawi Mauritius Mozambique Namibia Nigeria Rwanda Seychelles Sierra Leone South Africa South Sudan Sudan Swaziland Tanzania Uganda Zambia Zimbabwe Level 18 Transversal Activity Report SAI Comparison on Audit Standards & Methodology SAI Figure 5: SAI comparisons on Audit Standards and methodology domain (2013 figures were used for Angola and Mozambique) From the figures above it can be observed that SAIs still need to do more within the domain of audit standards and methodology. For instance only 16% (4 SAIs) of the SAIs are at level 3 and above while 12 (48%) are at level 2.5 and above. However, it should be noted that the region has come a long way in terms of implementing ISSAIs since 2010 although they still acknowledge that more still needs to be done especially in the setting up of quality control management systems, monitoring of the same systems, computirising working papers and use of CAATs in the audit processes. Communication and stakeholder management This domain focuses on aspects such as communication policy and strategy covering internal and external communication, channels of communication between SAI and Parliament, PAC and judiciary and other stakeholders like Ministry of Finance and other oversight bodies, promotion of the SAI via engagement with the media, public, academic institutions and international community and organizations; communication audit performance and results. The performance among the 25 SAIs on this domain is summarized in figure 6.

19 Angola Botswana Eritrea Ethiopia Gambia Ghana Kenya Lesotho Liberia Malawi Mauritius Mozambique Namibia Nigeria Rwanda Seychelles Sierra Leone South Africa South Sudan Sudan Swaziland Tanzania Uganda Zambia Zimbabwe Level SAIS ASSESSMENT AGAINST THE FIVE DOMAINS IN ICBF SAI Comparison on Communication & Stakeholder SAI Figure 6: SAI comparisons on Communication & Stakeholder domain (2013 figures were used for Angola and Mozambique) The communication and stakeholder management domain also shows that majority of the SAIs are yet to get to level 3 in the ICBF framework. Only 4 (16%) of the SAIs are at level 3 and above 13 ( 52%) of the SAIs are at level 2.5 and above. There has been marked improvement in this domain as SAIs are acknowledging the need for setting communication effective systems and structures to ensure both internal and external seamless communication. However, it must be pointed out that in this domain several SAIs are still to set up robust communication channels that demonstrate their value and benefits to their publics. The differences on how the SAIs have performed will be revealed in details when we address the individual domains and the strategic imperatives in our subsequent presentations. Performance on domains from 2010 to 2014 During the strategic period ( ) the target was that SAIs in the region would strive to reach level 3 of the ICBF framework. The targeted level was that 40% of the SAIs would attain level three and above during this period under review. Table 3 depicts the trend from 2010 to 2014

20 20 Transversal Activity Report 2014 Number of SAIs in the region on level 3 and 4 in the years 2010, 2011, 2012,2013 and Year 2011 Year 2012 Year 2013 Year 2014 Level Level Level Level Level Level3 Level 4 Level 3 Level 4 Level Independence Organization & Human Resources Audit Standards & Methodology Communication & Stakeholder Table 3: Comparison between the number of SAIs on level 3 and 4 in the years 2010, 2011, 2012, 2013 and 2014 all 25 countries included (2013 figures were used for Angola and Mozambique) As can be observed from Table 3 above there has been a good number of SAIs that have reached level 3 and above in the independence and Legal Framework. For instance, 15 (60%) SAIs reporting that they are at level 3 and above. On the other hand there is no significant difference in the number of SAIs who report that they are now at level 3 on organization and, with the numbers dropping from 9 (36%) the previous year to 6 ( 24%) in A similar marginal drop is noted in Human Resources from 28% in 2013 to 24% in Moreover, Audit Standards and Methodology has seen a drop from 24% to 12% for 2013 and 2014 respectively. On Communications & Stakeholders, there was no movement over the last two years. There are various reasons that explain the movement of the ratings under each of the domains which will be discussed under the strategic imperatives evaluations in the following chapter. To enable us get more precise information on the development on the above domains, we shall look at the performance of strategic imperatives in the next chapter.

21 CHAPTER 4 21 CHAPTER 4 SAIS ASSESSMENT AGAINST THE STRATEGIC IMPERATIVES Introduction Following the AFROSAI-E governing board annual meeting of 2006, the following strategic imperatives were identified for the corporate plan for and also adopted for the just ended corporate plan ( ): Independence of the SAI Human resource practices and management development Communication and stakeholder management Quality assurance Performance auditing Use of information technology in auditing These strategic imperatives are key to capacity building in the AFROSAI-E region. Three of these imperatives, that is, Human Resources, Communication & Stakeholder and Independence are also part of the five domains in the ICBF framework. Other imperatives include quality assurance, performance audit and use of IT in audit. These last three imperatives are based on elements mainly but not exclusively within the Audit Standards and Methodology. A glance at the imperatives over the years starting from 2010 to 2014 shows how the region has performed over this period as shown in the figure 7 below. This has been made possible by computing averages on the six imperatives as shown on figure 7. STRATEGIC IMPERATIVES Independence Human Resources Communication Quality assurance Performance audit Use of IT in audit Figure 7: Comparison between the average numbers of the six strategic imperatives for SAIs participating in surveys in the years 2010, 2011, 2012, 2013 and 2014 (based on 25 countries but note that 2013 figures were used for Angola and Mozambique). The graph shows marginal increases across all six imperatives over the five years. Despite the slight increase in the score, it is worth noting that five imperatives comprising Human Resources, Communication, Quality assurance, Performance audit and use of IT in audit are still below the regional target of level 3. This possible reasons for this will be explained under each imperative.

22 22 Transversal Activity Report 2014 Monitoring the strategic imperatives The table below shows the percentage number of SAIs that had achieved level three in these targeted six strategic imperatives from 2009 to STRATEGIC IMPERATIVES Independence of the SAI Human Resource practices and management development Communication and stakeholder management Comparison to the strategic imperatives on level 3 in the corporate plan for estimated position for 2009 in percentage on level 3 - the calculated positions for 2009, 2010, 2011, 2012, 2013 and 2014 based on the surveys on level 3 - targeted position for 2014 in the corporate plan ( ) on level 3 Estimated position in 2009; % of 23 SAIs Calculated position in 2009; % of 22 SAIs Calculated position in 2010; % of 23 SAIs Calculate d position in 2011; % of 20 SAIs Calculated position in 2012; % of 21 SAIs Calculated position in 2013; % of 24 SAIs 20% 63% 48% 45% 50% 50% 10% 27% 39% 25% 25% 29% 10% 41% 30% 15% 13% 17% Quality assurance 5% 41% 39% 10% 8% 8.3% Performance auditing Use of Information Technology (IT) in auditing 25% 45% 35% 20% 13% 25% 20% 23% 13% 15% 13% 13% Calculated position in 2014 % of 25 SAIs Table 4: Positions on level 3 in percentage for the strategic imperatives in the corporate plan for Year 2009 is estimated, years are calculated based on the activity report survey. Year 2009 was first estimated when the decision about the strategic imperatives was made, then calculated from the self-assessments gathered for the year. Year 2014 presents the targeted position (level 3) for the strategic imperatives presented in the corporate plan for (The percentages were calculated from the SAIs that responded and figures for Angola and Mozambigue were estimated based on 2013 data) 56% 24% 16% 20% 20% 12% Targeted position in 2014; % of 25 SAIs 40% 35% 40% 60% 60% 40% During the start of the strategic period in 2009, AFROSAI-E set up specific targets on each of the six imperatives indicating the percentage number of SAIs that should have achieved level 3 in those strategic imperatives. As noted from the table above, the targets ranged from 40% to 60 % of the SAIs. Taking note that December 2014 was the end of the strategic period, when the targets set out in 2009 were set, it would be helpful to examine how far AFROSAI-E has been able to help SAIs enhance their capacity in those six imperatives. As observed, 60% of SAIs are at level 3 on independence of the SAI against a set target of 40%. Human Resources practices and management development has 24% of the SAIs at level 3 and above against a target of 35% of them. On Communication and Stakeholder, 16% of the SAIs are at level 3 and above against a target of 60%. This is a drop from 2013, where 17% of the SAIs were at level 3. Quality assurance has 20% at level 3 and above against a target of 60%, a remarkable improvement from 8.3% in 2013.

23 23 Performance audit has 20% of the SAIs at level 3 and above against a target of 60%, while use of IT in audit has 12% at level 3 and above against a target of 40%. By and large, apart from the first imperative of independence, the other strategic imperatives were not on target as per the 2014 targets. Perhaps this could be a pointer to some of the challenges being experienced by SAIs or the targets set appear to have been overambitious? A clearer indication on how the SAIs performed on the imperatives in 2014 is shown in figure 8. It should be noted that despite the exact level 3 and above targets not being met, the majority of SAIs are at level 2.5 and above across all the imperatives. This is notably on independence (88%), Human Resources (64%), Communication (52%), Quality Assurance (56%) and performance audit (64%). However, as can be seen figure 8, use of IT in audit is still a challenge as only 32% of the SAIs are at level 2.5 and above.. Achievements against Targeted Development Level 100% 90% 88% 80% 70% 60% 50% 40% 30% 20% 10% 40% 60% 35% 24% 64% 40% 16% 52% 64% 60% 60% 56% 20% 20% 40% 12% 32% Target Dev Level 3 and above 2.5 and above 0% Independence Human Resources Communication Quality assurance Performance audit Use of IT in audit Figure 8: Comparison between the percentages of the SAIs that have reached level 3 and above and the percentages of the SAIs that have reached level 2.5 or above (Based on all 25 SAIs in the region except that for Angola and Mozambique estimated positions were used based on 2013 figures) Based on the figures of level 2.5 and above it can be concluded that the 2009 targets were to a great extend achieved. In the next chapter each of the imperative is further interrogated so as to get more in depth information on what worked well and not worked well within these imperatives towards the achievement of level 3 and above of the ICBF.

24 24 Transversal Activity Report 2014 CHAPTER 5 Strategic imperatives related to the five domains in ICBF Introduction Our foregoing discussions have dwelt on aggregated numbers for domains and strategic imperatives. This has some inherent weaknesses as some interesting observations from some questions are not captured. An examination on how these questions have been answered will help provide a more balanced view on the SAIs development. The focus of this chapter will be on particular aspects of the strategic imperatives where SAIs are not performing well, hence affecting the attainment of the targeted level 3 established level. However, in some instances we shall point out areas where particular SAIs excelled. Each of the strategic imperatives will be handled separately as indicated in subsequent presentation in this chapter. Performance along six strategic imperatives: Independence of SAIs Details on this imperative were discussed in chapter two following the description of the independence domain. We acknowledge, however, that Independence is the foundation of SAIs as declared in the Lima and Mexico declarations (ISSAIs 1&10) and thus it is important to closely analyse some key independence principles. Figure 9 below captures some key questions under this imperative Independence & Legal Framework Detailed Strategic Imperative Analysis The Parliament or another oversight body appoints the SAI's external auditors 52% 48% The SAI submits an annual report on its own performance to Parliament and other key stakeholders 40% 60% The SAI has an effective follow-up mechanism on SAI performance audit recommendations as well as those made by the legislature The SAI decides upon all human resource matters (recruitment, remuneration, promotion etc) 40% 60% 48% 52% 3 and above Below 3 The executive does not take part in the preparation of the SAI's budget appropriation or the final decision on the SAI's budget 40% 60% 0% 20% 40% 60% 80% 100% Figure 9: How SAIs responded in terms of their operationalised independence against key questions.

25 Strategic imperatives related to the five domains in ICBF 25 Despite the overall indicators showing that most SAIs are at level 3 in the independence and legal framework domain the following observations derived from figure 9 are important to consider: SAIs that indicated that they are at level 3 and above in determining their budgets include, for example, Ethiopia, Rwanda, Sierra Leone, South Africa, South Sudan, Sudan, Tanzania, Uganda and Zambia which is only 40% of the SAIs. 60% are below level 3, that is, the SAIs do not independently determine and decide on their budget. The SAIs indicated that the executive arm of their governments and not their national assemblies are still in control of the determination their final budget figures before approval by their National Assemblies. When it comes to administrative independence it can be observed that 52% of the SAIs are below level 3 in making decisions on human resources matters such as recruitment, remuneration and promotion. However, we have 48% of SAIs have sufficient administrative independence of level 3 and above and these include, for example, Ethiopia, Kenya, Liberia, Rwanda, Seychelles, Sierra Leone, South Africa, South Sudan, Sudan, Tanzania and Uganda. Based on findings of quality assurance reviews carried out in 11 SAIs in 2014, it is our considered view that more still need to be done for the regional SAIs to achieve sufficient administrative independence. Another observation is that 60% of the SAIs are below level 3 in ensuring that the SAI has an effective follow-up mechanism on SAI audit recommendations as well as those made by the legislature. However, some SAIs indicated that they are at level 3 and above and they include Ghana, Malawi, Namibia, Rwanda, Sierra Leone, South Africa, Sudan, Tanzania and Uganda. A robust follow-up mechanism for audit recommendations would ensure that government is made to account fully for gaps identified during audits. When it comes to submission of the SAI s own performance report annually a significant number of SAIs comprising 40% are at below level 3. In other words we still have a number of SAIs that are not adequately reporting on their own performance to Parliament and other key stakeholders by way of publishing their annual performance report. Examples, of those SAIs that responded that they were at level 3 and above include: Ethiopia, The Gambia, Ghana, Kenya, Liberia, Malawi, Mauritius, Rwanda, Seychelles, Sierra Leone, South Africa, Sudan, Tanzania, Uganda and Zambia. However, from this group of SAIs it was not clear how many of the same SAIs publish the same performance reports. It is encouraging to note that more than half of the SAIs have Parliament or another oversight body appointing external auditors to audit their annual financial statements. SAIs that are at level 3 and above comprise Ethiopia, The Gambia, Ghana, Kenya, Malawi, Rwanda, Seychelles, Sierra Leone, South Africa, South Sudan, Tanzania, Uganda and

26 26 Transversal Activity Report 2014 Zimbabwe. But, there is still 48% of SAIs who are auditing their own annual financial statements. The above observations reveal that the main challenges facing SAIs is the operationalization of their independence, mostly financial autonomy and administrative independence. Human Resources Human Resource is the third domain in the institutional capacity building framework. This domain is also one of the strategic imperatives for the period ending December Apart from addressing human resources issues with the SAI this imperative also covers organization and management as well as other related elements within the other domains of the ICBF. The development of the Human Resources Handbook was finalized in 2012 and since then a number of annual HR workshops have been conducted. Since the development of the Human Resources Handbook and its distribution to SAIs there has been noticeable positive movements within this domain. In figure 10 we show aggregated development levels of the SAIs under this imperative. Human Resources Mandate Strategic work (optimizingmonitoring/evaluation and and policies) follow-up of HR Training Figure 10: Level of development in the area of Human Resources for 2013 and 2014 As observed in figure 10, the majority of the SAIs responded that there were above level 2.5 in mandate, strategic work and training. Monitoring and evaluation and follow up in other words implementation of the same policies and strategies is still below level 2.5 in several SAIs. However, SAIs still tend to overrate themselves in responding to questions under this domain. Detailed insight to what is happening within the individual imperatives has been shown in figure 11, which will be discussed next.

27 Strategic imperatives related to the five domains in ICBF Detailed Analysis of some selected questions on development of Human Resources The SAI has implemented a monitoring and evaluation system of the different aspects of training and results achieved 60% 40% The SAI is managing its performance appraisal system in accordance with international standards and good practice 56% 44% The SAI has implemented a monitoring and evaluation system of the different aspects of a Human Resource development policy 68% 32% The SAI has implemented a Human Resource policy in line with best practice including provisions for remuneration of staff based on performance 64% 36% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% (Not Implemented) Below 3 (Implemented)3 and above Figure 11: Analysis of selected questions under the Human Resources Strategic Imperative for % of SAIs are below level 3 in implementing a monitoring and evaluation system of the different aspects of training and results achieved. SAIs that are at level 3 and above in this area include Eritrea, Ghana, Malawi, Rwanda, Sierra Leone, South Africa, Sudan, Tanzania and Zimbabwe. When it comes to the SAIs managing their performance appraisal systems in accordance with international standards and good practices, 56% of them responded that they were below level 3. On the other hand, 44% of the of the SAIs responded that they were at level 3 and above and they include; Kenya, Malawi, Mauritius, Rwanda, Seychelles, Sierra Leone, South Africa, South Sudan, Tanzania and Zambia. Again there appears that some SAIs were assessing themselves higher than what an independent quality assurance review would indicate. However, it is encouraging to observe that SAIs responded that setting up of robust and effective performance management systems was fundamental for the effective development of their human resources. When responding to the question of establishing human resource policies including provisions of remuneration of staff based on performance, a few SAIs responded that there were at level 3 and above. For example only seven SAIs responded that they had achieved level 3 and above and these include; Malawi, Namibia, Rwanda, Sierra Leone, South Africa, South Sudan and Tanzania. The majority of SAI responded that they were at below level 3. This observation has also been noted on the independence domain that most SAIs had no full control of recruitment and remuneration of staff in their SAIs. As such it may be logical that 68% of SAIs are below level 3 in implementing a monitoring and evaluation system of the various aspects of the Human Resource development policies.

28 28 Transversal Activity Report 2014 Further, analysis in terms of the functions that HR is responsible over as to their coordinative and facilitative roles within the SAI reveals the need for more work to be done to reach the desired levels. For example, two selected questions provide some insight into what is happening in SAIs. These are captured in figure 12 with the main focus being in two areas of time recording systems and organization development strategies. 2014:SAIs that have Effective Time Recording Systems and Organisation Development Policies The SAI has implemented a time recording system, which enables reporting on costs of staff 68% 32% (Not fully implemented) Below 3 (Fully implemented) 3 and above The SAI has an organizational development (OD) plan/policy in place 56% 44% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100% Figure 12: SAI that have put in place effective time recording systems and organization development policies It should be noted that 68% of the SAIs are below level 3 in implementing a time recording system to enable reporting on cost of staff. SAIs that indicated they are above level 3 and above in this area include, for example, Eritrea, Mauritius, Namibia, Seychelles, South Africa and South Sudan. Further, from the general questions SAIs were asked to rate themselves on whether they cost their audits. From the responses only 32% of the SAIs responded that they were above level 3 in implementing a time recording system enabling reporting on costs of staff and audits and these include, for instance, Ghana, Malawi, Rwanda, South Africa, Sudan, Tanzania, Uganda, Zambia and Zimbabwe are at level 3 and above. However, results of the quality assurance support visits in this area showed that most SAIs still need to set up effective time recording systems that would enable the costing of audits. Another important point to consider is that 56% of the SAIs responded that they were below level 3 in terms of having implemented an organizational development plan or policies. SAIs that were at level 3 and above include Ethiopia, Ghana, Kenya, Malawi, Mozambique, Namibia, Sierra Leone, South Africa, Tanzania and Zimbabwe. However, when compared against the results of quality

29 Strategic imperatives related to the five domains in ICBF 29 assurance support visits this assessment seem to be in line with the SAIs assessments. Another important dimension under this domain is the development of managers within member SAIs Development development is one of the important factors that affect the transformation of a SAI s capacity to capability. After realizing the leadership and management gaps that was present in SAIs AFROSAI-E and IDI cooperated in designing and implementing the Development Programme (MDP) in This programme has become part of the AFROSAI-E capacity building tools in SAIs. Figure 13 shows the development levels of SAIs in terms of setting up structures and programmes for the development of their managers. Development Mandate Organizational Culture Planning Programs/Systems Audit Related Figure 13: Developments in the area of Development for 2013 and 2014 As can be seen in figure 13 there has been progress in the development of clear mandates, organizational cultures, programme systems and procedures and audit related management development. Although the development level of SAIs within the planning dimension is still below level several 3, SAIs responded that they have set localized MDPs for development of their current and future managers. The foregoing developments on human resource and management development could be an indication that the presence of a Development Programme is important to enhance performance in this strategic imperative. Results from the 2014 survey a show that 52% of SAIs have some MDP in place whilst 48% still need more assistance in to develop their managers as is shown in figure 14.

30 30 Transversal Activity Report 2014 The SAI has a specific management development program (MDP) in place in accordance with international standards and good practice 48% 52% (No) Below 3 (Yes) 3 and above Figure 14: Presence of a specific management development programme As shown in figure 14, 52% of the SAIs are below level 3 in the implementation of a specific management development programmes in accordance with international standards and good practice. For instance, SAIs that responded being at level 3 and above comprise Eritrea, Ethiopia, Malawi, Namibia, Nigeria, Rwanda, South Africa, Tanzania, Uganda, Zambia and Zimbabwe. However, considering the results of quality assurance support visits in some of the countries mentioned there were no specific evidence produced during the reviews to prove the existence of specific management development programmes within some of the countries. Quality Assurance Quality assurance is one of the strategic imperatives that can be looked upon as an area of strategic focus within the domain of audit standards and methodology and the other four domains. The fairly low score (24%) for quality assurance shown in table 4 has been analysed further. As can be seen, the average score given is only 24% of the SAIs the same if all 25 SAIs are taken into consideration had passed level 3. The score is compiled out of a number of questions. Development levels of the SAIs on this imperative since 2012 to 2014 is summarized in figure 15.

31 Strategic imperatives related to the five domains in ICBF 31 70% 60% Quality assurance levels based on assorted questions 67% 63% 56% 50% 40% % 20% 25% 17% 24% % 0% Percentage of SAIs on level 3 and above Percentage of SAIs on level 2.5 and above Figure 15: Quality Assurance Level calculated on a subset of the original quality assurance questions in the selfassessment questionnaire. The percentage is based on the number of SAIs, taken all 25 into consideration, that have reached level 3 and higher or respectively level 2.5 or higher[note that estimates were used for Angola and Mozambique based on 2013 figures]. These questions cover different parts of quality aspects including quality in IT and questions about peer reviews. However, the IT issues are part of the strategic imperative of Use of IT in Audit and have thus been taken into consideration within two of the imperatives. This has pulled down the result for quality assurance in a noticeable way. Recalculating the numbers by taking out the questions 2 for quality concerning IT will thereby give a higher score on quality assurance, which better corresponds to the efforts put into this imperative. In figure 15 there is a notable improvement on the number of SAIs on level three and above on quality assurance levels in 2014, with 24% of the SAIs on level 3 and above. This can be explained by the significant drop on the number of SAIs on level 2.5 and above with 56% of the SAIs on this level down from 67% in From the questionnaire the questions on quality and mainly on quality control and not on quality assurance have been extracted. In figures 16 and 17 the scores on quality control measures in place for regularity audit and performance audit can be seen. The result shows that 58% of the SAIs have implemented quality control measures for regularity audit and 46% of the SAIs for performance audit. The number is an average from four key questions on quality control for both regularity audit and performance audit. 2 The questions for the quality assurance imperative and the changes are attached in appendix 3

32 32 Transversal Activity Report 2014 In order to improve the quality of the actual audits well-developed quality control systems need to be in place. Part of such systems require the development and implementation of robust quality control measures for the SAIs to be able to continuously follow up on the improvements, identify possible gaps, strengths and weaknesses and design strategies that address the gaps and weaknesses. Eleven quality assurance reviews visits were made by the AFROSAI-E secretariat during Comparing the rating for 10 key issues as another subset of questions in the self-assessment questionnaire 3 with the rating in the quality assurance reviews, the tendency to rate oneself higher than an external reviewer would is seen. However, it must also be said that the majority of the ratings are on the same level for the self-assessment and the external reviews. Table 5 shows a comparison between the ratings done by the eleven SAIs and results of quality assurance support visits reports by AFROSAI-E. SELF ASSESSED LEVELS OF 11 SAIS COMPARED WITH THE RESULTS OF QA REPORTS 2014 Comparison between the SAIs self assessed level on a number of relevant questions in the questionnaire and the SAI s level according to the QA reports for year 2014 QUESTION Total % Self assessed level is higher than in QA report Self assessed level is equal to QA report Self assessed level is lower than in QA report % % % Table 5: A number of 11 SAIs in the region were subject to quality assurance visits by AFROSAI-E during The table shows the difference between the maturity level in accordance to the quality assurance report on the one hand and the SAIs own self assessed rating in the self-assessment questionnaire for The result in table 5 shows that the insight and understanding of the actual development stage in the SAIs on a general level corresponds well to what is interpreted from an external perspective, thus providing an opportunity for a better prerequisite for further development. This result is also in line with the aforementioned interpretation of the stabilization for the scoring on the aggregated general level for the domains and strategic imperatives; though one needs to note that there are still some few SAIs that tend to overrate themselves. 3 The questions compared with the quality assurance visits are attached in appendix 4

33 Strategic imperatives related to the five domains in ICBF 33 Looking at quality assurance from the perspective of regularity audit from 2012 to 2014, the results over the years are shown in figure 16. Main aspects of Regularity Audit Mandate Manual Quality Control Follow-Up Figure 16: Quality assurance from the perspective of regularity audit From the figure 16 it is apparent that SAIs have improved in the development of manuals and quality control measures but more needs to be done in follow up of recommendations, where there has been a significant drop from 2013 at level 2.33 to level 2.26 in This is similar to the observations made when discussing the independence imperative, where most SAIs did not have follow-up of audit recommendation mechanisms in place. A detailed analysis relating to the development of quality control aspects in regularity audits is given in Figure 17 Quality Control Aspects in Regularity Audit The SAI has an overall annual audit plan covering activity plans for regularity audits 36% 64% (No) Below 3 The SAI reports to Parliament on the implementation status of the PAC recommendations 56% 44% (Yes) 3 and above 0% 20% 40% 60% 80% 100% Figure 17: Quality assurance from the perspective of regularity audit

34 34 Transversal Activity Report 2014 Figure 17 above shows the development of quality control and assurancein the the regularity audit discipline. 64% of the SAI responded that they have developed and implemented an overall annual planning mechanism for planning and executing regularity audits that is monitored at the top management level. However, when it concerns the monitoring of PAC recommendations only 44% responded that they have a mechanism in place. The developments and quality assurance perspective for performance audit will be discussed with performance audit which is an independent strategic imperative. Performance Audit The performance audit strategic imperative can also be seen as a focal point within the domain for audit standards and methodology as mentioned earlier. There has been evident development of performance audit in the region as seen by the increase in the number of performance auditors and performance audit reports issued in the region. For example, figure 18 shows the results of development levels of SAIs within this imperative from 2012 to Performance Audit Mandate Manual Quality Control Follow-Up mechanism of recommendations Figure 18: Four dimensions of how far the development of Performance Audit has come. The dimensions are based on different clusters of the performance audit questions in the self-assessment questionnaire for 2014 (23 responding SAIs) The performance on this imperative as shown in figures 18 above show that while there is a notable improvement on the manuals and quality control and mandate with scores being above level 2.5, setting up of effective follow-up mechanism and monitoring the effective implementation of quality control measures still remain a challenge over the period under review as the average score is far away below level 2.5. A more detailed presentation on the challenging areas in this imperative is detailed in figure 19.

35 Strategic imperatives related to the five domains in ICBF 35 DETAILED ANALYSIS ON SELECTED QUESTIONS RELATING TO THE DEVELOPMENT OF PERFORMENCE AUDIT The SAI has implemented quality control measures for performance audit when it comes to specification and planning of type of review, including nature, scope and frequency 60% 40% The SAI has implemented quality control measures for performance audit when it comes to definition of roles and responsibilities 64% 36% (No) Below 3 (Yes) 3 and above The SAI has implemented quality control measures for performance audit when it comes to SAI policy and procedures 68% 32% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100% Figure 19: Quality Control in Performance Audit: Detailed analysis of three selected questions 40% of the SAIs responded that they had achieved level 3 and above when it comes to implementing quality control measures for performance audit in the area of planning and specifying type of reviews, their nature and scope. These SAIs include Botswana, Kenya, Lesotho, Malawi, Namibia, Rwanda, South Africa, Tanzania and Uganda. When it comes to definition of roles and responsibilities in performance audit, 64% of the SAIs are below level 3. The ones above level 3 comprising 36% of the SAIs are among others Ethiopia, Kenya, Lesotho, Malawi, Rwanda, Sierra Leone, South Africa, Tanzania and Uganda. 32% of the SAIs have achieved level 3 and above on implementing quality control measures like policies and procedures for performance audit. Examples of such SAIs are Ethiopia, Kenya, Lesotho, Malawi, Rwanda, South Africa, Tanzania and Uganda. This an important achievement though there is still have more SAIs that are at below level 3. This may be attributed to the fact that performance audit is still relatively new in the region compared to regularity audit. There is, therefore, need for more developemt interventions by both SAIs and the Secretariat to ensure full development and implementation of ISSAI compliant performance audit quality control measures. Looking at the responses on some key questions on performance audit imperative shows how different SAIs responded across the set of questions as shown in table 6.

36 36 Transversal Activity Report 2014 Comparison of the response pattern to key questions on performance audit QUESTIONS Yes No n/a-n/r N % N % N % The performance audit reports are issued and made public 16 73% 4 18% 2 9% The SAI submits performance audit reports for tabling in parliament The SAI support the preparations and deliberations of performance audit reports in parliamentary committees and participate on a management level in meetings all as agreed with PAC 14 64% 5 23% 3 13% 14 64% 5 23% 3 13% Table 6: Comparison of the response pattern to key questions on performance audit (based on the 23 responding SAIs) It is understood that timespan for carrying out and finalizing a performance audit report is important as it will depict how long it has taken from a pre-study to the publishing of the actual report as well as affect the quality and relevance of the findings in the report. Thus, it is important to see a comparative analysis of how the SAIs responded in this area in the Table Time for performance audit reports from the start of a pre-study to the AG s signature TIME SPAN NUMBER OF SAIs Up to 1 year 13 Between 1 and 1,5 years 3 Between 2 and 3 years 1 Above 2 Not applicable 6 Table 7: Time for finalization of performance audit reports [note that estimates were used for Angola and Mozambique based on 2013 figures]. It encouraging that more than 50% of the SAIs now take up to one year to finalise and publish a performance audit. On the other hand we have 6(24%) SAIs responding that they take between one and above 3 years to complete and publish a performance audit. The delay to finalise performance audits may be attributed to shortage of skilled and experienced auditors, lack of financial resources as well as inadequate management support due to capacity constraints. For the strategic period under review, the targeted number of fulltime performance auditors in the region by December 2014 was set at 500. It is encouraging that in the feedback from SAIs there were 498 fulltime performance auditors. Clearly, the target in the number of auditors has been achieved and what remains is the setting up of systems and structures for ensuring improved quality, timeliness and frequency of performance audits carried out in the region. Use of IT in Audit The strategic imperative on IT in audit falls under the audit standards and methodology domain but is an independent strategic imperative. However, it is also cross cutting among all the other

37 Strategic imperatives related to the five domains in ICBF 37 domains. This is an emerging area as the AFROSAI-E secretariat consults and engages with SAIs in the region. The special focus here is the implementation of IT tools such as electronic working papers and computer assisted audit techniques (CAATS) among others. First, related to audit of IT, there was a general question that required SAIs to indicate the platform used by their country to run the government s Integrated Financial Information System (IFMIS). This information is detailed in figure 20. What platform does the government integrated financial management system (IFMIS) run on? 4% 32% 16% 8% 40% ORACLE SAP EPICOR OTHER NOT RATED Fig 20: IFMIS platform used in countries of the 25 member SAIs The assessment of government IFMIS in the region as shown in figure 20 reveals that 40% (11) of the countries use Oracle platform, 8% (2) use SAP and 16% (4) are on EPICOR whereas 32% did not rate their country IFMIS platform. This information is important to secretariat for designing and delivering IT capacity building solutions in the region. The development levels in the IT imperative scored marginal movements. For example, in figure 21 during the strategic period; the assessed three years 2012 to 2014 posted a steady incremental developments of IT in audits in members SAIs.

38 38 Transversal Activity Report 2014 IT in Audit IT strategy IT tools used in audits IT audits Figure 21: Development levels in IT, carrying out of IT audits and use of IT tools in audits As observed from figure 21 there is a gradual but steady rise on all three aspects of this strategic imperative. Apart from IT tools used in audits which is approaching level 2.5, IT strategy and IT audits are yet to get to level 2.5. Although there is encouraging movement under this imperative more still needs to be done by SAIs in leveraging IT in their audits given the innovative opportunities that IT development can afford to SAIs in developing countries. This can be seen if we focus on analyzing developments within areas of selecting questions as shown in figure 22. IT Development levels based on selected questions The SAI is using tools such as computer assisted audit techniques (CAATS) 52% 48% The SAI is using tools such as electronic working papers 60% 40% Below 3 (No) The SAI has an IT support function with at least one (1) IT person for evety 30 staff members 64% 36% 3 and Above (Yes) The SAI has developed an IT/IS audit strategy for its IT/IS audits 60% 40% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100% Figure 22: Use of IT/IS in audit in 2014: Development levels for four selected questions From figure 22, there is an indication that 52% of the SAIs are at level 3 and above in the use of Computer Assisted Audit Techniques (CAATS). SAI that responded that there are at level 3 and above include Botswana, Ethiopia, Mauritius, Namibia, Rwanda, Seychelles, South Africa, Tanzania, Uganda, Zambia and Zimbabwe. However, it should be noted that based on quality assurance

39 Strategic imperatives related to the five domains in ICBF 39 support visits under this area, some of the countries appear to have over assessed themselves given the evidence contained in the particular quality assurance reports sent to the SAIs On the other hand, 40% of the SAIs responded that they were at level 3 and above in the use of electronic working papers. Among these SAIs are Botswana, Ethiopia, Mauritius, Namibia, Rwanda, South Africa, Swaziland, Tanzania and Uganda. Again some SAIs under this group appear to have over rated themselves as still more needs to be done before they get to level three 64% of the SAIs indicated that they were below level 3 in having an IT support function with at least one IT person for every 30 staff members. SAIs that responded that they were at level 3 and above include, for example, Eritrea, Ethiopia, Kenya, Liberia, Malawi, South Africa, Namibia, Tanzania and Zambia. Communication Communication is the fifth domain in the ICBF and the sixth strategic imperative described in this report. Performance in this strategic imperative over the last two years is shared in figure 21. Communication Mandate Strategies/policies Practicies (regular, channels and ad hoc) Internal communicaiton system User friendliness Promotion of SAI Figure 23: Development levels within the communication & stakeholders management strategic imperative 2013 and 2014 As noted from figure 21, we have all the key aspects of communication being responded to as at level 2.5 and above especially for the year 2013 and This is partly attributed to such key interventions like the SAI/PAC rollout programme and the regional communication workshops. It appears there is awareness among SAIs that communication is fundamental in their development. Such developments are encouraging as it provides the necessary impetus for SAIs to achieve the targeted level 3 of the ICBF. However, based on the results of quality assurance support visits assessment there is a general tendency to overate themselves under this domain. This has been corroborated by SAIs who commented that there is more that need to be done to develop and

40 40 Transversal Activity Report 2014 implement communication, policies/ strategies and systems in the area of internal communication, media communication and communication with the legislature. Detailed development on identified challenging areas is captured to enable the appreciation of the required developments to achieve level 3 and above. Figure 23 has this information. DETAILED ANALYSIS OF SELECTED QUESTIONS UNDER COMMUNICATION & STAKEHOLDER MANAGEMENT DETAILED ANALYSIS The SAI has implemented participation in workshops/seminars to promote the SAI via academic institutions 68% 32% The SAI has implemented a communication policy and strategy based on GAP analysis considerations 52% 48% (No) Below 3 (Yes) 3 and above The SAI has implemented a communication policy and strategy based on stakeholder analysis (including prioritization) 52% 48% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100% Figure 23: Detailed analysis of selected questions within the communication and stakeholder management strategic imperative 68% of SAIs are below level 3 in participating in workshops and seminars to promote the SAI via academic institutions. 32% of the SAIs which include Kenya, Mauritius, South Sudan, Tanzania, Uganda and Zambia indicated that they had achieved level 3 and above. However, only 48% of the SAIs have achieved level 3 and above when it comes to implementing their own communication policies and strategies. 52% responded that they were at level 2 and below. Interestingly, the same has been observed under the HR imperatives in terms of none implementation of HR plans, policies and procedures. It appears SAIs are facing challenges when it comes to monitoring the implementation of their own policies and procedures. GENERAL PERFORMANCE OF THE SAIs New focus areas In the 2014 questionnaire, questions were also included to gather baseline information on new focus areas. There are six new focus areas, namely, audit of performance information, audit of budgets, audit of extractive industries, professionalization programme, development of SAI innovation frameworks, and the executive leadership development programme that could provide details on the six new top strategic imperatives. The details of the responses are provided in figure 24

41 GENERAL PERFORMANCE OF THE SAIs 41 ASSESSMENT OF NEW FOCUS AREAS The SAI has identified, designed and implemented a leadership development programme targeting all levels of its management. 40% 60% The SAI has identified the need for the development and implementation of a SAI innovation framework based on the use of IT has strategic area, audit innovation and 24% 76% The SAI has identified the need for the establishment public sector professional accountancy organisation for the training of public sector accountancs and auditors 44% 56% 3 and above (Yes) The SAI carries out audits of performance information 24% 76% Below 3 (No) The SAI carries out audits of the budget(s) 40% 60% The SAI carries out audits of extractive industries 20% 80% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Figure 24: New focus areas for SAI development On an institutional perspective, SAIs specified high demand for the building of adequate capacity in the area of leadership development, innovation and professionalization of accountancy in the public sector. Figure 24 show the details with the highest needs being in the development of innovation frameworks as part of SAIs organizational development initiatives. When it relates to carrying out audits in various subject areas within the SAI s mandate we observed material interest being raised by SAIs for the development of necessary capacity. For instance, in figure 24, we noted that 24% of the SAIs responded that they were at level 3 and above in carrying out audits of performance information. Majority of the SAIs, that is, 76% of them, are below level 3. Some of the SAIs with level 3 and above responses on performance information include; Malawi, Rwanda, South Africa, Sudan, Tanzania and Uganda. On whether the SAI carries out audits of the budget, 60% of the SAIs indicated a general response of level 3 and above but with comments be raised regarding absence of mandate for the SAIs to audit the budget process. This area may need awareness interventions to help SAI promote and prioritise the audit of the budgets processes and execution, monitoring and reporting. There is a high demand on the audit of extractive industries among SAIs. However, comments were raised as to the need for building adequate capacity and selection of critical sectors that will demonstrate value and benefits of SAIs. Currently, only a small number of SAIs carry out audits of extractive industries on a limited basis as shown by responses of 20% of the SAIs indicating that they are at level 3 and above.

42 42 Transversal Activity Report 2014 Timeliness and audit coverage Timeliness in the submission of audit reports and coverage of audits have been identified as needing improvement during the strategic period under review. Although the questions used in the surveys during this strategic period were not directly related to ICBF framework, they were used because it was found important to include the questions in the survey for purposes of interpreting the status of development in the region. Time for tabling audit reports is not only dependent on the date of submission of the reports to the legislature but it also paints a picture of how well the public financial management system works as well as how the SAI itself works. As such the parameters have been expanded to ensure compatibility with the requirements of PEFA indicators on the scope, nature and follow-up of external audits 4. According to the PEFA indicator number 26, level C, twelve months is the limit for audit reports to be submitted to the legislature. Regularity Audits Not completed within prescribed time vs completed %age # of Reg Audits not completed in prescribed time over Reg. Audits Completed in % Please state the number of financial (regularity) audits not completed in the prescribed timeframe 3205 Please state the number of financial (regularity) audits completed during No. of Audits Figure 25: Regularity audits completed on time versus those that did not comply in 2014 As has been observed since the 2011 activity report there has been incremental improvement in timeliness of submission of audits reports by SAIs in the region. For example, for the year 2014 of the audits; (80%) audits were completed and finalized within the prescribed legal timeframes against non-compliance of 3034 (20%) as shown in figure 25. The reasons for none compliance were various, for instance; shortage of staff and funds, non-submission of the financial statements by auditees, late submission by the same and others. On the other hand, SAIs also 44 The indicator was developed by PEFA, a multi-agency partnership sponsored by among others the World Bank, the European Commission and DFID; PEFA Public Expenditure and Financial Accountability

43 Number of Auditors GENERAL PERFORMANCE OF THE SAIs 43 attributed the reasons for not attainment of 100% audit coverage to budgetary and staff constraints; and capacity limitations as well limiting legislative instruments. Size and composition of audit staff Over the period 2009 to 2014 the region has experienced increases in the number of its auditors. As can be seen in figure 26, the majority of audit staff in SAIs within the three audit streams were about 93% of them being regularity auditors, while 5% of them are performance auditors and approximately 2% of them being IT auditors. This can be explained by the historical realities of auditing being regularity/ financial in the region. Of course, the challenge is to grow the number of auditors in the other audit disciplines. COMPOSITION OF AUDITORS IN THE REGION - TREND IT Auditors Performance Auditors Regularity Auditors Figure 26: The number of regularity, performance and IT auditors in the region As noted from the above graph, there is a steady increase in the number of regularity auditors over the years, with a slight drop in 2014 that can be explained by SAI Nigeria who lowered their 2014 figures after revision. The number of performance auditors is increasing at a fairly steady rate over the years with the number of IT auditors lagging behind. As earlier noted, the number of performance and IT auditors are still few as compared to regularity auditors. To reach level 3, a SAI has to have a performance audit unit of at least 10 performance auditors, while for IT, it is not defined. In smaller SAIs, the numbers might be lower so long as it is a significant percentage of the total number of auditors. Detailed information about individual SAIs is disclosed in appendix 5. Financial Resourcing of SAIs Financial resourcing of most SAIs in the region is still dependent on government budgetary allocations with the executive wielding great influence on the size, amount and classification of their budgets. Out of the 23 SAIs who responded to the survey, three SAIs did not submit information about their own as well as their countries national budgets figures. The total of the national budgets of the 20 countries who responded amounts to an equivalent figure of US$293,3 billion. The total of

44 44 Transversal Activity Report 2014 the SAI budgets in these countries amount to $595,8 million representing an average % against the total national budget. A well-resourced SAI such as South Africa has a ratio of against their national budget. It can therefore be concluded that a ratio of % could be accepted as a regional benchmark. Using this benchmark as a mid-point the results of the survey can be presented as follows in table 8; Number of Countries Percentage of SAI Budget as a Ratio of the National Budget Benchmark Ratio Deviation from the Benchmark Table 8: Comparison of 20 SAI budgets as percentages of national budgets against the 0.002% benchmark As can be seen in table 8 during the 2014 financial year the calculated ratio of the SAIs budgets compared with the national budgets show that 10 (50%) of the SAIs has a ratio of 0.001% below the 0.002% benchmark. Only four (20%) SAIs achieved the 0.002% benchmark of a well-resourced SAI. The other 6 (30%) SAIs had their budgets above the benchmark. It important to note that our further analysis reveal that those SAIs who were on or above the benchmark also included in the budgets abnormal items like construction of office buildings and acquisition of capital equipment like vehicles which are generally considered to be once off budget items. It can generally be concluded that a big number of SAIs (above 50%) in the region are under-funded. As such strategies need to be developed to close the funding gaps. This would assist SAIs to achieve their development goals within a shorter period. This was also corroborated by comments from the SAIs who pointed out that lack of operational financial independence in most SAIs significantly limits their ability to effectively fund strategic development projects.

45 CONCLUSIONS 45 CHAPTER 6 CONCLUSIONS The AFROSAI-E Institutional Capacity Development Framework (ICBF) covers the different elements that have to be taken into consideration when establishing and developing a sustainable SAI. The framework is divided into five domains, which all have a number of elements and five development levels. The different domains are covered by the questionnaire that was sent out to the member SAIs in the region. When compiling the report some of the elements have been highlighted and others have been left out. The objective is to analyse and discuss in more detail the key outstanding issues observed in this year s survey, so as to paint a clearer picture of areas that still need more attention beyond Generally, the results in this year s report show that the responses are being stabilized. This in turn shows that the self-awareness of the situation also is interpreted in a more consistent way between the years, which is good. This enhances the possibility to prepare for development in a more efficient and effective way. However, there are still some areas; though few, where SAIs over rated themselves, especially in the area of organization and management, human resources and communication. Progress seen in the strategic areas for 2014 In the previous activity report, there was a feeling that there should be a broad alignment between the strategic and operational levels. The improvements observed in the previous year also highlighted the need to develop communication strategies; the need to develop strategies for planning and managing financial and human resources; the need to develop quality assurance strategies; the need to develop performance audit; and the need to analyze the reasons for deficient timeliness in reporting. It is satisfying to note that there has been further good improvement in this year s report. Generally, it is concluded that there has been good progress in the member SAIs during the strategic period under review. Compared with 2013, the work of SAIs on the strategic and operational levels reveal that the weak link seems to be on the operational/business planning level; and the ability of SAIs to clearly link the operations to their strategic plans. In our view this observation raises several different questions because there are different dimensions and reasons that can be used to explain the differences. For instance, in the domain of independence and the legal framework of SAIs the weak link has been observed to be in the slow progress in operationalizing SAIs legal framework that include the setting up of robust follow-up of audit recommendations mechanisms and annual reporting on SAIs performance in the public arena. Early on during this strategic period it has been observed that on a strategic level, SAIs were well developed but there was a gap between the strategic level and the operational level. In most SAIs the challenge is on the implementation of the strategic plans. In our view this gap still need to be

46 46 Transversal Activity Report 2014 closed. However, it is accepted that there are different explanations on the reasons for this gap which may include; lack of effective monitoring and evaluation mechanisms on the implementation of what has been planned; strategic and operational plans that do not communicate effectively with each other; cultural factors aspects such as the manner in which superiors communicate with subordinates and vice versa can explain the possible dysfunctional communication between managers and their subordinates. Thus, we emphasise the importance of appreciating that good internal communication at the strategic level is as important as the need for both managers and organizational staff to understand what to do in the rest of the organization. This may require the establishment of comprehensive management and leadership development programmes that addresses both the development of the organizational systems and structures as well management. Consequently, the recommendations on communication and management development raised in the previous year are still relevant. CONCLUSIONS AND WAY FORWARD The observations and conclusuions in this report are focused on assisting SAIs achieve their desired development levels in view of the strategic imperatives and the new imperatives. It should be observed that the 2014 activity report just like the 2013 report also addresses the need for SAIs to ensure alignment between their strategic and operational level goals. As such all efforts required to drive the development of SAIs towards full achievement of level three and above of the ICBF need to be continuous and in line with realities of the developmental needs of each SAI. As discussed in this report, the targeted goals that were set for this period were generally achieved although there are still areas that require further development. On the other hand, if we look closely into the underlying understanding of the different strategic imperatives, development is seen within several lenses. Further, it is also seen that taking the SAIs that have reached the level of 2.5 or higher the SAIs in the region seem to be heading towards the stipulated target. Independence Just like in the previous year, independence is the domain that shows the most stable figures. While the area of legislative independence has experienced encouraging development, SAIs still have some challenges in operationalizing their independence. Some of the challenges noted include; the area of financial independence, recruitment and remuneration of staff, involvement of the executive in the budgetary process, weak follow-up of audit recommendations mechanism, non-production and failure to publish the SAI s annual performance report. The need to become independent from the executive is the most obvious. SAIs should, thus continue to work for independence in practice and not only in legislation by lobbying both their primary and

47 CONCLUSIONS 47 secondary stakeholders. This is specifically important in relation to the executive. There may be need to develop a toolkit in the region that would assist SAIs in this endeavor. Human Resources Human resource is the most important resource of any organization and as such the development of the same cannot be overemphasized. The main focus of this imperative is the development and implementation of effective policies and plans that are well aligned with strategic plans and with best practices. Consequently, the development and establishment of performance management systems that include talent management is fundamental in order to accelerate the achievement of higher productivity levels for both the SAI and staff. In this report it was observed that human resource as a strategic partner and facilitator of the SAI is not well linked to other functions of the SAI. These weaker links however concern the human resources management on an operational level like the lack of effective appraisal systems and systems that encourages the staff to find, use, manage and share information, knowledge and skills. Another weak link was on whether or not there is are specific management and leadership development programmes in place that encourages the professionalization of the various SAI disciplines. Thus, SAIs and the Secretariat should continue to develop and implement human resource management tools to assist in the achievement of higher development levels. Secondly, SAIs should continue to focus on the establishment of management and leadership development programme to improve the capacity of their managers. Thirdly, SAIs also start to invest in the professionalization of their staff in order to ensure the development of capable organisations. Communication Communication is crucial for the wellbeing of the SAI as it affects how the other four domains of the ICBF are executed. This report shows that most SAIs are yet to effectively implement their communication policies and strategies. It is however reassuring to note that most of the SAIs have developed communication policies but the challenge is in the implementation. The following insights are thus put forward; Communication is always a crucial issue and the results in this year s report show that in relation to parliament especially the communication concerning reporting on own performance and as part of that includes reporting on follow-up of recommendations needs to be put into focus. There is need to further develop the external communication with parliament (PAC) by capacitating the communication functions/units of SAIs. The development of internal communication between the different organizational levels should continue to be a focal area as means of ensuring better alignment of the strategic and operational levels of staff. Consequently, SAIs should continue to prioritise the

48 48 Transversal Activity Report 2014 establishment of robust organizational communication structures and human relations to ensure effective internal communication. Quality Assurance Setting up of robust quality control measures in the SAI assures and enhances the credibility and reputation of the SAI s audit services to its different stakeholders. It follows that the continuous monitoring of the SAI s quality control management system is important. On aggregate the development level of quality assurance, though there has been good improvement, still needs to be prioritized in the region. In other words, this is an area that needs to be focused continuously given that the quality control aspects for the audit disciplines are evolving. For example, quality control aspects of especially management and communication apart from the audit disciplines are also necessary to focus before the SAI can achieve quality audit services. Quality Assurance is a continuous work and there is still a need to focus on the quality assurance issues in the different parts and levels of the SAIs Performance Audit Performance audit is a relatively new discipline, especially for some of the countries in the regions and thus still needs to be an area of focus for further development. There has been significant progress in the development of performance audit in the region in this strategic period. In terms of achievement, there is better understanding and interest in performance audit now compared to when the strategic imperative was set. However, the performance audit discipline still needs a lot of support and education. Together with continuous training and development of performance auditors there should be deliberate prioritization in the development and implementation of quality control management systems focusing on the audit review skills necessary for performance auditing and enhancing recruitment, training and retention for auditors and managers with a wide mix of different professional backgrounds. Use of IT in Audit The use of IT in audit has been known to drive innovation and creativity in the delivery of audit services. Although there has been progress in the development of this imperative there is still more room to develop this imperative even in the next strategic period. As such, there is still need for development not only in the area of knowledge and skills for auditing but as well as in the innovative and creative use of the same. Further, that there should be prioritized focus on the development and implementation of comprehensive IT strategies and IT support systems that are in tune with the IT development landscape.

49 APPENDICES 49 APPENDICES

50 Appendix 1: AFROSAI-E INSTITUTIONAL CAPACITY BUILDING FRAMEWORK (ICBF): A GENERIC FORMAT OF THE INSTITUTIONAL PERSPECTIVE FIVE DOMAINS WITH ELEMENTS FOR ALL THE 5 LEVELS IN THE FRAMEWORK (ICBF) INDEPENDENCE AND LEGAL FRAMEWORK ORGANIZATION AND MANAGEMENT HUMAN RESOURCES AUDIT STANDARDS AND METHODOLOGY COMMUNICATION AND STAKEHOLDER MANAGEMENT INDEPENDENCE OF THE SAI Appropriate and effective constitutional/statutory/ legal framework Financial autonomy Managerial and administrative autonomy Appropriate human, material and monetary resources INDEPENDENCE OF THE HEAD OF SAI AND MEMBERS OF COLLEGIAL INSTITUTIONS Security of tenure Legal immunity in the normal discharge of their duties SUFFICIENTLY BROAD MANDATE A broad mandate and full discretion in the discharge of SAI functions Direct submission of reports to Parliament Access to information Discretion in selection of audit issues Freedom to decide on content, timing of audit reports and to publish and disseminate them LEADERSHIP AND DIRECTION STRATEGIC PLANNING ANNUAL OPERATIONAL PLANNING ORGANIZATION OF THE SAI Organizational development Existence of a performance audit function Existence of an IS audit function Existence of an IT support function INTERNAL CONTROL SYSTEM in line with International standards USE OF RESOURCES A management information system (MIS) tracking key management information A time recording system to enable reporting of staff costs HUMAN RESOURCE AND PROFESSIONAL DEVELOPMENT POLICY Including: Recruitment Remuneration Performance management system Career development Training Staff welfare Professional development Job rotation Retaining Exit DEVELOPMENT PLANS Aligned with: Strategic plan Annual operational plan MANAGEMENT OF PERSONNEL Recruitment Development Staff welfare Performance appraisals Retaining Filling of vacant posts Exit ANNUAL AUDIT PLAN Covering: Assessments of constraints Current issues and stakeholder expectations Risk assessments in place for prioritizing audit risk Clear statement of audit coverage Activity plans for regularity and performance audits Addressing of backlogs AUDIT MANUALS Aligned to international standards Connected to a training program Reviewed and updated regularly QUALITY CONTROL MEASURES AND QUALITY ASSURANCE SAI policy and procedures Roles and responsibilities Type of review specified and planned, including nature, scope and frequency Implementation of a quality assurance handbook or guidance for full compliance to international standards COMMUNICATION POLICY AND STRATEGY COVERING INTERNAL AND EXTERNAL COMMUNICATIONS Based on: Legal framework Vision, mission and values Stakeholder analysis (including prioritization) SWOT or similar analysis Gap analysis considerations CHANNELS OF COMMUNICATION Between: SAI and Parliament PAC and Judiciary AD HOC MEETINGS With: Ministry of Finance and oversight bodies INTERNAL COMMUNICATION Including: Alignment of staff to SAI s vision, mission, goals and objectives Implementation of effective information sharing practices

51 APPENDICES 51 INDEPENDENCE AND LEGAL FRAMEWORK ORGANIZATION AND MANAGEMENT HUMAN RESOURCES AUDIT STANDARDS AND METHODOLOGY COMMUNICATION AND STAKEHOLDER MANAGEMENT EFFECTIVE FOLLOW UP MECHANISM at the SAI on its recommendations SAIS REPORTING ON ITS OWN ACTIVITIES AND USE OF RESOURCES OVERSIGHT AND ACCOUNTABILITY The Parliament or an oversight body appoints the SAI s external auditors CODE OF ETHICS and its monitoring TRAINING ASPECTS WITH MONITORING AND EVALUATION MECHANISMS For: New entrants development On the job training Secondments to other SAIs Audit/accounting qualifications Coaching and mentoring process CAPACITY TO TRAIN ITS STAFF To: use information develop knowledge develop skill QUALITY ASSURANCE PROCESSES PERFORMED BY OTHERS AUDIT IT-TECHNIQUES Such as: Electronic working papers Computer assisted audit techniques (CAATS) IMPLEMENTATION OF THE SAI COMMUNICATION STRATEGY for the audit process with the auditees COMMUNICATION With: Relevant experts Professional bodies Relevant journals Internal audit Other public sector audit institutions SAI REPORTING Should include: Follow up on previous recommendations Standard structure of reports, user-friendly with materiality considerations PROMOTION OF THE SAI Via: Engagement with: > Media > The public > Academic institutions > International community and organizations Use of effective information sharing practices AUDIT PERFORMANCE AND RESULTS Such as: Audit coverage of expenditure Number of signed and issued or published performance audit reports Number of/percentage of performance auditors in relation to total audit staff Integration of IS audit in regularity and performance audit Coverage of IS audit Time for submission of the annual audit report to Parliament from the beginning of the year Time for implementation of the recommendations Key stakeholders view on the benefit of the audit

52 Appendix 2: Country Level Presentations 2014 Appendix 2 shows the development levels in accordance with the institutional capacity building framework (ICBF) within the AFROSAI-E region. The values are based on annual self-assessment questionnaires for the four years from 2010 to 2014.

53 APPENDICES 53 Angola 5.00 Angola based on 2013 data Independence & Legal Framework Organization & Human Resources Audit Methodology & Standards Communication & Stakeholder Botswana 5.00 Botswana Independence & Legal Framework Organization & Human Resources Audit Methodology & Standards Communication & Stakeholder

54 54 Transversal Activity Report 2014 Eritrea 5.00 Eritrea Independence & Legal Framework Organization & Human Resources Audit Methodology & Standards Communication & Stakeholder Ethiopia Ethiopia Independence & Legal Framework Organization & Human Resources Audit Methodology & Standards Communication & Stakeholder

55 APPENDICES 55 Gambia 5.00 Gambia Independence & Legal Framework Organization & Human Resources Audit Methodology & Standards Communication & Stakeholder Ghana 5.00 Ghana Independence & Legal Framework Organization & Human Resources Audit Methodology & Standards Communication & Stakeholder

56 56 Transversal Activity Report 2014 Kenya 5.00 Kenya Independence & Legal Framework Organization & Human Resources Audit Methodology & Standards Communication & Stakeholder Lesotho 5.00 Lesotho Independence & Legal Framework Organization & Human Resources Audit Methodology & Standards Communication & Stakeholder

57 APPENDICES 57 Liberia 5.00 Liberia Independence & Legal Framework Organization & Human Resources Audit Methodology & Standards Communication & Stakeholder Malawi 5.00 Malawi Independence & Legal Framework Organization & Human Resources Audit Methodology & Standards Communication & Stakeholder

58 58 Transversal Activity Report 2014 Mauritius 5.00 Mauritius Independence & Legal Framework Organization & Human Resources Audit Methodology & Standards Communication & Stakeholder Mozambique 5.00 Mozambique based on 2013 data Independence & Legal Framework Organization & Human Resources Audit Methodology & Standards Communication & Stakeholder

59 APPENDICES 59 Namibia 5.00 Namibia Independence & Legal Framework Organization & Human Resources Audit Methodology & Standards Communication & Stakeholder Nigeria 5.00 Nigeria Independence & Legal Framework Organization & Human Resources Audit Methodology & Standards Communication & Stakeholder

60 60 Transversal Activity Report 2014 Rwanda 5.00 Rwanda Independence & Legal Framework Organization & Human Resources Audit Methodology & Standards Communication & Stakeholder Seychelles 5.00 Seychelles Independence & Legal Framework Organization & Human Resources Audit Methodology & Standards Communication & Stakeholder

61 APPENDICES 61 Sierra Leone 5.00 Sierra Leone Independence & Legal Framework Organization & Human Resources Audit Methodology & Standards Communication & Stakeholder South Africa 5.00 South Africa Independence & Legal Framework Organization & Human Resources Audit Methodology & Standards Communication & Stakeholder

62 62 Transversal Activity Report 2014 South Sudan 5 South Sudan Independence & Legal Framework Organization & Human Resources Audit Methodology & Standards Communication & Stakeholder Sudan 5.00 Sudan Independence & Organization & Legal Framework Human Resources Audit Methodology & Standards Communication & Stakeholder