Peer Learning Event for EITI Implementing in Francophone Countries in Africa

Posted by WGEI On Feb 21, 2018

Peer Learning Event for EITI Implementing Francophone Countries in Africa
Peer Learning Event for EITI Implementing Francophone Countries in Africa

Extractive Industries Transparency Initiative (EITI) recently hosted a peer-learning workshop in Yaoundé, Cameroon (28-30 November) for Francophone Africa. A great number of French speaking African countries are working towards implementing the EITI standards, to demonstrate transparency in their extractive industries sectors.

Implementing the standards is challenging. The EITI Secretariat is increasingly interested in using the work of SAIs in this process. Why? Because SAIs may give assurance on the EI revenue figures presented by government. In the EITI reconciliation process the EI companies’ payments to government and government’s receipts from EI revenue shall be reconciled and compared. The companies’ payments shall be verified by their own external auditors, while the government’s reported receipts shall be verified by an independent auditor, preferably a SAI. The question is; how can EITI rely on the verification by the SAI?

WGEI was invited to the Yaoundé workshop to explain about the role of SAIs in auditing the extractive industries and how to rely on their work. Mr. Trygve Christiansen from OAG Norway represented WGEI as facilitator on the topic “Data reliability”, which refers to the reliability of data provided by the Ministry of Finance on the EI government revenue figures. I explained that typical sources for assessing the quality of the work of SAIs are SAI Performance Measurement Framework (SAI PMF) assessment reports and Public Expenditure and Financial Accountability (PEFA) assessment reports. A better option may be to assess how SAIs are already auditing the EI value chain. The overview of audit reports along the EI value chain on the WGEI website may be a valuable source. Future EITI country reports are supposed to include an assessment of the whole EI value chain in the country. I gave a number of examples of countries which have carried out audits along the whole value chain including award of licenses, monitoring of production, revenue audits and how revenue has been allocated. These audit results may be used by EITI in assessing how the whole EI value chain in the country is working.

What shall EITI do when the SAI cannot be relied upon? In many cases in Francophone Africa they have tasked the Inspection Générale des Finances (The Inspectorate General of Finances) to perform the verification of government revenue figures. In some cases, they may have a better understanding of financial audit. The Inspection Genérale des Finances typically report to the Ministry of Finance and can only account for revenue figures managed by the Ministry. In the long term it may not be sustainable to rely on an entity which is within the Ministry of Finance, for at least two reasons. Firstly, there may be other government entities such as the resource ministry or the state owned oil/mining company that collects the EI revenue. The Inspection Genérale des Finances may not be able to access these figures. Secondly, the Inspection Genérale des Finances is not an independent entity, but is instead accountable and dependent on the Ministry of Finance.  The Cour de Comptes (Court of Audit) however is the de facto independent SAI. We discussed lengthy strategies for how to use  the Cour de Comptes more in the EITI work, and how to improve their capacity of verifying government EI revenue figures.

Lastly, I learned that the SAIs of Cameroon, Senegal and Mauritania are playing an active role in the EITI reconciliation process. They assess the reporting templates which the country’s Ministry of Finance shall submit to the respective country EITI representatives.

To sum up, SAIs can play an increasingly active role in the EITI reconciliation process. SAIs can give assurance on the credibility of government EI revenue figures. Also, SAIs perform audits on the whole EI value chain, not just EI revenue. With the increased scope of EITI reports, reliance can also be put on the whole work of SAIs in auditing the extractive industries. SAIs play a key role in ensuring transparency, accountability and credibility on how government manages the extractive industries sector. This needs to be stronger embedded into the EITI reconciliation process.

By  rygve Christiansen

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