Coastal and Marine Environments in Africa: A Cooperative Audit by the African Organisation of English-Speaking Supreme Audit Institutions (AFROSAI-E)

Report ID: 240

In 2017, AFROSAI-E initiated a cooperative project to audit coastal and marine environments in Africa. Six Supreme Audit Institutions from the region participated. This publication expands on the process followed and the common findings among the participating countries.

AFROSAI-E (African Organisation of English-Speaking Supreme Audit Institutions), with the support of the GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit), initiated a project in 2017 to capacitate SAIs of countries with coastal areas, to conduct audits to:

• Assess the state of coastal ecosystems;
• Understand the significant issues and coastal zone management risks for coastal communities;
• Make recommendations for improvement.

The AFROSAI-E region has 16 member countries that are coastal states, two of which are island states. Six SAIs agreed to participate in this cooperative audit using a mix of both performance and compliance audit principles and methodology. The six SAIs are Liberia, Mauritius, Namibia, Seychelles, Sudan and Tanzania.

Findings:

Lack of public awareness of coastal environmental issues: Three of the participating SAIs found that there is limited general awareness and understanding by the public of the importance of the marine environment and related pollution and degradation issues.

Outdated and insufficient legislation/ policies and poor alignment with international commitments: Almost all the participating SAIs found that legislation, policies and plans related to coastal management and protection are outdated and insufficient to address many of the current environmental risks.

Inadequate human and technical resources: Two SAIs found that there are inadequate human and technical resources (satellite surveillance systems, vessel monitoring systems, boats for inspections etc.) to manage and monitor coastlines and marine environments. Human resources also lack the necessary competencies and understanding of marine-related environmental risks and issues. Technical resources and infrastructure essential to the guarding of the coastal zones are scarcely available.

Too many silos and too little coordination: Three of the six SAIs found that the relevant sector (coastal/marine environment) policies are fragmented. Limited or no cooperative arrangements and coordination exist among the various spheres of government and relevant stakeholders, to manage and protect coastal regions and related resources.

Inadequate data, statistics and information systems: Three of the participating SAIs found that national data, statistics and information systems that inform decisions and coastal programmes are inadequate or completely unavailable. For example, statistics on threatened marine species and fishing activities as well as data on the health status of marine environments and the levels of coastal degradation are not available.

Inadequate monitoring of coastal resources and poor enforcement of legislation: All six SAIs found that monitoring of coastal resources and enforcement of legislation are inadequate.

Ineffective performance indicators to monitor progress: Two SAIs found that either no key performance indicators are being implemented to measure progress in achieving objectives on the management and condition of coastal and marine resources, or the indicators used are ineffective.

Insufficient coastal response strategies specific to climate change risks: Almost all the participating SAIs found that climate change response strategies related to coastal environments are insufficient or non-existent.

Are adequate mechanisms in place for the designation and effective management of Marine Protected Areas within the Mediterranean Sea?

Report ID: 241

The cooperative audit identified that the necessary mechanisms for the designation and effective management of Marine Protected Areas (MPAs) within the Mediterranean Sea were not always in place to achieve the desired equilibrium between the sustainability of Marine Protected Areas and blue growth.

This cooperative audit based its findings and conclusions on seven individual national audit reports, which were compiled by the Supreme Audit Institutions (SAIs) of Albania, Cyprus, France, Greece, Malta, Portugal and Slovenia. These national reports considered MPAs to entail a delineated marine site, which may have been already designated or is to be designated as such under international, regional or national legal frameworks and policies. The main objective of a MPA is to conserve and nurture the marine biodiversity while striking a balance with any economic activity permitted in the area. This definition includes, but is not restricted to, Natura 2000 sites, Specially Protected Areas of Mediterranean Importance (SPAMIs) designated under the Protocol concerning Specially Protected Areas and Biological Diversity of the Barcelona Convention, artificial reefs or designated Marine Parks.

The aim of the cooperative audit was to determine the degree to which countries in the Mediterranean region are effectively conserving marine biodiversity to attain the targets set in national legislation and international protocols. To address this aim, the participating SAIs compiled an audit design matrix based on issues relating to the regulatory framework, strategies, site’ assessments undertaken, management plans drafted and national surveillance efforts. The analysis of these five key areas, led to these main findings:

a. The legal framework regulating MPAs is sufficiently robust and mandates national authorities to ascertain the sustainability of the marine environment. However, it does not provide a common definition of what constitutes a MPA. In addition, overlapping and in some instances conflicting provisions were identified within the national regulatory frameworks.

b. National strategic frameworks, generally, reflected the political will and aimed to outline the relevant outputs as well as outcomes through the designation of MPAs. However, in three of the participating countries no comprehensive sector specific strategies are in place, while all SAIs identified the potential of strengthening national strategic frameworks, so as to optimize their impact.

c. Participating SAIs noted that national authorities have carried out the relevant site assessments to designate MPAs. Nonetheless, the scope of these assessments was not always appropriately broad, either due to resource and technical expertise limitations, or to diplomatic issues when the site assessments concerned joint jurisdictions or the high-seas.

d. While it is recognised that management plans are key to the implementation of measures to ensure the sustainability of MPAs, most participating SAIs reported that site-specific plans are not yet in place. Moreover, other technical and logistical limitations, such as coordination issues and the non-deployment of resources, influenced the degree to which participating countries could implement specific measures to ascertain the conservation of protected species within MPAs.

e. SAIs reported that site-specific management plans, administrative capacity weaknesses and coordination limitations between stakeholders are the key elements that hindered adequate monitoring and enforcement of measures in MPAs. Monitoring and enforcement shortcomings do not guarantee that MPAs and therefore the biodiversity they aim to protect are being managed, as well as utilised, in a sustainable manner.

Governments’ responsibilities in designating, managing and enforcing the regulatory framework concerning MPAs is a complex endeavour. This audit has noted that more needs to be done to find a balance between the protection of the marine environment and the economic activities within. Within this context, site-specific plans and the deployment of the appropriate level of resources are a prerequisite to effective management, regulation and monitoring of Marine Protected Areas.

The equilibrium between marine conservation and blue growth also necessitates cross-border cooperation. To this effect, the strengthening of bi-lateral and multi-lateral frameworks of cooperation in this area between Mediterranean countries is critical to the sustainability of this biodiversity and socio-economic rich sea.

Practical Advice for Auditors of Foreign Aid Projects in the Pacific: First Co-Operative Financial Audit

Report ID: 242

The regional co-operative audit of funds provided by foreign aid was the first pilot for a co-operative financial audit conducted by the Pacific Association of Supreme Audit Institutions (PASAI) under its co-operative audit program. Supreme Audit Institutions (SAIs) in six Pacific Island Countries (PICs) conducted individual audits. This report summarises the findings across the six individual audits conducted and identifies some of the common weaknesses in the audit of foreign aid projects. Furthermore this pilot program resulted in multiple observations and lessons learned which will assist SAIs in the conduct of financial audits of foreign aid projects in the future.

It is expected that both SAIs and development partners in the Pacific Region may learn valuable lessons from individual SAI reports as well as from this regional report to improve and enhance the quality of the audits of funds provided by foreign aid.

Six SAIs participated (Cook Islands, Fiji, Kiribati, Samoa, Tonga and Tuvalu), with 12 participants attending the planning meeting and 10 participants attending the final reporting meeting.

The conduct of a financial audit does not include any scope for the auditor to comment on the efficiency or progress of the project itself or the effectiveness of the foreign aid received by government. This scope falls under the audit requirements of a performance audit. On this basis, the audit reports provided an audit opinion on compliance with the funding agreement.

The audit findings that resulted from the audits are summarised as follows:

1. non –compliance with the funding agreement in relation to procurement processes and reporting requirements

2. weak controls over the disbursement of payments

3. poor record management systems

4. lack of asset management processes in place (no fixed assets register)

5. budget reports were not sufficiently comprehensive and were sometimes not prepared according to funding agreements (or project operational manuals)

6. untimely budget reporting which limits their usefulness

7. lack of evidence of governance arrangements such as no signing of minutes of steering committees and no sign off by review panelists to engage contractors

The management responses received from the auditees were positive and in support of the audit recommendations raised by the SAIs.

Overall the foreign aid for these projects was generally managed effectively and as a result the findings were not pervasive and the audit opinions issued were therefore unmodified. However, these audit findings are repeated year after year and usually the auditors do not follow up on the implementation of recommendations until the next annual audit. If these audit issues are not addressed by the implementing agency when the auditors raise them, this increases the opportunity in the future of risk of theft, fraud and misappropriation of funds or assets.

Details of the audit scope, including what constitutes a risk-based approach to financial auditing and audit findings can be found in Section 1 and Section 2 of this report.

Collection of Works on Results of the 1st Cooperative Compliance Audit – Public Procurement in the Pacific

Report ID: 243

The audit was a joint initiative between PASAI and the INTOSAI Development Initiative (IDI). Lead by PASAI’s Director of Technical Support, A’eau Agnes Aruwafu and Mr. Shofiqul Islam, IDI’s Manager of Capacity Development, PASAI’s team of facilitators included two officers from Audit NZ, one auditor each from SAI Cook Islands, Samoa, Norway and Maldives, and PASAI’s Director of Practice Development, Sinaroseta Palamo-Iosefo who helped with design, planning and quality reviews. The whole team met in Oslo to design the program followed by a two-week planning workshop in Auckland, NZ, in 2015, and another week of reporting in Samoa, in Dec 2016. Quality assurance of the reports was done in Dec 2017, with the SAIs’ reports being made public for most in 2018.

It was a long-term activity but a successful one, and this report highlights not only the results of the audits themselves, but also the lessons learnt in being the first region to carry out a cooperative compliance audit, on this particular topic. This report sits in the PASAI suite of information-sharing regional reports as PASAI continues to support its SAIs as Learning and Knowledge organisation (and we’ll soon be following up with a regional report on the cooperative performance audit of preparedness for implementation of the SDGs).

Key Audit Issues

There were many audit issues identified during these audits which are recurring and all-too-common problems in the Pacific region. For instance:

• Procurement legislation is out of date and need to be reviewed on a regular basis to ensure the purchasing practices are up to date, efficient, effective and that the seven principles of procurement are met;
• There is poor implementation of the procurement life-cycle phases relating to planning and monitoring or evaluating contracts, which is largely due to the lack of focus or training in these areas for procurement staff and disagreement with those charged with governance;
• There is a lack of procedure and guidance for some aspects of the procurement life-cycle; and
• Public Officers responsible for the use of public funds through procurement practices must be reminded of maintaining high ethical standards with integrity and honesty.

However, this regional programme identified new issues that need to be addressed to improve public procurement practices in the pacific region and hopefully reduce the ongoing recurring audit issues identified:

• Responsibilities for public procurement have traditionally been seen as an administrative service function carried out by staff who have not been trained properly in the procurement lifecycle. There needs to be a change from this being an administrative role to becoming a more proactive and strategic one. Building professional procurement expertise in governments will meet the development challenges faced as a result of weak procurement practices;
• Many of the procurement units or officers responsible for procurement practices did not have a good grasp of the entire procurement cycle including the seven principles of procurement. These are written in legislation and some procedures, but not embedded in daily practice to constantly remind all officers of their responsibilities. Training is required across all government agencies involved in procurement to remind them of the importance of accountability and transparency;
• This compliance audit methodology has really fine-tuned the focus of auditors to really highlight how non-compliance with procedures, legislation and processes increases the risks of fraud, theft and misappropriate of government resources (assets and cash). However, if the audit results are not followed through with actions by government/ministries to improve on these procurement processes, then there will be no change;
• Development partners in the region provide training on procurement in-country; however, these are usually in relation to their own procurement requirements. There needs to be an alignment to the government processes to try and improve procurement processes of governments/implementing agencies at the same time. The underlying principles of procurement will always be the same across the globe, so this is a good starting point for all training provided.

Energy efficiency of Public Sector Buildings

Report ID: 244

The supreme audit institutions of the Flanders region of Belgium, Bulgaria, Estonia, Hungary, Latvia, Lithuania, Portugal and Slovakia have conducted a cooperative audit on the energy efficiency of public sector buildings. The cooperative audit was conducted within the framework of the Working Group for Environmental Auditing of the European Organization for Supreme Audit Institutions (EUROSAI WGEA). The aim of the audit was to determine how well the participating countries have implemented the respective requirements of the European Union Energy Performance of Buildings Directive and the Energy Efficiency Directive. Audited countries have mostly done well in transposing the concrete targets of the directives into national law.

For example, most countries have put in place the 3% renovation or energy saving target for public sector buildings, devised necessary financial instruments, as well as established requirements for nearly zero-energy buildings and for public sector buildings to have and display energy performance certificates. Likewise, the systems for monitoring and control have been developed. Nevertheless, implementation has remained a challenge. Looking more closely into how the targets, requirements and systems have been implemented, the national audits found that funding has mostly been incoherent, and the effectiveness of the financial support system has not been analysed in all but one country. And only one country could report that the funds spent for fulfilling the 3% target are being monitored. Though both the 3% target and the deadline for nearly zero-energy buildings have been set in national legislation, proper planning and measuring for achieving the targets are lacking in some countries.

Furthermore, monitoring and control systems tend not to fulfil their purpose. National audits have discovered that checking the quality and proper placement of energy performance certificates has been infrequent and, in some cases, checks have not been conducted in practice. Though countries have been keen to use the options listed in the EED by choosing narrower definitions and smaller renovation and savings targets of central government buildings, over half of the participating countries are still struggling to meet the 3% target.

According to the SAI’s this was mainly due to a lack of planning or a poor implementation of existing plans. Inadequate funding and the poor quality of data on renovations or energy saved, were also pointed out by participating SAIs. In their national audit reports, participating SAIs have recommended to undertake systematic and improved planning, as well as comprehensive strategies to enhance the energy performance of public sector buildings.

SAIs also stated that implementation of energy efficiency programmes could be more efficient and effective. Furthermore, participating SAIs noted that monitoring and control activities should be more systematic. Their results should be analysed and measures should be taken to eliminate any shortcomings. Another important issue SAIs pointed out is the need for improved funding of energy efficiency measures. This includes more information about funding options, as well as more ambition in devising measures.