The AFROSAI 2017/18 Coordinated Audit on Corruption as a driver of Illicit Financial Flows

Report ID: 234

In 2017, members of the AFROSAI from South Africa, Senegal, Togo, Tanzania, Kenya, Niger, Uganda, Sierra Leone, Zimbabwe, Chad, Côte d’Ivoire and Liberia undertook a coordinated audit, focusing on corruption as a driver of Illicit Financial Flows, especially on Asset Declaration and Public Procurement Systems which was completed in April 2018. 

On the topic of Asset Declaration Systems, the audit revealed that:

• Systems have been put in place in all but one country, but they differ substantially.
• There is a need to revisit the regulatory frameworks.
• The sanction regime needs to be strengthened and fully applied.
• In most countries, the verification of declarations needs to be urgently improved.
• Public accessibility of declarations needs to be reconsidered.

On the topic of Asset Declaration Systems, the audit revealed that:

• Systems have been put in place in all countries with regulatory frameworks that provide for transparency.
• Public procurement systems need to deliver on competitiveness and efficiency.
• Conflicts of interest in public procurement need to be better managed.
• Inclusion of procurement officials in asset declaration regimes is essential.
• Corruption reporting mechanisms need to be made fully operational.
• Oversight over procurement, including follow up and sanctions, must be strengthened.
• Capacity for implementation of procurement laws and regulations is weak.

The overall conclusion of the AFROSAI 2017/18 Coordinated Audit on Corruption as a driver of Illicit Financial Flows:

• The Governments audited have made substantial progress in putting the asset declaration and procurement systems required by AUCPCC and UNCAC in place. It is now imperative to improve their operations.
• As an overarching finding, it is imperative to strengthen the controls of these systems, whether it is the verification of asset declarations, the procurement audits by oversight bodies or the control of declarations of conflict of interest in procurement. These controls combined with adequate sanction regimes must be put in place to prevent impunity.
• Supreme Audit Institutions are essential actors in providing recommendations for improving these and other public finance systems. Their role in national governance systems should therefore be strengthened.

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.

Strengthening Procurement Audit Practices & Compliance in the Caribbean - Compendium Report of Collaborative Procurement Audits Undertaken in Select Caribbean Countries

Report ID: 279

With the joint support of the World Bank and the Inter-American Development Bank (IDB), CAROSAI launched an initiative for collaborative audits on procurement. The SAIs of  Bahamas, Guyana, Suriname, Barbados, Montserrat, St Kitts, Curacao and Belize conducted the collaborative audit in their respective countries. The audits were conducted simultaneously as part of a knowledge-sharing approach in reviewing procurement activities. The purpose of these audits was to assess the general adequacy of procurement practices across the region.

The report aims to share audit methodologies and approaches as well as  to serve as a tool for knowledge-sharing and a baseline for procurement audit in the Caribbean providing insights on government’s engagement and compliance with procurement rules and recommendations for enhanced procurement practices.

Source: carosai.org/strengthening-procurement-audit-practices-compliance-in-the-caribbean-compendium-report-of-collaborative-procurement-audits-undertaken-in-select-caribbean-countries/

Report on the Coordinated Audit carried out by NKÚ and BRH on VAT under the mini one-stop shop scheme

Report ID: 283

For many years already, the Supreme Audit Institutions (SAIs) of the Czech Republic  and the Federal Republic of Germany have successfully cooperated in the field of VAT and have also carried out two coordinated audits.

The two SAIs decided to address the topic of e-commerce and VAT for the first time,
 taking up current economic developments and carried out a cooperative audit.

The audit subject was the taxation of digital services supplied by EU companies to private
consumers in the European Union. The audit covered the period from 1 January 2015 to 30 June 2017.

The audit objective was to study
• how the tax authorities of the two countries have complied with their EU obligation to
implement MOSS;
• emerging difficulties in implementation; and
• the extent to which the MOSS system is suitable for ensuring VAT revenue collection.
Both SAIs summarised their findings in national reports and jointly drafted the jpint report on that basis.

SOURCE: https://www.nku.cz/assets/publications-documents/other-publications/joint-report-vat-under-moss-scheme-2019-en.pdf

Informe Final de Auditoría N° 791 de 2021 sobre Auditoría de Compras Públicas Sostenibles utilizando análisis de datos.

Report ID: 429

Se evaluó la eficacia de las acciones de gestión gubernamental dispuestas por la Dirección de Compras y Contratación Pública, el Ministerio del Medio Ambiente y la Subsecretaría de Evaluación Social del Ministerio de Desarrollo Social y Familia, para la implementación de la meta nacional acordada vinculada con la meta N° 12.7 de los ODS “Promoción de prácticas de compras públicas que sean sostenibles, de conformidad con las políticas y prioridades nacionales”, considerando aspectos de resiliencia. Además, se revisó la adopción de los lineamientos instruidos por las citadas entidades públicas en las Municipalidades de Cerrillos, La Pintana, Las Condes, Puente Alto y Talagante, para el período comprendido entre el 1 de enero de 2018 y el 31 de diciembre de 2020.Se evaluó la eficacia de las acciones de gestión gubernamental dispuestas por la Dirección de Compras y Contratación Pública, el Ministerio del Medio Ambiente y la Subsecretaría de Evaluación Social del Ministerio de Desarrollo Social y Familia, para la implementación de la meta nacional acordada vinculada con la meta N° 12.7 de los ODS “Promoción de prácticas de compras públicas que sean sostenibles, de conformidad con las políticas y prioridades nacionales”, considerando aspectos de resiliencia. Además, se revisó la adopción de los lineamientos instruidos por las citadas entidades públicas en las Municipalidades de Cerrillos, La Pintana, Las Condes, Puente Alto y Talagante, para el período comprendido entre el 1 de enero de 2018 y el 31 de diciembre de 2020.