Mandate and Jurisdiction of the CAPA in Relation to its Oversight Role/Optimizing CAPA’s Effectiveness Rasheed Draman African Centre for Parliamentary Affairs (ACEPA) Accra, GHANA

Outline The Mandate of the CAPA Clear Mandate but Limited Jurisdiction Lessons from the European Parliament European Court of Auditors European Parliament Committee on Budgetary Control Ensuring Success with a Clear Mandate and Limited Jurisdiction Supporting the Work and Independence of the OIA of PAP PAC Success Factors: World Bank Institute Survey Objectives of CAPA Review of Audit Reports Issues to Look out for in Audit Report

The Mandate of the CAPA Rule 22 (2) of the Rules of Procedure of PAP, Article 3, the CAPA shall have the mandate to: Consider the internal and external audit reports relating to the PAP and recommend appropriate measures for an effective implementation of the recommendations arising therefrom; Consider the reports sof the Board of External Auditors on the African Union and recommend appropriate measures for an effective implementation of the recommendations arising therefrom; Exercise all other functions as are incidental or auxiliary to the discharge of its mandate.

Clear Mandate but Limited Jurisdiction What is the exact jurisdiction of the CAPA? While the mandate is clear, jurisdiction is not. Current arrangements make it possible for the CAPA to deal with internal and external audit reports relating to the PAP Given it current status, the PAP has not yet “started” examining the reports of the Board of External Auditors on the African Union

Lessons from the European Parliament Two Key Institutions of accountability: The European Court of Auditors The EP Committee on Budgetary Control

The European Court of Auditors The European Court of Auditors mission is to contribute to improving EU financial management, promote accountability and transparency, and act as the independent guardian of the financial interests of the citizens of the Union. The ECA’s role as the EU’s independent external auditor is to check that EU funds are correctly accounted for, are raised and  spent in accordance with the relevant rules and regulations and have achieved value for money.

The European Court of Auditors In democratic societies, complete, accurate and readily available information on budgetary and policy implementation is essential for effective scrutiny and decision-making. Such information helps promote sound financial management and serves as a basis for accountability. Like Member States, the EU needs an external auditor which can act as an independent guardian of the financial interests of its citizens.

The Committee on Budgetary Control The Committee on Budgetary Control is responsible for the control of the implementation of the Union's budget, meaning that the taxpayers' money is spent efficiently, effectively and according to EU law. In close cooperation with the Court of Auditors, it audits the accounts of EU Institutions and suggests improvements in order to ensure sound financial management. It considers fraud and irregularities in the budget implementation, and suggests measures aimed at preventing and prosecuting such cases.

The Committee on Budgetary Control The discharge procedure is the main tool at hand of the parliamentarians in the Committee. During this procedure it scrutinises the implementation of the EU Budget by all actors involved, i.e. inter alia the Commission, Parliament, other institutions and Agencies on the basis of the yearly annual report of the European Court of Auditors. For this purpose, the Committee organizes hearings to which it invites members of the examined bodies. The discharge procedure is a very important ex-post role in the budgetary procedure. Acting on recommendation from the Council, the EP is tasked with giving a "discharge" - clearance - to the Commission in respect of the implementation of the community's budget.

Ensuring Success with a Clear Mandate and Limited Jurisdiction What can CAPA do with its clear mandate but limited jurisdiction? David McGee, former Clerk of the New Zealand Parliament, and now New Zealand’s Ombudsman, says in his excellent book ‘The Overseers’, “… if accountability relied entirely on catching people out it would inevitably fail, short of turning the country into a police state. Accountability is about instilling or reinforcing an ethos of legal compliance and efficient practice. It works by motivating people in ways that are beyond their direct control to engage in desired conduct.”

Ensuring Success with a Clear Mandate and Limited Jurisdiction CAPA’s oversight role can be carried out in two main ways under the current arrangement: By informing the PAP, and through it to the National Parliaments and African people, about the activities of the PAP with particular emphasis on the economy, efficiency and effectiveness with which they are carried out Through the recommendations made in its reports, as a driver for change in financial practices and procedures of the PAP How well CAPA carries out these two roles will determine how successful it is.

Supporting the Work and Independence of the OIA of PAP Like the office of the Auditor General at the national level, CAPA has a responsibility for ensuring that the OIA is properly supported to carry out its functions independently CAPA should ensure that there is total response and appreciation of the work of the OIA CAPA should ensure that recommendations of the OIA are fully implemented and its work is not undermined CAPA should also ensure that the OIA reports solely to the PAP and not to the Executive arm of the AU

PAC Success Factors: WBI Survey

Results Africa Australasia Canada Caribbean South Asia UK Recommendations accepted 36 75 50 90 100 Recommendations Implemented 18 70 Legislation Modified 20 12 25 33 Information Improved 57 80 Legal Action Taken 9 40 Disciplinary Action Take 30 56 (N) (11) (9) (4) (7) (10) (3)

Objectives of CAPA’s Review of Audit Reports? CAPA’s ultimate objective is to determine the materiality of findings in Audit Reports through evaluation of: The gravity of the findings of the Reports The frequency of occurrence of particular lapses across different departments The magnitude of public funds involved; and Other administrative lapses which the Committee deems necessary for correction

Issues to look out for in Discussing Audit Reports Issues raised in the External and Internal Audit Reports on Audit Outcomes Issues of financial probity (e.g. fraud), as highlighted in the audit reports or disclosed in the management report or in notes to the financial statements, or that come to the committee’s attention in any other way Compliance with the PAP’s or AU’s financial or related regulations

Issues to look out for in Discussing Audit Reports The interrogation and evaluation of instances of over-expenditure (relative to appropriations), and other instances of unauthorised expenditures and the authorisation or non-authorisation of these expenditures  The interrogation of instances relating to irregular, fruitless and wasteful expenditure  

Issues to look out for in Discussing Audit Reports Supply chain management and procurement, particularly large tenders, large capital projects and Public Private Partnership deals, where applicable The disposal of significant state assets, and any major financial or related losses suffered by the PAP Corporate governance of the PAP and its relevant departments

Issues to look out for in Discussing Audit Reports The extent of any public interest in the issues canvassed in the audit reports.

Final Words: CAPA as PAP’s/AU’s Financial Watchdog As the continent faces ever greater challenges and increasing pressure on its public finances, CAPA’s role will be to warn of risks, provide assurance and offer guidance to PAP and eventually AU policymakers on how to improve the management of public finances and ensure that Africa’s citizens know how their money is being spent. This will be the essence of CAPA’s contribution to strengthening the democratic legitimacy and sustainability of the PAP and the AU.  

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