1. Audit of the Consolidated Fund 2008 11 May 2010

2. Outline Why discuss the audit 2008? Role DPs in the accountability chain Issues arising from Audit 2008 Issues for discussion

3. Why discuss the audit 2008 Use of Country Systems: Audit is essential piece in accountability chain  trust Audit provides information on: –quality of recording/accounting/reporting –quality of spending (targeting, performance, efficiency) Legal implications and monitoring of systems performance

4. Role DPs in accountability chain Accounting / Reporting by CAGD and MDAs External Audit By GAS Discussion by Parliament Follow up by CAGD / MDAs Through ARICs Prosecution by Attorney -General Support to PFM reforms Strengthen GAS Strengthen Public Accounts Com. Strengthen A-G MDBS: - Justification for budget support - Systemic improvements Support to Civil Society

5. Audit 2008 Qualified opinion: –Reconciliation between Public Accounts and MDA information –Consolidated fund overstated by 410 mln in the Public Accounts –Disputed loan balances of 676 mln –Inability to verify the transfer of 318 mln into GoG/Vodafone escrow account Overspending of 30% against appropriated budget.

6. Weaknesses in a number of areas –Quality of financial administration (e.g. financial statements) –Management of public loans –Under- and overstatements of expenditures and transfers (incl. MDBS!) –Management of debts –Unauthorised payments and non-disclosure –Discrepancies between MDA and CAGD –Overstatement of cash and bank balances –Vodafone

7. Issues for discussion ARIC response to 2008 recommendations Recurring issues: –Quality of financial statements –Reconciliation of financial data –Management of loans –Debt recording and management