1. GAC Hub Training Addis Ababa 4-7 June 2007
External Audit
4-7 June 2007

2. External Scrutiny and Audit
PI-26 Scope, nature and follow-up of external audit
Scope and nature of audit performed
Timeliness of submission of audit reports to legislature
Evidence of follow up on audit recommendations

3. Contd. PI - 28 Legislative scrutiny of external audit reports
Timeliness of examination of external audit reports by legislature
Extent of hearings on key findings undertaken by legislature
Issuance of recommended actions by the legislature and implementation by executive

4. Diagnozing external audit
External audit is more than capacity of SAI. Consider components of effective external audit system:
Ministry of Finance: responsible for producing annual accounts and financial statements, setting FM rules and ensuring compliance
SAI: providing comprehensive external audit
Legislature: authorization and oversight of revenue and spending
Effective audit system is crucial to GAC

5. Some questions
Does the MF provide annual accounts and financial statements in a timely way, and allow in-year access to books for SAI?
What is legal mandate for SAI?
Pre-audit?
Financial statements
Regularity/compliance
Value for money/performance
Is SAI sufficiently independent?
Anglo/Franco models

6. Contd. Does it have sufficient capacity? Audit methodology
Skills and skill mix
Code of conduct
Staff pay and conditions
Work environment
Annual work plan – risk based?
Tackle procurement?

7. Legislative oversight
Are SAI reports timely, relevant and readable?
Does PAC have skills?
Are PAC reports timely with clear recommendations?
Are hearings and reports in public domain?

8. Executive follow up
Does MF take action on SAI/legislature findings and sanction errant officers, remove accounting officer – is stewardship of public finances a factor in career development?

9. What’s happened? Extensive updating of colonially inherited audit laws
New laws give SAI greater control over staffing, pay and budgets, and widen scope of audit
Are they using new powers vigorously or does the old culture of avoiding controversy prevail?
Are annual accounts more timely?
Any signs that the MF is taking its stewardship role more seriously?