1. Optimizing the Effectivenes of CAPA: Keeping an Eye on Audit Reports
Rasheed Draman, Ph.D
African Centre for Parliamentary Affairs (ACEPA)
Accra, GHANA

2. The Chain of Accountability

3. Focus of the Audit Reports
Two Key issues:
Whether the PAP’s/AU’s financial administration rules and the regulations were followed
If any misappropriations, embezzlements, diversions of funds or any kind of financial irregularities or malpractices had taken place during execution of the budget or in the management of an institution’s finances

4. Audit Opinion

5. Types of Audit
Financial - traditional focus of public sector auditing.
Auditor general model - financial audit focuses on the accounts of government departments using sampling techniques.
Audit Court Model - emphasis on the legality of spending to see whether government revenue and spending have been used for approved purposes and departments have conformed to laws.
Value for money audit or performance audits -
‘Four Es’ economy, efficiency, effectiveness and equity.

6. Value for Money Audit

7. Value for Money: The 4 Es
Economy - keeping the costs low and minimising the cost of resources used for an activity, having regard to appropriate quality.
Efficiency – making the most of available resources. Have resources been put to optimal or satisfactory use or whether the same or similar results in terms of quality and turn-around time could have been achieved with fewer resources.
Effectiveness – achieving the stipulated aims or objectives. Goal- attainment concept concerned with the relationship between goals or objectives, outputs and impacts. Are the stipulated aims being met by the means employed, the outputs produced and the impacts observed?

8. Value for Money: The 4 Es
Equity – whether or not resources have been disbursed in a manner that ensures that every section of society benefits.

9. Value for money’ considerations in the health sector
Hospital purchases inputs: staff, equipment, medical supplies
Transforms these inputs into outputs in services to community
The outcomes are effects on patient health.

10. ‘Value for money’ considerations
Performance auditing checks for economy, efficiency and effectiveness in this process, asking, respectively:
Are supplies, equipment and staff purchased for cheapest price? (economy);
Is adequate number of operations carried out with inputs? (efficiency);
Do operations improve patient health? (effectiveness).
It can be summarized that the ‘Three Es’ require respectively spending less, spending well, and spending wisely.

11. 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

12. 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

13. 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

14. 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

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

16. 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.

17. THANK YOU!!!