Establishing a reliable audit system

Gemechu Dubisso, auditor-general at the Office of the Federal Auditor-General, attended Addis Ababa University (AAU) where he earned a Bachelor of Arts Degree in Accounting. He also studied at Glasgow Caledonian University to earn his graduate degree in Financial Management. The Office of Auditor-General is one of the most important government offices which conducts financial and performance audits in the public sector. Currently, the office is facing major challenges, one of which is high staff turnover. Yonas Abiye and Yohannes Anberbir of the The Reporter sat down with Gemechu at his office for an exclusive interview to discuss pertinent issues including his office’s undertakings. Excerpts:

The Reporter: In your audit report of the 2013/14 fiscal year presented to Parliament recently, you highlighted challenges faced by your office when it comes to staff retention and asked for salary adjustments. Can you elaborate how this challenge is affecting the office’s ability to discharge its responsibilities?

Gemechu Dubiso: Structurally speaking, we do not have human resource problems to discharge our responsibilities. According to the establishing proclamation, the auditor-general has the power to organize the office, prepare the structure and salary scale of the office, prepare and submit the budget of the office to parliament. And upon approval, the office is mandated to audit government offices. So, there is no problem there. But since parliament does not have a consulting body or expert on structural matters, it often consults with the Ministry of Civil Service. We have prepared and submitted the structure of the office to parliament and it has been approved. But the issue is staffing the office with competent human resources.

Two factors are affecting that effort. The first is finding competent professionals with the required quantity from the market. The other is putting in place a salary and benefits package that can attract the desired human resource. Having a favorable work environment is also another factor. In this regard, the government is erecting headquarters for us. We will soon move into our new headquarters. The human resources we hire are, for the most part, those trained in accounting and auditing fields.

Due to the growth of the private sector, these professionals are in high demand. The private sector is offering attractive salary packages for these professionals. In addition, I do not think the demand for such professionals is proportional to what the market is supplying. On top of that, our salary scale and benefits package is not attractive enough. That is the fundamental problem. Let alone to attract others in the market, it is impossible to retain the staff we have. Without addressing this, it will be impossible for us to discharge the massive responsibility we are entrusted with.

Do you think it is proper for the Ministry of Civil Service, an executive organ which your office audits, to be involved in structural issues including the salary scale? Why would parliament consult the Civil Service Ministry?

It would be difficult to conclude that the executive organ directly makes a decision on the issue of salary scale of the Office of the Federal Auditor General. As things are at this moment, it would also be difficult to say parliament alone is making decisions on the salary scale of the office. We agree that structural and salary scale issues are tasks to be performed by experts. But parliament does not have a body of experts who does that. And so the House is getting such consultation from the Ministry of Civil Service.

We do not have a problem with that. But the House must come to a decision after appreciating our challenge vis-à-vis the advice of the ministry. We have submitted our request to parliament. And there are discussions between the ministry and the House, which is why the issue is yet to be addressed.  Parliament should act.

In my view, this working procedure should change. We may need to look at the experience of other countries to draw a lesson and amend the proclamation. Some countries, for example, have an organizational set-up known as a Commission. It comprises retired judges, retired auditors-general and retired professionals in the field who are tasked with salary scale-issues. In the first place, the very intention of giving the House the mandate to approve structural and salary matters is to ensure that the auditor-general discharges its responsibilities independently.

The establishment of an Auditor-General dates back to more than half a century. How do you assess the office’s structural independence and organizational strength in the life-time of the three regimes of the  time?

The auditor-general was first set up in 1940 during the life-time of the Imperial regime. It used to be known as the Audit Commission and was accountable to the Ministry of Finance and later to the Prime Minister. Its responsibility was only to  audit the Ministry of Finance. It did not audit any other government offices. When the Derg was in power, the auditor- general was accountable to the president. And now, as per international standards, the auditor-general is accountable to the highest government organ – the House of Peoples' Representatives. The appointment and independence of the auditor-general is also in conformity with the International Organization of Supreme Audit Institutions (INTOSAI) and UN conventions. We are now in a position to audit every government office and present our report to parliament.

I can say we have come a long way but there are still issues that need to be addressed. Although late, the House has a standing committee concerning audit. In particular, the current standing committee is undertaking a commendable work in follow-up. Over the past five years, the committee has conducted 95 public discussions with government offices found with audit problems. It is, at least, creating a sense of accountability among government office heads.

How do you describe the kind of public audit system in the country?  

In public sector audit, there are two types of systems in the world – Westminister and Court systems. In Court System, the auditor-general office has two wings – audit and judicial wings. This means the office can also adjudicate cases and take measures. Westminister is the type of system in countries that follow a parliamentary system of government. That is the system we are following. The auditor-general is accountable to parliament and presents its report to the House. The ultimate measure to be taken based on the report rests on the House. But there are still measures the auditor-general can take. Government offices are expected to take corrective measures based on the audit report. If they failed to do so without adequate reason, the auditor-general may take the case to court.

The Reporter: Does it do this without the intervention of the House of Peoples' Representatives?

Yes. There is no parliamentary intervention in this situation. But we do not file charges. This is done jointly with the Ministry of Justice. Our legal department, in conjunction with the Ministry of Justice, can take to court such government offices. The head of that government office can be held accountable. The head will be brought before court for failing to take corrective measures in repeated audit problems. If found guilty, the head may face up to a ten-year  jail term.

There are some government offices that are found on the wrong side of repeated audit report findings. If you have such powers, why haven’t you taken such measures?

When I was appointed head of this office, my priority was expanding the office’s audit works. The focus is on building the capacity and system to audit all government offices in the country. My second priority is creating awareness including within the executive, parliament and media to be a sense of accountability. Audit works are not very well understood in the country. For these reasons, we have chosen not to take the legal recourse yet. But following our audit report of 2011/12 fiscal year, there is a big awakening.

Audit findings of accounts of public universities were particularly very problematic. As a result, a meeting was held with the board chairman of higher institutions and senior government officials. At the time, we also had audit findings of the 2012/13 fiscal year which also showed no improvement from the previous year. So, higher institutions were informed that they would be held accountable if things did not improve in 2013/14 fiscal year. It was the first time for an audit report to cause such a stir. We now expect measures would be taken. Pursuant to the law, we have also come to the conclusion that we, jointly with the Ministry of Justice, should take the legal recourse. We have reached an agreement with the ministry. The phase of raising awareness is behind us. It is time to hold those at fault accountable.

Before your appointment to this office, there was a dispute whether the Office of Federal Auditor-General should have the mandate to audit budget allocated to regional states. Some regional states refused to be audited and that dispute ultimately resulted in the removal of the then auditor- general after the former prime minister lambasted his audit report. Do you audit the budget of regional states now?

One of the reasons for the debate was that the auditor general was not able to audit regional states due to language barriers. Some regional states simply refused to be audited by the federal auditor-general. Then the federal government refused to give a penny if regional states refuse to be audited. As a result, things returned to normal. This happened after the auditor-general presented the report to parliament. So, there is no change in the law. We do audit budget allocated to regional states. We do not have the capacity to reach all 700 weredas. So, what we do is to cover 300 weredas annually. The audit is not comprehensive but focuses on internal controlling mechanisms. 

In your 2011/12 audit report you cited difficulty to properly audit the accounts of security and intelligence agencies due to the nature of such institutions. Then, you were tasked to come up with a special scheme to audit the security and intelligence agencies. But two years ago, the National Intelligence and Security Re-establishment Proclamation, which barred the auditor-general from directly auditing such institutions, was enacted. What is your take on that?

There were gaps in the law until the issue was raised in  2011/12. So, there were confusions. As any government agency, we went to audit these agencies. As you know, they purchase intelligence information. These are classified materials of national interest with security reasons. You cannot expect that to be made public. It is the same in many countries. So, the proclamation cleared the confusion by establishing what can and cannot be audited. On that basis, we audit the National Intelligence and Security Services (NISS) in some areas we already have agreed on. With the Ministry of Defense, that was not the case but we expect it to be so. So, I do not think the law is an encroachment on the responsibilities of the auditor-general.

You have talked about raising awareness. Are there government offices or ministries that still give you difficulties when you go to audit?

Yes there are. One example is the Ministry of Industry (MoI). Just as they reacted to our audit report through a newspaper, we would like to do the same. We were at the ministry auditing the whole year. But on May 14, the ministry said they had further documents that should have been considered. That was when we finalized our audit report and were preparing to present it to parliament. If they are of the view that the laws were observed, why did they fail to present all the documents beforehand? [The 2013/14 Auditor-General report accused MoI of purchasing over 743.7 million birr worth of construction and consultancy services without complying with the legal procurement procedures]. There are also others who are attempting to deceive the public the same way. They must cooperate; not doing so will lead to accountability. Otherwise it is our resource which will be squandered.

The audit standing committee is chaired by an opposition member. The reason for that is to ensure accountability. But how independent is the office itself?

I should leave that judgment to you. But in my view, our office is independent. I am in my seventh year, and we can plan whatever we want, audit whoever we want. There has been no interference as to what we should or shouldn’t do. Parliament gets a copy of our annual audit report only ten days prior the hearing. There has been no pressure on us to amend our audit findings. I can attest to that. You can also deduce that from our audit reports. The government has opened itself to us. We could talk about the independence of this office had that not been the case or if the media was barred from the parliamentary hearing. With regard to the audit standing committee in the House, it is led by the opposition member during the previous term and current term as well. What we must understand is, this is that not a political issue or policy matter. This is only about the question of whether the laws are observed or not.

Judging by the election result from the fifth general election, there might be no opposition member to chair the audit standing committee during the next five years. How much impact would that have on the activities of your office?

I do not think it will have an impact on our activities. I have worked with the last two standing committee including the one currently in place. The current chair [opposition MP Girma Seifu] was an auditor himself. He was a former staff of our office. What matters is the commitment. If the government is committed to transparency accountability, then whether or not MPs from different parties are represented in the standing committee will not be the main issue.

In your stay as head of this office, what is the biggest obstacle you faced?

I would say the human resource issue. If we address that, the office could do more than it is doing currently. We could have expanded our work even more. We could have added a lot of value. When we talk of audit, it is just about numbers. A well-qualified and competent auditor can suggest better recommendations. We would have contributed more to bring about accountability. The other challenge is refusing to accept wrongdoings. Our objective is not to highlight wrongdoings so that a certain government office or head is punished. Our objective is to see to it that the laws are observed, show where the gaps are, so that the government offices can better achieve their missions. We do that based on factual evidences. Taking measures based on audit reports also remains a challenge. I can only be satisfied when my work achieves the end result, when it brings an impact and when I see improvements. There are now  pressures by parliament and the executive to achieve that.