pfm in africa : the role of accountancy profession and ... in africa : the role of accountancy...
TRANSCRIPT
PFM in Africa : The role of
Accountancy Profession
and Independent Oversight
Institutions
Ms. Asmaa Resmouki
PAFA President
ICPAK Seminar - May 18th 2016
CONTENT
Presentation to: XXXXXX Date: xx xx xxxx
1. WHY IS PFM REFORM IMPORTANT IN AFRICA?
2. ROLE OF ACCOUNTING PROFESSION IN PFM
REFORM
3. ROLE OF OVERSIGHT INSTITUTIONS AS MAIN
STAKEHOLDERS IN PFM REFORM
4. MAIN TAKEAWAYS AND THE WAY FORWARD
FOR THE ACCOUNTING PROFESSION
1. WHY IS PFM IMPORTANT IN AFRICA
Presentation to: XXXXXX Date: xx xx xxxx
1.1 Definition of PFM and Impact on
governance
1.2 Status and trends of PFM Reform
in Africa
1.1 DEFINITON OF PFM
Presentation to: XXXXXX Date: xx xx xxxx
• PFM is the system by which financial
resources are planned, directed and
controlled to enable and influence the
efficient and effective delivery of public
service goals
1.1 FACTORS MILITATING FOR PFM REFORM
Presentation to: XXXXXX Date: xx xx xxxx
• Strong demand for financial transparency from government
debt holders
• Politicians becoming more accountable on the utilization of
taxpayers’ money
• Public sector financial statements reflecting the full
economic impact of political decisions
• Growth prospects in Africa leading to higher expectations on
governments
1.2 WORLD BANK ASSESSMENT OF PFM REFORM IN AFRICA
Presentation to: XXXXXX Date: xx xx xxxx
• World Bank monitors PFM through 5 components : Budgeting
Accounting
Internal control
Financial reporting
Auditing
• World Bank measures PFM performance through
PEFA assessments (Public Expenditure and
Financial Accountability)
1.2 WORLD BANK PEFA SCORES IN AFRICA
Presentation to: XXXXXX Date: xx xx xxxx
More specifically, the continent is lagging behind in the
following indicators :
Budget control
Quality of accounts
Efficiency of external audit
Parliamentary oversight
1.2 TRENDS OF PFM REFORM IN AFRICA
Presentation to: XXXXXX Date: xx xx xxxx
• Increasing trend to move to accrual accounting, and
more specifically to IPSAS
• PwC research (2015) : In 5 years time, the biggest
shift to accrual accounting is expected in Africa and
Latin America, followed by Asia
2. ROLE OF ACCOUNTING PROFESSION IN PFM REFORM
Presentation to: XXXXXX Date: xx xx xxxx
2.1 Landscape of Accounting Profession in Africa
2.2 Role of Accounting Profession at PAO level
2.3 Role of Accounting Profession at Regional level
2.4 Status of Accounting reform in some African
countries
2.1 LANDSCAPE OF ACCOUNTING PROFESSION IN AFRICA
Presentation to: XXXXXX Date: xx xx xxxx
• Members of PAFA : 46 PAOs from 38 countries, covering about
100,000 professionals
• 8 African countries without PAOs
• IFAC membership : 18 nations in Africa without a PAO sufficiently
developed, that have not yet joined IFAC as Members or Associates
Need for Capacity building : Main challenge in Africa
2.1 IFAC MEMBERSHIP LANDSCAPE WORLDWIDE
Presentation to: XXXXXX Date: xx xx xxxx
IFAC Member Bodies
IFAC Associates
No PAO or PAO is
not IFAC
member/Associate
2.2 AT PAO AND PROFESSIONELS’ LEVEL
Presentation to: XXXXXX Date: xx xx xxxx
• Accountants and Auditors in public sector : Important links in the financial reporting chain
Major role in Protection of public interest
• Advocates for PFM reform
• Trusted advisors and Capacity builders in : Transition to accrual accounting
Implementation of IPSAS
Internal and external auditing
Internal control procedures
• Education and training
2.3 AT REGIONAL LEVEL - PAFA
Presentation to: XXXXXX Date: xx xx xxxx
• Advocacy role / Capacity building / Sharing experiences among PAFA
members
• Adoption of International Standards (among which IPSAS) by PAFA in
2012
• ‘Improved Public Sector Reporting’ is one of the 5 Strategic initiatives
of PAFA’s strategy : Tools, materials, and resources to engage political leadership
Influencing IAESB to include Public Sector subjects in the accountancy
qualification framework
Research on topical PFM areas to influence PFM reforms at countries’ level
Public sector programs of mutual interests with other institutions (AFROSAI,
ESAAG …)
2.4 STATUS OF ACCOUNTING REFORM IN SOME AFRICAN COUNTRIES
Presentation to: XXXXXX Date: xx xx xxxx
FRANCOPHONE COUNTRIES
• Laws exist + Close timelines to shifting to Accrual basis + PFM
reforms are part of governments’ agendas
But implementation lagging behind
• Main challenge : Involvement of PAOs and Accounting
Professionals in Public Sector - Business models of Francophone
PAOs – Political will
• Call for Action : PFM Conference in Senegal – October 2015 -
Organised by PAFA/IFAC/FIDEF/WB/AfdB
2.4 STATUS OF ACCOUNTING REFORM IN SOME AFRICAN COUNTRIES
Presentation to: XXXXXX Date: xx xx xxxx
KENYA / UGANDA / TANZANIA / NIGERIA / ZAMBIA / ZIMBABWE
PAOs are instrumental in public sector accounting reform
projects and capacity building projects
Influential positions in Public sector : Positions of Accountant
general and Auditor General are occupied by members of PAOs
Several Professional Accountants are employed by the
government (10% to 30%)
Adoption of IPSAS with Implementation Road map
Main challenges : Capacity building + Implementation gaps
+ Timing
3. ROLE OF OVERSIGHT INSTITUTIONS AS MAIN STAKEHOLDERS IN PFM REFORM
Presentation to: XXXXXX Date: xx xx xxxx
3.1 Main stakeholders in Oversight
3.2 Major Audit models of SAIs in Africa
3.3 Status of Oversight in African countries:
Areas requiring further development
3.1 MAIN STAKEHOLDERS IN OVERSHIGHT
MINISTRY OF
FINANCE
SUPREME
AUDIT
INSTITUTION
Parliament /
Public
Accounts
Committees
PFM cannot function properly without proper
oversight and control
3.2 MAJOR AUDIT MODELS OF SAI IN AFRICA
Presentation to: XXXXXX Date: xx xx xxxx
PARLIAMENTARY MODEL JUDICIARY MODELThe work of the SAI is linked closely to the
system of parliamentary accountability
The SAI is an integral part of the judicial
system
NATIONAL AUDIT OFFICE
All rights, powers and responsibilities vested
in the Auditor general personally
COURT OF ACCOUNTS (OR AUDIT)
Its Members are judges and are typically
appointed for an unlimited term, with one
Member selected to act as its President
A strong focus on financial audit and on the
value for money
Major attention paid until recently to verify
the legality of the transactions
3.2 MAJOR AUDIT MODELS OF SUPREME AUDIT INSTITUTIONS
Presentation to: XXXXXX Date: xx xx xxxx
PARLIAMENTARY MODEL JUDICIARY MODELStaff have a professional financial
background – accountants and auditors.
Staff have legal or generalist backgrounds.
Audit reports are submitted to Parliament
for review by a dedicated committee –
normally called Public Accounts Committee
(PAC);
Recommendations are issued by the PAC;
and Government responds to PAC reports
There is often no committee in parliament to
which the Court reports The Court itself
holds officials to account, and is able to
impose penalties on audited officials.
3.3 STATUS OF OVERSIGHT IN AFRICAN COUNTRIES
Presentation to: XXXXXX Date: xx xx xxxx
• Study performed by AFROSAI-E based on self
assessment tool of its 25 Members
• Progress made but still weak areas requiring further
development
3.3 STATUS OF OVERSIGHT IN AFRICAN COUNTRIES
Presentation to: XXXXXX Date: xx xx xxxx
AREAS REQUIRING FURTHER DEVELOPMENT
• Independence and legal framework of SAIs
• Financial Resourcing of SAIs
• Communications and stakeholder management
3.3 STATUS OF OVERSIGHT IN AFRICAN COUNTRIES
Presentation to: XXXXXX Date: xx xx xxxx
AREAS REQUIRING FURTHER DEVELOPMENT
• Strategies for planning and managing financial and
Human Resources
• Development of quality assurance strategies
• Timeliness and audit coverage
4. MAIN TAKEAWAYS AND THE WAY FORWARD
Presentation to: XXXXXX Date: xx xx xxxx
4.1 Main Takeaways
4.2 The way forward for the
accounting profession
4.1 MAIN TAKEAWAYS
• PFM Reforms are long term projects
• No one size fit for all
• Political will and leadership
• Coordination of development agencies’ contributions
4.2 WAY FORWARD FOR THE ACCOUNTING PROFESSION
Presentation to: XXXXXX Date: xx xx xxxx
• Professionalization of Public sector
• Engaging in more constructive dialogues with
governments
• Capacity Building
• Attraction of professionals and high skills to the
public sector