Public Audit in Francophone Africa – the complementary roles of the General State Inspectorate and the Court of Accounts

The Inspection générale d’Etat is an African innovation, essentially presidential, which over turns generally accepted paradigms, especially of experts from parliamentary countries or at least non-presidential, which is significantly different from arrangements which exist elsewhere. (Gueye 2007: 199)


Introduction

In most French speaking African countries there is a General State Inspectorate (usually called an Inspection générale d’Etat, but other terms are used). This type of institution evolved in post-colonial Africa and so has no parallels in France, Canada or other developed French speaking countries. Many public financial management advisors consider the General State Inspectorate to be an internal audit institution and most PEFA reports make this assumption. However, in around a third of Francophone African countries the General State Inspectorate is the Supreme Audit Institution and the member of INTOSAI for the country.

It has been argued that General State Inspectorates should not be considered as external auditors or supreme audit institutions as they are part of the executive. In contrast the Courts of Accounts (Cour des comptes) are claimed to be outside and functionally independent of the executive. General State Inspectorates are usually appointed by the president or the prime minister and their annual reports are sent to these offices rather than to parliament. However, this may also be the case for Court of Accounts and, indeed for Auditors General in Anglophone countries. Independence is not easy to achieve for any Supreme Audit Institution. The new president of the Court of Accounts in France was, for example, in effect appointed by Sarkozy in early 2010, the French president, and the UK government has just failed to establish an ‘independent’ budget office.

Multiple Audit Institutions in Many Countries

INTOSAI requires each country to nominate a Supreme Audit Institution, however, in many countries there are several bodies which contribute to the function of a Supreme Audit Institution. The public sector consists of a complex amalgam of different types of entities, these include central government ministries, departments and agencies, sub-national governments (states, provinces, local governments etc) and state owned enterprises (or parastatal organisations as they are usually termed in Africa). In many countries, the Supreme Audit Institution is only responsible for central government. So, for example, in the UK and US the Supreme Audit Institution is not responsible for the audit of local (or state) governments (as is also the case in Nigeria and Ethiopia). In France and other countries regional Courts of Accounts play a similar role. In addition, in some countries, state owned companies are not audited by the Supreme Audit Institution, they may be audited by private audit firms (for example, UK and Nigeria) or a separate institution, for example, the Audit Service Commission as in Ethiopia and Eritrea. As a result, there is a spectrum of different approaches. In India there is a very powerful Auditor General that is responsible for the audit of almost the totality of the public sector, in contrast in Nigeria there are 74 Auditors General and none of them are allowed to audit the accounts of state owned companies.

Models of Supreme Audit Institution in Francophone Sub-Saharan Africa

Francophone Sub-Saharan African countries have two types of institution which undertake external audit type functions, either of which may be designated as the Supreme Audit Institution for an individual country:

• the Court of Accounts is a division of the Supreme Court or separate court within the judicial system. The individual members of the court (judges or magistrates) are led by a president who is generally appointed by the president of the relevant country. The court, with the support of its staff, judges the legality and regularity of the transactions and accounts of individual public accountants and reports to Parliament on the overall State Account. There is limited follow up of the Court’s reports by Parliament. The professional staff traditionally have a legal rather than accounting or audit backgrounds, but this is expanding in several countries

• the General State Inspectorate reports either to the president or the country’s prime minister, but it is largely independent of the state bureaucracy and has access to all state institutions, public servants and their documents. It usually largely sets its own annual programme. Each public institution may not be visited or reported upon each year. The larger ministries will be reviewed each year, but different departments will be subject to review each year. The professional staff of the General State Inspectorate are usually educated in public financial management at specialist higher education institutions. If irregularities are found they are reported to the relevant ministry or other agency for appropriate action to be taken (Wynne, 2010).

The Court of Accounts, as part of the judiciary, may be considered to be independent of the executive, but their members may be appointed by the president or the council of ministers and their reports may not be submitted direct to parliament. In France, which is the model broadly adopted by most Franco-phone countries, the first president of the accounts court is formally appointed by the council of ministers. The accounts court produces two annual reports. The first is sent to all members of parliament and reviews the execution of the budget. The second annual public report is sent to the president rather than to parliament (Bouvier, Esclassan & Lassale, 2004).

As the General State Inspectorate is accountable to the president or the prime minister they may also have a high degree of independence from the entities (ministries, departments and agencies) which they audit. A distinction could perhaps be made between independence from the executive and independence from the entities which are subject to audit. If the General State Inspectorate has the support of a strong president they may in fact have considerably more independence from the ministries and other bodies which they audit than a Court of Accounts whose budget may have to be submitted through the Ministry of Finance before being agreed by parliament (Wynne, 2010). In addition, there has been a trend in recent years for more General State Inspectorates to make their annual reports public.

The following General State Inspectorates are all members of INTOSAI and are the Supreme Audit Institutions for their countries (but each of these countries also has a Court of Accounts or equivalent):

· Burundi - Inspection Générale de l’Etat

· Cameroon - Contrôle Supérieur de l’Etat

· Centrafrique - Inspection Générale d'État

· Guinée Conakry - Inspection Générale d'État

· Mali - Contrôle Générale des Services Publics

· Togo - Inspection Générale d'État.

In these countries, the General State Inspectorates are full and active members of INTOSAI. The General State Inspectorate of Cameroon is currently hosting the Secretariat of CREFIAF, the sub-regional body of Supreme Audit Institutions in Francophone African countries. In 2002 the General State Inspectorate of Cameroon was also a member of the Board of INTOSAI. In the same year the 8th General Assembly of AFROSAI (the regional body of Supreme Audit Institutions in Africa) was held in Burkina Faso when the General State Inspectorate was the Supreme Audit Institution for that country and it was agreed that they would continue as the Secretary General of AFROSAI.

Wide Scope of Francophone Supreme Audit Institutions

Both the General State Inspectorate and the Court of Accounts have a wider scope than would be expected for Auditors General in Anglophone countries. They have be power to follow public money, something that was only recommended in the UK by the Sharman review in 2001 (Sharman). This report defined public money as:

“All money that comes into the possession of, or is distributed by, a public body, and money raised by a private body where it is doing so under statutory authority” (Sharman 2001: 15)

And then the report went on to recommended that public money should be subject to audit by public auditors. This principle is generally followed in Francophone countries and the General State Inspectorate and the Court of Accounts have a wide remit to audit the following:

• all public services, offices and organisations
• local authorities
• parastatal bodies, public companies, enterprises and establishments
• public projects and development agencies
• any bodies benefiting from public financial support (state aid).

The final bullet point may be extended to include all bodies making a public appeals for funds and so may include insurance companies, pension funds and trade unions. In Cameroon this may be extended still further and the General State Inspectorate may audit any private bodies that are strategic for the nation or related to national defence. In Senegal the scope of the Court of Accounts includes all those organisations in the above bullet points, all organisations controlled directly or indirectly by these entities and national appeals for funds from the public and the organisations benefiting from such appeals (World Bank 2009).

Specific Role of the Court of Accounts

In contrast to this wide scope, the Court of Accounts, has a very limited role. The core and original role of the Court of Accounts is to confirm, or otherwise, the legality of the accounts of the public accountants. If their accounts are found to be legal and regular, the public accountant is given quietus, or full discharge, and so is freed of any further personal or financial responsibility for the sums of money that they have paid (Bouvier, Esclassan & Lassale 2004). If any errors or irregularities are found then the public accountant may be required to repay the money concerned and, in addition, they may be required to pay a fine.

The other core role of the Court of Accounts is to provide a report which is sent with the budget out-turn report (financial statements) of the government to the National Assembly. This report may include some broad comments on the level of payments and receipts by the government compared to the budget for the relevant financial year and also a commentary of the general economic and financial environment of the country (Court of Accounts of Ivory Coast 2010). This report also includes a formal opinion or certificate of conformity between the level of payment orders paid by the public accountants and the value of the payments orders raised by the officials with responsibility for raising orders (ordonnateurs) (Lienert 2003).

In addition to this report to the National Assembly, the Court of Accounts provides a General Public Report on the activities of the Court. This is usually addressed to the President and may be made public. This provides general background details of the activities of the Court of Accounts for the year concerned, significant developments, major findings and may include details of training received. It will also usually include a summary of the main activities of the Court and any significant developments.

These quite specific roles of the Court of Accounts mean that the role of the General State Inspectorate may be complementary to the Court. In France, the role of the Court of Accounts has expanded. In Francophone Africa the General State Inspectorate has generally been used to fulfil these additional roles.

Origins of the General State Inspectorate

Under the French approach, there are a series of inspectors for each public service, for example, inspector of education, inspector of health etc. In 1906 the Governor General of French West Africa created the Inspection Service of Administrative Affairs. This body reported directly to the Governor and provided findings and propositions, which were less prescriptive than recommendations (Gueye 2008).

This service was reorganised in 1936 and again in 1937. At this stage the service was independent and essentially mobile. Inspectors were not allowed to take on other management or executive responsibilities. The scope of the work was now all administrative services except for the treasury and the technical services of the colonies head quarters. The inspectors had the obligation to inspect each territorial region every year and to provide an annual report of their activities, observations and follow up (Gueye 2008).

In 1943 the name of this service was changed to the General Inspection of Administrative Affairs. The General Inspector was nominated by decree of the Governor and chosen from amongst the governors of the colonies or the chief administrators. The service was based in Dakar and covered all of French West Africa (Gueye 2008).

With independence, the General Inspection of Administrative Affairs reported to the President of the Council and then to the President of the Republic. The General State Inspectorate was formed in Senegal, for example, in 1964.

More recently General State Inspectorates were established in countries which did not have them before, for example, in Djibouti in 2004 and in Mauritania in 2005. In 2001 the Commission on Reform of Structures and Missions of the State in Algeria recommended the formation of a General State Inspectorate reporting to the President to control the functioning of all public services and administration. This was to have been in addition to the Court of Accounts which reviews the financial operations linked to budget execution.
In Djibouti, despite the already existing Court of Accounts, a General State Inspectorate was established in law in 2001. The idea was that the ex post juridical control (after the event legal control) of the Court of Accounts would be complemented by a body which could act during the implementation of the budget (General State Inspectorate, Djibouti, 2007). The general state inspectorate has developed its own approach to audit which takes in to account all management sub-systems, “this includes:
• evaluating whether the character of new or existing programmes are effective, appropriate or pertinent considering their objectives and whether the expected results are achieved

• identifying constraints and performance factors and whether management has identified alternative solutions or the opportunity costs to achieve the programme’s objectives effectively and efficiently

• identifying any overlaps or duplications or conflicts with other programmes and recommending ways of executing programmes in the best manner possible
• evaluating programmes for conformity with laws and regulations, but also the adequacy of systems of internal control and especially systems to monitor their success” (page 10/11).

This first annual public report from the general state inspectorate of Djibouti also notes that:

“The general state inspectorate is a concept specific to Africa, with a universal, general and extended scope. It usually consists of elite staff recruited through competition from amongst the highest officials of the state (magistrates, national directors, secretaries general of ministries etc), at least in Sénégal, Burkina Faso, Côte d'Ivoire etc” (page 24).

This evolution and the spread of the formation of General State Inspectorates shows that the value and the usefulness of such organisations has been clearly demonstrated and recognised across Francophone Africa.

Conclusions

In Francophone African countries the Court of Accounts and the General State Inspectorate both play a complementary role in the audit, review and inspection of the financial management of their governments. In each case their independence is being improved in a number of countries. Their role is becoming more effective and the resources devoted to these institutions is being increased. However, such improvements need to continue.
In 2002 Transparency International made the following recommendations for further improvements in the quality of both the Court of Accounts and General State Inspectorate.

Court of Accounts

• The mission, objectives and the internal regulations should be defined and voted upon by parliament.
• Systems should be developed to protect the autonomy of the magistrates, their nomination and career management.
• The decisions by the Court of Accounts in their evaluation of public accounts should be final and not subject to any further appeal to another body.
• The annual reports of the Court of Accounts should be made public and subject to extensive publicity.
• The Court of Accounts should be provided with the necessary human, financial and material resources to undertake their work.

General State Inspectorate

• General State Inspectorates should be able to determine the majority of their annual work programmes
• The annual reports of the General State Inspectorates should be made public and subject to widespread publicity.
• The relevant authorities should take into account the propositions made the General State Inspectorate especially when these concern cases of fraud or corruption and recommendations to prevent this in future.
• Recruitment to the General State Inspectorate should be by competitive examination to avoid favouritism. Staff should benefit from regulations to protect the security of their positions and their career development.

In some countries co-operation between the Court of Accounts and the General State Inspectorate has improved in recent years. As with the co-operation between internal audit and the Auditor General in Anglophone African countries, there are a number of ways in which this could be further improved including the following steps (Diamond 2002):

• There should be proper coordination to ensure adequate audit coverage and to minimise duplication of effort.

• There should be access to each other’s audit plans and programmes.

• Periodic meetings should be organised to discuss matters of mutual interest.

• There should be an exchange of audit reports.

• Institutional mechanisms should be created to ensure common understanding and sharing of audit techniques and methods.

• Sharing of training and exchange of staff for two-three years in each case.

An effective Supreme Audit Institution is essential to achieve sound public financial management. In Francophone African countries, either the Court of Accounts or the General State Inspectorate may be nominated as the Supreme Audit Institution for a particularly country. However, these institutions play complementary roles. Despite significant improvements in recent years, further work is needed to optimise the independence, capacity and the resources available to both types of organisation.


References:

Bouvier, M, Esclassan, M & Lassale, J (2004) Finances Publiques, Montchrestien: LGDJ (7th edition)

Court of Accounts, Ivory Coast (2010) General Activity Report for 2008/09, Abidjan: Court of Accounts

Diamond, J., (2002) The Role of Internal Audit in Government Financial Management: An
International Perspective, Washington: IMF Working Paper 02/94

General State Inspectorate, Djibouti (2007) Annual Report of the General State Inspectorate, Djibouti

Gueye, Abdou Karim (2008) Inspections générales d’Etat d’Afrique. Réalités, perspectives et enjeux, Djibouti
www.thebookedition.com/inspections-generales-d-etat-d-afrique-Abdou%20karim%20Gueye-p-2871.html

Lienert, I (2003) A Comparison Between Two Public Expenditure Management Systems in Africa, Washington: IMF

Sharman, Lord (2001) Holding to Account—the Review of Audit and Accountability for Central Government, London: Stationery Office

Transparency International (2002) Combattre la Corruption : Enjeux et Perspectives, Berlin : TI

World Bank (2009) Training Needs Assessment for the Court of Accounts of Senegal, Washington DC: World Bank

Wynne, Andy (2010) Independence of Supreme Audit Institutions in Sub-Saharan Africa, International Journal of Governmental Financial Management, May - www.icgfm.org/digest.htm