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AUDIT OFFICE ACT, 2009 The objectives Of the Act 1) To establish an independent office of the Comptroller and Auditor-General as an office outside the Public Service 2) To provide for the administration of the office and the conditions of service for its members. 3) To provide for the additional functions of the Comptroller and Auditor-General 4) To establish the office of the Audit Office Commission and provide for its functions 5) To provide for the transfer of persons from the Public Service to the Audit Office ) To amend section 3 of the Interpretation Act [Chapter 1:01] and Public Service Act [Chapter 16:04] and to provide for matters connected with or incidental to the foregoing 7) To provide for the funds of the Audit Office which consists of moneys from Parliament, donations and other fees and charges for services provided by the Audit Office 8) To provide for the establishment of the Audit Committee as well as the committee’s responsibilities, composition and functions. Background of the Act ? Current Legislation

Audit and Exchequer Act Chapter 22:03; Treasury instructions The Audit and Exchequer Act’s objective is to provide for the appointment, powers and duties of the Comptroller and Auditor-General and of his staff; to provide for the examination and audit of public accounts and the raising of surcharges; to make provision for the management and control of public moneys and State property and the protection and recovery thereof; to regulate and control the expenditures of certain statutory bodies and statutory funds and to permit the making of loans thereto .

The Audit and Exchequer Act Chapter 22:03 left the areas of responsibility between the Comptroller and Auditor General and the Treasury not so clear. There was need to clarify the roles and responsibility of management of public finance between the Auditor General and the Accountant General. ? Economic Environment For the past ten years, the economic environment has been so difficult such that most workers had lost the culture of working. It is against this background that the Comptroller and Auditor General finds itself in need to restructure and change the mindset of its members so that it will be able to deliver to the nation.

Furthermore the alleged gross mismanagement of state resources has called for a more powerful tool of the Government to stamp authority. The Comptroller and Auditor General’s Office has been seen by many as a toothless bulldog. Tapiwa Mashakada,( Chairperson of the Public Finance Committee) in the Zimbabwe Independent of 6-12 November 2009 says “The committee came to the conclusion that although the constitution of Zimbabwe provides for the independent of the Comptroller and Auditor General, there is still more that needs to be done for the Audit Office to be able to realise such independence and supremacy in reality”

This was against the fact that the Special Report issued by the office recently , actually has no one looking at it, with the accused being left scot free, but instead, having members of the office being threatened. There is virtually no follow up to issues raised in this report. ? Appointment of staff Initially the Audit office was a closed field. This was however changed and all members of the Comptroller and Auditor General became public servants. Due to lower remuneration, the office suffered brain drain as all qualified members left. This impacted negatively on the work of the Comptroller and Auditor General.

At some instances the Office had to lower their entry requirements only to ensure that there is someone in office The constitution of Zimbabwe (Section 105) provides for the appointment of an independent Comptroller and Auditor-General. The functions and responsibilities of the Comptroller and Auditor-General are spelt out in the Audit and Exchequer Act chapter 22. 03. In line with global trends and the need to strengthen auditor independence and ensure effective accountability for public funds has necessitated the proposed Audit Office Act 2009 which seeks to make further provisions of the Comptroller and Auditor-General and his/her staff.

To be seen to be independent the Auditor-General must be both free from control or direction of the Executive Government and free from political bias. Consequently, an important feature of the statutory framework that supports the office of Auditor-General should be that it provides an appropriate level of freedom for the Auditor-General to act without direction or interference. The proposed Act seeks to address among other things the following key issues: To separate the Comptroller and Auditor-General’s management function from the audit and oversight role. • To improve accountability in the audit process and enhance efficiency in the utilization of public resources and assets. • To eliminate operational limitations inherent in the existing Audit and Exchequer Act by providing for an independent Audit Office Commission. Strengths 1) The Act has enhanced the independence and power of the Comptroller and Auditor-General’s office through the following: Reaffirmation of the removal or suspension of the Comptroller and Auditor-General from office by Parliament. The involvement of Parliament ensures that only national interests are considered as opposed to individual party or political interest. • The Act will empower the Comptroller and Auditor-General to select, recruit and appoint personnel of the right caliber. • The establishment of the Audit Office Commission will enhance accountability of the Comptroller and Auditor-General by providing and oversight role.

Technocrats will be appointed to sit on the commission. • The establishment of the Audit Office Committee will enhance operational effectiveness of the office. • Conditions of service of the Audit Office fixed by the commission. • More specifically, the Auditor General is entitled to free access to all information that relates to the fulfillment of his/her responsibilities In this context, the Auditor General has the power to demand and receive from members of the public service any information, reports and explanations that s/he considers necessary.

The Auditor General may also examine any person under oath on any matter pertaining to an audit undertaken by the Office, and shares the same powers as a public inquiry commissioner in doing so. • The Auditor General has the power to station his/her staff in any public service office whenever it is deemed necessary. • It allows for the segregation of duties which results in good administration through the provision of the commission power to delegate its functions. It broadens the duties and functions of the Comptroller and Auditor-General to include oversight over ministries and parastatals management of public resources including the effectiveness and efficiency of ministries. • The Comptroller and Auditor-General shall have complete discretion in the discharge of his or her functions and, in particular immaterial items, in determining whether to carry out any examination in terms of this Act and as to the manner in which any such examination is carried out.

Thus he may not examine and audit any particular account or fund or any particular class of documents, which in his opinion it would not be appropriate or expedient for him to do so but he may, by notice in writing, inform the Speaker and the Minister for the time being responsible for finance, of his opinion and, unless otherwise directed by Parliament, he shall not make any examination, audit or report in relation thereto. • It enables the Comptroller and Auditor-General to exercise of his functions effectively and efficiently since he shall not be subjected to the direction or control of any person or authority other than Parliament. Encourages the practice of good accounting principles by public accounts of Zimbabwe, all accounting officers, receivers of revenue and other persons entrusted with public moneys or property of the State since they shall at least once in every financial year be examined, audited and reported on by the Comptroller and Auditor-General on behalf of Parliament.

• It encourages peer reviews since the Comptroller and Auditor-General may, by notice in the Gazette, appoint a person registered as a public auditor in terms of the Public Accountants and Auditors Act [Chapter 27:12] to inspect, examine and audit the accounts, records or stores that are equired by this Act or by any other enactment, to be inspected, examined or audited by the him and report the results of the inspection, examination or audit. • Segregation of Duties: – Some of the duties that were conflicting with the functions of the treasury. All such duties will be transferred from Comptroller and Auditor General to the Treasury. • Contracted Audits: Section 9:- This section allows the Comptroller and Auditor General to contract other public auditors.

This is a strength in that where the Audit Office has no capacity the public entities would definitely not suffer. • Part IV of the Act Provides for the establishment of the Audit Office Commission. This seeks to give more independence to the Audit Office. The Comptroller and Auditor General reports to this commission on all their findings. Independence of auditors helps ensure that reports are produced objectively. • The Act also provides that the Comptroller and Auditor General’s office shall be audited by independent auditors. . g. Ernst and Young. This then removes the most famous question within society, “WHO POLICES THE POLICE”. The existence of these independent auditors would ensure that those who give direction to the Government are on their side doing the right thing. Weaknesses

• While the Auditor General has the power to comment on whether or not the federal government has implemented its policies in a financially effective manner, s/he does not have the power to comment on the government’s choice of policies. Although the Auditor General is entitled to free access to all information that relates to the fulfillment of his/her responsibilities he/she may be denied access to certain information in some exceptional situations. eg the President’s office. • The Auditor General is appointed by the President, so there might be political influence there by affecting his/her independence. • Although the department has sits own budget, it does bind every public institution to be audited to the limitation of resources as some departments have to invite them for an audit at their discretion. There is no tenure of office for the Comptroller and Auditor General. There is need for rotation, say every five years. • The Comptroller and Auditor General does not have power to seal, search and seize documents and other related items considered necessary for audit and inspection. • The Comptroller and Auditor General  does not have powers to instruct government investigating agencies to perform activities considered necessary. • Appointment of the Comptroller and Auditor General, he/she is appointed by the President in consultation with the Public Service Commission.

This will make it a political appointed compromising his or her independence and there will be conflict of interests. • Five members of the commission will be appointed by the President and therefore the control of the commission will be under the President as the result the commission will be political hence there will be no objectivity. • Section 4 allows the President to suspend the Comptroller and Auditor General from office on grounds of insolvency or incompetence or misbehaviour or physical or mental incapacity.

However on resumption of sitting of parliament, if nothing is said by the parliament pertaining to that issue, the Comptroller and Auditor General can come and resume his/ her duty. • The use of unclear phrases: – Section 10(2) provides that the Comptroller and Auditor General may report on any other matter relating to the audit of public accounts which the Comptroller and Auditor-General think necessary. :- Such phrases are prone to abuse as they do not clearly specify what should be reported, the Comptroller and Auditor General may collude not to disclose other pertinent issues with Ministry officials. Section 25 specifies removal of members from the Audit Office. This section does not give the aggrieved party room for appeal which is unfair. At least the member being removed should be given room to appeal or make any objections where necessary. • The first Schedule of this Act seeks to give more guideline pertaining to section 14(2) qualifications, terms and conditions of office, vacation of office, and suspension and dismissal of members of the Commission to the procedure to be followed by the Commission at its meetings.

The weaknesses is on paragraph 6(3) is that the notice of meetings is not clear. The notice of the meeting needs to be clear as to the time and venue of the meeting. • This Act does not give the Comptroller and Auditor General powers to ensure that their recommendations are taken aboard. Neither does it give them powers to enforce Ministries to comply with Treasury regulations. ( c) Other issues that would have been incorporated to improve on the Act

The Act should also incorporate the following: • The tenor of office of the Comptroller and Auditor General should be limited say to two five-year terms at most. • The President should only be allowed to suspend or remove the Comptroller and Auditor General on the recommendation of parliament. • The Comptroller and Auditor General should be allowed to attend and present his audit findings to parliament instead of leaving this role to the Finance Minister. • The Commissioners should be appointed by parliament through Public

Accounts Committee • The Act should provide for an acting Comptroller and Auditor General in the event that the Auditor General is suspended for any reason. • The Act should provide main details of the nature of the business that will be discussed at the commission’s quarterly meetings. • The Act should also provide the Auditor-General with the power to question policy where weaknesses have been observed. • Restrictions should be removed on areas of audit this implies the Office of the President and the revenue collected by ZIMRA. The Auditor General should conduct forensic audit by now given the environment where fraud is on the increase. • The Act should also specifically include that the Office of the Comptroller and Auditor-General is apolitical. • Immunity/protection from actions by others in its performance of duties must also be provided. • The suspension of the Comptroller and Auditor General should be done procedurally, and if he/she is to come back to the office, there should be properly laid down procedures of doing so. • This Act should avoid the use of ambiguous phrases.

The law makers should strive to make a law that is straight forward and easy to understand and implement, without leaving any room for abuse, misinterpretation or confusion. • Parliament and relevant bodies should ensure that action is taken upon all audit findings within a given timeframe within a maximum of three months. • There may be a risk of dilution of powers of the Comptroller and Auditor General by the commission. Government should ensure that the establishment of the Audit Office Commission would not create another office which will duplicate the work of the Comptroller and Auditor General.

This can be achieved by giving clear and precise guidelines as to the functions of the Comptroller and Auditor General and the functions of the Audit Office Commission. • The audit office should be guaranteed of protection from victimization for instance the Comptroller and Auditor General, Ms Chiri, in her recent auditor’s report covered up the names of corrupt Ministers (Reference Financial Gazette November 12-18). All corrupt activities should be published to the public as they are the stakeholders to improve transparency.

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