Lara Taylor-Pearce: An Independent Auditor
Almost two weeks ago, Bloomberg's Silas Gbandia reported finance minister J.J.Saffa said on Star Television that Sierra Leone Public Finance Audit Shows $1 Billion Missing. According to Gbandia, Saffa pledged that the government will recover the funds by June, without specifying how it plans to do so.
The report also said that President Julius Maada Bio commissioned the audit into public spending from 2015 to 2018 after his election last year. Sierra Leone's economy measured $3.7 billion in 2017.
Numerous news outlets including Sierra Express Media and Cocorioko have reported on the radio interview given by Sierra Leone's auditor general, where she countered the claims of Saffa and Jusu.
Ms. Taylor-Pearce is being lauded as a champion in the free press and opposition circles who have come under a barrage of criticism for graft and mismanagement, unproven allegations which are sometimes debunked.
Below are excerpts from an archive interview Taylor-Pearce did with Jamie Hitchen for Africa Research Institute. The article was first published in 2016.
Since her appointment in 2011 as Auditor General of the Republic of Sierra Leone, Lara Taylor-Pearce has put forward 953 recommendations for improving public financial management. Government action on recommended reforms has been partial and invariably slow, but the profile of the Audit Service Sierra Leone (ASSL) continues to grow. While striving to encourage greater transparency, efficiency, and accountability in government, Taylor-Pearce is equally keen to raise public awareness of the critical importance of sound governance.
AN INDEPENDENT AUDITOR
Are the reports and recommendations of the Audit Service Sierra Leone (ASSL) heeded by the government and acted upon in the way you would like? Do you have adequate resources for your work?
ASSL is mandated to report findings to the nation’s Parliament, as is the case for many other supreme audit institutions around the world. It is up to parliamentarians to scrutinise the report and ask the auditees to address the concerns raised. Section 119 (5) of the 1991 Constitution clearly states that Parliament “shall debate the report of the Auditor General and appoint where necessary in the public interest a committee to deal with any matters arising therefrom”.
As an office we have moved a long way since 2007, the year I joined as deputy auditor general. Then we had just three qualified accountants. We now have 24 and a good number of them have received advanced training, funded by the audit office. We have benefitted from consistent, albeit slow, financial support from the government that has only begun to wane in the last year or two.
Staff members are employed by an independent Audit Service Board and are not part of the civil service. Since 2007 they have been paid on a par with private sector auditors. In Africa auditing can be a risky business because the work often exposes what people want to hide. Public sector auditors need to be well remunerated.
Sierra Leone is one of the few countries in Africa that has enshrined administrative independence for its audit office into law. The 2014 Audit Services Act (see endnotes) was a positive development for our institutional freedom. It is important for audit offices to establish and retain fiscal independence. Doing our job and maintaining our independence is a daily struggle.
Tensions exist between supreme audit institutions and governments across the world. Governments are mandated to pay the salaries of audit staff but are often criticised by report findings. Overall in Sierra Leone I think the government views us as a necessary evil.
Yes, we shine a light onto things that they would rather keep hidden; but we also lend credence to the accountability framework in the public financial management system, ensuring their actions are given greater national and international credibility.
ON PUBLIC FINANCIAL MANAGEMENT
The ASSL website states that “through independent professional standards-driven audits we establish to a level of audit assurance that public money is used by the government in the manner intended by parliament”. What would be your overall assessment of the government’s use of funds in terms of value for money and accounting for expenditure? What improvements in public financial management have you seen since your appointment as Auditor General in 2011?
The rules set out in the Public Procurement Act of 2004 are still frequently flouted. When you have very senior government officials getting involved in the issuance of contracts, and then not questioning the delivery and quality of those goods, there is a problem in the system – a problem that fails to adhere to value for money principles.
Every year we audit ministries of “high importance” – broadly based on the funding they receive – alongside other specially selected MDAs (ministries, departments and agencies). Since 2011, a lot of money has gone into departments without the outputs you might expect. With its level of funding, the Ministry for Agriculture, Forestry and Food Security should have been able to achieve the food security level targeted by the government, but we are far from that. The Ministry of Education has invested heavily in improving attendance at school, but there is more to education than volume. Quality is equally, if not more, important. The Ministry of Health and Sanitation has failed to roll out the Free Healthcare Initiative as it intended. The outbreak of Ebola showed up the health sector as a shameful panoply of dysfunction.
What are the consequences of ignoring the rules and regulations set out in the law? Are government ministries supportive of your work? To what extent is a lack of capacity at ministry and local government levels an impediment to proper audit practices in Sierra Leone?
Insufficient pressure is put on auditees to respond to the recommendations of reports. If there were greater consequences for ignoring these, perhaps attitudes would change. One solution would be to not release financial allocations to ministries until they enacted at least some of the recommendations from the ASSL audit. Ministries need to be incentivised to do the right thing if compliance is to become the norm.
If you ask someone in the Ministry of Finance and Economic Development, for example, about the functions and role of the audit office you will be given the answer that you want to hear – the nice answer, that they are working closely with the ASSL and supporting our work. They do support us in allowing our auditors to carry out reviews, but when it comes to action on recommendations little changes.
Perhaps ministries do not understand the importance of audits and financial processes. We are not investigating them to cause problems but to ensure that funds for the development of Sierra Leone are being spent judiciously. As it is, ignoring our recommendations is causing widespread problems in the broader public financial management system.
When it comes to capacity, lots of training of audit staff within MDAs has been done. They should be aware of the basic things they are supposed – and not supposed – to do. The laws are also there to guide them. The need for adherence to the law is not something that you need to go to a special school to learn. Nonetheless, it will not happen until there are consequences for flouting the rules, both for individuals and ministries. Until we get to that point, commitment to proper audit practices will continue to be a personal choice.
It is true that because of the work of the audit office in shining light and exposing malpractice people are becoming more careful. It is also true that there is a limit to what adherence to “due process” can prevent when it comes to the misuse of funds. If malpractice is done totally off the books and we cannot see it, then we cannot talk about it. Rumour and speculation cannot be allowed to impinge on the auditing process. One way of addressing this problem would be to carry out a forensic audit, but we do not yet have the requisite skills or capacity.
I look forward to a scenario when, after Parliament has finished with our annual report, efforts are made to prosecute based on malpractice highlighted by our findings. In five years my office has never received a communication from the attorney general’s office about action being taken against public officials because of what we have uncovered. Nor have I been given any formal indication that our efforts have formed the basis for successful prosecutions by the Anti-Corruption Commission (see endnotes). We have actively sought to engage both with our work, as they are the ones mandated to investigate those who have transgressed. The will to act has to come primarily from these institutions.
I am not saying that our approach completely stopped malpractice, but it certainly sent a message. At the very least it slowed down misappropriation of funds, particularly after the first audit report was published in February 2015. Individual staff became more cautious about putting their signature to documents that they knew the ASSL auditors would scrutinise. The second part of the audit, published in February 2016, recognised the improvements in financial management of the Ebola response. It also drew attention to the lack of punitive action against the malpractice raised by the first report.
As an auditor, I cannot dictate to Parliament what they should do with the report and how they should act on the findings. Nor is it the role of the auditor general to prescribe punishment... For serious breaches of financial management procedure, I would support forcing the individuals responsible to pay back the money. It would send a strong message. But currently, this does not happen. People continue to get away with transgressions.
ON MONITORING AID AND INVESTMENT
Is international donor funding in health, education and infrastructure and large-scale investment projects sufficiently open to scrutiny from the ASSL? Why is this important?
When international partners claim they have helped improve the country in key sectors like health and education we would like to be able to verify and validate those claims
Institutionally we have come a long way, so a lack of capacity is not an issue. At the very least international actors could give us copies of their audits to put in our own reports. But this does not always happen and some of the agreements the government enters into with external agencies lack transparency.
More broadly, we do audit World Bank-funded projects and conduct quality assurance on audits done for African Development Bank-funded projects. The ASSL does audit funds from the UK’s Department for International Development given as direct budget support to the government through our regular audits of MDAs.
The quality of our reports and our credibility is everything
We would like to engage in monitoring some of the infrastructure projects being undertaken in Sierra Leone; and also to carry out IT and extractive industry audits. A special investigations team would enable us to explore new areas without distracting us from the work we are doing now. We cannot do everything, however, and it would be difficult, for example, to obtain the contracts and documentation necessary to carry out an audit of Chinese infrastructure projects. We are not shying away from that challenge or any other, but it is important that we do not overstretch ourselves. The quality of our reports and our credibility is everything. I believe in focusing on what is achievable and doing it right, only then can you expand and grow.
ON TRANSPARENCY AND PUBLIC ENGAGEMENT
How does the work of the ASSL contribute to improving the awareness of citizens about government initiatives and projects that aim to deliver basic public services for citizens of Sierra Leone? What else could be done to improve engagement with the wider population?
Before becoming Auditor General I met people that did not even know the office existed, when in fact it has been around in various guises since 1962. In 2010 our annual report became a public document but it was not until 2012 that it became public knowledge. It was in that year, shortly after I took office, that we started making a concerted effort to raise levels of citizen awareness about its contents. It is important Sierra Leoneans are better informed about what is really happening with government finances.
In 2015, 4% of the ASSL budget, which is a little over US$1m, was set aside for civic engagement. Staff, accompanied by the principal auditor of the Parliamentary Public Accounts Committee (see endnotes), embarked on a nationwide sensitisation and awareness-raising programme. The aim was twofold: to explain the operations of the audit office and to share the contents of the most recent reports. We had meetings with key stakeholders in all 14 districts of the country. There were interactive radio debates in English and vernacular languages, and schools were visited to educate the next generation. In total, over 50 public gatherings were held.
It is important Sierra Leoneans are better informed about what is really happening with government finances.
Engaging with civil society and journalists when a new report is issued is also important. By convening day-long information sessions we can better position them to inform the wider population of our key findings. But further improvements are needed. The voluminous nature of our annual report does not make it widely accessible. We are in the process of developing an approach to present key findings in a more digestible and visually engaging way. The first report to benefit from accompanying infographics will be the 2014 annual report which was tabled in 2015.
Efforts to improve our own transparency at the ASSL have led to more questions being asked of government as to why certain expenditure is poorly accounted for and why promised projects are not being delivered. Our financial statement for 2015 was externally audited and published on our website. We also have to set a good example and reflect on what we can do better.
The Audit Service Sierra Leone is the Supreme Audit Institution of Sierra Leone. Section 119 of the 1991 Constitution of Sierra Leone provides for the establishment of the office and the functions of the auditor general. It is mandated to oversee 39 ministries, departments and agencies (MDAs), 19 local councils, 149 chiefdoms, 64 statutory bodies and donor-funded projects.
The Audit Service Act 2014 provides for the continuance of ASSL as an autonomous body with authority to ensure greater accountability in the receipt, disbursement and control of public funds, to promote greater efficiency and effectiveness in the use of public funds, and to provide for other related matters. It replaced the Audit Service Act 1998, which was implemented in 2004.
The Parliament of Sierra Leone comprises 124 members, of whom 112 are directly elected from across Sierra Leone’s 14 districts.
The Public Accounts Committee (PAC) is a committee of Parliament. Its 11 members, all MPs, are appointed in proportion to the number of MPs in each political party elected to Parliament. The PAC is responsible for reviewing the financial statements of government MDAs, and examining the management of public money.
The Sierra Leone Anti-Corruption Commission (ACC) was established by the Anti-Corruption Act of 2000. That Act was repealed and replaced eight years later when the Anti-Corruption Act 2008 was passed into law by Parliament. The 2008 legislation gave the ACC powers to prosecute for the first time.
Click here to read the full interview