SAIs, important actors in fragile situations - PowerPoint Presentation

Slide1

SAIs, important actors in fragile situations

Susanne Wille European Commission

September

2017Slide2

State-building must be holistic, including appropriate means of oversight.

Countries in fragile situations have high risks.

SAI are instrumental to a state's good functioning and to the fight against corruption, fraud and mismanagement. Slide3

Different types of support to SAI:

•

Capacity development projects

• TA, equipment and infrastructure

• Policy and political dialogue

• Budget support is dependent on a well-functioning SAI and promotes oversight. Slide4

'State Building Contract' In a context of fragility, the Commission has a specific form of budget support instrument at its disposal.

"to be used when situations of fragility or transition require action … to help partner countries to ensure vital state functions and to deliver basic services to the population"Slide5

State Building Contracts are Budget Support : Four Pillars

5Slide6

For State Building Contracts the

same

eligibility

criteria

apply

:

1) A stable

marco-economic

framework2) Sound public policies and reforms3) Good or improving public financial management 4) Transparency and oversight of the budgetThey have to be respected before approval of an operation and during : before each paymentBUT the analysis and interpretation are adapted to fragile situations

6Slide7

State building contracts were introduced in 2012.

The EU has developed SBCs with 21 countries, about a quarter of the total number of countries with whom the EU has budget support operations. (2016: 24 operations with a total budget of 2.2 billion Euros)

This instrument

seems

to

work

well

.Slide8

State building contracts and SAIs

Fragile situations are characterised a need to strengthen the resilience of the state. The main areas of focus are public financial management, health, education, domestic revenue mobilisation, and macroeconomic stability.

The SAI

play

an important

role

,

notably

as key to good public finance management and

in the fight against corruption, fraud and mismanagementSlide9

A short analysis of risks

Overall the risk ranking of 'all countries' and 'fragile countries' is similar. For all countries 'corruption and fraud', 'rule of law' and '

Gov

effectiveness' are high on the list.

The main risk in countries in fragility is 'vulnerability and exogenous shocks'.

In a fragile situation immediate needs are more prominent, this changes the ranking.

Therefore (?) 'external audit' seems to be perceived as relatively less risky in in SBC countries. This concerns the

relative

importance only. Slide10

One example of integrated

support to SAI

'Performance Indicators' imply that additional budget is released on the achievement of mutually agreed results or indicators.

In state building contracts, in each case one or more of the performance indicators concern either external audit or related issues (fight against corruption, internal controls , public accounting).

These expected results are typically focal points in the discussions and policy dialogue. Slide11

The Commission and GAC of Liberia

EU support for the GAC started in January 2007 and the partners are now working on the planning of the third generation project.

In Liberia

there

are self standing

projects

as

well

as indirect support

through

the state building

contracts

.The support to GAC is assisted by Intosai and AFROSAI and integrated into PFM reforms.Slide12

Evaluation recommendations :

-

Be (ambitious but) realistic

- the GAC´s own strategic plan should take centre stage

- consider the interplay of external factors, most notably the political and legal environment, which define to a large extent the degree of a SAI’s independence, autonomy and weight as an anchor of accountability

-

long-term relationship with a well-developed peer SAI aimed at mentoring and supporting would be helpful