Auditors urged to boost governance capacity in developing countries

20 Oct 15

External auditors need to start thinking about how they can develop internal audit systems and capacity in countries receiving aid, a member of the European Court of Auditors has told Public Finance International.

It is one a number of questions that will be considered at an ECA-hosted conference in Luxembourg that starts today.

Speaking to PF International ahead of the conference, ECA member Danièle Lamarque, who has organised the event, said consideration of the interplay between audit and aid spending was timely given the reshaping of priorities as defined by the United Nations’ Sustainable Development Goals.

She also noted the emergence of new institutions, such as the Asian Infrastructure Investment Bank, as well as new donor countries like Brazil and China and development instruments, such as results-based financing.

Their emergence raised some “sensitive” questions about how their work can be co-ordinated with that of more established donors such as the European Union.

“How can we assess the impact of the effectiveness of aid with these new actors in the framework? And how can we as auditors help developing countries and other supreme audit institutions to improve their work to be able to assess in their own countries the efficiency and effectiveness of aid?”

Developing countries traditionally have weak forms of reporting and it is a challenge for the European Commission and member states to help recipient countries improve this, she said.

Lamarque noted that a large part of aid is given in the form of budget support, effectively giving foreign governments money to spend as they wish.

“On the one hand it is very good as it develops responsibility in the beneficiary countries but on the other hand it is difficult to assess because once it is in the budget of the country we can do nothing. I’m not able to audit what happens in Mali or in Senegal,” she explained.

“One of the challenges for auditors, because we cannot audit everything, is to try to develop internal audit systems or capacity in beneficiaries, be they countries or institutions or administrations.”

The conference will run on 20-21 October and will consist of three roundtable discussions considering the future development landscape, how aid can be made more transparent and effective, and how effectiveness can be assessed.

Speakers have been drawn from the UN, the Organization for Economic Co-operation and Development and World Bank, as well as EU institutions and the developing world.

“We will not solve the global problem of development, but we expect people to exchange new ideas on a topic that is evolving very rapidly,” Lamarque told PF International.

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