- The multiple awards winning office of the Auditor General of the State of Eritrea and its work ethos is an African example to follow
The presence of a credible and well-functioning audit office attests to a country’s level of progress. In many countries, especially developing ones, corruption tends to hinder nations’ overall progress. In many cases budgets are embezzled and funds misallocated resulting in a spread of inadequate developmental patterns or, worse still, no development at all. To avoid an inadequate development the office of the Auditor General should operate properly, and Eritrea’s office of the Auditor General is an example.
Through proclamation No. 23/1992 the Office of the Auditor General of Eritrea was established in 1992 alongside other Government institutions and offices. With subsequent proclamation in 1993, proclamation No. 37/1993, the mandate and objectives of the office got revised and the OAG has been functioning upon since. As explained in the latest legal notice, 14/1993, Article 2/25, published in January of the year 1993, OAG was granted five main mandates: to audit all Government Institutions, to set standards and guidance of audit works and accordingly conduct follow ups, to provide essential advice in the financial regulation issued by the Eritrean Ministry of Finance, to impound books of accounts where there is suspicion of fraud, misuse and crime, and to issue certificates authorizing the competence of private auditors and accountants.
In layman’s words, what the OAG does is basically audit all government offices including Ministries, Commissions and Institutions. It is also the mandate of the OAG to audit all the funds that come from abroad when directed to any institution of the Government of Eritrea. The office also sets standards for its units allocated in various ministries and institutions as well as private audits; it follows and implants regionally and internationally recognized standards. OAG gives advice to the Ministry of Finance when needed, although it is an office that functions independently from the Ministry. OAG reports to the office of the President. When there is misuse of Government funds, the office impounds the book of accounts and then conducts an investigative audit. The Office of the Auditor General makes efforts to empower private audit offices in the nation as it is mandated to verify their competence and provide them with certificates of competence. The competence of private audit offices is important as OAG does outsource some tasks to the private sector when needed. There is a committee tasked with verifying applications of those who intend to work as private authorized auditors and accountants. The Chair and Secretary of the committee are members of the OAG and the rest represent organizations, including the Ministry of Trade and Industry, the Ministry of Finance, the College of Business and Economics and also a representative of the Private Audit Firms. The OAG’s undertakings are accessible to the public and concerned institutions.
The OAG is a rather small office when compared to audit offices around the world. It constantly makes efforts for its human resource development. Some tasks of the OAG are covered by Audit Service Corporation (ASC), a semi-autonomous organization working independently under the general supervision of the Auditor General. The ASC audits all public enterprises and some government activities such as accounts of banks and the National Insurance Corporation of Eritrea.
To operate efficiently, the office has categorized its audit errands in to three categories whereby ministries’ and institutions’ books of accounts are audited. They differentiate them in clusters of big ministries and big institutions with huge government funds and budgets as well institutions assessed as risky, where proper books of accounts are not kept. There, audits for this category are conducted annually. The second cluster is that of the medium sized institutions followed by the third cluster, composed of small institutions, where the audits are conducted on a flexible schedule on rotation basis.
Before Eritrea’s independence, there was an audit section of the liberation front during the armed struggle for liberation. This was merged with those who were working in the Northern Audit Branch of colonial Ethiopia. In addition, auditors who were working for the Auditor General of Ethiopia in Addis Ababa joined the office. It was the combination of the three categories that formed the Office of the Auditor General of the State of Eritrea. At that time, the OAG had only 20 staff members. It had made significant progress in a very short period of time until the Ethiopian offensive in 1998. The 20 years of no-war-no-peace situation affected the OAG like the other Eritrean institutions though its progress was not stopped.
Since 1993, the OAG has been an office of excellence whose efforts have been recognized and awarded by several regional and international organizations. It has also been an exemplary one in Africa within its minute yet vigorous structures. In 2006, the former Auditor General, current Minister of Finance, Mr. Berhane Habtemariam, was given an award by ACCA International for his efforts in establishing a new audit office and paving the ground for young accountants to go for their advanced studies in ACCA professional qualification. Based on this, Eritrea managed to produce significant number of professional accountants. Later on, in 2014, under the leadership of the current Auditor General, Mr. Gherezgiher Ghebremedhin, the OAG obtained an award of recognition from the regional organization of AFROSAI-E (African Organization for English Speaking Supreme Audit Institutions) as “Best Progress Demonstrated During 2014 Technical Update”, where the works of the Audit Offices was assessed. Lately, in November 2018, the OAG also got “An Award of Recognition in Performance Audit”. On January 22nd 2019, the OAG launched a five-year strategic plan (2019-2023) for further integrated and efficient work. Its goals are to enhance the independence of the OAG, to enhance its organizational and managerial capacities, a major focus on its HRD, to enhance the office’s manpower, and to boost audit services provided by the office and work on OAG’s public image so that stakeholders and the public in general are aware of the office’s functions and reputation.
As Eritrea is a relatively new country so are its institutions. There are many supreme audit offices across the world as well as commendable ones in the African region. When considering external factors inflicted on Eritrea, which have slowed the development of national institutions, the Audit Office has been making commendable progress proving to the Eritrean public and the outside world that Eritrea has a credible and capable audit office.
In Eritrea, budgets for ministries, institutions and projects are allocated by the Ministry of Finance. The Ministry of Finance has conventional set of rules both for financial and property regulations, and the OAG makes sure that budgets allocated by the government are used for the intended purposes. This allows the government to have direct control of its budget and resources, avoiding grounds for fraud and improper use of government funds.
I had to ask whether there were challenges that the office ever faced. The Auditor General said that, fortunately, all the government institutions in Eritrea do respect the work of the office. In other countries, explained Mr. Gherezgiher, some organizations oppose the Auditor General. In Eritrea, however, the Auditor General’s said that organizations try to fulfill the office’s requirements and implement the recommendations as well as opinion they give. The setbacks they face are minimal and amendable.
Mr. Gherezgiher Ghebremendhin, the Auditor General, praises the people’s tradition and values which make their work easier. Moreover, Mr. Gherezgiher elaborated on the office’s vision to strengthen its competences. I was given a tour of the office and noticed young auditors in a convenient environment working on online courses of ACCA. The library is constantly updated with new editions of accounting books. The staff members of the office are encouraged to grow professionally. The atmosphere of work shows how and why the office of the Auditor General is one to praise.