FROM THE DESK OF HEAD OF SAI

Mr. John F.S. Muwanga

Mr. Muwanga is a Fellow of the Chartered Association of Certified Accountants and a member of the Institute of Certified Public Accountants of Uganda. He also holds a Master of Science degree in Accounting from the University of Glamorgan which has since merged with the University of South Wales (UK) in April 2013.

He was originally appointed the Auditor General in 2001 and was re-appointed in July 2007. He initially worked in the private sector for eleven years where he practiced for six of those years as a Partner with Coopers & Lybrand (now PricewaterhouseCoopers) in Zambia and then in Malawi.

Thereafter he worked in the public sector in Uganda since 1994 as a Consultant (Internal Audit Advisor attached to the Treasury), and also held line positions within the Ministry of Finance, Planning and Economic Development as Director Accounts (Accountant General). During 2006/07 he served on a multi-donor program as the Deputy Head at the PEFA (Public Expenditure & Financial Accountability) secretariat based in Washington D.C. at the World Bank Offices. The donor partners included amongst others the World Bank, IMF and DFID.

He has served on many committees most notably on the Committee on Budget & Finance of the International Criminal Court based in the Hague (2003 to 2006) and the Institute of Certified Public Accountants of Uganda. From 2008 to 2014 he served as a member of the United Nations Independent Audit Advisory Committee, which is a panel of experts who provide advisory services to the General Assembly and has also had the privilege of being the Vice Chair and then Chair in the latter years of the Committee. He has also served as a member of (i) the World Bank Multi-Lateral Audit Advisory Group and, (ii) the ACCA (UK) Public Sector Committee.

I would like to appreciate the INTOSAI-KSC for its work operating and maintaining the INTOSAI community portal which serves as a valuable forum for knowledge exchange within the audit fraternity especially in these uncertain and delicate times.

It is my pleasure to contribute to this effort by sharing this article on the Working Group on Audit of Extractive Industries’ journey since its inception seven years ago.

The INTOSAI Working Group on Audit of Extractive Industries

Introduction

The INTOSAI Working Group on Audit of Extractive Industries (WGEI) was established in 2013 at the XXI International Congress of Supreme Audit Institutions (INCOSAI) in Beijing, China. Its creation was in response to a study commissioned by the INTOSAI- Donor Cooperation and undertaken by the INTOSAI- Donor Secretariat in cooperation with AFROSAI-E in 2012. .”

The study found that a number of Supreme Audit Institutions (SAIs) faced challenges in auditing Extractive Industries (EI) including understanding the sector due to its technical complexity, training and retaining specialised staff with the appropriate knowledge about EI business processes, complex legislation and lack of access to and availability of information about the sector. Participating SAIs expressed a need for acquisition of more knowledge about the sector, capacity development and increased sharing of knowledge and experience among SAIs.

One of the recommendations of the study was to establish a working group to respond to the challenges and address the needs raised by SAIs. This proposal was endorsed at the XXI INCOSAI Congress in 2013 resulting in the establishment of the WGEI. The objective of the working group was to promote the audit of extractive industries within the INTOSAI community in order to support good governance and sustainable development for the United Nations post 2015 agenda. SAI Uganda was appointed as its first Chair.

The first meeting was held in Kampala Uganda in 2014 and attended by 53% of its 30 original members. In this meeting, WGEI Terms of Reference were adopted, Activity Plan drawn and a Steering Committee established that comprised of the SAIs of Uganda, Norway, Brazil, Iraq and South Africa to ensure achievement of its objective.

2014 – 2016

In the period 2014 – 2016 the working group made tremendous progress towards achieving its objective. The Steering Committee was operationalised and a Community of Practice installed within the Secretariat. The community of practice was designed as a platform for SAIs, stakeholders and others of like interest to share best practices, resources and contacts with the aim of strengthening audit of extractive industries. The Secretariat staff consisted of a Coordinator of the Community of Practice and an Information Technology Officer from SAI Uganda, and an international advisor supported by SAI Norway.

The Secretariat uploaded existing audit reports, research, EI materials and guidance, tools and resources to the newly launched WGEI website, which operates to this day serving as an access and exchange point for EI information for members and stakeholders. The website has now morphed into a webpage on the INTOSAI community portal. A newsletter featuring EI updates and discussions on topical issues was launched in 2015, and over the years both the SAI community and external stakeholders have contributed articles. 17 issues of the Newsletter have been published so far with 1,012 subscribers.

An assessment was made by the Secretariat to ascertain the capacity building needs of member SAIs. To address the identified capacity gaps, WGEI initiated and participated in training workshops and seminars, and developed basic training material on specific topics. Benchmarking visits between SAIs were embraced as a means of sharing knowledge and experience, a couple of which were successfully undertaken. The theme of knowledge transfer through networking was extended to all members’ meetings which were held annually in 2014, 2015 and 2016.

Recognising that knowledge and expertise in extractive industries exists beyond the INTOSAI community, the Secretariat and individual SAIs initiated and maintained dialogue with external stakeholders such as World Bank, Organisation for Economic Cooperation and Development (OECD), NORAD Oil for Development, Extractive Industries Transparency Initiative (EITI), Publish What You Pay, German Corporation for International Cooperation (GIZ) and Natural Resources Governance Institute (NRGI). In some instances this dialogue culminated in collaboration on mutually beneficial projects.

2017 – 2019

During this period the working group consolidated the gains from the previous period and further developed its activities. The working group structures and Activity Plan were modified and refined to better serve its members who steadily increased and currently stand at 42. The WGEI Terms of Reference were amended, and the membership of the Steering Committee was increased to 10 to provide for representation from various INTOSAI regions and better manage the workload. The Steering Committee currently comprises of the SAIs of Uganda, Iraq, Ecuador, Fiji, United States of America, India, Ghana, South Africa, Zambia and Norway, with SAI Indonesia as an observer.

Notable successes during this period included developing products to facilitate the EI audit processes. A ‘Training Framework for the Audit of Extractive Industries’ intended for use as guide by SAIs and interested stakeholders in developing course content for training in the audit of EI and a ‘Briefing Note on the role of SAIs in the Good Governance of EI’ which underscores the contribution of SAIs in the sector, among the products, were approved as INTOSAI documents at level 3 of quality assurance at the XXIII INCOSAI, 2019, Moscow, Russia. Others in progress are a ‘Framework of Government Auditing Standards for Oil Companies under Service Contracts’ developed to provide guidance to SAIs whose countries employ service contracts in EI and ‘Extractive Industries Auditor Toolkit’ designed as a web based tool to provide an overview of EI to inform auditors new to the sector.

In addition, EI audit reports and materials were translated from their original languages to other INTOSAI languages to make them more accessible and relevant to the wider SAI community. The existing EI audit reports were also mapped against the United Nations Sustainable Development Goals (SDGs) to provide a reference point for SAIs interested in testing preparedness for or implementation of the SDGs in their audits.

Conclusion

Presently the WGEI is implementing the (2020 – 2022) Activity Plan which emphasises utilisation and improvement of products and initiatives developed in the previous period, and focuses on continuous identification and unravelling of challenges experienced by SAIs in EI. It is encouraging to note that a number of SAIs have responded to the call to participate in executing activities in the Activity Plan.

The achievements of the working group would not have been possible without the support of the Steering Committee, Member SAIs and the various Stakeholders who worked with us over the years. Allow me to express my gratitude to you all. It is my hope that the working group will attain even greater heights as we continue to promote the audit of extractive industries within the INTOSAI community.