Examination of Witnesses (Question Numbers
140-143)
DEPARTMENT FOR
INTERNATIONAL DEVELOPMENT
30 NOVEMBER 2009
Q140 Chairman: Just imagine if our
NAO only audited 80% of our government expenditure. It would be
an international scandal.
Dr Shafik: But this is a country
whose total expenditure per capita is £80 per person and
the UK's is £11,000 per person. We are talking about a slightly
different scale and stage of development.
Q141 Chairman: What progress are
you making to try and improve governance through the Malawian
NAO? Is there a Committee of Public Accounts? Is it effective?
What does it do?
Mr Sharpe: They have just audited
and carried out parliamentary scrutiny of their accounts for the
last three years which had lagged behind. I think the important
thing that is going on at the moment is this work that we are
doing to strengthen them in doing audits at district level, which
is what we are particularly contributing to supporting at the
moment.
Ms Hines: What we are doing is
because the National Audit Office, like a lot of other parts of
government, suffers from capacity constraints, as DFID we are
enabling them to use private sector auditors within Malawi to
clear the backlog of audits of all the district assemblies. They
will be done by the middle of next year, 2010. I should also point
out that when we have any concerns at all about any project or
programme we are funding, if we are not satisfied with the audits
produced by government, we then pull in an independent audit.
We have done that on several occasions in the past and then we
have somebody like Deloittes or PWC who are operating in Malawi
to do an independent audit for us if we are at all concerned.
Q142 Chairman: Within the political
process in Malawi what happens to the work of the NAO? Is there
a Committee of Public Accounts equivalent? That is what I asked
you and how effective is it?
Ms Hines: There is and it is called
the PAC and they are one of the people who participated most recently
in the budget support review because we are trying to get them
much more involved.
Q143 Chairman: How effective are
they?
Dr Shafik: I can tell you that
the permanent secretaries in Malawi complain no end to me about
it, if that is a measure of effectiveness!
Ms Hines: The audits done by the
National Audit Office will now go straight to Parliament. They
have recently changed the rules so they will go straight to Parliament
rather than through government. Government in the past used to
put their own response on top of the audit report before it went
to Parliament. Now to avoid any concern about government interfering
with the audits they are going to go straight to Parliament and
the government will provide its own letter separately.
Chairman: Thank you. That concludes our
hearing. Clearly this is one of the poorest countries in the world.
An estimated 40% of the population remain below the national poverty
line. That is the equivalent of 23 pence a day. Clearly, we congratulate
DFID in the sense that some good things are happening in terms
of health for citizens, reducing poverty, increasing harvests
and reducing hunger. Unfortunately, it is not possible to say
with any accuracy how much of this good progress is directly down
to your help. I think this is an inherent difficulty in budget
support measures or an inherent difficulty where funds are channelled
through central and local government systems. I would like the
Treasury to keep a particularly close eye on this in terms of
value for money. What is also unsatisfactory is that the Department's
own measures of whether their programmes are delivering value
for money are weak. Despite the Department, you yourselves, setting
your own targets for programmes with a deadline of June 2008,
some two-fifths were still not achieved in time. Having said all
that, we do commend you on the useful work that you are doing.
Thank you, Dr Shafik.
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