Examination of Witnesses (Question Numbers 140-143)


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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