sharing in governance of extractive industries

The case for collaboration between Supreme Audit Institutions and the EITI

An introduction to the common interests and opportunities for the EITI to collaborate with Supreme Audit Institutions.

This video produced by GIZ explains the work of Supreme Audi Institutions.

Embedding the EITI in government systems instead of replicating them
Achieving compliance with the EITI Standard often hinges on the quality of the information disclosed by implementing countries. In the past, poor quality assurance of government and government data has been one of the main causes of non-compliance with the EITI requirements.

Well-functioning oversight institutions, such as Supreme Audit Institutions (SAIs), play a key role in holding both companies and government agencies accountable. SAIs act as watchdog agencies responsible for the audit of government revenue and expenditure. By scrutinising public financial management and reporting they provide assurance that resources are used as directed by national governments. The EITI builds on existing audit and assurance systems in government and industry and promotes adherence to international standards. Indeed, the EITI Standard references the importance of SAI’s and their international association, INTOSAI, in providing credible international standards of assurance to the EITI process.

In many cases, the EITI acts as a diagnostic tool that identifies weakness in audit and assurance standards and compliance. The EITI can help identify areas of risks where further investigation is needed. In Albania, Azerbaijan, Côte d’Ivoire, DRC, Ghana, Mali, Mauritania, Mongolia, Nigeria and the Philippines EITI reports identified weaknesses in the quality assurance of government data and made recommendations how these weaknesses can be addressed.

But there are greater opportunities for collaboration. A key area of debate in the EITI community is the question of “mainstreaming”. Ideally, extractive industry transparency should not be confined to EITI Reports, but rather become an integral part of how governments manage their sector. Rather than simply relying on the EITI reporting mechanism to bring about transparency, governments implementing the EITI could to a greater extent make the information required by the EITI Standard available through their government and corporate reporting systems in a variety of formats, such as databases, websites, annual reports, portals etc. In Burkina Faso, Ghana, Kazakhstan, and Zambia, for example, SAIs are already certifying the disclosure of government receipts in EITI reports.

Looking ahead
In addition to contributing to the reliability of data disclosed in EITI Reports, SAIs could also use EITI reports to identify areas of risk and conduct further investigations. Of course SAIs and their mandates differ greatly from country to country and also rely on the involvement of the government accountant and the parliamentary body which reviews their reports. The EITI is also implemented differently in each country to reflect their differing needs. Presently the EITI International Secretariat is working with interested countries on mainstreaming EITI reporting to align the government accounts with the EITI reporting. Hopefully, this will lead to additional opportunities for collaboration between the EITI and INTOSAI, especially its Working Group on Audit of Extractive Industries.

Regional Director Bady Balde co-authored this blog.

This blog item first appeared on eiti.org 30 November 2015.

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