WGEI Steering Committee meeting held in Washington D.C.
25th – 28th September 2017
Starting from 2014 the INTOSAI Working group on Audit of Extractive Industries (WGEI) organizes a yearly meeting with its members together with regional bodies and/or external speakers in the extractive industries (EI) sector. In exception, the annual meeting held this year is a working meeting for the WGEI Steering Committee (SC) members, where regional bodies and a range of external speakers were also invited.
The main objective of the Steering Committee meeting that took place from 25th- 28th September at the U.S. Government Accountability Office (GAO) in Washington D.C., is to chart the way forward regarding the implementation of WGEI’s three-year Activity plan for 2017-2019. The SC meeting had very fruitful discussions about the activity plan and identified specific goals and tasks to be implemented under different activities. During the meeting, several presentations and papers were presented by activity leaders. The external subject matter experts were also brought in to address the steering committee members on the key topical issues facing the extractive industries.
Implementation of the three-year activity plan
Some of the points deliberated involved the Working group’s role in facilitating knowledge sharing for Supreme Audit Institutions (SAIs) regarding the audit of the extractive industries sector. This role includes organizing trainings and sharing published audit reports and guidelines for the audit of extractive industries. To promote knowledge and experience sharing in the audit of EI, there is still a need to increase the visibility of audit reports, map existing guidelines and organize capacity-building activities for the benefit of the members. In organizing capacity building trainings and workshops, it is important to cover the different regional areas such that as many members as possible are engaged and included. In addition, the topics tackled in the trainings should be relevant for the SAIs and be based on their needs.
The annual meeting also reflected upon the need of engaging external stakeholders as well as WGEI members in the activities of the Working group. The objectives of the discussion was to identify relevant stakeholders that can support SAIs in the EI-audit, promote the role of SAIs and to define possible strategies for how the Working group can strengthen relations with these stakeholders and better utilize their knowledge, networks and resources in enhancing SAI impact.
Topical issues discussed
Some of the topical issues discussed included among others Sustainable Development Goals (SDGs) and their linkage to extractive industries, and Illicit Financial Flows (IFFs) as a development challenge to many developing economies especially Africa. The meeting also discussed the Canadian practice audit guidelines for mining. This guide mainly helps performance auditors in planning and conducting the audit as well as reporting the results of the mining and petroleum audits effectively. This guide provides a list of questions that can be considered when planning an audit, and it has a useful tool that could also assist in risk analysis, in addition to key context information and useful references.
The steering committee members were also updated on extractive industries guidelines by AFROSAI-E. In this regard, AFROSAI-E introduced an updated conception of the value chain. This stresses the fact that legal frameworks are consulted at every stage of the value chain and that implementation of sustainable policies is considered at every stage of the chain.
The SAI of Uganda presented to the committee the cost recovery guidelines developed in conjunction with the colleagues from the Norwegian audit office. This manual applies the requirements of the International Standards of Supreme Audit Institutions (ISSAIs) for compliance auditing: ISSAI 400 and ISSAI 4000. This was chosen because it allows for the interpretation of an authority (law, regulation or agreement) as the basis for criteria. The costs which are deemed as recoverable must be necessary, economical, appropriate and related to petroleum operations. In the case of SAI Uganda, once a certain figure is determined as recoverable, the recoverability is capped to 60% of production and the rest is carried forward to subsequent years.
All in all the discussions from the meeting resulted in further points of action to ensure a better implementation of the activity plan. Some of the key decisions made during the meeting are as follows. The SC members agreed that the current chair to continue until 2022 (term of nine years). In addition, the SC meeting decided to expand the steering committee membership from the current 5 to ten members. WGEI general meetings will take place every three years, which culminates with the completion and report of the work plan, as well as the work plan for the next three years and the working steering committee meetings to take place every year.
The steering committee also decided to elaborate a strategy for external stakeholder engagement and pursue funding opportunities with selected donors. Furthermore, to ease the implementation of the WGEI activities, the SC resolved to implement the Extractive Industry activities through the INTOSAI regional bodies. Notably, engaging WGEI members is crucial to better promote knowledge and experience sharing between SAIs pertaining the audit of extractive industries.
By SSali Edward and Stefanie Grace G. Fernandez