African Organisation of English-speaking Supreme Audit Institutions

OAG Zambia and OAG Norway’s Peer-to-Peer cooperation

“Relevant in all areas, but only effective in some.”

Evaluation shows that OAG Zambia and OAG Norway’s peer-to-peer cooperation has contributed to improve the overall capacity of OAGZ, although the results achieved vary largely across working areas. ICT security audits and compliance audit in the mining sector shows the best results.

Findings from the evaluation suggest that the Peer-to-Peer cooperation has contributed to significant progress in both Audits of Extractive Industries and Information Technology Audits in Zambia. Since the Office of the Auditor General has an important role in ensuring accountability, good governance, and a transparent and effective use of public funds, even relatively small improvements in its functioning can have significant societal impacts.

To increase the benefits of working with external partners, the partners should strengthen “internal capacity building and sharing processes”, to spread the benefits from a peer-to-peer cooperation throughout the institution. It is also necessary ensure coherence between external partners by inviting to joint annual planning meetings discuss the recipient SAI’s objectives and needs for assistance each year. This would allow partners to accommodate not only to recipient SAI’s needs and interests, but also to the other existing sources of assistance and provide that for which each partner is best suited.

OAGN is encouraged to use the flexibility of the peer-to-peer project design to increase or decrease their efforts over time in specific areas of collaboration, while maintaining the relationship and safeguarding the trust built between both institutions. This ensures an efficient allocation of resources.

BACKGROUND

Long-time partners

The Peer-to-Peer cooperation between the National Audit Office Zambia (OAGZ) and the Office of the Auditor General of Norway commenced in 1997. Over the years, the cooperation has evolved and the modalities changed. The focus has been to strengthen the impact and effect of these Supreme Audit Institutions (SAIs), thus contributing to improving the management of public funds.

The peer-to-peer approach is one of collegial support and benefit – Zambian and Norwegian auditors have jointly worked together to identify capacity gaps, prepared training materials relevant for ongoing audits and conducted trainings and audits. The funding for the project, as for all OAGN institutional cooperation projects is sourced from the ordinary OAGN budget, independently of external funding or donors. This model maintains the independence of OAGN from the Norwegian development entities OAGN must audit annually. On average over the cooperation period with OAGZ, the average annual cost for OAGN has been approximately 133 000 Euros. OAGN only carries costs for own personnel and does not support OAGZ financially. In total, OAGN spends 1 to 1,5 million Euros annually on their international capacity building and institutional cooperation projects.

Peer-to-Peer partnership highly satisfactory

Oslo Economics, one of Norway’s leading firms in performing evaluations and cost-benefit assessments of policy measures, says that project design responded satisfactorily to the needs, priorities, and context of OAGZ. The cooperation agreement matched OAGN’s comparative advantages and the peer to peer partnership was highly satisfactory in terms of being a well-suited approach.

Moderate impact but important project

The impact of the cooperation project is considered moderate. The cooperation project significantly contributed to strengthening of the OAGZ, but moderately increased the accountability in the management of public resources in Zambia. Sustainability, i.e. the extent to which the net benefits of the intervention are likely to continue, is overall considered to be satisfactory, although there is definite room for improvement. Oslo Economics suggest that the design of the project considered sustainability in highly satisfactory manner, while the mechanisms set in place to ensure it were unsatisfactory.

An example of how OAGZ included OAGN in their work is the mining licenses compliance audit on the 2017 accounts, presented in parliament in 2020.

Zambia’s mining sector contributes about 70% to the country’s foreign exchange earnings and 73% to its exports. Over 3,100 companies operate in the industry. The allocation of licenses has a significant direct impact on the performance and economic contribution of the sector, as it determines which companies obtain the rights to develop and operate mines and how they undertake mining exploration and mining.

OAGZ drew on findings from Zambia Extractive Industries Transparency Initiative (ZEITI) reporting and validation that identified disclosure gaps in the technical and financial criteria for assessing license applications. The risks identified in the licensing procedures, subsequently lead OAGZ auditing whether licenses were awarded in line with the mining legislation, and whether licensees then adhered to their obligations. The audit identified a range of opportunities to strengthen the licensing process, including assessment of applications, compliance in quarterly reporting by companies and oversight of export licenses. The findings generated significant media attention and were presented in Parliament in March 2020. The Ministry of Mines has since cancelled 874 licenses, and is considering reforms to address weaknesses identified in its licensing procedures. (Source: EITI Progress Report 2020, p. 14)

OAGZ used OAGN actively as a sparring partner and subject matter discussion partners during what ended up as OAGZ’s first compliance audit on this topic.

Recommendations regarding project design and planning in P2P partnerships

  • Gather as much information as possible on the partner’s potential funding constraints, external vulnerabilities, and availability of resources.
  • An accurate picture of the institution’s vulnerabilities is key to select the areas of work with reduced exposure and high potential impact.
  • OAGN should build sustainability into future bilateral agreements from the start. All organisations have a degree of turnover, and cooperation activities will never cover all the staff within an organisation. Both partners should be aware of this and make explicit plans for how the human capital created by the cooperation will remain in the institution when people leave, and perhaps more importantly, how it will spread throughout the rest of the organisation.

Any questions or requests for the full report can be sent to Geir Ambro, senior adviser (gam@riksrevisjonen.no) and OAGN contact point for the OAGZ P2P cooperation.