Making A Difference In The Performance Of SAIs


Contingent liabilities pose an increasing risk of destabilising a government’s public finances. As ministries of finance develop their public debt management capabilities, an important consideration is the role of the middle office in managing contingent risks. From 7 – 8 December 2016, CABRI (Collaborative Africa Budget Reform Initiative), held a policy dialogue session to provide risk managers with an opportunity to share their experiences on challenges they have faced, the lessons they have learnt and the good practices they are striving to implement.

The programme was structured around the five aspects of contingent liability management: (i) understanding the costs; (ii) establishing a robust regulatory and policy framework; (iii) building an enabling institutional environment; (iv) improving measurement of contingent liabilities; (v) proactively managing the application, assessment, approval, recording and monitoring processes; and (vi) instituting comprehensive disclosure and reporting requirements.

Representatives from AFROSAI-E gave a presentation on the role of SAIs on the disclosure of and reporting on contingent liabilities under the theme “Sustainability of public entities through adequate disclosure and reporting of contingent liabilities”. The presentation highlighted the six main challenges being faced in the region with regards to contingent liabilities as:

  • the different Auditing Mandates for SAIs;
  • the different definitions of Contingent liabilities from one SAI to another;
  • the resulting limitations on audit coverage;
  • poor record keeping by auditees;
  • integrity of comparative information; and
  • the lack of follow up on audit findings and recommendations.

The main message on lessons learnt from the AFROSAI-E region was that strong SAIs at institutional level can contribute positively and effectively to the achievement of sustainability through the audit of contingent liabilities. The use of collaborative information and unpredictable audit procedures by auditors goes a long way in identifying, disclosing and reporting on contingent liabilities towards the sustainability of public entities.