New draft bill to improve 40 year old Audit Service Corporation proclamation
The Government of Ethiopia has tabled a request for a supplementary budget close to 27.9 billion birr before the House of People’s Representatives (HPR). The latest request comes four months before the current fiscal year ends and is an additional federal budget to the current year [2012 E.C] which amounts to 387 billion birr.
Tabled on Tuesday – dubbed “2012 Fiscal Year Supplementary Budget and Financing Restructuring Proclamation,” it states that the required budget includes 9,890,040,123 birr for recurrent expenditures, while 18,000,000,000 birr is requested to finance restructuring.
The proposed sum of the budget amount [27,890,040,123] is requested to finance the budget deficit which was a result of implementing home grown economic activities. The draft bill states two possible sources, domestic revenue and external assistance, to cover these financial requirements.
Hence, domestic revenue, mainly Tax revenue, is expected to fetch a total of 19,976,029,148 while external sources are expected to contribute a total amount of 7,914,010,975 birr.
After holding first hand discussions on the proposed bill, the House has referred it to the Budget and Finance Standing Committee with a majority vote for further revisions.
In the same session, the House has held discussions on a draft bill tabled for the “Reestablishment Regulation of Audit Service Corporation…..” This will improve the existing proclamation for the first time, since it was first endorsed 40 years ago.
Stating the main rational behind the re-establishment of the corporation, the preamble states that, it is required to update the existing proclamation with the current contexts in accordance with Proclamation No. 982/2016, to reestablish the Office of the Federal Auditor General and Article 2 Sub-Article 2(17) of the Proclamation to Amend the Establishment Proclamation of the Office of the Federal Auditor General Proclamation No. 1146/2019.
The draft proclamation aims to strengthen the audit system in the country, playing an important role in providing reliable data, useful for the effective management and administration of the national economy.
In the existing proclamation, there are no provisions that designate, to which the corporation is accountable to. Addressing this issue, the latest draft bill proposes a specific provision that gives the corporation a mandate, as an autonomous Federal Government organ, having juridical personality of its own, while it shall be accountable to the Federal Auditor General, upon the approval of the draft bill.
The corporations duties and responsibilities, in regards to the existing proclamation, has been limited to the audit of only public enterprises, partially owned public enterprises and Service delivering organizations. Meaning it does not allow audit of government projects and other organizations which seek Special Audits’.
However, now, the proposed draft bill expands the objective and responsibilities of the corporation enabling it to carry out auditing tasks on the accounts of the federal Government Organizations, assigned to it by the Federal Auditor General. Similarly, it further audits projects and programs financed by donors and lender accounts.
In addition, the draft bill designates the Auditor General with the power of appointing the Director General; and his/her deputy which has not been clearly stipulated in the existing proclamation. In addition, the corporation will have five board members, mainly the Federal Auditor General (Chairman), the Minister of Finance (member), the Attorney General (member), Director General of the Accounting and Auditing Board of Ethiopia (member) and the Director General of the Corporation (member).
According to the draft, the capital of the Corporation shall be Birr 100,000,000.