Lesotho Receives MEFMI Training in Auditing of Public Debt

The Government of Lesotho has embarked on a Reform Programme to address challenges identified in different components of the Public Financial Management System.  The reform is being partly financed by a grant from the African Development Bank (AfDB). External audit is one of the areas the reform is focusing on, to address institutional and technical capacity constraints facing the Office of the Auditor-General in performing its mandate.

It has become apparent that the country has capacity gap in auditing, and yet, public debt is one of the biggest budget expenditure items in Lesotho, hence the need to put adequate controls while enhancing accountability and transparency in its management. The Office of the Auditor General as a Supreme Audit Institution is mandated to promote public accountability by ensuring that the executive is accountable to it, Parliament and the public.

In recognition of the need to address this weakness and facilitate knowledgeable auditing of public debt, the Office of the Auditor General in Lesotho requested MEFMI for technical assistance in training its audit staff on auditing of Public Debt Management operations and procedures. MEFMI conducted the training in Maseru, Lesotho, from 30 November to 4 December 2015.

The workshop was officially opened by the Auditor-General, Mrs Lucy L. Liphafa. In her opening remarks, Mrs Liphafa commended MEFMI for accepting to partner the Government of Lesotho in its efforts to address challenges currently existing in Public Financial Management, particularly those focusing on addressing capacity constraints facing the Office of the Auditor-General in auditing public sector debt. She noted that the sheer size of public debt and the increasing level of sophistication in public debt management practices required the Office to enhance competence of auditors to prepare them for public debt audit. In this regard, she urged participants to use every opportunity to tap from the vast experience and expertise that the workshop availed, to prepare themselves for the task of conducting both performance and regularity auditing of public sector debt. Such skills would help enhance audit independence and the credibility of audit processes and outcomes.

The training was designed to equip audit staff with practical skills required to conduct both financial and performance auditing of public sector debt. Participants were also introduced to conceptual issues in sovereign debt management procedures, performance standards and evolving international best practices in auditing public debt, based on the on-going international work to develop relevant guidelines within the network of supreme audit institutions. It is expected that the knowledge gained would enable participants to undertake more comprehensive and knowledgeable auditing of debt management in Lesotho.

Participants were mostly drawn from departments within the Office of the Auditor General of Lesotho, particularly Research and Development, Community Services and Statutory Boards, General Public Services, Economic Services, Corporate Services and Performance Audits. The Ministry of Finance’s internal audit department was also represented by two officials. The workshop targeted middle and senior level audit officials. A total of forty two (42) participants attended the workshop, of which thirty one (31) were female, representing 74 percent of the total.

The training covered sessions on public debt management processes and procedures, as well as public debt audit, particularly compliance and performance auditing. The training resulted in:

• A better understanding among participants of public debt management principles, processes, procedures and tools;

• A better understanding of the public debt management processes, particularly the selection of public debt management audit topics,   performance and regularity auditing, practical skills needed for effective auditing of public sector debt; and compilation and analysis of audit findings and formulating recommendations; and

• Increased awareness on evolving international best practice in auditing public debt, based on the on-going international work to develop the relevant guidelines within the network of supreme audit institutions.

Participants recommended a follow-up training, particularly focusing on DeMPA tool to reinforce their understanding of the performance assessment methodology, as this would assist them when conducting public debt management audit.