Statement of the Deputy Chairperson at the launch of IPSA Project Oversight Committee (IPOC), Johannesburg 21st October 2013
Your Excellencies,
President, Pan-African Parliament
President, African Court of Human and Peoples' Rights
Chairperson, African Commission on Human and Peoples' Rights
CEO, NEPAD Planning and Coordination Agency
It gives me great pleasure to welcome you to Johannesburg and to have this rare opportunity to meet you at this launch of the implementation phase of the International Public Sector accounting Standards within the AU.
As you will recall, in January this year, the Assembly of Heads of State and Government adopted the International Public Sector Accounting Standards (IPSAS) as a basis of accounting and financial reporting for the entire Union. The objective is to harmonize financial reporting practices, improve transparency, promote efficiency, and comparability of our financial statements.
I am sure; you also received my communication in July 2013, which constituted into the IPSAS Project Oversight Committee so that the processes of operationalizing the project are led at the highest levels within the AU.
Your Excellencies, let digress a bit into history.
The AUC processes improvement programme started with the Institutional Transformation Process (ITP), launched in 2005 with the dual objective of:
• Modernizing financing and accounting systems and introducing computerized MIS and knowledge management systems; and
• Strengthening the capacity of the AUC to manage and coordinate effective links with the different organs and stakeholders of the African Union
The ITP achieved some significant milestones, notably the introduction of a strategic planning process, the introduction of a results based planning and management system and the introduction of SAP-an Enterprise Resource Planning System.
Another initiative was the 5 Pillar Institutional Audit covering Accounting Standards, Internal Control Standards, Internal Audit Charter and reporting, procurement and grant awards procedures. I am happy to let you know that the AUC which started at the needs improvement level, is now rated “Satisfactory” on 4 of the five Pillars. We are working on the accounting standards to complete the exercise and this will happen when we are IPSAS compliant.
Why IPSAS?
As you know, most Governments and Public International organizations, including the United Nations (UN) and its Specialized Agencies have adopted and have either completed implemetation or are in the process of implementing IPSAS. Need I therefore stress that the Union should not to remain behind but be in tune with comparable organisations since we mobilise resources from the same sources?
IPSAS is composed of credible, high quality, independently produced accounting standards, underpinned by a strong due process and supported by governments, professional accounting bodies, and international development organizations. It is not just a list of standards but a critical tool to make credible partners for doing business with. IPSAS represent best practice for governments’ and international inter-governmental organizations and the AU systems can only overlook it its peril.
Benefits
I know our technical people will outline to us the key benefits of the adopting IPSAS which include:
a) Improved stewardship and transparency with respect to recording of all assets, liabilities, revenues and expenses;
b) Improved quality, comparability and credibility of AU financial statements to Member States, donors and staff, by enhancing accountability, transparency and good governance.
c) More comprehensive and consistent information about income and expenditures which better support Results Based Management, and
d) Improved consistency and comparability of financial statements over time and across different organizations.
Challenges
We should not under estimate the task, for the adoption of IPSAS involves considerable challenges and complexities, involving the review of Financial Rules and Regulations, accounting policies, review and improvement of information systems. Furthermore, it also entails a significant cultural change in the way management and staff understands and uses financial information. The successful transition to IPSAS therefore hinges on strong senior management support and engagement, dedicated intra-organ task forces and the adoption of a project management approach to implementation. This exactly explains why we need to lead the process from the front.
It is therefore critical that we move in unison for leaving behind anyone of us will affect the rest. Moreover, the Assembly decision covers all the Organs of the African Union. It must be a joint project into which we all have a stake. Just as we shall work together at the oversight level, our personnel must do the same at the implementation level so that we meet our target of being fully compliant end of 2014.
Excellencies, let me now draw this Committee’s attention to the proposed revisions to the Financial Rules and Regulations to support the adoption of IPSAS. These proposed revisions, accompanied by explanations of the proposed changes, will be submitted to the PRC for consideration later this year and for approval during the January 2014 summit. I understand that the draft have been circulated to all organs for comments. The proposed changes are the outcome of a collaborative effort led by the IPSAS Implementation task Force and supported multi-disciplinary team on administrative policies to ensure that it reflects a union-wide document.
Let us carry out our oversight role with complete commitment and dedication which will require that we constantly monitor progress and ask the following questions:
a. Have all IPSAS issues been identified and IPSAS-compliant policies formalized within our various systems?
b. Have our procedures been fully integrated and made IPSAS-compliant?
c. Have our systems been tested, integrated and made IPSAS-compliant?
d. Have structures been set up to provide ongoing support to everybody involved in these processes?
e. Have all stakeholders been informed, prepared, trained and equipped for IPSAS adoption?
f. Is there a robust framework to support staff, management and our field offices during data collection and clean-up?
g. Have all impacts on the Financial Rules and Regulations (FR&R) been considered?
h. Have all policy decisions been supported by the Board of Auditors as well as the PRC?
Conclusion
In conclusion, let me draw you to the documentation the outlining the responsibilities of the IPSAS Project Oversight Committee, please read them and always keep them at the back of your mind as we embark on this work. While acknowledging that there will be challenges, we have to remain committed to the full implement IPSAS by end of 2014.
I thank you once more for attending this important meeting.
LET US GET DOWN TO WORK.
