Contributions and Challenges in the Fight Against Corruption - an Auditor General's Perspective  
By Mr. Fred M.Siame, Auditor General of Zambia.

The Role of the Auditor General in the Republic of Zambia is to provide audit services to the government and other institutions in order to promote accountability, economy, efficiency and effectiveness in the collection, disbursement and utilization of funds and other resources for the benefit of society. The Auditor General seeks to satisfy this role by encouraging hones, efficient management and full accountability throughout the government and other institutions receiving grants and other subventions from the government. Therefore, the Office of the Auditor General serves the public interest by issuing reports to Parliament that point out areas that require monitoring and strengthening by the management. 

These laws do not specifically empower the Auditor General to directly audit issues pertaining to corrupt practices. However, the application of audit tests and checks is instrumental in revealing areas of risk on which management of the audited entities is required to take corrective action. Therefore, the power of fight and combat corrupt practices rests with the executive authority of an organization. In the government set up, the executive authority is at two levels. The first is Cabinet level (ministers), where policies and priorities are set, and the second level is the civil service, which is headed by a Parliament Secretary who is operationally the Chief Executive and Controlling Officer of the ministry. The civil service assists the minister in implementing policies and achieving set goals. In carrying out its duties, the civil service uses resources provided by Parliament for which it must account. Therefore, the work of the auditor General is to check whether the implementation of the programs is accordance with the policies and priorities and intentions of Parliament. 

Causes of Corruption

Corruption occurs in almost all the countries around the world. Media reports of corrupt practices that have been uncovered provide evidence that the scourge is not only limited to developing countries. However, the impact of corruption on the public in developing countries is more severe than in developed countries.

Corruption takes place because of a lack of accountability and transparency on the part of public integrity systems. As a result, there is widespread perception that the public service has lost its direction, that many elements within the public sector are corrupt, and that many of the private sector firms that transact business with the public sector are also corrupt. The public sees officials, and officials seem to see themselves, as existing not to provide a service to the public, but as a body that is not accountable to the public it professes to serve. 

The environment in which government transacts its business contributes to the increase in corruption. A business environment characterized by poor accounting and financial management system renders official susceptible to corrupt practices. In Zambia, there are good accountability system in place, but some of the officials managing the institutions override such systems and render institutions unaccountable. 

The state of the economy is another factor that contributes to the increase in corruption, Poverty is largely blamed for the increase in corruption, as people have to survive and will do anything necessary to ensure that there is food on the table. However, this is not to say that if people are poor then they are corrupt. 

Another cause of corruption is greed. This is seen in cases where individuals want to "live above their means". In such cases, officials want to perpetuate their expensive lifestyles at the expense of public. 

Types of Corruption

We also need to draw a line between administrative corruption, which is the focus of this article, and political corruption. Administrative corruption can be classified into two main categories. The first occurs when services or contracts are provided "according to the rules" and other when services and contracts are "against the rules". In the first category, an official is gaining illegally for doing something he/she is ordinarily required to do by law. For example, officials could create unnecessary artificial shortages or make procedures difficult so that only those willing to pay them receive the intended goods or services. Areas that are prone to this kind of practice include issuing of licenses and registration certificates and admitting students into schools and colleges. In the second category, a bribe is paid to obtain services that the official is prohibited from providing. These two categories of corruption can manifest themselves in any of the following forms.         

Conflict of Interest  

This form of corruption occurs when an official stands to profit incidentally from an official act. This could involve awarding a contract to a company in which the official has a financial interest. Various types of conflict of interest situations are encountered from audit perspective, as will be further elaborated on below. 

Bribery

This occurs when an official accepts money or some other consideration to particular course of action or inaction. This type of corruption is rarely uncovered through audits because of lack of audit trial or evidence, especially in cases where bribes are paid in cash. 

Illegal Gratuities

These are similar to bribery Schemes except there is not necessarily an intention to influence a particular business decision. These are also not easily uncovered due to lack of evidence. 

Economic Extortion

This occurs when an official demands money or some other consideration to make particular business decision. Cases of economic extortion are only uncovered through information obtained from complaints from suppliers of goods and services when" whistle-blowers" have provided information. Whistle-blowers are individuals who have direct knowledge of illicit payments and can sometimes provide the evidence to substantiate their claims. 

Contributions Towards the Fight Against Corruption

In what ways then has the Auditor general assisted in the fight against corruption? Having addressed the causes and types of corruption and how it occurs, it is clear that the work of the Auditor General has been most successful in the area of conflict of interest in highlighting risk associated with conflict of interest. The reports of the Auditor General have pointed out glaring irregularities, such as officials awarding contracts to companies that they have vested interest in. For example: 

The reports of the Auditor General have highlighted irregularities in awarding contracts for procurement of goods and services, such as school desks, blankets, and medicines without the prior authority of the Tender Board. In certain cases, Tender Board authority is sought after tenders have already been awarded. There are also instances where one company is awarded tenders to manufacture, distribute and maintain various categories of goods and services ranging from school desks to road rehabilitation. 

Other areas where the work of the Auditor General has been effective concern revelations of overpayments in the procurement of goods and services. These irregularities have been cited in many sectors of the government. Common cases include the procurement of equipment, office supplies and services. 

Another area that is increasingly becoming a source of concern is third-party transactions. Transactions in this category involve local debts incurred by ministries and the suppliers claimed payments from another ministry, most often the Ministry of Finance. This process results in insufficient documentation to support expenditures, and in some cases, payments have been made in excess of what was due. Also, there are cases where suppliers have demanded to be paid through the issuance of treasury bills when the original agreement called for cash payments. 

Several irregularities have also been cited in the liquidation of public companies wherein the members of the committee of Inspection have been regularly appointed, thereby rendering the oversight responsibility of the committee ineffective. 

The reports of the Auditor General have also highlighted cases where advance payments were made but goods and services were not delivered. This is another area of risk, as the institutions are denied the necessary tools and services essential in carrying out their work. 

The cases cited above point out areas of weaknesses in the control environment leading to conflict of interest and other practices contrary to the provision of services to the public. Corrupt officials could easily exploit such weaknesses in the system to perpetuate their unlawful acts. Consequently, executive management needs to be vigilant and ensure that the control environment is constantly reviewed and strengthened. 

The findings of the Auditor General are reported to the executive management of the institutions under audit and to Parliament as the representative of the taxpayers. Parliament prescribes the remedial action to be undertaken, but unfortunately, in some cases the recommendations are not implemented. One of the reasons for failure to take corrective action is that the offending officials derive benefits through the irregularities that are being perpetuated. It is incumbent upon Parliament, however, to devise mechanisms to safeguard the public interest. Some of the measures could include budget cuts in case of noncompliance. 

Challenges in the Fight Against Corruption

The role of audit renders credibility to the government accounting systems by certifying the data presented by executive management. The Office of the Auditor General recognizes that the traditional methods and approaches to auditing are no longer effective at addressing the need of society credible information. The impact of some of the weaknesses identified in the public sector can only be properly analyzed through use of new audit techniques such as performances auditing, forensic auditing, and information technology auditing. However, the staff members of the Office of the Auditor General may not have the requisite skills in some of the new audit techniques. For this reason, the office has initiated training programs that are intended to build capacity and competencies in these new areas. 

The Office of the Auditor General also realizes the importance of increasing the scope of its coverage in order to promote accountability and transparency at all levels of the government. It is for this reason that the office has proposed decentralization to the provincial and, subsequently, district levels as these are the levels at which a number of government programs are implemented.  

There is also a need to strengthen the Office of the Auditor General so that it carries out its work more effectively. The issue of the independence is basic to ensuring that the office functions effectively. Matters of independence that affect the Office of the Auditor General are in the areas of funding, recruiting, and setting conditions of service. In this light, the Office of the Auditor General has proposed that Parliament grant funding to the office in accordance with the planned scope of work without the executive branch, through the Ministry of Finance subjecting the budget to cuts and delaying the release of funds. The office has also proposed a law to establish the office as an autonomous body with powers to recruit staff and set its own conditions of services so that competent staff members can be retained by the office. 

The Way Forward

It is clear from press reports and other publications that the problem of corruption is increasing, not only in Zambia but also worldwide. To eradicate the scourge, there is need for close collaboration between institutions that have been set up to promote accountability, transparency, and the rule of law and the civil society in its lobbying efforts. There needs to be joint training sessions where information can be exchanged and corrective actions can be proposed. 

Awareness campaigns, including publishing corruption literatures in local languages, should continue so that the general public is not sensitized but also constantly reminded that corruption is a problem. The public also needs to be told about the impact of the problem through concrete examples of the problems that results from corruption. 

As their awareness increase, the people will also need protection from being victimized should they come forward with information about corrupt practices. Without some measure of protection, citizens will fear reprisals should they report cases of corruption. This may necessitate other measures such as establishing anonymous hotlines or allowing other institutions, for example, civil societies, to collect information from informants. 

Penalties for offenders should be constantly reviewed and made stiffer so that the law can work as a deterrent to other would-be offenders. Further, the successful prosecution of senior officials who have been charged with corruption will go a long way toward changing the public’s perception that the senior officials or “big fish” are easily let off the charges and only the “big fish” are fried. 

Above all, preventing, rather than detecting, is the most effective way to combat corruption. 

For more information, contact the author at: Office of the Auditor General, Audit House,  P.O.Box 50071, Ridgeway, Lusaka, Zambia, Fax: ++260(1) 25 03 49, E-mail: auditorg@zamnet.zm.