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BoEA Mandate

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Rule 97

The Board of External Auditors

(1) The Board of External Auditors appointed by the Executive Council shall audit the accounts of the Union.

(2) The audit shall be conducted in accordance with internationally accepted auditing standards.

 

Rule 98

Composition of the Board of external Auditors

(1) The Board of External Auditors shall comprise of Heads of Supreme Audit Institutions from member states of the Union appointed by the Executive Council.

(2) In addition to members of the first tier, the Board of External Auditors shall be composed of five (5) members, (one per region) to be appointed by the Executive Council and the members of the first tier on the scale of assessment to African Union Budget.

(3) Membership of the Board shall elect be open to all Member States, with the exception of those affected by sanctions in conformity with the relevant rules of the Union.

(4) The term of office of the Board shall be two (2) years. Board Members shall be eligible for re-appointment only once. The term of office of one (1) of the members shall expire at the end of every term. One (1) member should also remain to serve a second term for the purpose of institutional memory. Consequently, the Executive Council shall appoint four (4) members every two years.

(5) The Board shall elect a Chairperson from amongst its members to serve for its term of office.

(6) If a member of the Board ceases to hold office as Auditor-General (or equivalent title) in her/his country, the tenure of office in the Board of External Auditors is terminated and the person who succeed her/him in his country becomes new board member to serve the rest of the term. A Board member may not otherwise be removed during her/his tenure except by a decision of the Executive Council.

(7) The members of the Board of External Auditors shall be responsible to the executive Council of the Union through the PRC.

Rule 99

Audit terms of References.

1.  The specific terms of Reference of the Board of External Auditors shall be to:

a. Carry out a posterior external audit of the accounts of the Union;

b. Ensure that the audit shall be conducted in conformity with the generally accepted auditing standards and guidelines and subject to any special directions of the Executive Council.

c. Verify the manner in which the Accounting Officer and those answerable to him/her have performed their accounting duties and responsibilities;

d. Formulate all proposals that are likely to increase the efficiency of methods of budgetary and financial management, including the accounting system and internal liaisons between the various authorities responsible for the framing preparation and administration of the annual budget. and

e. Perform specific examinations and issue separate report as may be requested by the PRC.

2. Honoraria shall be paid to Members of the board and the assigned auditors for the service rendered as per the scale of the Union for such services.

Rule 100

Authority and independence of the Board of External Auditors

  1. The Board of External Auditors shall
    1. be completely independent and solely responsible for the conduct of the audit of the union.
    2. neither be influenced nor subject to the direction or control of any person or authority.
    3. during the course of the audit, have access to all accounts, documents, registers and records of the Union, and to all other supporting evidence of any of its transactions that the Board considers necessary to consult for the effective discharge of its duties; and
    4. have no power to disallow any items in the accounts but shall draw the attention of the Accounting Officer for appropriate action on any transaction to which it entertains doubt as to the legality or propriety. Audit objections to these or any other transaction to which it entertains doubt as to the legality or propriety.

Rule 101

Facilitation and conduct of Audit

  1. The Accounting Officer shall provide the Board of External Auditors with records, information books of accounts and any other documents and all the facilities the Board of External Auditors may require in the performance of the audit.
  2. Information which is classified as privileged or confidential and which is required by the Board of External Audit for the purposes of an audit shall be made available on request.
  3. The Board of External Auditors shall
    1. respect the privilege and confidential nature of nature of any information so classified which is made available to the Board and shall not make any other other use of the information except in direct connection with the performance of the audit; and
    2. inform the Executive Council of any refusal of information, classified as privileged, which is its opinion, was required for purpose of the audit.
  4. Considering that the period for preparation of financial statements of each financial year should be definitely completed by 31st March following the year end, auditing operations by the board of External Auditors shall start during the first week of April.
  5. The final report on the auditing operations of the Union, containing the observations of the Board of External Auditors,  shall be completed by 31st May of each year and presented to the PRC for consideration before submission to the Executive Council at its Budget Session.
  6. The financial statements of the AU Commission shall be signed by the Accounting Officer and the Director of Finance and in the case of the other organs, the respective Competent Authority and Head of Finance.
  7. Notwithstanding paragraph 1 above, the Accounting Officer shall prepare and submit to the Board of External Auditors the following statements, not later than three (3) months following the end of each financial year;
    1. Summary of Investments losses, if any;
    2. Summary statement of ex gratia payments;
    3. Written off losses of cash, receivables and property; and
    4. Summary statement of losses of cash and receivables.

Rule 102

Reporting by the board of External Auditors

  1. The Board of External Auditors present its annual audit report to the PRC Sub Committee on Audit Matters and GSCBFAM sitting jointly with the F15 Technical Experts.
  2. The Chairperson of the Board of External Auditors or its delegated authority shall attend the meetings of the PRC whenever the report of the Board of External Auditors is being discussed.
  3. Refusal or delay in the submission of the Financial Statements by the Accounting Officer, shall be brought to the attention of the PRC by the Board of External Auditors.
  4. The PRC shall make appropriate recommendations thereon to the Executive Council.
  5. If the Financial Statement presented by the Accounting Officer meets with no objection, the Executive Council shall deliver a discharge to the Accounting Officer.

Rule 103 (Adopted)

Audit Opinion

  1. The board of External Auditors shall express an audit opinion on the financial statements of the union
  2. The opinion of the Board of External Auditors shall state whether the: -
    1. financial statements present fairly the financial position as at the end of the financial year and the result of the operations for the period then ended;
    2. financial statements were prepared in accordance with International Public Sector Accounting Standards (IPSAS)
    3. accounting principles were applied on a basis consistent with that of the preceding period; and
    4. transactions carried out in the financial year were in accordance with these Rules.
  3. The audit report and opinion of each organ shall be signed by the Chairperson of the Board of External Auditors.

Rule 104

Management Letter

  1. All audit findings included in the management letter shall be discussed with the auditee, before submission to Policy Organs.
  2. The management letter of the Board of External Auditors shall state:
    1. the type and scope of the examination by the Board of External Auditors;
    2. matters affecting the finality or accuracy of the accounts including where appropriate
      1. information necessary to the correct interpretation of the accounts;
      2. any amounts which ought to have been received but which have not been brought to account;
      3. any amounts for which legal or contingent liability exist and which have not been recorded or reflected in the financial statements
      4. Expenses not properly substantiated;
    3. whether the International Public Sector Accounting Standards (IPSAS) are applied in a consistent manner, and where there are deviations, whether the deviations have a material impact and are disclosed in the notes to financial statements;
    4. other matters which should be brought to the notice of the Executive Council including:
      1. cases of fraud or presumed fraud;
      2. wasteful or improper expenses of the money or other assets of the Union, notwithstanding that the accounting for the transactions may be correct;
      3. expenditure /Expenses likely to commit the Union to unnecessary further financial commitments.
      4. any defect in the general system governing the control of receipts or disbursement of supplies and equipment;
      5. expenses not in accordance with the intention of the Executive Council after making allowance for duly authorized transfers within the budget, and;
      6. expenses not in conformity with the authority, which governs it;
    5. The accuracy or otherwise of the supplies and equipment record as determined by stock and examination of the record; and
    6. Where appropriate, transactions accounted for in a previous year concerning which further information has been obtained or transactions in a later year concerning where it seems desirable that the Executive council should have advance knowledge:
      1. The Board of External Auditors shall make such observations, findings, comments resulting from the audit, as it may deem appropriate.
      2. Whenever the scope of the audit is restricted or the Board of External Auditors is unable to obtain sufficient evidence, the Board of External Auditors shall refer to the matter in its report, clarifying the reason for its comments and the effects on the financial positions and the financial transactions as recorded.
      3. The Board of External Auditors shall at an audit clearance meeting obtain explanation of any matter under observation before including such matter in the audit management report. The Board shall not conclude its report without first affording the Accounting Officer an adequate opportunity of explanation on the matter under observation.
    7. Status of prior year audit findings;
    8. Summary of audit adjustments indicating recommended accounting entries, as approved by the relevant Policy Organs of the Union; and
    9. Audit findings of the Board of External Auditors shall be structured under the following headings; Criteria, Observation, Recommendation and Management Comments
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