New body to improve government transparency

Abu Dhabi Accountability Authority has remit to boost performance and financial oversight to international standards across public sector.

Riyad al Mubarak, the ADAA's chairman, at the launch of their annual report in Abu Dhabi on March 23, 2009.

The newly established Abu Dhabi Accountability Authority yesterday outlined the full scope of its operations, ranging from ensuring financial transparency and probity to improving performance across the emirate's public-sector operations.

The ADAA, created in December from the Abu Dhabi Audit Authority, highlighted plans to adopt international standards of financial transparency in government departments, agencies and state-owned enterprises, including departments such as Abu Dhabi Municipality and agencies such as the Food Control Authority. In recent months officials have been finalising the organisation's strategic plan, outlined yesterday in the authority's first Accountability Report, which also details the organisation's own finances.

Among the priorities of the authority is a fraud risk assessment aimed at tackling financial mismanagement in the public sector. The authority has also established audit committees to assess the financial performance of departments not previously subject to external scrutiny. "The direction has been very clear: we need to improve our accountability and transparency," said Riyad al Mubarak, the ADAA's chairman. "Accountability is the essence of any government because they are responsible for public finances and public resources and to have an accountable government, you need transparency as well."

Dozens of the emirate's government departments, agencies, state-owned enterprises and the courts of the Ruler and Crown Prince come under the remit of the authority, which reports to Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, in his role as chairman of the Executive Council. All are now required to appoint internal and external auditors to oversee their finances, and the ADAA will monitor the work of these audits.

Mr al Mubarak said that while most state-owned enterprises already had internal audit programmes, until recently these had been optional for some government departments. However, most have now set such systems up, with 29 established so far with the help of the ADAA. "This will allow ADAA to focus on the macro rather than the micro, which will be handled by the internal audit," Mr al Mubarak said.

As part of the reforms, the Abu Dhabi Government is now issuing financial statements that comply with the International Public Sector Accounting Standards (Ipsas) and are externally audited. Mr al Mubarak said the ADAA's role extended beyond monitoring the finances of institutions, something that the audit authority already conducted, to now include ensuring better quality management. "Part of our overall strategy is to assist public entities to enhance their performance by becoming a trusted adviser," he said.

"We will support the adoption of best practices and communication between public entities. If we see good practice by X entity, we can recommend them for Y entity. We can compare and benchmark one entity against another one." Mr al Mubarak said there was "no excuse" for the ADAA not to fulfil its expanded remit, saying the organisation was well resourced and supported by the emirate's rulers. "We want to help the government and its entities to improve performance and ensure high standards," he said. "We do that by providing services that are independent and objective."

Mr al Mubarak said the authority would not be able to audit all government departments, agencies and state-owned enterprises each year, but would cover "a very high percentage". It has also set up a special forensic accounting and fraud risk unit tasked with preventing financial wrongdoing and mismanagement. The priority would be, Mr al Mubarak said, to prevent fraud by improving internal controls, rather than on detection.

"We will work closely with the Ministry of Interior, public prosectors and police and other security related agencies," he said. Mr al Mubarak said the ADAA would appoint an external agency to carry out a fraud risk assessment and would publish a fraud control policy. "We mean by fraud all types of financial misconduct," Mr al Mubarak said. In developing the ADAA's priorities, Mr al Mubarak and other officials visited countries such as Australia, New Zealand and the United Kingdom to learn about international best practice.

"It's important to know we have been benchmarked against international audit institutions," Mr al Mubarak said. Earlier this month, ADAA became a member of the International Forum of Independent Audit Regulators, joining 28 other regulatory bodies from countries including Brazil, Hungary, Ireland, Japan, the Netherlands, Norway, the United Kingdom and the United States. By the end of June, ADAA is required to publish an audited financial statement of Abu Dhabi Government. This will be the second time the government has produced an audited financial statement prepared according to Ipsas accounting guidelines, rather than internal government rules.

Out of the ADAA's 90 auditing staff, 13 are Emiratis and the organisation said training Emiratis to carry out its work was a priority given to it by Sheikh Mohammed. In another measure to improve financial accountability, an organisation called Finance Public Prosecution was set up last month to prosecute cases of bribery, money laundering, abuse of power, the misuse of funds and embezzlement in public and semipublic organisations.

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