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Strategic plan Office of the auditor general Lesotho

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Strategic plan Office of the auditor general Lesotho Powered By Docstoc
					Committed to integrity, professionalism, respect and excellence in all we do




                              Lesotho



                  Strategic Plan
             for the financial years
              2008/09 to 2012/13




                                May 2008
2

Foreword:
This strategic plan sets out the vision, mission, core values and goals of the Office of
the Auditor General for the 5 year period commencing April 2008 to March 2013. The
plan supersedes the previous strategic plan finalised in March 2006 and takes account
of progress and developments since that date. As with the previous plan the period
covered by this plan represents one of considerable change. It is important therefore
that all stakeholders, including Parliament, Government Ministries and the Public, are
aware of and support the role, direction and focus of the external audit of the
Government of Lesotho over the next 5 years. The Office of the Auditor General will
play a key role in the Government’s overall aim of securing public accountability and
transparency.


In accordance with good international audit practice, this plan sets out how this office
will address its key strategic goals in general terms in the long term. Annually, more
detailed plans will be prepared for each of five audit departments which cover all of the
offices functional areas, namely:


   Research and Development
   Performance Audits
   Ministerial Audits I
   Ministerial Audits II
   Parastatal Audits


A key requirement for the future development of the Audit office is the passing of a
new Audit Law. Unfortunately no progress has been made since March 2006 on this
issue. A new law is necessary to enhance the independence of the Office, in particular,
by placing the Office of the Auditor General under the National Assembly rather than
the executive as at present. This is fully in line with best international practice and
reflects what is taking place with Audit Office’s throughout the world. The Act also
places additional responsibilities and arrangements for accountability of this Office.


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The new Act recognises the broader role of public audit, with an increasing emphasis on
performance audit, whereby this office will examine and report on whether economy,
efficiency and effectiveness has been secured from Government operations. Other
developments will also take place in respect of the annual audit of the accounts and on
compliance or regularity aspects of Government to further the goal of transparency and
accountability. The main features of the new Act are highlighted at Annex 1.


This strategic plan takes place against a climate of change across Government, which
will also impact on the work of this Office. Major changes will include:


   Public financial management reforms of the budgeting, procurement, accounting
    and internal audit systems.
   Financial decentralisation as a result of the Local Government Act.


The ability of this Office to deliver its strategy will depend on the number and quality of
its resources, in particular, its audit staff. I recent years the OAG operated below its
authorised strength. This strategy sets out how audit staff will be developed over the
five-year period to meet the challenges set out in the plan. This development will take
place under internal programmes as well as with donor assistance.


L.L. LIPHAFA (MRS)
AUDITOR GENERAL                                                DATE:




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TABLE OF CONTENTS                                       Pages

Foreword by the Auditor General                         2-4


1. Introduction to the Strategic Plan                   6-8


2. OAG Fundamental Intensions                           9 - 11


      2.1    Vision
      2.2    Mission
      2.3    Functional Values and Principles
             2.3.1     Values
             2.3.2     Principles
             2.3.3     Slogan

3     Objectives and Functions                          12 - 13


4     Development of Strategic goals                    14 - 16


5     Six Strategic goals – summary and detail          17 – 33


6     Monitoring and Evaluation of the Implementation
      Plan                                                34


Annexes:

Annex 1      SWOT Analysis                              35 – 37

Annex 2      Environmental Analysis                     38 – 39

Annex 3      Stakeholders’ Analysis                     40– 41

Annex 4      Functional Activities of OAG               42 - 43




                                                                  4
5



1.      VISION, MISSION, AND VALUES


1.1 Vision
        The vision of the OAG sums up our long term aim which is to be:


        “A leading independent Supreme Audit Institution that promotes public
        accountability and transparency”


1.2 Mission
        The OAG mission statement is as follows:
        “To promote sustainable public accountability and transparency, by providing
        professional auditing services to all stakeholders whilst creating a respectful
        workplace where our diverse workforce can strive for excellence and realise their
        full career potential.”


1.3 OAG Values


     a. Independence and objectivity
     The OAG is an agent of Parliament that is independent of Government. OAG reports
     will be independent and based on evidence collected in accordance with the
     requirements of the Public Audit Act and based on International Auditing Standards
     and guidelines. The OAG will bring an unbiased, objective and fair approach to its
     work.


     b. Accountability and Transparency
     The OAG will promote greater accountability and transparency in the use of public
     funds, and for the results achieved with these funds.




                                                                                       5
6

    c. Commitment to excellence
    The OAG is committed to continuously improving its processes and practices and
    delivering products and services of the highest quality, in accordance with best
    professional practices and standards. The OAG will share its experience with other
    relevant professional bodies and contribute to the advancement of legislative audit
    discipline.


    d. Respectful workplace
    The OAG is committed to providing a working environment in which all are treated
    with dignity and respect and encouraged to realise their full career potential. The
    OAG will encourage open and honest communication to create a climate of trust and
    teamwork. The OAG values each employee’s talent and diversity; and will support
    learning and quality of life endeavours.


    e. Trust and Integrity
    The OAG will sustain public confidence by ensuring that auditors conduct themselves
    with honesty and integrity, treating information with due confidentiality, and
    generally acting in a manner that meets the highest standards of professional
    conduct.


    f. Disciplined Workforce
    The OAG is a disciplined workforce that observes manager\subordinate principles,
    office policies and maintains high professional interpersonal skills.


    The OAG values can be summarised in the following slogan:

       “Committed to Integrity, Professionalism, Respect
       and Excellence in all we do!”




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2       OBJECTIVES & FUNCTIONS OF OAG


2.1     Function:
      The function of OAG, under the Public Audit Act, is to provide an opinion as to
        whether or not:


      a) The public accounts of Lesotho present fairly the finances of the Government
         and the individual public bodies to which they refer.


      b) The financial transactions of the Government and public bodies comply with
         relevant legislation, the authority of Parliament and regulations issued by any
         relevant competent body.


      c) The financial affairs of the Government and public bodies have been managed
         with due regard to probity, and that their statutory and ethical duties to
         Parliament and the public have been met in an open and even-handed manner.


      d) OAG TO DRAFT THIS SECTION ON SPECIAL REPORTS UNDER CURRENT ACT.


2.2     Reporting
      The Auditor General’s reports will provide recommendations and advice to
      Parliament and public bodies on significant issues discovered during the course of
      audits. Reports will include but not be limited to the following issues:


      (a) Whether the accounting records have been properly maintained


      (b) Opinions on the financial statements




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      (c) Whether the rules, procedures and internal controls are sufficient to secure
         effective control of the assessment, collection and proper allocation of revenues



      (d) Whether money expended and charged to an appropriation account has been
         applied to the purpose or purposes for which Parliament intended and with due
         regard to ensuring effective internal control and



      (e) Whether internal controls, rules and procedures established and applied are
         sufficient to safeguard the control of public money and assets



      (f) The extent as to which a public body acquires and carries out its activities
         economically, efficiently and effectively.




2.3     Follow Up Work
        The OAG will follow up its work and reports to Parliament and public bodies
        periodically to ensure that due consideration and action has been taken on the
        recommendations.




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3     STRATEGIC GOALS
3.1   In order to develop clear and complete strategic goals for the next 5 years, the
      OAG has carried out a review of progress against the previous strategic goals
      and revirewed the current position of the OAG.


3.2   The strategic plan also takes account of known or likely developments over the 5
      year period, which could affect its mission and responsibilities. The main changes
      are as follows:


      (a)    Introduction of new budgeting processes, including medium term
             budgeting (MTEF).
      (b)    The introduction of a new accounting system (IFMIS) over the period
             2006 to 2008 will have a significant impact on the work of the OAG over
             the lifetime of this plan.
      (c)    Changes in the format and presentation of accounts, to accord with
             international guidelines.
      (d)    Changes to procurement arrangements.
      (e)    Fiscal decentralisation under the Local Government Act.
      (f)    The establishment of new statutory bodies.
      (g)    The enhancement of internal audit across Government
      (h)    Efforts to address known weaknesses in internal control.
      (i)    Privatisation of Public Entities.




3.3          Key issues arising from the above analysis are tabulated below.
Key Issue         Current Position                     Development Needs
1 Update the      Existing law is outdated and does    Enactment of the draft law
legal framework   not provide for full independence.   would enhance independence
of     OAG   in   OAG is perceived to be responsible   and update the role, including
Lesotho.          to MFDP and this perception is       formal      recognition     of
                  encouraged by the fact that they     performance audit. OAG need
                  are accommodated in the same         to deliver the provisions and


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                     building. A new Public Audit Act is in operate      effectively and
                     draft form.                            efficiently under Parliament.
                                                            Separate accommodation (from
                                                            the MFDP) would also help to
                                                            reinforce the independence
                                                            aspects.

2 Develop the OAG auditing is carried out against            Staff development and training
quality       a background of weak internal
              and                                            needs to be improved to
scope of OAG  control and governance. OAG needs              ensure staff receive up to date
functional    to develop a risk based approach to            training in line with best
              financial auditing in line with
activities in line                                           practice as well as regular
with          international standards and best
             best                                            updates on new developments.
practices     practice to ensure its limited
              and                                            Develop or update manuals of
International resources are directed at the key              guidance e.g. financial and
Auditing      risk areas. Similarly it needs to              performance audits.
Standards     develop its performance audit                  Enhance      quality     control
              capability further.                            functions.
3 Respond to The next 3-5 years will see major               OAG needs to contribute to the
PFM and other changes to the PFM systems                     process of reform, with advice
changes       including budgeting, procurement,              as needed, as well as develop
              accounting and internal audit as well          its own staff and systems to
              as fiscal decentralisation.                    meet the major changes.

4 Develop OAG        The analysis noted a range of           Develop HR approach, services
staff capacity,      current weaknesses in terms of          including     training      and
motivation and       management practices, attitudes         development of audit managers
support              and motivation. A training plan is in   and other support staff. Provide
                     place and has received donor            due support to OAG staff
                     support over recent years. More         regarding health and safety
                     needs to be done.                       issues. Review means of
                                                             enhancing team spirit and a
                                                             sense of value in the OAG
                                                             mission. Review transport and
                                                             other operational needs.

5.      Develop Stakeholder perception of role and           Improve external and internal
reporting  and purpose of OAG is not well                    communications      particularly
communication understood and relationship with               regarding interaction with the
                PAC and the media requires                   PAC and media.
                enhancement to maximise the
                impact of OAG work. Internal
                communication (within OAG staff
                and other public bodies) needs
                enhancement. Further development
                and growth in frequency and
                complexity of audit reporting will
                follow the new Public Audit Act.


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4     Strategic Goals 2008/9 to 2012/13

4.1   As a result of the above analysis, the original six key strategic goals have been
      refined into five for the five-year period up to 2012/13. These are:


      Goal 1:      To actively support the replacement of the existing audit law with a
                   new Public Audit Act which reflects international best practice and
                   thus secure the benefits of enhanced OAG independence for the
                   Government of Lesotho


      Goal 2:      Implement fully International Auditing Standards and best practices
                   for Supreme Audit Institutions, thereby delivering a more effective
                   and professional audit service producing high quality outputs for
                   users.


      Goal 3:      Respond positively to changes as a result of public financial
                   management and other reforms affecting the Government of
                   Lesotho, thereby contributing to the overall enhancement of
                   accountability and financial management.


      Goal 4:      Develop the capacity, professionalism and motivation of the OAG
                   staff, through training and other means, resulting in enhanced
                   productivity and quality of work.


      Goal 5:      Improve communications – internal and external - and the
                   understanding of the role of the OAG among all stakeholders and
                   enhance the working relationship between the OAG and the PAC




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4.2    Details of the key objectives, success measures and timeframe are shown in
detail below for each of the six goals.




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                                 GOVERNMENT OF LESOTHO: OFFICE OF THE AUDITOR GENERAL
                                         STRATEGIC GOALS 2008/09 TO 2012/13

      GOAL 1: To actively support the replacement of the existing audit law with a new Public Audit Act which reflects
                   international best practice and thus secure the benefits of enhanced OAG independence for the Government of
                   Lesotho.
STRATEGIC                      KEY ACTIVITIES                      SUCCESS MEASURES          2   2   2   2   2 COMMENTS
OBJECTIVES                                                                                   0   0   0   0   0
                                                                                             0   0   0   0   1
                                                                                             8   9   1   1   1
                                                                                                     0   1   2

1.1 Proactively seek the passing 1.1.1 Draft Public Audit Act      Cabinet Approval of           *               Amendments as needed
of a new Audit law through concluded and submitted to              draft proposals
Parliament                       Cabinet

                               1.1.2 Public Audit Act    finally    Approved Act provides                        Depends on length of
                               enacted and operational             for enhanced                      *           approval      process and
                                                                   independence and                              Legislative time
                                                                   responsibility to
                                                                   Parliament

1.2 Develop new budgetary and 1.2.1 Review budget procedures &      Budget procedures in         *   *   *       Work can commence in
accounting      systems   and decide on model for new OAG          place                                         advance of new Act
procedures for OAG

                               1.2.2 Develop first independent      Budget(s) prepared and       *   *   *   *
                               budget for OAG from 20010/11        approved by Parliament                        Achievement       of    this
                               onwards.                                                                          objective is subject to new
                                                              Accounting system in                               Law coming into force.
                               1.2.3 Establish Audit Revenue place     and  working                              Consider adopting the new
                               Fund and accounting system    satisfactorily                      *   *   *   *   GOL IFMIS system



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STRATEGIC                          KEY ACTIVITIES                     SUCCESS MEASURES               2   2   2   2   2 COMMENTS
OBJECTIVES                                                                                           0   0   0   0   0
                                                                                                     0   0   0   0   1
                                                                                                     8   9   1   1   1
                                                                                                             0   1   2
                                   1.2.4 Annual financial statements Prompt completion of                    *   *   * Assumes that 2007/8 is
                                   prepared                          annual accounts                                   first financial year of
                                                                                                                       independent    accounting
                                   1.2.5     Independent     external Unqualified audit                      *   *   * and audit
                                   auditor appointed                  opinions issued

1.3 Review current organisational 1.3.1         Identify     possible Changes             required       *               Work can commence on
structure to ensure fit for purpose organisational changes            identified                                         this on the assumption
under new Law                                                                                                            that the new law will be
                                                                                                                         passed

                                   1.3.2 Implement new changes        Changes             required           *           On passing of new Act
                                                                      implemented


1.4 Develop other accountability 1.4.1 Identify reporting needs and Prompt submission of                 *   *   *   *   A range of performance
procedures for OAG as set out in systems for the periodical reports quarterly reports and                                measures for OAG need to
the Public Audit Act             to PAC                             annual report                                        be developed and agreed
                                                                                                                         with PAC
                                                                      Reports indicate positive          *   *   *   *
                                                                      contribution of OAG, in
                                                                      line with the Act and
                                                                      agreed annual plans

1.5 Review accommodation needs 1.5.1      Seek       alternative Satisfactory                            *   *   *   *   Consider the possibility of
and       location     both   to accommodation for OAG, within accommodation secured                                     an accommodation swap
accommodate the new OAG and resource framework                                                                           to minimise additional
to reinforce its independence                                    Physical move successful                                costs
                                                                 and      supports  OAG



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                                                                         independence

Note to Goal 1:

1 Other goals flowing from the Public Audit Act e.g. on staffing, performance audits and on reporting are dealt with in goals 2 and 4 below.




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                                   GOVERNMENT OF LESOTHO: OFFICE OF THE AUDITOR GENERAL
                                           STRATEGIC GOALS 2006/07 TO 2010/11

      Goal 2:      Implement fully International Auditing Standards and best practices for SAIs, thereby delivering a more
                   effective and professional audit service, producing high quality outputs for users.


STRATEGIC                        KEY ACTIVITIES                     SUCCESS MEASURES            2   2   2   2   2 COMMENTS
OBJECTIVES                                                                                      0   0   0   0   0
                                                                                                0   0   0   0   1
                                                                                                8   9   1   1   1
                                                                                                        0   1   2

2.1 OAG is represented at key    2.1.1 Attendance at relevant       Regular representation      *   *   *   *   *   A summary of such
international bodies concerned   bodies such as AFROSAI ( African   and feedback of                                 activities and outputs to be
with enhancing the performance   Organisation of SAIs), INTOSAI     developments to all staff                       incorporated in staff news
of Supreme Audit Institutions    etc.                                                                               letters
(SAIs)                                                              Contributions to            *   *   *   *   *
                                                                    international working
                                                                    parties on audit
                                                                    developments

2.2    OAG develops its audit 2.2.1 Complete a new strategic        Strategic        planning *     *   *   *   *   Operative from April 2006
planning processes in line with planning process                    procedures lead audit
international auditing standards                                    activities & development

                                 2.2.2 Review and update strategy   Updated         strategic           *           Periodically when needed
                                 as needed                          document

                                 2.2.3 Prepare annual activity      Approved annual plans *         *   *   *   *   Allow contingency time
                                 plans, based on this strategy,     form the basis of
                                 international auditing standards   detailed audits
                                 and the planning procedures in
                                 the Act                            Evidence of the planning                        Use     standard     forms,
                                                                    process on file                                 include formal review of IA


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STRATEGIC                           KEY ACTIVITIES                         SUCCESS MEASURES           2   2   2   2   2 COMMENTS
OBJECTIVES                                                                                            0   0   0   0   0
                                                                                                      0   0   0   0   1
                                                                                                      6   7   8   9   0

2.3 Develop and apply quality 2.3.1 Draw up quality control                Quality control staff,     *           *       Review periodically in the
control function/procedures   function needs e.g. staffing and             guide, processes and                           light of experience
                              processes, including performance             performance measures
                              targets                                      developed

                                    2.3.2 Agree plan and carry out         Evidence of quality        *   *   *   *   *   Procedures should include
                                    regular internal reviews of quality    reviews including good                         stakeholder views
                                    across OAG activities to determine     practice and weak areas
                                    standards and quality of work in
                                    practice

                                    2.3.3 Prepare individual and           Reports produced               *   *   *   *   Hold periodical workshops
                                    annual quality control reports for     promptly and distributed                       with    all     staff  to
                                    dissemination to all staff and other                                                  disseminate good practice
                                    stakeholders e.g. PAC                  Evidence of enhanced                           and highlight development
                                                                           quality over time                              areas


2.4    Develop technical manuals 2.4.1 Prepare a manual of                 Manual produced      and *                     Evidence of application of
of guidance for staff            guidance on performance audits            guidelines applied                             guidelines will come from
                                                                                                                          supervision and review of
                                    2.4.2 Prepare updated version of       Manual updated and             *               each     task    and   via
                                    the financial audit manual (to         procedures applied                             periodical quality control
                                    include all compliance/regularity                                                     reviews
                                    aspects


Note to Goal 2: Detailed aspects of achieving goals on financial, regularity and performance audits are dealt with under goals 5 & 6



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                                      GOVERNMENT OF LESOTHO: OFFICE OF THE AUDITOR GENERAL
                                              STRATEGIC GOALS 2006/07 TO 2010/11

       Goal 3:        Respond positively to changes as a result of public financial management and other reforms affecting the
                      Government of Lesotho, thereby contributing to the overall enhancement of accountability and financial
                      management.
STRATEGIC                           KEY ACTIVITIES                         SUCCESS MEASURES            2   2   2   2   2 COMMENTS
OBJECTIVES                                                                                             0   0   0   0   0
                                                                                                       0   0   0   0   1
                                                                                                       6   7   8   9   0

3.1 Assist the reforms by offering 3.1.1 Attend meetings and give          Advice given and IFMIS      *   *               Assumes IFMIS system
advice on the development of the advice on the needs of the OAG            provides for enhanced                           operational from 2008
new Government Accounting from the IFMIS accounting system                 external audit facilities
System (IFMIS)
                                   3.1.2 Provide advice on internal        Advice given and acted      *   *
                                   control needs for IFMIS generally       upon

                                    3.1.3     Monitor       transitional   Advice given and acted      *   *               This will be a major
                                    arrangements from GOLFIS to            upon                                            exercise over the next few
                                    IFMIS & give advice as needed.                                                         years,       given      the
                                    This may include a review/audit of     Audit/review of balances        *   *           unreliability of existing
                                    a statement of affairs of cash and     provides IFMIS with                             GOLFIS balances.
                                    other balances.                        sound opening balances



3.2 Review and give advice on 3.2.1 Monitor the development of             OAG views on IA acted *         *   *   *   *   This will provide IA with a
the development of internal audit. internal audit under the pilot audit    upon quality enhanced                           useful, independent review
                                   ministries through review of audit                                                      of progress and quality
                                   plans, reports etc and advise as
                                   needed


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STRATEGIC                                                             SUCCESS MEASURES            2   2   2   2   2
OBJECTIVES                       KEY ACTIVITIES                                                   0   0   0   0   0
                                                                                                  0   0   0   0   1
                                                                                                  6   7   8   9   0   COMMENTS


                                 3.2.2      Carry   out      annual   Annual assessments of           *   *   *   *   Starting early 2007 in time
                                 assessments of the quality and       IA carried out                                  for 2007/8 audit year
                                 scope of internal audit work and
                                 reflect in OAG annual plans          Increased reliance on           *   *   *   *   This is likely to be a
                                                                      internal   audit    work                        phased process in line with
                                                                      possible and reflected in                       IA phased development
                                                                      OAG plans

3.3 Review and advise on other 3.3.1 Monitor developments and         Advice given and acted *        *
reform       aspects     including advise, as needed.                 upon
procurement,       decentralisation
etc. to ensure that adequate
accountability and transparency
built in.

3.4 Provide for adequate staff 3.4.1 Attendance at briefing           Senior staff briefed and *      *               See also Goal 4 for
development in respect of the sessions, workshops etc.                aware of key reforms                            specifics    on       staff
reforms                                                                                                               development and training.
                               3.4.2      Disseminate details of      Staff well informed of *        *
                               reforms and changes via staff          reforms and prepared to
                               newsletters, meetings and formal       carry out audits under
                               training, as needed                    changes systems and
                                                                      environment

3.5 Adjust annual audit plans and 3.5 Planning meetings to include    Annual      audit    plans *    *   *   *   *   This is vital to ensure that
priorities in the light of the above annual developments to be        reflect     developments                        OAG is seen to contribute
reforms                              reflected in audit activities    and give   due weight to                        the reform processes.
                                                                      new/high   risk aspects



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                                      GOVERNMENT OF LESOTHO: OFFICE OF THE AUDITOR GENERAL
                                               STRATEGIC GOALS 2006/07 TO 2010/11

       Goal 4:        Develop the capacity, professionalism and motivation of the OAG staff, through training and other means,
                      resulting in enhanced productivity and quality of work.
STRATEGIC                            KEY ACTIVITIES                         SUCCESS MEASURES            2   2   2   2   2   COMMENTS
OBJECTIVES                                                                                              0   0   0   0   0
                                                                                                        0   0   0   0   1
                                                                                                        6   7   8   9   0

4.1 Undertake an overall review      4.1.1 Re-assessment of staff           Comprehensive review        *   *               This is a major exercise
of OAG staffing, transport, IT and   numbers,      grades,     structure,   completed, with budget                          but will be needed to
other resource needs in the light    organisation to deliver the legal      implications and                                justify  any    additional
of the enhanced audit under the      duties and strategic plan              justification                                   investment in OAG.
Public Audit Act and public
financial management reforms         4.1.2 Assess the support costs         Comprehensive review        *   *               This activity needs to be
                                     needed to deliver the legal duties     completed, with budget                          linked with other goal 4
                                     and strategic plan                     implications and                                objectives, which are to
                                                                            justification                                   develop staff capacity,
                                                                                                                            improve        productivity,
                                     4.1.3 Incorporate proposals in         Additional resources            *   *   *   *   motivation and quality of
                                     medium term and annual budget          secured, where justified,                       outputs
                                     cycle    and     seek   additional     which enable OAG to
                                     resources from Parliament              enhance service/outputs                         Develop a 3 year medium
                                     (assumes that the new Public           and quality                                     term         expenditure
                                     Audit Act operational)                                                                 framework (MTEF)

4.2 Enhance Human Resource 4.2.1 Review role and needs of HR                HR policy and resources         *
(HR) services to OAG staff in services   to    support    the               paper produced
support of staff development, developments needed
increased    motivation   and
productivity




                                                                                                                                                      20
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STRATEGIC    KEY ACTIVITIES                       SUCCESS MEASURES             2   2   2   2   2   COMMENTS
OBJECTIVES                                                                     0   0   0   0   0
                                                                               0   0   0   0   1
                                                                               6   7   8   9   0
             4.2.2 Update training needs          Training    needs    and *       *           *   Some professional training
             analysis and plans to support the    plans    updated     and                         may be developed in
             staff developments needed to         support staff and service                        future   with     external
             deliver an enhanced audit service    needs                                            funding.          Monitor
             and meet the demands of reforms                                                       developments

             4.2.3 Deliver training plans – in-   Training delivered as *          *   *   *   *   Also local alliances are
             house, externally as needed and      planned and follow up                            developed further for long
             funded                               assessments in work                              term training needs
                                                  place indicate enhanced                          Ensure plans address the
                                                  quality,         output,                         needs regarding audit
                                                  productivity        and                          management, supervision
                                                  feedback to enhance                              as well as technical and
                                                  future training                                  motivational aspects

             4.2.4 Carry out annual staff         Surveys      completed, *        *   *   *   *   This survey(s) would be
             surveys to monitor staff views on    acted upon and show a                            useful    alongside  ones
             job      satisfaction,      career   trend of higher job                              carried out with audited
             development, training etc.           satisfaction                                     bodies to gain an overall
                                                                                                   picture of OAG progress in
                                                                                                   terms of quality and
                                                                                                   impact
             4.2.5     Develop team building      A       programme       of
             activities and other means of        activities developed with                        Other aspects of improving
             improving attitudes to the OAG       an active participation                          and motivating staff are
             function and the value of            and        long      term                        covered throughout goal 4
             individual contributions             application                                      and elsewhere

             4.2.6 Develop a general policy       Policy developed and                             This will support wider GoL
             regarding staff health and safety    activities delivered e.g.                        health initiatives e.g. on
             issues                               health leaflets, meetings                        HIV/Aids etc. See also 4.3



                                                                                                                            21
22


STRATEGIC                          KEY ACTIVITIES                         SUCCESS MEASURES            2   2   2   2   2   COMMENTS
OBJECTIVES                                                                                            0   0   0   0   0
                                                                                                      0   0   0   0   1
                                                                                                      6   7   8   9   0

4.3    Develop      means    and   4.3.1 Develop a paper which sets       Comprehensive system *          *
procedures to measure, monitor     out     performance     measures,      and    procedures    for
and enhance the productivity and   targets and monitoring procedures      performance and output
output of all OAG staff            aimed     at    maximising       the   monitoring developed
                                   productive output of audit staff.

                                   4.3.2 Managers and staff trained       Training delivered and          *   *   *   *   Provides        additional
                                   in the use of the performance          performance        data/                        feedback for the training
                                   system and how to maximise their       results show a sustained                        needs assessment and
                                   productive work and quality.           improvement            in                       plans
                                   Training to include feedback from      productivity
                                   the quality control process




                                                                                                                                                  22
23

                                    GOVERNMENT OF LESOTHO: OFFICE OF THE AUDITOR GENERAL
                                            STRATEGIC GOALS 2006/07 TO 2010/11

 Goal 5:Develop and enhance the quality of functional audit activities: namely opinion audits, regularity, and performance audits
STRATEGIC                        KEY ACTIVITIES                    SUCCESS MEASURES               2   2   2   2   2   COMMENTS
OBJECTIVES                                                                                        0   0   0   0   0
                                                                                                  0   0   0   0   1
                                                                                                  6   7   8   9   0

5.1 Enhance the audit of 5.1.1 Update the financial                Manual updated and applied     *   *
Government Accounts – the audit       manual    to   reflect
opinion audit – in line with current, best practice and the        Procedures and opinions
international standards and new accounting system IFMIS            based on international                             The first year’s accounts
developments                                                       guidelines                                         from IFMIS are likely to be
                                                                                                          *   *   *   2008/9 financial year

                                 5.1.2 Training delivered in the   Key staff trained in skills
                                 updated procedures in the         needed and applied on          *   *   *   *   *
                                 manual and received in the        opinion audits (as evidenced
                                 use and audit of IFMIS. IT        in quality control reviews)
                                 audit skills enhanced.                                                               Note:       A       parallel
                                                                   The audit opinion(s)                               development could be the
                                 5.1.3 IT and other equipment      become less negative over                          production of ministry wise
                                 needs reviewed (see 4.1) to       the period with an ultimate            *   *   *   accounts, with opinions
                                 support this goal                 aim of unqualified opinion                         given on each ministry.
                                                                   (s) of the accounts
5.2 Contribute to the clearance of 5.2.1 Advice given as needed    Resolution of 5 year backlog *                     Proposals delivered      by
the 5 year backlog of accounts on the resolution of the 5 year     endorsed by OAG                                    Treasury in late 2005
and the earlier completion of the backlog
audit of recent audit years                                        Opinion audits are complete *      *   *   *   *   This depends on the
                                   5.2.2 Allocate time/staff to    and reported to Parliament                         delivery of the annual
                                   opinion audits to facilitate    within    the      statutory                       accounts for auditing
                                   prompt completion               timeframe




                                                                                                                                                23
24



STRATEGIC                              KEY ACTIVITIES                 SUCCESS MEASURES               2   2   2   2   2   COMMENTS
OBJECTIVES                                                                                           0   0   0   0   0
                                                                                                     0   0   0   0   1
                                                                                                     6   7   8   9   0

5.3      Contribute      to     the    5.3.1 Continue to develop the See 5.1.1 above                 *   *
enhancement       of     regularity,   regularity element of audits
stronger internal control and          including use of updated
good governance through an             procedures in the financial
enhanced       programme       and     audit manual and training
delivery of regularity audits          thereon

                                       5.3.2 Annual audit plans give Audit     plans     reflect a *     *   *   *   *   Note    development      of
                                       due weight to regularity audit focussed approach on key                           measures under PFM to
                                       and key risks                  risk areas and takes account                       strengthen internal control
                                                                      of IA work in this area                            and     enhance       good
                                       5.3.3 Review IA work on                                                           governance
                                       regularity aspects


5.4    Carry     out    focussed       5.4.1 Develop performance Performance              audit *        *   *   *   *   Prepare a long term
performance     audits   through       audit techniques through the programmes,     plans  and                           programme, for review
enhanced planning of project           development of a performance activities based on wide                             and delivery of priorities
areas and dialogue with Ministries     audit manual                 dialogue in selection of a                           each year.
and Government                                                      priority programme

                                       5.4.2 Carry out pilot audit(s) Pilot audits help to deliver       *
                                       testing the new procedures     more effective performance
                                                                      audits




                                                                                                                                                  24
25



STRATEGIC                     KEY ACTIVITIES                    SUCCESS MEASURES                2   2   2   2   2   COMMENTS
OBJECTIVES                                                                                      0   0   0   0   0
                                                                                                0   0   0   0   1
                                                                                                6   7   8   9   0

5.5 Enhance the quality and 5.5.1 Develop and/or use Audit Files and reports                        *   *   *   *   OAG can use existing
acceptability of performance performance     measures     and indicate  clear   evidence                            performance     indicators
audits                       indicators to support audit work regarding performance and                             from documents such as
                             and evidence                     output measures                                       Strategies, MTEF budget
                                                                                                                    documents etc.
                                                                                                    *   *   *   *
                              5.5.2 Develop staff skills and Feedback from Ministries and
                              experience of performance audit Parliament         indicate
                              through the training programme enhanced quality and impact
                              under goal 4
                                                                                                                    Reference may also be
                              5.5.3 Quantify results of audit The cost of the OAG audit is          *   *   *   *   made     to   international
                              (costs/benefits) if performance more than offset by the                               examples    to     consider
                              recommendations implemented     benefits identified in reports,                       relevance and use in
                                                              if implemented in full                                Lesotho context


                              5.5.4 Liaise with MFDP and OAG have consulted widely *                *   *           Keep    in   touch       with
                              others      regarding  the and their work and reports                                 developments over the
                              development of performance reflect latest developments                                next few years and as pilot
                              management and measures                                                               MTEF      ministries      are
                              generally                                                                             extended     and       other
                                                                                                                    performance       initiatives
                                                                                                                    develop




                                                                                                                                               25
26

                                    GOVERNMENT OF LESOTHO: OFFICE OF THE AUDITOR GENERAL
                                            STRATEGIC GOALS 2006/07 TO 2010/11

      Goal 6        Enhance the quality and impact of a audit reports, and improve communications generally within OAG and
                    externally
STRATEGIC                         KEY ACTIVITIES                        SUCCESS MEASURES            2   2   2   2   2   COMMENTS
OBJECTIVES                                                                                          0   0   0   0   0
                                                                                                    0   0   0   0   1
                                                                                                    6   7   8   9   0

6.1 Develop the style, content    6.1.1 Discuss the format of           Opinion and regularity      *
and format of audit reports to    opinion and regularity reports with   reports developed in line
enhance      impact and  likely   ministries   to    help    identify   with survey findings and
acceptability                     improvement areas                     good international
                                                                        practice

                                  6.1.2    Review house style for Reports are more user *               *
                                  reporting performance audits    friendly e.g. use of brief
                                                                  summaries,      a   more
                                                                  concise body of the
                                                                  report,     with    more
                                                                  detailed evidence

                                  6.1.3 Carry out sample surveys of     Ministries and others           *   *   *   *
                                  audited bodies on the quality of      acknowledge an
                                  reporting and audit contents          improvement in
                                                                        reporting

6.2 Develop the monitoring 6.2.1 Review and enhance the                 Revised            system *     *               Important as the extent
system to track implementation audit monitoring system                  identifies action/ lack of                      and scope of performance
of audit recommendations                                                action more clearly                             audits develop

                                  6.2.2 Follow up recommendations       Prompt action taken by          *   *   *   *
                                  promptly and take prompt action       OAG and an increasingly



                                                                                                                                              26
27



STRATEGIC                       KEY ACTIVITIES                     SUCCESS MEASURES               2   2   2   2   2   COMMENTS
OBJECTIVES                                                                                        0   0   0   0   0
                                                                                                  0   0   0   0   1
                                                                                                  6   7   8   9   0
                                where response limited             positive response taken
                                                                   by Ministries


6.3    Review    reporting  and 6.3.1 Discuss reporting     and Development       needs
advisory service to Parliament/ advisory needs with PAC         clearly identified and
PAC in the light of the new Act                                 acted upon
and the needs of the PAC


                                6.3.2    Consider    options for   Options fully     explored                         Options     could   include
                                enhancing the reporting and        and costed                                         secondment of OAG staff
                                advisory services to Parliament                                                       as well as enhancement of
                                and any staffing and cost          PAC                  confirm                       day to day advice on
                                implications of enhancements       enhancements to OAG                                individual reports and the
                                                                   service and their ability                          framing of questions for
                                                                   to fulfil their role                               PAC members

6.4      Develop          internal 6.4.1 Consider further the range Measures implemented *            *   *   *       Ideas already identified
communication with staff in OAG    of means to keep all staff and past communication                                  include          regular
                                   informed and engaged with goals problems         remedied                          newsletters,   meetings,
                                   of OAG                           (based on staff surveys)                          workshops etc.

                                                                                                                      Involvement of staff in
                                                                                                                      developments such as this
                                                                                                                      strategy should also help




                                                                                                                                               27
28



STRATEGIC                      KEY ACTIVITIES                         SUCCESS MEASURES        2   2   2   2   2   COMMENTS
OBJECTIVES                                                                                    0   0   0   0   0
                                                                                              0   0   0   0   1
                                                                                              6   7   8   9   0

6.5 Enhance reporting and      6.5.1 Consider various means           Enhanced communication *    *   *   *   *   Brochure prepared     and
communication of audit role,   including regular, brief newsletters   Methods implemented                         distributed in 2005
goals, outputs and impact to   for wide distribution
outside stakeholders
                               6.5.2 Hold periodical workshops or     Demand     for  regular *   *   *   *   *
                               seminars on OAG developments           communication
                               and issues of accountability and       sustained/ grows over
                               transparency                           time

                               6.5.3 Consider other means of          Implementation    of
                               “selling” the role and value of an     recommendations
                               effective external audit of            enhanced in terms of
                               Government                             numbers and value




                                                                                                                                         28
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6     MONITORING AND EVALUATION OF THE IMPLEMENTATION PLAN

6.1   The implementation framework of the key strategic goals and activities will be
      monitored and evaluated by means of Departmental Business Plans.             The
      Business Plans will be prepared on annual basis, including performance indicators
      and performance standards. Review and appraisals will be done on quarterly
      basis.


6.2   In order to meet functional objectives mentioned earlier, the departments will
      draw up annual audit plans following the procedures outlined in the Public Audit
      Act.




                                                                                    29
        30


                                                                                       Annex 1
SWOT ANALYSIS

Strengths Analysis
Strengths               Description of strength            How do we capitalise on them
International           Member of international            OAG can take advantage of training
exposure                auditing organizations             opportunities as well as attend
                                                           conferences, seminars and
                                                           workshops in order to keep up to
                                                           date with current developments.
Staff development       Well mapped out training and       OAG must ensure that the plan is
programmes              development needs                  implemented and continuously
                        assessment for staff over an       updated so that it does not become
                        extended period of time            irrelevant.
Educated workforce      Most of the staff has the          OAG must ensure that the available
                        requisite qualifications to do     skills are continuously updated and
                        the work.                          maintained and staff utilised to the
                                                           maximum potential
Availability of Audit   The availability of audit          OAG must ensure that the manuals
Manuals                 manuals makes work more            are reviewed and updated so that
                        efficient by giving guidance to    they are in line with changing
                        auditors on how to proceed         environmental factors.
                        with practical work.



Weaknesses Analysis
Weakness                Description of weakness            How do we improve on them
Inadequate financial    The OAG’s budget is allocated      The OAG can strive to initiate
resources               by Ministry of Finance and         changes in the legislative framework
                        Development Planning and is        that would allow it to have
                        therefore restricted as with       independence.
                        other government Ministries
Inadequate Human        The growth of other                OAG should seek to increase its
resources               government departments and         establishment and therefore its
                        Ministries has left OAG behind     human resources in order to keep
                        in terms of staff numbers.         up with the increasing number of
                                                           Auditees.
Inadequate human        Staff are not utilised to their    OAG should come up with an
resource planning       maximum potential.                 appropriate manpower plan.
Negative perception     The OAG has not undertaken         OAG should hold series of
towards OAG             awareness workshops so as to       workshops and produce brochures
                        inform all stakeholders what its   to inform stakeholders of its
                        mandates and functions are.        function.


                                                                                                  30
       31


       Opportunities Analysis
Opportunity               Description                        How can they be exploited
Supportive   Parliament,  There is political will for        OAG must strive for independence,
Public          Accounts  greater accountability and         growth    and     seek     greater
Committee, etc.           good governance on the part        enforcement of recommendations.
                          of the government and other
                          stakeholders
International   relations There     are    opportunities     OAG can take advantage of this by
with other Supreme Audit gained by OAG by virtue of          sharing experiences and ideas with
Institutions              being     a     member      of     other international organisations
                          international organisations        with a view to learning from them,
                                                             as well as taking advantage of
                                                             training opportunities when they
                                                             are available.
Financial support   from Donors support accountability       Through this support there can be
the donors               and good governance which           great technical advancement and
                         is what OAG stands for              institutional strengthening.
The restructuring of the Restructuring and growth of         This is an opportunity for the OAG
ministries               Government Ministries has           to grow and gain independence.
                         left OAG behind.



Threats Analysis
Threats                      How does it threaten OAG          How can their impact be
                                                               lessened
Political climate may        The position may become Revised Public Audit Act, with due
affect the position of the                               inind
                             politicised and this may affect independence built in.
Auditor General              the work of the OAG.
Weak economy of the          The weak economy of the We can seek to lessen the impact
country                      country affects the growth of of the threat by initiating the bid
                             OAG       and   its    bid    for towards independence for the
                             independence                      OAG.
Insufficient remuneration    As a result of being part of We can seek to lessen the impact
and benefits in the civil    the      civil   service     the of the threat by initiating the bid
service                      remuneration of auditors is towards independence for the
                             low and this result in high OAG.
                             staff turnover.
Transport problems           Due to transport restrictions We can seek to lessen the impact
                             the OAG is unable to carry of the threat by initiating the bid
                             out audits throughout the towards independence for the
                             country which is in direct OAG.
                             contradiction of its mandate
                             to         promote         public


                                                                                               31
       32

                          accountability
Culture of laxity in the This     culture   results   in Manage performance of employees
civil service             performance in OAG being as well as putting stringent
                          below the required standard    monitoring and evaluation tools in
                                                         place
Lack of enforcement on This threat lessens the impact OAG can seek to lessen the impact
the implementation of of the audits that have been of the threat by ensuring that
audit recommendations conducted                          recommendations         are     as
by the audited bodies                                    constructive and specific as
                                                         possible. Legislation should make
                                                         provision for enforcement clauses
                                                         to counteract this threat.
Nepotism             and This creates corruption and OAG has to work even harder to
favouritism in the civil contradicts the principles of promote good governance and
service.                  good governance, which OAG public accountability
                          has to work to promote.
Life          Threatening Staff performance of infected OAG must develop health and
Diseases       in     the and affected people will be safety workplace policy and
workplace                 low and therefore affect the programme         that    can   give
                          achievement of OAG goals guidelines on how it can assist and
                          and objectives                 support those employees who
                                                         need it.




                                                                                         32
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                                                                                Annex 2
ENVIRONMENTAL ANALYSIS

Political Environment

     The government has embarked on restructuring of all the ministries and the other
     sectors of government have expanded tremendously since independence. The
     political stability has also attracted many donors to finance development projects in
     the country. While the Office of the Auditor General has the statutory mandate to
     audit government ministries, projects and statutory bodies, the office itself has not
     expanded to match the expansion of the services being offered to the public.


Economic and Social Environment

     There are serious negative issues affecting the economy such as the AIDS
     pandemic, reduced budgets, increasing poverty, exceptional unemployment levels
     and alleged corruption and fraud which are reaching alarming levels. This leads to
     demands, from all stakeholders, for greater accountability and transparency in the
     use of limited resources by public officials. This has put great pressure on the Office
     of the Auditor General to report on accountability.


Physical Environment

     Lesotho is one of the countries blessed with white diamond – water, and this has led
     to the improvement of the economy through royalties from the Republic of South
     Africa. There have also been a significant number of investors running factories in
     the country, which has also contributed, to the improvement of the economy.


     There is an increasing consciousness on environmental issues such as pollution,
     overflowing of the dams, etc. The office should therefore be prepared for this and
     go beyond financial auditing into environmental audits. This means more specialised
     work, which should be matched with adequate resources and the requisite skills.


                                                                                         33
34


Technological Environment

     The Government Financial Information Management System (GOLFIS) represented a
     move forward but has not worked as intended. This is to be replaced by a system
     called IFMIS, which is being phased in over the next few years. It is important that
     the OAG advises on the development of the new system. This is to ensure that
     adequate controls are in place along with sufficient facilities for external audit.


     It is also important that the OAG has adequate office technologically to meet the
     needs of this system and to meet the needs of the new audit remit under the Public
     Audit Act. The number of computers and allied equipment also needs to be
     increased to match the number of staff currently being trained to carry out
     computer audits.


Legal Environment

     The current Audit Legislation is being reviewed since there have been many
     constraints under this legislation e.g. Office of the Auditor General is an office within
     the public service which means the office is staffed with civil servants governed by
     Public Service Regulations.


     The economic and political growth in Lesotho has translated into increased public
     expenditure and revenue as the process of development and diversification of the
     economy continues. There is a need for more stringent controls relating to the
     management of public funds and a more effective state audit function hence a need
     to review the present legislation and include clauses that will move the office
     towards independence.




                                                                                           34
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                                                                                Annex 3
STAKEHOLDERS’ ANALYSIS

     Parliament
        OAG audits Public Accounts and report to parliament
        Parliament approves OAG’s budget
        PAC facilitates the discussions of audit reports with Government Ministries’ Chief
         Accounting Officers



     Government Ministries
        OAG audits and reports to ministries
        OAG offers free technical advice
        Negative attitudes towards auditors
      Government ministries do not maintain proper records
      The influence of Public Service Regulations and Financial Regulations is shifting
         the operations of OAG in general



     Public
        They need to know how public funds have been utilised
        OAG has to report to them on the utilisation of these funds


     Employees
        OAG staff is not fully informed about the operations and goals of OAG and
         therefore the mandate will not be attained
        Weak supervision of staff
        Communication links are weak between management and employees
        Lack of commitment for the job
        Lack of passion for the job
        Low morale of staff
        No motivation



                                                                                        35
36

      Laxity in doing the job

     Private Sector
        AG commission audits to private auditing firms
        OAG has a mandate to audit statutory bodies and subsidiary companies in which
         the government’s interest is 50% and above.


     Donor Agencies
        Relationship with OAG is good
        Relationship with others is the same as in public


     International organisations
        Training programmes
        Harmonisation of standards
        Parallel audits
        Conferences and seminars
      Drafting of training material


     Other Supreme Auditing Institutions
        Sharing of experiences
        Exchanging audit reports
        Sharing of social activities
        Exchange programmes




                                                                                   36
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                                                                            Annex 4
     FUNCTIONAL ACTIVITIES OF OAG

     Performance Audits

          a) To continuously monitor key issues in government ministries and
             departments so as to keep abreast of with developments in government
             operations
          b) To conduct general surveys in government ministries and departments for
             identification of potential audits areas.
          c) To conduct preliminary studies in government ministries and departments
             for identification of possible audit problems.
          d) To undertake main audits to obtain relevant, reliable and sufficient
             evidence so as to draw reasonable conclusions on the causes and effects
             of identified problems.
          e) To follow up on recommendations in the audit reports 6 months after
             issuance to assess the extent to which recommendations have been
             implemented.
          f) To improve the performance of government ministries and departments
             by undertaking quality audits so as to ensure that their operations are
             carried out with due regard to economy, efficiency and effectiveness.



       8.2   Financial and Regularity Audits
          (a) To facilitate the improvement of the quality of financial management in
             the public sector in order to ensure that expenditure has been applied for
             the purposes intended by Parliament and public moneys are fully
             accounted for.
          a) To stimulate the accountability concepts, including internal control and
             good governance, in order to ensure that the parliament holds the Chief
             Accounting Officers responsible for the use of public funds and
             safeguarding of public assets; and adherence to governing legislation


                                                                                     37
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       b) To carry out an audit of the public accounts of the Government of Lesotho
       c) To deliver high quality audit services that will maintain and improve the
           public image, high standards and professionalism.


     8.3   Research and Development

       a) To strengthen the IS unit in order to be able to utilise soft data and
           facilitate IS audits
       b) To manage the performance of Auditing staff so as to ensure that they do
           not deviate from set goals and objectives
       c) To maintain the quality of Audits by conducting Research in technical
           developments in order to keep up with changing environmental factors.
       d) To introduce and implement the quality control model in order to improve
           the efficiency and effectiveness of audits.
       e) To maintain, professionally competent and financially viable operations
           capacity to conduct audits so as to ensure a sound public sector auditing
           capability.
       f) To facilitate the acquisition, development, retention and effectiveness of
           quality human resources in order to ensure the smooth accomplishment of
           the OAG mandate.
       g) To strengthen the Pensions unit in order to facilitate faster and smoother
           pre-auditing of terminal benefits.




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