The increasing importance of Supreme Audit Institutions (SAIs) as accountability stakeholders in tax and revenue matters is a noteworthy development in the realm of fiscal governance. While most SAIs have the mandate to audit public revenue and expenditures, they have traditionally focused on the latter. SAIs, however, can play a vital role in ensuring transparency, efficiency, and accountability in the collection and management of public revenue owing to their legal independence from the executive. Their engagement on the revenue side of public finance has become crucial in addressing various challenges related to revenue administration, revenue generation, and fiscal sustainability. 

Against this backdrop, on 28 February 2024, Consultative Group 4 of the Addis Tax Initiative (ATI) hosted a webinar which focused on the role of ‘Supreme Audit Institutions (SAIs) as accountability stakeholders for tax systems that advance the SDGs’. The event sought to facilitate dialogue and knowledge exchange among national SAIs and other stakeholders in tax processes to ultimately strengthen the mutual understanding of their roles and opportunities to contribute to tax and development. Attended by around 100 participants, the webinar was moderated by Ms. Fariya MOHIUDDIN from the International Budget Partnership (IBP). The interactive session featured representatives from the African Organisation of English-speaking SAIs (AFROSAI-E), the Federal Court of Accounts (TCU) of Brazil, and the Office of the Auditor General (OAG) of Kenya. Their insightful contributions and experiences enriched the discussion and provided invaluable insights. After the presentations and panel discussion, participants engaged with the speakers through the Q&A session.


Ms. Fariya Mohiuddin
The session was moderated by Ms Fariya Mohiuddin


The webinar 

The event commenced with a presentation by Mr Edmond SHOKO, from AFROSAI-E, on the Public Financial Management Reporting Framework (PFM-RF) – a tool which allows SAIs to assess the performance of public financial management processes along the whole budget cycle, including the revenue side. Mr. SHOKO elaborated on the functionality of this excel-based tool specifically developed to identify relevant PFM risks in countries by assessing their preparedness in different tax collection and spending aspects. The tool was created with a particular focus on institutions like ministries of economy and finance, tax authorities, parliaments, and ministries, departments, and agencies (MDA). Within the context of SDGs, Mr. SHOKO explained how the tool identifies risk areas, compare entity and country performances over time, and allows to identify root causes of SDG implementation failures. At the conclusion of his presentation, the moderator asked if there had been a country experience where the tool had been particularly useful or where it showed a surprising finding with regards to the oversight of tax policy and revenue administrations. In response, Mr. SHOKO mentioned revenue authorities are some of the best performing institutions within the PFM cycle which indicates that “our countries and systems are good at collecting money, but not so good at spending it”. He mentioned the case of Uganda as an instance and invited participants to read the report of the findings on the usage of the PFM-RF tool.


Mr. Edmond Shoko
Mr. Edmond Shoko presents the PFM-RF tool


Building upon the foundational insights provided by AFROSAI-E, Ms. Edna MOGAKA from OAG, Kenya, and Mr. Paulo MALHEIROS from TCU, Brazil, presented their country experiences on the application of the PFM tool. They elaborated on the significant role of Supreme Audit Institutions (SAIs) in assessing fiscal sustainability and tax administration issues within their respective countries.   

On the experience of Kenya, Ms MOGAKA explained their journey in the initial application of the tool. Some of the achievements included the first published report that was tabled to Parliament. Notably, deficiencies in policy, legal framework, governance, and oversight emerged as prominent factors contributing to the poor performance of some of the PFM processes and establishments. Ms MOGAKA highlighted the Kenya Revenue Authority (KRA) as the strongest institution with a score of 3.0, which provides timely, accurate, and evidence-based forecasts to the Ministry of Finance. The lack of coordination between tax policy and tax administration was, however, assessed as a risk. Ms MOGAKA underscored the pivotal role of SAIs as stakeholders in strengthening a system of checks and balances within the nation's institutions. Bringing to attention the necessity of engaging with ministries, departments, and agencies when working on such assessments, Ms MOHIUDDIN then asked the OAG Kenya team about the key learnings from managing these kinds of processes across government institutions. Mr. Anthony MURIUKI, OAG Kenya, stressed the significance of sensitisation, timely communication, and robust collaboration throughout the assessment process as pivotal for successful PFM evaluations.


Mr. Anthony Mu
Mr. Anthony Muriuki shares OAG Kenya's experience with PFM evaluations


Transitioning to the Brazilian context, Mr. MALHEIROS presented the PFM assessment and reporting for three prominent ministries – education, health, and social security – which collectively represented 45% of Brazil’s budget in 2019. Using surveys conducted by the TCU, Mr. MALHEIROS showcased evidence of the challenges identified through the PFM tool. The surveyed entities were requested to provide information, facilitating a comprehensive analysis to determine underlying issues and their causes. Subsequently, a scale defining key indicators for assessment was devised for each ministry, enabling the identification of specific concerns based on the assessment outcomes. Notably, discrepancies were identified in the registries and records of evaluated entities, indicating a deficiency in transparency within certain processes. Consequently, governance and oversight were pinpointed as crucial issues influencing the overall performance of selected Brazilian institutions. The moderator, Ms. MOHIUDDIN, further emphasised governance and supervision as significant bottlenecks. She then inquired about the involvement of additional accountability stakeholders to address these bottlenecks and whether civil society organisations could contribute to this effort. In his answer, Mr. MALHEIROS suggested that promoting transparency is instrumental in encouraging civil society participation. By making government results public, stakeholders are equipped with the necessary tools to hold ministries accountable.


Mr. Paulo Malheiros
Mr. Paulo Malheiros presents the Brazilian experience using PFM-RF


As a follow up to the points raised in the presentations, the event hosted a panel discussion to further shed light on the role of SAIs in tax and revenue matters. The first question on the involvement of other accountability stakeholders in supporting SAIs to bolster confidence and enhance PFM efficiency was directed to the OAG Kenya team. Mr. MURIUKI underscored the key role played by entities like parliament and CSOs in closing feedback loops in the context of PFM assessment. The next question about potential cooperation among SAIs at national, regional, and global levels to enhance tax for SDGs was posed to the AFROSAI-E representative. As such, Mr. SHOKO highlighted the applicability of the assessment methodologies across countries and encouraged stakeholders from diverse regions and institutions to leverage PFM reports in addressing challenges related to tax and revenue administration. Lastly, Mr. MALHEIROS was queried about insights from Brazil regarding the measurement of gender impacts within performance audits. He emphasised the need and significance of dedicated departments that analyse policy design and its differential effects on various demographics, including gender and indigenous communities. 

The first round of panel questions was complimented by an insightful exchange led by additional questions panellists posed to each other. Notable points of the discussion are summarised as follows. In Brazil, the application of the PFM-RF entails a parliamentary presentation. Once gaps are identified, recommendations are directed to relevant ministries, followed by a sustained monitoring process until resolution.

It is also noted that, while differences in the application of the tool exist between Latin America and Europe as compared to Africa, there are similarities. The tool has been employed as a risk assessment mechanism to inform future actions as well as to generate reports for parliamentary submission.

Elevating the discourse on these topics was identified as imperative to foster inter-agency collaboration. Regional events and reports were suggested as a means to facilitate comparative analysis among countries and sustain ongoing discussions. Engaging partners to address weaknesses after post-tool application and collaborative efforts and communication among diverse agencies were deemed pivotal for enhanced performance.

The takeaway of the webinar is clear: SAIs play a critical role in advancing the SDGs by ensuring that revenue generated from taxation is allocated efficiently and effectively to support development priorities. Their audits help identify opportunities for increased domestic resource mobilisation (DRM), improved budget allocation to priority sectors, and reduced revenue leakages. Hence, SAIs are indispensable accountability stakeholders in the pursuit of financing the SDGs, thereby contributing to global development objectives.

Speakers and moderator
Speakers and moderator