The Abu Dhabi Accountability Authority (ADAA), an independent body mandated to oversee transparency and accountability across Abu Dhabi Government, issued its “Accountability Report 2015″.
His Excellency Riyad Al Mubarak, Chairman of ADAA stated in the report foreword: “It gives me a great pleasure to bring to you the Accountability Report 2015, the 7th issue of the annual report of the Abu Dhabi Accountability Authority (ADAA), that affirms our commitment to the highest standards of transparency and accountability, the standards that have become a way of life under the leadership of His Highness Sheikh Khalifa Bin Zayed Al Nahyan, the President of the United Arab Emirates.
This issue of the annual report arrives at a time when the Government Summit – Shaping Future Governments – has just been concluded. During the Summit, we learned about the ambitious vision of the future of the Government and what has been accomplished in all areas of government sectors.
One can’t mention the Summit without stopping at the keynote speech of His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces. A speech that cited the history, witnessed the present and shaped the future… His Highness said every successful government treats its citizens as a national asset. He added that state-building doesn’t only depend on governments, but also on every citizen and resident of this blessed land.
He quoted a saying by the late Sheikh Zayed bin Sultan Al Nahyan that: The new generation should be aware of the suffering of its ancestors. This awareness will provide them with drive, firmness and solidity in order to complete the epic of construction and development initiated by our fathers and ancestors.
We at ADAA, under the direction of His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces and the support of His Highness Sheikh Hazza bin Zayed Al Nahyan, National Security Advisor and Vice Chairman of the Abu Dhabi Executive Council, are proud that we have developed and sponsored the Auditor Development Program designed with the objective of contributing to the training and development of Emirati auditors and assisting them acquire the necessary skills and knowledge to advance and excel in their careers. Since the inception of the Program, more than fifty UAE nationals have joined.”
In conclusion of the foreword, His Excellency the Chairman of ADAA extended his thanks to everyone who has contributed to the achievements of ADAA including public entities and ADAA employees, praying to the Almighty Allah to grant everyone success in serving our generous Country.
The Report explained in the first part the strategic pillars of the overall strategy,objectives, mandate, outputs and outcomes expected from ADAA.
The second part of the Report is a detailed explanation of ADAA work methodologies that are used to produce its ten outputs under ADAA three output groups: Audit& Financial Examination Group; Performance & Risk Assurance Group; and Supporting Accountability Group.
The third part of the Report summaries ADAA 2014 achievements including summary of all reports issued, in addition to a highlight of 2015plan. The Report is concluded in the fourth part providing the 2014 audited financial statements of ADAA.
The Report said that ADAA issued 824 reports during the past five years across its two groups, the Financial Audit & Examination Group and the Performance & Risk Assurance Group, of which 162 reports were issued in 2014 (82 Financial Audit & Examination reports and 80 Performance & Risk Assurance reports).
The Report added that ADAA – under the Financial Audit & Examination Group – has audited the consolidated financial statements of Abu Dhabi Government and conducted 73 Financial Examinations of the audited financial statements at Subject Entities that resulted in 1,128 comments related to the quality of audit work. These included 131 comments related to the “Statutory Auditor Appointment Rules – SAAR” issued according to Law No. (14) of 2008 establishing ADAA. This is in addition to 5 Financial Management Assessment reports that were issued under this Group.
The Report also showed that ADAA – under the Performance & Risk Assurance Group – issued 52 reports on Internal Audit Assessment that resulted in providing 1,407 recommendations with the objective of improving the internal audit work quality at Subject Entities due to their impact on developing performance, enhancing the control environment and reinforcing the governance structure at Subject Entities.
The Report added that ADAA issued 22 Procurement Review reports resulted in 1,072 observations and issued a number of reports related to government services and outputs reviews that included the Sheikh Khalifa Medical City, the program for the construction of the nuclear power plants, the public housing program, the construction of public housing, the program for Al Ain roads and the Government performance management framework. The Report disclosed all significant recommendations presented in these reports.
The Report indicated – under the Supporting Accountability Group – that ADAA continued to encourage Subject Entities to recognize the importance of developing documented and approved regulations at each Subject Entity relating to complaints on financial violations as well as appointing a compliance officer within the internal audit function at every entity to assume the responsibility of receiving complaints, logging and examining them and making recommendations to the competent authority within the entity.
The compliance officer should also notify ADAA immediately upon discovering any violation and send a copy of the investigation documents once completed supported by the investigation records and actions taken as mandated by Law No. (14) of 2008.
The Report declared that ADAA received 15 complaints during last year that were generally related to abuse of power and conflict of interest, violation of procurement laws, regulations and procedures, negligence in managing public money and breaching code of conduct.
The Report illustrates two cases related to complaints received by ADAA. The first case relates to an accounting supervisor working for a government department who, taking advantage of his position, was embezzling sums of money from petty cash which was under his custody.
The scheme involved pulling out the original invoice from its reimbursement attachments after being paid and claiming it for reimbursement for a second time and taking the cash for himself. Accordingly, the case was referred to the public prosecutor’s office which began investigation and presented the case to the competent court. The court issued its decision against the defendant to return the embezzled sum of money and fined him an additional equal amount along with imprisonment for five years and deportation from the Country.
The second case concerned an employee in one of the government company’s overseas offices who embezzled a sum of money and concealed the incident by posting false periodic journal entries in the entity’s accounting system. The entity conducted an investigation and concluded the termination of the official’s employment and referred him to the competent authorities.
Showing ADAA initiatives to achieve one of its outcome to have more qualified Emirati auditors, the Report stated that ADAA developed specialized training programs with the objective of contributing to the training and development of Emirati auditors and assisting them acquire the necessary skills and knowledge to advance and excel in their careers. As one of these programs, ADAA developed the “Auditor Development Program” which was designed to give young Emirati graduates the opportunity to develop their careers and move from entry level Assistant Auditor to a Chief Auditor over a period of 7 years.
During 2014, 13 Emirati graduates were recruited into the program bringing the total number of graduates to 59 since its inception.
The program includes on-the-job training, secondments to the big 4 audit firms as well as simultaneously offering professional certifications in the accounting and audit profession such as the Certified Public Accountant (CPA) and the Certified Internal Auditor (CIA). To help facilitate this development, ADAA has hired a full time lecturer to provide preparation courses in these subjects which has already proven beneficial with the Emirati graduates obtaining a number of passes in various examinations.
The Report stated other ADAA initiatives to encourage Emiratisation within the audit profession where ADAA, thru its Statuary Auditor Appointment Rules (SAAR), obliged statutory auditors of Subject Entities to ensure that the audit team includes at least one UAE National.
The Report mentioned in this regards that during September 2014, ADAA issued the second edition of SAAR. According to the second edition of SAAR, Subject Entities shall appoint statutory auditors through circulating requests for audit services proposals to at least four statutory auditors.
Statutory auditors may be reappointed for additional periods, up to a maximum of three consecutive years, subject to an annual evaluation by the Subject Entity on the quality of audit services provided and the competence of the audit team while taking into consideration comments raised by ADAA in its reports.Statutory auditors cannot be retained for a period exceeding four consecutive years, and Subject Entities can only appoint the same statutory auditor or the audit engagement partner after a cool off period of four years from the date of the last audit services provided by either of them.
The Report has covered a number of ADAA international achievements and activities during 2014 including the appointment of His Excellency the Chairman of ADAA as a member of the High-Level Advisory Council, established by the International Federation of Accountants (IFAC), alongside Mr. David Walker, former chair of the Government Accountability Office in the United States of America and a former presidential candidate, and Mr. Chegl Larson, an advisor for the Organization of Economic Cooperation and Development and the former Auditor General of Sweden.
The Council leads the “Accountability. Now.” initiative launched recently by IFAC in order to encourage governments in developed and developing countries on the application of the highest transparency and accountability standards and promote awareness of the need to strengthen public sector management and public money reports due to the importance of financial management in the public sector in achieving the target of global growth and improve living standards and raise public confidence.
The Report also pointed out ADAA participation in the World Congress of Accountants in Rome, Italy where ADAA shared Abu Dhabi experience in the public audit and accounting profession with approximately 4,000 professionals from more than 100 countries. The Congress is the largest global gathering of the accounting profession and is held every four years. In addition, the Report highlighted that His Excellency the Chairman of ADAA, along with 28 scientists, academic experts and practitioners, participated in a panel discussion at the Blavatnik School of Government – University of Oxford, which was hosted to discuss the direct and indirect effects of monetary policies and regulations in advanced economies on emerging and developing economies.
The Report said that, during 2014, ADAA Training Centre was approved as a registered sponsor on the National Registry of Continuing Professional Education (CPE) Sponsors of the United States of America, showing ADAA’s commitment to the delivery of high quality continuing professional education in compliance with the Statement of Standards for CPE Programs jointly published by the AICPA and NASBA as well as the program requirements of the National Registry of CPE Sponsors.
ADAA has announced that the “Accountability Report 2015” will be available on Saturday, the 7th of March 2015 on its website: www.adaa.abudhabi.ae