SELECTED ECONOMIC ISSUES
State Audit: An Instrument for
Accountability and Good
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The Centre for Policy Analysis is an independent, non-governmental think-tank, which provides rigorous analysis and perspectives on economic policy issues. Our objective is to: promote a non-partisan informed debate on macroeconomic, growth and poverty alleviation issues which are pertinent to the Ghanaian economy, to enhance the capacities of institutions in Ghana through training and finally to disseminate and publish economic information in order to raise public awareness of economic and developmental issues. The Issues Paper Series is part of CEPA’s publications and presents analysis of current economic issues relevant to Ghana’s developmental agenda.
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CEPA Issues Paper No. 10
State Audit: An Instrument for Accountability and Good Economic Governance 1
STATE AUDIT: AN INSTRUMENT FOR
ACCOUNTABILIT AND GOOD ECONOMIC GOVERNANCE
The people’s right to know and even control how their taxes and other resources made available to the government are used is one of the cornerstones of democratic government. In a Presidential form of government it is parliament or the legislature which exercises this control on behalf of the people. The key inputs for parliament to the exercise of this control are the Budget Estimates, the Appropriations Act and the Audited Public Accounts. A legislature that has the time and resources to examine revenue and expenditure proposals can influence the direction and size of the budget. The Appropriations Act in principle provides the legally binding upper limits for expenditures which the Executive may not exceed. The audited public accounts are the essential weapon in dealing with the stewardship of public receipts and expenditures as outlined in the budget and authorized under the Appropriations Act. In this monograph we look at the role of the auditor general: what the office is expected to do, and how far it has performed its responsibilities, its constraints and challenges, and the lessons to be learnt if Ghana is to improve economic governance. The paper concludes with a commentary on the Auditor-General’s report on the 2002 Consolidated Fund. 2. Government Activities and the Need for Accountability and Auditing The primary role of government is to provide the legal framework within which all economic transactions occur. It is common to divide the activities of government into three broad categories: (a) the production of goods and services and the regulation of private producers; (b) the direct purchase of goods and services from firms and households such as the employment of civil servants to the services of street cleaners; and (c) the redistribution of income. To undertake its numerous activities, the government organizes itself into Ministries, Departments and Agencies who undertake these functions on behalf of the executive for the ♣
This issues paper emerged out of work done for the Parliamentary Public Accounts Committee in June 2005 and sponsored by the Canadian Parliamentary Centre, Accra Ghana. The project was coordinated by Dr. Joe Amoako-Tuffour, a Visiting Research Associate of CEPA and an Associate Professor of Economics at St. Francis Xavier University, Antigonish, Nova Scotia, Canada (email@example.com).
CEPA Issues Paper No. 10
State Audit: An Instrument for Accountability and Good Economic Governance 2
benefit of the public at large. Some activities may be...
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