Gemechu Dubiso:

The Man with a Big Job

When the House of Peoples Representatives approved Gemechu Dubiso Godana’s reappointment as Auditor-General of the Office of the Federal Auditor General by Prime Minister Hailemariam Desalegn on March 10, 2015, many agreed that he deserves the post. This is because Gemechu is up to the task based on his five years of experience in the position, demonstrating courage, confidence and uncompromising ethics when he reports about the mismanagement of public resources in federal and regional offices. EBR spoke with Gemechu to learn more about his career and the difficulties facing him and his profession.

Gemechu Dubiso has one of the most stressful jobs in the country. His job entails keeping the executive branch of the government responsible for the funds it allocates to different public institutions. He is entrusted with the task of delivering reliable and objective information to support members of the Parliament in carrying out their responsibilities of monitoring the executive by carrying out audit reports.
Gemechu’s education and vast experience in the field of management and finance has prepared him for this daunting task. The 50 year-old Auditor General was born in Arsi, in the Oromia region, to parents who worked as farmers. After finalizing high school in Arsi, he joined Addis Ababa University’s (AAU) Department of Accounting in 1982 and graduated with a bachelor’s degree four years later. Six years later, he joined the Glasgow Caledonian University in Scotland and received his master’s degree in financial management.
He started his career at the former Ministry of Inland Trade during the Dergue regime as a finance officer. “My responsibility at the Ministry was auditing the accounts of government parastatals, which I can say gave me a chance to see how public institutions handle their accounts at an early age,” he told EBR.
After the downfall of the Dergue, Gemechu held key positions in the Oromia Region, including as the head of the regional Trade Bureau’s internal audit service, advisor to president of the Oromia Region and manager of the Oromia Development Association. Finally, he established the Oromia Credit and Saving Institution, which he ran for ten years as general manager.
Gemechu, who has served as the head of the Federal Office of the Auditor General for the past six years, says he is content with his job, despite its challenges. In fact, he considers himself lucky. “When you lead one government institution, your influence will be limited to the activities of that institution only,” says the Auditor General. “But my current post is different, since my influence can reach almost all government institutions.”
In fact, his influence was felt when he presented his 2013/14 auditing report that covered 133 government offices and 300 city and woreda administrations to members of the Parliament on June 2, 2015. He presented the findings of his office, which exposed accounting mismanagement and lack of controlling mechanisms in several federal offices.
The 64-page report revealed that slightly more than ETB2 billion remained unaccounted for in 78 offices. The Auditor General admits that the nature of the problem remains the same as the government budget keeps increasing. Gemechu is quick to point out the government’s failures: “Ever since I took this job, the findings of the auditing reports mainly indicate three setbacks: the failure of providing proper documentation for procurements, expenditures that have not been properly accounted for and lack of clarity in finance administration.” Gemechu attributes these problems to massive staff turnover in the field of auditing, which is contributing to the poor accounting practices witnessed in most public institutions.
Surprisingly, Gemechu’s office is not immune from this problem. In fact, he mentioned in his report that 60 employees resigned from his office in the last fiscal year alone, which is making things difficult for him and his colleagues. In his view this can be tackled using short- and long-term strategies. “In the short run, staff turnover can be reduced by providing non salary benefits, like putting together housing facilities,” he advised. ‘‘Long-term solutions, however, should include salary increases and boosting the skilled laboursupply.’’
Similar to previous years, the Auditor General’s report indicates that public universities have been found for their unaccounted monies.
Ethiopia’s higher education infrastructure has grown rapidly in the last two decades and millions of birr have been channeled to make this happen. However, the report suggest that close to ETB50 million was spent by seven universities, including the earlier-established Bahir Dar and Jimma universities, without following the correct protocol.
The Auditor notes that public universities spend money without adhering to the laws of the country, regardless of the fact that these institutions should be centers of excellence. ‘‘This is because administrators of the universities do not give enough attention [to handling university expansion projects].’’
However, he admits that the additional task, which is overseeing expansion projects, brings additional pressure to the administrators. “Obviously, I cannot deny this fact and it is something the government should look up.”
As a way out, he suggests all the expansion projects undertaken by universities be handled by an independent body, just like the government did for the construction of public institutions’ offices.
During the past five years, the construction of headquarters for public institutions has been overseen by the Office Building Project, organized under the Ministry of Urban Development, Housing and Construction.
When this happens, officials of the government will focus on their main activities, rather than being concerned about the supervision of their headquarters construction, he says. “You don’t see me bothering about the construction of the building, which will replace the current building we are working on.”
Despite the inefficiencies observed in public universities, however, he sees improvement. “In the past, officials at universities and government institutions used to take it personally when they were mentioned in the audit report,” he remembers. “Fortunately, such thinking is vanishing and they are now recognizing our job as necessary.”
But he is not only seeing improvements in the executive branch of the government. Rather, he applauds the changes he is observing in the legislative wing. ‘‘Previously, it was the Budget and Finance Standing Committee that was responsible for handling issues related to the auditing of government offices. But since 2006, a new working group known as the Government Expenditure Control Standing Committee became responsible, which allows members of the Parliament to be more effective.’’ This committee held 54 meetings with different government offices in the past three years in the presence of Gemechu or his colleagues.
But as excited as he is for such improvement, he says he is not satisfied yet because the Parliament did not start to take actions against officials that head public institutions regardless of their wrongdoing. “I haven’t come across any official who has been discharged from his position or wento court for [misusing funds].”
In addition to auditing the accounts of government institutions, your office is responsible for strengthening and expanding the accounting and auditing profession in Ethiopia. What have you accomplished so far?
In Ethiopia, there was no office responsible for accounting and auditing practices. Therefore, this mandate was given to the Office of the Federal Auditor General, unlike the practice in other countries. It was only in February 2015 that the National Accounting and Auditing Board was established.
Since it was our secondary priority, the standardization and growth of the accounting and auditing practices was given less attention. So the development of professionalism in the sector is low. We don’t think we have played a major role as we should have to advance these professions but we have done what we can using our limited capacity and resources to license professionals and draw up a standard for accounting and auditing practice in collaboration with other stakeholders.

Why has it taken so long for Ethiopia to develop a robust accounting and auditing sector?
During the last years of Emperor Haileselassie, there were a few professional associations in the country, but they dissolved when the Dergue came to power. For so long, there was no professional association in Ethiopia, unlike other African countries. It was in the last ten years that a few activities started. In those African countries that have good accounting and auditing practices today, it was the long existence of strong professional associations that pushed for the establishment of a body that regulates the sector. So this was one factor that contributed for the delay.
The second factor was the economic structure of the country. During the Dergue regime, there was no private sector-led economy. The government also imposed a maximum of ETB500,000 capital for a few private companies that were established during the time. This had a great impact on the development of the private sector and eventually the accounting and auditing professions because there was less demand. It was only after 1991 [when the Dergue regime fell] that things started to change. That is when the country started to follow the free market policy, which made the private sector flourish slowly. So in my opinion, it was the lack of demand that contributed to this problem initially. And after demand started to grow, it was the absence of a pushing factor from the private sector.

Currently, the private sector is actively participating in the economy compared to 20 years ago. This means there is a growing demand for the services of auditors and accountants. But universities still fail to provide standardized training.
It has been 28 years since I graduated from university and I have seen two versions of GAAP [Generally Accepted Accounting Principles] – the UK and US – practiced in the country. This indicates the need to review our education system according to global development. Most countries are now migrating to international financial reporting standards. Academicians at different universities have the responsibility to make this happen.

How come it’s been so difficult to create standardization?
Initially, the number of universities in the country was very few, so the issue of providing standardized training for students was ignored. But when the number of universities started growing, the problem became complex. The academicians should push for the establishment of a uniform system.
Newly established universities should give some thought to this issue before preparing their curriculum. I myself repeatedly asked the academicians why the system is not standardized but I see reluctance. There is also the issue of lack of preparedness and limited resources.

In order to transform the economy from agriculture-based to that of industrialization, the government is currently focusing on attracting foreign direct investment. The existence of proper accounting and auditing information systems has a significant effect on foreign investor’s decisions, which is lacking in Ethiopia. Why is the government reluctant to further develop the profession?
Of course, one of the factors that contributes to the investment decision of foreign companies is the existence of a proper financial reporting infrastructure and practice. If these are not established there will not be transparency, which can force investors to go elsewhere.
Considering these facts, the government is working to modernize these systems. In the past, three research studies were conducted by different stakeholders, which made it possible for the establishment of the National Accounting and Auditing Board.EBR

3rd Year • July 16 – August 15 2015 • No. 29