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Viewing cable 09DAKAR351, SENEGAL'S PUBLIC PROCUREMENT AUTHORITY PLANS TO AUDIT

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Reference ID Created Released Classification Origin
09DAKAR351 2009-03-24 11:48 2011-08-24 16:30 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Dakar
VZCZCXRO8082
PP RUEHBZ RUEHDU RUEHGI RUEHJO RUEHMA RUEHMR RUEHPA RUEHRN RUEHTRO
DE RUEHDK #0351/01 0831148
ZNR UUUUU ZZH
P 241148Z MAR 09
FM AMEMBASSY DAKAR
TO RUEHC/SECSTATE WASHDC PRIORITY 2083
INFO RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCPDOC/USDOC WASHDC
RUEHLMC/MCC WASHDC
RUEHZO/AFRICAN UNION COLLECTIVE
UNCLAS SECTION 01 OF 02 DAKAR 000351 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR EB/IFD/ODF, EB/ESC/IEC, AF/EPS AND AF/W 
TREASURY FOR AFRICA DESK 
 
E.O. 12958: N/A 
TAGS: EFIN EINV PGOV ECON KCOR BTIO SG
SUBJECT: SENEGAL'S PUBLIC PROCUREMENT AUTHORITY PLANS TO AUDIT 
MINISTRIES, AGENCIES, AND INSTITUTIONS 
 
DAKAR 00000351  001.2 OF 002 
 
 
1.  (SBU) Summary: Following the January 2008 establishment of broad 
and strict new public procurement requirements, the main regulatory 
agency, ARMP, is gearing up to conduct independent, far-reaching 
audits of public institutions' compliance with the new standards. 
This could prove politically difficult since a number of the 
national agencies and ministries to be audited are carrying out 
special presidential programs that are widely assumed to not meet 
the transparency, accountability, and competitive bidding 
requirements of public tender laws.  We agree with ARMP that donors 
should make known our interest in these audits and the principle of 
non-interference should judicial action be warranted.  End summary. 
 
2.  (SBU) According to officials from Senegal's (mostly) independent 
public procurement regulatory authority, ARMP, all of Senegal's 
large public entities, and some of the smaller ones, that do public 
procurements and tenders (or are supposed to), will be audited for 
compliance with the country's strict public procurement laws, which 
entered into effect on January 1, 2008 and which conform to WAEMU 
directives.  ARMP is finalizing the tender award for an 
international audit company to carry out the task. 
 
3.  (SBU) Under the current plan, all public institutions with 
budgets of CFA 10 billion or more (approximately USD 20 million) 
will be audited.  This will include most ministries and national 
agencies (including agencies directed by the Presidency), as well as 
other public institutions such as universities and hospitals.  Fifty 
percent of institutions with budgets between CFA 5-10 billion and 25 
percent of those with budgets below CFA 5 billion will also be 
audited.  The World Bank will help finance this important project. 
According to Mr. Saer Niang, ARMP's Director of Training and Public 
Information, 20-40 contract auditors may be required since the goal 
is to complete the audits in 2009.  ARMP will provide specific 
training to the contract auditors. 
 
ARMP'S Role 
----------- 
4.  (U) ARMP assures that government entities are properly following 
Senegal's public procurement laws, and it rules on discrepancies or 
requests for waivers to those laws.  ARMP currently receives some 
budgetary support from the government, but aspires to be fully 
independent by charging fees on companies responding to public 
tenders.  ARMP, through Niang's office, is also responsible for 
publicizing Senegal's public procurement requirements and for 
training government institutions, industry groups, and civil society 
on these requirements and procedures via workshops and other 
outreach.  ARMP has received funds from Canada and the European 
Union to conduct these outreach efforts in and around Dakar, and has 
also received USAID funding to do similar work in a number of cities 
outside Dakar.  ARMP also maintains a "liste rouge" (blacklist) of 
companies that are under sanctions and not permitted to bid on 
public tenders.  Companies can be excluded for ten years or longer. 
These cases and ARMP's decisions are posted on its website. 
 
5.  (U) Senegal has another institution that controls and monitors 
public tenders, the "Direction Centrale des Marches Publics" (DCMP), 
which reports directly to the Ministry of Finance.  It coordinates 
with ARMP on public outreach and data-gathering.  DCMP also provides 
advice and rulings on tender awards and on requests for waivers. 
The public procurement code permits very few exceptions to 
competitively bid tenders.  DCMP is required to publish on its 
website quarterly the list of contracts awarded.  No public 
procurement action should be permitted unless it was included in the 
procurement plans submitted in advance to the DCMP by governmental 
organizations. 
 
EXPECTING PROBLEMS -- HOPING FOR POLITICAL SUPPORT 
--------------------------------------------- ------ 
6.  (SBU) Niang fully expects that serious irregularities will be 
found during the course of the audits.  He noted that in some cases 
individuals may be required to return misappropriated money.  He is 
optimistic that serious problems will be forwarded to the judicial 
system for possible prosecution.  In anticipation of such actions, 
Niang's team is already providing training to government auditors, 
magistrates, prosecutors, and judges.  Niang said it would be 
vitally important that all irregularities be handled in a 
transparent and strict manner and that there be no political 
pressure "from the Presidency or elsewhere" to permit some 
institutions to avoid accountability.  In Niang's view if this first 
round of audits proceeds without interference, it will set a high 
standard and send the right message that there will be no political 
protection for either government agencies or private companies with 
regards to public procurement irregularities.  Niang appealed to 
Econ Counselor for the USG and other donors to make this point 
directly to President Wade and other senior officials.  ARMP plans 
 
DAKAR 00000351  002.2 OF 002 
 
 
to make all results from the audits publically available on its 
website. 
 
COMMENT 
------- 
7.  (SBU) The GOS deserves compliments for establishing new laws, 
regulations, and procedures that fully realize WAEMU guidelines on 
public procurement.  It appears that public institutions are largely 
taking seriously the goal of having almost all public contracts for 
goods and services be awarded via the public tender process.  It 
would be a very positive indication of the Wade Administration's 
commitment to public finance reform should ARMP be successful in 
conducting thorough reviews and audits of public institutions' use 
(or possible misuse) of public procurements and by allowing 
irregularities to pass without political influence through the 
judicial system.  To date, however, national agencies that are 
largely extensions of President Wade's special projects, such as 
ANOCI (run by the President's son) and APIX (the agency for 
investment promotion and "grand works") have managed to avoid 
independent scrutiny of many activities and transactions. 
Therefore, looking for opportunities to highlight the importance of 
non-interference with ARMP's audits will be a goal for us, and we 
hope for other donors as well. 
 
8.  (U) There may also be a valuable role for the MCC to play in 
supporting the theory and practice of open and fair public tenders 
as it establishes the framework for its proposed compact with 
Senegal. 
 
BERNICAT