VZCZCXRO3528
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DE RUEHBP #0511/01 2151539
ZNR UUUUU ZZH
R 031539Z AUG 09
FM AMEMBASSY BAMAKO
TO RUEHC/SECSTATE WASHDC 0608
INFO RUEHZK/ECOWAS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 BAMAKO 000511 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EAID ETRD EINT EAGR ML
SUBJECT: MALI'S AUDITOR GENERAL RELEASES 2009 REPORT 
 
REF: BAMAKO 00232 
 
¶1. (SBU) On July 13, Mali's Office of the Auditor General 
(BVG) released its fourth annual report.  Notwithstanding a 
tumultuous year for the office and the Auditor General, the 
BVG was able to conduct 49 audits in 2008, up from 33 in 
¶2007.  Among the 25 entities audited, the BVG identifed 98 
billion CFA (USD 200 million) of revenue lost to the Treasury 
between 2003-2007.  Of that figure, 40.64 billion CFA (USD 81 
million) was attributed to fraud, and 57.63 billion CFA (USD 
75 million) was due to mismanagement.  If history is any 
guide, the government will recover much of the money 
identified in the report, and the audited institutions will 
implement some of the changes suggested by the BVG.  It is 
unlikely, however, that the corruption identified in the 
report will result in criminal prosecutions.  End Summary. 
 
-------------------------- 
End of an Interesting Year 
-------------------------- 
 
¶2. (SBU) On July 13, Mali's Office of the Auditor General 
(BVG) released its fourth annual report.  As in the past, the 
Auditor General Sidi Sosso Diarra first delivered copies to 
the President, followed by the Prime Minister and other 
officials in the Government.  On July 28, Diarra presented 
his findings to the Malian press corps and responded to 
criticisms of the BVG's methodology and conclusions. 
 
¶3. (SBU) The most remarkable aspect of this year's report is 
that it was published at all.  During the course of the year, 
Diarra faced what he described as a "media lynching," a major 
French consulting firm recommended that the BVG be scrapped, 
and Diarra himself was placed under arrest during a showdown 
with the Malian judiciary (see reftel).  At the July 28 press 
conference, Diarra insisted the adversity only strengthened 
the BVG's resolve to complete its work effectively. 
 
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A Lot of Money 
-------------- 
 
¶4. (SBU) The BVG was able to conduct 49 audits in 2008, 
compared to only 33 in 2007.  The 49 audits took place within 
25 government entities, and identified approximately 98 
billion CFA (200 million USD) lost to the Malian Treasury 
between 2003 and 2007.  To put this figure in perspective, 98 
billion CFA is equivalent to 10% of Mali's budget of 1.001 
trillion CFA (2 billion USD), and almost equal to Mali's 
budget deficit of 128 billion CFA (256 million USD).  Of the 
98 billion CFA identified as lost by the BVG, 40.64 billion 
CFA (81 million USD) was due to fraud (defined as theft, 
deviations of funds, and double and/or unjustified payments), 
and 57.63 billion CFA (75 million USD) was due to 
mismanagement.  In all, the BVG estimated that 89.5 percent 
of that money, or almost 88 billion CFA (176 million USD) 
could still be recovered by the government if certain steps 
were taken.  Comment: Given the limited resources of the 
Malian government, this seems like a very high estimate.  End 
Comment. 
 
¶5. (SBU) Remarkably, 76 billion of the 98 billion CFA 
identified by the BVG as lost to the Malian state were the 
responsibility of just three audited entities: the INPS 
(Social Security), Customs, and the Treasury itself.  The BVG 
determined INPS was responsible for losing 22 billion CFA (44 
million USD) by failing to pursue employers who did not 
regularly pay social security contributions for their 
employees.  The Treasury as an institution was the greatest 
culprit of all, costing itself 44 billion CFA (88 million 
USD).  The greatest problem identified at Treasury consisted 
of 25.5 billion CFA (51 million USD) of payments for which no 
documentation existed to explain or justify the expense. 
 
------------------------ 
Criticism and Complaints 
------------------------ 
 
¶6. (SBU) The BVG has frequently been criticized for being a 
redundant agency duplicating audit mechanisms already in 
place in Mali, such as the Accounting Section of the Supreme 
Court.  In addition, the entities audited often take issue 
with the conclusions of the report, particularly when the 
conclusions of the report conflict with audits conducted by 
other entities.  In this year's report, for example, the 
National Agency for Provincial Investment (ANICT) was blamed 
for the loss of 40 million CFA (80,000 USD), notwithstanding 
the Agency having been audited by a European Union service 
that found no financial impropriety. 
 
¶7. (SBU) The BVG, in turn, points out that each entity 
audited has an opportunity to present written objections and 
 
BAMAKO 00000511  002 OF 002 
 
 
explanations to the auditing teams; and after the draft audit 
is written, the audit team meets with management to discuss 
disagreements.  The Auditor General told the press July 28 
that entities are fully able to voice their concerns, even if 
at the end of the day, the BVG does not agree.  Diarra 
further noted that some entities abuse the consultative 
process to delay the completion of the BVG's report, and that 
in the case of such delay, at some point a decision must be 
made.  Diarra attributed inconsistencies with other reports 
to the fact that different auditors use different 
methodologies. 
 
--------------------- 
Prospects and Results 
--------------------- 
 
¶8. (SBU) To date, there has not been a single criminal 
prosecution resulting from the investigations of the BVG. 
However, the Auditor General can point to other tangible 
results of the BVG's work.  Each year, the BVG conducts 
follow-up studies of entities audited in years past, in order 
to see if the recommendations of the BVG have been put into 
place.  Of the nine such examinations conducted in 2008, the 
BVG reported that 74 percent of its recommendations, or 98 of 
132 recommendations, had been implemented by the audited 
entities, resulting in better financial management and 
decreased opportunity for fraud.  In addition, the Auditor 
General frequently remarks that the work of the BVG has 
allowed the state to recover billions of CFA that would 
otherwise have been lost. 
 
-------------------------------- 
Comment: Now Comes the Hard Part 
-------------------------------- 
 
¶9. (SBU)  Given the tumultuous nature of the year just past, 
it is significant that the Auditor General has succeeded in 
completing significant audits and in producing what appears 
to be a thorough and far-reaching report.  The Auditor 
General was only able to overcome the trials and tribulations 
of the past year because of significant and public support 
from the Government.  Nonetheless, President Toure should go 
further.  In addition to outwardly expressing support for the 
BVG's work, President Toure should give that work teeth by 
encouraging criminal prosecutions against the acts of 
corruption identified in the report. 
 
MILOVANOVIC