The Permanent Representatives Committee (PRC), comprising Ambassadors accredited to the African Union (AU), have approved the adoption of international public sector accounting standards and a 5% salary increase for AU Commission staff, diplomats said Wednesday.
The adoption of the new accounting system will further AU’s compliance with international accounting standards.
According to a report prepared by the PRC Advisory Sub-Committee on Administrative, Budgetary and Financial Matters, currently chaired by Ghanaian Ambassador Thomas Kwesi Quartey, the adoption of the new system will enhance budgetary management of the AU funds.
The PRC also endorsed a plan to grant the AU staff some 5% pay increase.
The AU had sought at least 65% salary increase to motivate its staff, in the face of rising inflation, but the PRC said the increase being demanded is too high and should be based on the 5% annual budgetary growth set by the AU heads of state.
Currently, the highest earning staff members take home US$7,800 per month while local staffers earn US$2,520.
In its report for consideration by the African foreign ministers, who comprise the Executive Council, due to start meeting Thursday, the PRC said the implementation of the new financial reporting standards would not affect the AU financially, but would help to improve the organisation’s financial leadership.
The AU’s annual budget for 2012 stood at US$274 million, up from just US$140 million in 2008.
The adoption of the new financial standards is meant to appease international donors, who finance a big chunk of the organisation’s budget.
Out of the AU’s total budget for 2012, donors contributed a massive US$152 million.
Under the new accounting system, the financial expenditure of the Commission would be easily tracked and sent to donors, with the efficiency of generating such reports expected to reduce from six months to just two months, according to reports seen by PANA.
AU experts say effective budget tracking would eliminate the regular problem of exceeding budgetary limits. The full implementation of the new system is expected to be completed in 2015.