Since the Auditor General is the auditing czar for all ministries, departments and regions, what he has to say in his annual report should be followed as closely by citizens as Greenspan’s words of wisdom were by Wall Street. There are a few reasons why that isn’t possible here.
First, this year’s instalment (2006) entitled `Promoting Good Governance, Transparency and Improved Public Accountability’ was presented to Parliament almost a year late. In around a month the accounts for the year 2007 are due to be presented. How could 2006 findings in July of 2008 be taken seriously? We urge the Auditor General to ensure that the 2007 accounts are tabled as soon as possible so that they could be made public immediately upon the ending of the Parliamentary recess. The constitutional and legislative arrangements for the proper functioning of the audit office enable it to overcome problems like staffing and financing. The Auditor General, Mr Deodat Sharma needs to work aggressively towards this end.
Stabroek News has called on several occasions in these columns for the business-like treatment of the public accounts by both the Audit Office of Guyana and the Public Accounts Committee of Parliament otherwise the reports would just merely be lessons in history with little room for ensuring that the errant accounting officers are brought to book over their failings and the respective bodies take urgent remedial measures.
Second, the Audit Office can insert itself at will into public accounts matters by embarking upon special investigations with or without the sanction of the government. This is a technique that would be immeasurably useful but one which under the current Auditor General has been sparingly used as far as the public is concerned. Of course, when the previous Auditor General, Mr Anand Goolsarran attempted a review of the most fishy deal within the precincts of the Office of the President for the export of dolphins by a presidential advisor it was made clear to him that such efforts were unwelcome. Mr Goolsarran subsequently decided to resign his position for a UN posting.
Third, if the Auditor General’s word isn’t taken seriously by the various accounting officers it can hardly have a Greenspan-like effect on those who are required to mend their ways. In the main, the responsibility for ensuring that the accounting officers seriously take the word of the Auditor General lies with Central Government and its representatives in the regions.
This brings us now to the 2006 report which is littered with examples of how the government itself is flouting good governance standards and clearly set out procurement rules. The Auditor General found that the Contingencies Fund continued to be abused in 2006 despite this same defect being highlighted in the report for 2005. This is exactly the point. If the government is unheeding of important criticism of its financial conduct, then accounting officers in the various ministries and departments will take their chances similarly unless weighty penalties are applied.
The Contingencies Fund is exactly as it sounds: to be tapped for unexpected, unavoidable and unforeseen circumstances. The Auditor General pointed out numerous breaches of these conditions: $168M to the Ministry of Culture for the purchase of the BMWs for cricket world cup, $100M to the Ministry of Public Works for the maintenance of pontoons at the Demerara Harbour Bridge, $600M for the Ministry of Housing for civil works executed in housing schemes, $28M to the Office of the President for the airfares for students travelling to Cuba and $33M to the Ministry of Home Affairs for services to the prison population.
These items do not come under the rubric of unforeseen expenditure and call into question the budgeting process and planning at the level of central government.
Agencies coming under the Office of the President also continued to violate the procurement rules. The Guyana Office for Investment did not seek adjudication by the National Procurement and Tender Administration Board for $707,455 in expenditure and explained to the Audit Office that there was an urgent need for the acquisition of equipment.
The Government Information Agency expended $7M for a mini-bus and office equipment without following tender board procedures. Again the excuse was one of urgency; another convenient “contingency”. The Guyana Energy Agency did the same in respect of office equipment and so too did the Institute of Applied Science and Technology in relation to equipment for the office and a bio-diesel project. While the items were verified as having been received in all these cases and being brought to account, the Auditor General recommended adherence to the Procurement Act.
Breaches of procurement rules and other infractions were also committed by the ministries. One would expect that the Ministry of Finance would be beyond reproach. It was not. Funding for the Customs Anti-Narcotics Unit (CANU) continued to be classified under contributions to local organizations and further as has been noted before by several persons, CANU which was established to protect customs revenues is still not operating under the Customs and Trade Administration. The audit office recommended that it be transferred there.
Further, the State Planning Commission which was to have been closed several years ago and have its operations transferred to the Ministry of Finance continued to exist as a separate entity with a staffing of 65. The audit office again called for its dissolution and presentation of financial statements from 1992 to 2006 for audit examination.
Significantly, a problem that had been repeatedly pointed out by Mr Goolsarran and now by Mr Sharma has been cited again i.e. the non-transferring of lottery proceeds to the Consolidated Fund as required by law.
The report revealed that between 1996 and 2006 $2.95B was received from the Guyana Lotteries Company and put into account no.3119 instead of the Consolidated Fund. The report however said that the expenditure for 2006 was done in accordance with the guidelines for accessing lottery funding.
The posting of monies directly to that account opens an avenue for abuse and for unacceptable personal discretion in the assigning of the funds.
As the shepherds of public funds, one expects that the government will take a more serious approach on accounting failings that have been repeatedly pointed out by the audit office. The government never fails to trumpet the auditing of public accounts but yet 16 years after the restoration of democracy there are unacceptable violations which can be easily cured if the government follows the very laws it expects citizens to uphold.
We do believe that it will be very helpful in the next instalment or the subsequent one for the Auditor General to briefly address for each ministry, department and region whether the key previous-year recommendations were followed and if not why and what sanctions were applicable against the relevant delinquent accounting officers.
As pointed out in yesterday’s Business Page, the trail of the privatization proceeds is an also an important area of examination that the Auditor General should take up, perhaps by special investigation?
