Introduction
The Public Accounts Committee (PAC) recently approved the appointment of eleven senior officers in the Audit Office following a recommendation from the Auditor General (Ag.). At its previous meeting, the PAC was deadlocked on the matter, with Government members supporting the recommendation while Opposition members disagreed with it. The latter were of the view that some of the officers did not meet the requirements for the positions and that there was one case of an apparent conflict of interest.
What is the PAC?
The Standing Orders of the National Assembly are in effect the rules of procedure governing the work of the Assembly. Much of the Assembly’s work is carried out by various committees. One such committee is the PAC. Standing Order 82 states that there shall be a Standing Committee to be known as the Public Accounts Committee to consist of not less than six or more than ten members. Although not specifically stated, the composition of the Committee has traditionally been in proportion to the individual political parties’ representation in the Assembly. The Chairperson of the PAC must be a member of the main Opposition in the National Assembly.
Unlike other committees, a Standing Committee functions for the duration of the Assembly coinciding with the life of Parliament. For example, the recently appointed PAC will serve for the duration of the Tenth Parliament. After the next elections, a new PAC will be formed.
The Committee is expected to represent the Legislature as whole and not the separate political parties to which individual members belong. As Harold Wilson, the late British Prime Minister and one-time Chairman of the PAC, pointed out:
The essential fact is that this Committee is a Committee of the House responsible to the House as a whole, and is not a battleground for party faction…. I believe it is true to say that the authority of the Committee is greatly enhanced by its unanimous character and I hope the complete objectivity of its report. It is fair to say that many Honourable Members of both parties have made great endeavours and have sometimes sacrificed personal views to ensure that this shall be so.
PAC’s examination of the Public Accounts
The main function of the PAC is “to examine the accounts showing the appropriations of sums granted by the Assembly to meet Public Expenditure and such other accounts laid before the Assembly as the Assembly may refer to the Committee together with the Auditor General’s report thereon”. In other words, the PAC’s role is to examine the audited consolidated financial statements of the country, known as the Public Accounts, as well as those of ministries, departments and regions. The PAC also examines the audited financial statements of entities that are either state-owned or where controlling interest vests with the State. These entities are also required to have their audited accounts laid before the National Assembly.
The PAC’s examination seeks to ascertain to what extent expenditure has been incurred in the way Parliament intended. It uses the Auditor General’s report as a convenient starting point to examine accounting officers and other persons entrusted with the receipt and utilization of public funds and other assets. At the end of its examination, the PAC submits a report of its conclusions and recommendations to the National Assembly. Within 90 days of the submission of the PAC report, the Government is required to respond in the form of a Treasury Memorandum indicating what actions it has taken or proposes to take in relation to the PAC’s findings and recommendations, thus completing the accountability cycle.
The PAC’s scrutiny of the national accounts along with the reports of the Auditor General is an integral part of public accountability. As such, its timely examination and reporting back to the Legislature are of crucial importance. Ideally, this cycle should be completed within 12 months of the close of the financial year to enable legislators to properly review the government’s budgetary proposals for the next commencing fiscal year.
Over the years, especially during the 1990s, there have been delays by the PAC in carrying out such examinations and reporting back to the Assembly. The same can also be said of the Government’s Treasury Memorandum that was never issued for the years 1992 to 1998. The situation has since improved, since the PAC has completed its work on the 2009 Public Accounts. The Auditor General (Ag.) has submitted his report on the 2010 accounts which are currently being examined by the new PAC.
Constitutional Amendment of 2001
In 2001, the Constitution was amended to provide for the establishment of the Public Procurement Commission to oversee the procurement of goods and services by the Government. This amendment places an additional responsibility on the PAC in terms of the appointment of the five Commissioners. The PAC nominates these Commissioners, and the President makes the appointment, subject to the approval of two-thirds of the elected members of the National Assembly. Regrettably, after eleven years, the Commission is yet to be established.
The 2001 constitutional amendment also provides for the PAC to exercise general supervision over the functioning of the Audit Office in accordance with that office’s Rules, Policies and Procedures Manual. The background to this is that once the Audit Office is taken out of the Public Service and given autonomous status, there must be a new form of accountability relationship. In other words, the Auditor General has to be accountable to someone. Since in essence the Audit Office serves the Legislature and not the Executive, it is entirely appropriate for a committee of the Legislature to oversee its operations.
That committee is the PAC which acts as a kind of board for the Audit Office. It would be incorrect to suggest that the Auditor General can ignore reasonable guidance offered by the PAC, and it is worth emphasizing that only in the exercise of his duties under the Constitution, the Auditor General shall not be subject to the directions or control of any person or authority. In auditing, there is no concept of absolute independence. Likewise, the PAC should not harbour the feeling that it could impose its authority on the Audit Office in terms of its day-to-day functioning.
The Audit Act 2004
The Audit Act 2004 elaborates on the general supervisory role of the PAC, as part of the strengthening of Parliamentary oversight over the work of the Auditor General, as follows:
The Auditor General may, with the approval of the PAC, make regulations for the administration of the Act. These include a Rules, Policies Procedures Manual regarding the management and operation of, the conduct of audits by, and the standards by which such audits shall be conducted by the Audit Office. These regulations have to be tabled in the National Assembly which may confirm, reject or amend them;
The appointment and discipline of all senior officers and senior employees are subject to the approval of the PAC. It was under this section that the eleven officers referred to in the introduction to this article were appointed;
The Auditor General is required to submit to the PAC the proposed annual budget for the Audit Office, including work plans and programmes. The PAC reviews the budget and provides comments for consideration by the Auditor General who shall revise and resubmit it for endorsement by the PAC;
Within four weeks of the end of each quarter, the Auditor General is also required to submit to the PAC a report on the performance and operation of the Audit Office, and an Annual Performance and Financial Audit Report within four months of the end of the fiscal year; and
In respect of each fiscal year, the PAC shall appoint an independent auditor to audit and report on the financial statement and other information relating to the performance of the Audit Office.
Conclusion
The PAC has a crucial role to play in ensuring that public funds are used in keeping with the intention of Parliament, particularly as regards economy, efficiency and effectiveness in the use of such funds. It also has to consider to what extent the desired outputs, outcomes and impacts have been achieved. The PAC’s role is complementary to that of the Audit Office since it relies in a significant way on the detailed examination of and objective reporting by that Office. It is mainly for this reason that there should be a close working relationship between the two bodies.
Since the Audit Office is now delinked from the Public Service and is given autonomous status, it is entirely appropriate for it to be placed under Parliamentary oversight via the PAC. It is therefore important for respect to be shown for this arrangement and for all parties concerned to work towards a harmonious relationship in the interest of good governance, transparency and greater public accountability.
Finally, it is regrettable that the PAC has not yet delivered on its responsibility for nominating the commissioners for the constitutionally mandated Public Procurement Commission. It is still not too late to do so.
