The Audit Office is committed to promoting good governance including openness, transparency and improved accountability through: (a) the execution of high quality audits; (b) timely reporting to the Legislature and ultimately the public; and (c) ensuring the independence and objectivity of the Office.
Extract from the Audit Office’s mission statement
Introduction
The mission statement of any organization outlines its fundamental purpose. It is the guiding principle that informs all of its activities, and represents what the organization is striving to achieve. The above quoted mission statement highlights the crucial role the Audit Office plays in the public accountability process.
This article takes a closer look at the role of the Audit Office in the public accountability process.
Public accountability
Accountability exists where the management of resources is delegated from one person to another, the latter having an obligation to properly account to the former in relation to the way the resources have been utilized. At the national level, the Government is accountable to the citizens mainly through their elected representatives in the Legislature. Accountability is enriched if it is seen as a moral act, indeed a personal responsibility, voluntarily given, rather than being imposed. Imposed accountability can result in minimum compliance and in some instances non-compliance.
Public accountability is far more rigorous and demanding. It requires public officials to explain their actions publicly and to subject themselves to detailed scrutiny from the Legislative Audit and public reporting of the results. In this regard, an independent, credible, competent, and effective appraisal of the stewardship of those who are required to give an account, is indispensable to an effective system of public accountability. In Guyana, the Audit Office carries out that appraisal.
Mandate of the Audit Office
The mandate of the Audit Office is enshrined in the Constitution as well as the Audit Act 2004. Article 223 of the Constitution requires the public accounts of Guyana and of all officers and authorities of the Government of Guyana and the accounts of the Clerk of the National Assembly and of all courts in Guyana to be audited and reported on by the Auditor General. Public accounts of Guyana includes: (i) all central and local government bodies and entities; (ii) all bodies and entities in which the State has controlling interest; and (iii) all projects funded by way of loans or grants by a foreign State or organization.
Under the Audit Act, the Audit Office is required to examine the accounts submitted for audit to ascertain whether:
● they have been properly prepared, in accordance with applicable law, and properly present the operations and state of affairs of the entity concerned;
● the accounts have been faithfully and properly kept;
● the rules, procedures and internal management controls are sufficient to secure effective control on the assessment, collection and proper allocation of revenues;
● all moneys expended and charged to an account have been applied to the purpose or purposes for which they were intended; and
● essential records are maintained, and internal management controls and rules and procedures established and applied are sufficient to safeguard the control of stores and other public property.
The accounts to be audited include: (a) the consolidated financial statements (otherwise known as the public accounts); (b) the accounts of all budget agencies (i.e. ministeries/departments/regions); (c) the accounts of all bodies in which the State has a controlling interest; and (d) the accounts of all projects funded by way of loans or grants by any foreign State or organization. There is provision for the Audit Office to contract the services of private auditing firms to audit on its behalf any of the above, should that office consider it necessary.
Independence of the Audit Office
A leading authority on the subject once wrote that the concept of an audit and the concept of independence are the twin sides of the same coin; and that a dependent auditor has lost his/her raison d’etre and is a contradiction in terms. An auditor must not only be independent of those whose work he/she has to evaluate but must also be seen to be so lest his/her work is likely to lack credibility. However, despite all the safeguards for securing the independence of the auditor, in the final analysis, the individual’s state of mind is the influencing factor. Independence is the foundation pillar in auditing but it needs to be coupled with technical and professional competence.
Article 223 of the Constitution states that there shall be an Auditor General for Guyana and that in the exercise of his/her duties under the Constitution, he/she shall not be subject to the direction or control of any person or authority. This is the most powerful statement about the independence of the Audit Office since the Head is constitutionally protected from interference in the work of his/her office.
In addition, like other holders of constitutional positions, the Auditor General can only be removed for inability to discharge the functions of his/her office or for misbehaviour. If this happens, a tribunal has to be appointed comprising three High Court judges to hear the matter and to make a ruling. This important safeguard gives the Audit Office wide discretion as to how it carries out its work and how it reports the results without fear of any disciplinary action or other forms of sanction.
All of this, however, presupposes a substantive appointment of the Head of the Audit Office. The implication for any prolonged acting arrangement, apart from appearing to be contrary to the spirit of Article 223, is that the holder of that office is likely to be hard-pressed to be as critical as he/she would like to be of the operations of the Government. If his/her action is viewed as “misbehaviour” in the eyes of the Executive, he/she can be easily removed through the termination of the acting arrangement and relegation to his/her original position.
In the early 1990s, the Audit Office was not considered independent of the Executive whose work it has to evaluate. While the independence of the Auditor General is enshrined in the Constitution, the same could not be said of his/her office. The Audit Office for all practical purposes was a government department, and the Auditor General was expected to attend all meetings of Permanent Secretaries, chaired at the time by the Permanent Secretary of the Public Service Ministry. (The Head of the Presidential Secretariat currently chairs the meeting because of the changed arrangement whereby Permanent Secretaries are now political appointees. The Acting Auditor General attends these meetings as a matter of routine.)
The Auditor General did not have freedom and the flexibility to recruit, promote, discipline and remunerate staff members. The Public Service Commission carried out these functions. As a result, the Audit Office suffered from a significant shortage of staff as well as the skills needed to execute high quality audits. Because of this apparent lack of capacity and concerns over the independence of the Audit Office, international funding agencies, such as the World Bank and the Inter-American Development Bank, insisted that the audits of their projects be undertaken by private auditing firms, without any involvement of the Audit Office.
The Audit Office was also overlooked in preference to private auditing firms in respect of the audits of most of the entities in which controlling interest vests in the State. In effect, the Auditor General was considered external auditor of Central Government only and not the entire public sector. The records will show the Audit Office’s battles with the Administration culminating in an amendment in 1993 to the law to extend the mandate of the Audit Office to audits of entities in which controlling interest vests with the State, although this was not necessary.
The Executive also controlled the budget of the Audit Office. In many cases, the budget was subject to unilateral cuts by the Ministry of Finance. It is indeed inappropriate for those whose work the Audit Office has to evaluate to decide on the resources needed to carry out such evaluation.
The Auditor General submitted his reports to the Minister of Finance for laying in the National Assembly. This gives the impression, especially in the eyes of international funding agencies, and quite justifiably, that there was a reporting relationship with the Minister. Any Auditor General functioning under this arrangement will find it difficult to be as critical as he/she would have liked to be of the operations of the Government. Although the Minister could not make any changes to the Auditor General’s report once it was issued, he/she could choose to delay the report’s presentation to a more politically opportune time. There was no timeframe within which he/she was required to table the report, and there were instances of undue delays in doing so.
The Audit Office was restricted to producing one annual report only for the National Assembly. It could not have selected certain areas for in-depth performance audit review and reporting the results separately. The records will again indicate the battles between the Government and the Audit Office for a changed arrangement.
With the passing of the Constitutional Amendment Act of 2001 and the Audit Act of 2004, the Audit Office is delinked from the Public service and is no longer part of the Executive. However, to ensure that mechanisms are in place for its own accountability, the Public Accounts Committee exercises general supervision over the work of the Audit Office, especially as regards its budget and the ratification of senior appointments. In addition, the Auditor General submits his/her reports directly to the Speaker of the National Assembly, and the Audit Office is now free to select areas for more comprehensive reviews and to report separately on them. Finally, the Audit Office’s own operations are subject to an independent evaluation by a private auditing firm.
To be continued
