Introduction
The media recently carried a statement from the acting Auditor General that there is provision for him to continue in office until he would have reached the age of 65. He is 54 years old and has been acting in the position for the past seven years. However, his substantive position is Senior Deputy Auditor General (now Audit Director) which is a public service appointment with a retirement age of 55.
There are many companies that are owned by the State or where controlling interest vests with the State. Questions have also been raised about the acting Auditor General’s eligibility to audit the accounts of these companies in view of the fact that he is not a professionally qualified accountant.
Today, we examine these two issues from a constitutional/legal perspective as well as through a comparison of current trends in other countries. We will also consider whether the time has not come for setting term limit for the Auditor General.
Constitutional/legal requirements
Article 223(1) of the Constitution states that there shall be an Auditor General for Guyana, whose office shall be a public office. Implicit in this, is the requirement for a substantive appointment. Any acting arrangement in the event of a vacancy should be as short as possible, usually not more than six months, to allow for the selection of a suitable candidate for the post. For example, the late Mr. Farnum retired on 16 September 1990 as Auditor General of Guyana, and I acted as Auditor General for a little over three months before I was substantively appointed.
Once a substantive appointment is made, the Auditor General serves until age 65. Prior to 1980, the retirement age was 55. However, the successive administrations of former Presidents Burnham and Hoyte amended the related legislation to lift the retirement age first to 60, then to 65.
The Constitution is silent on the qualification requirements though the expectation is that the person so appointed would ideally be a professionally qualified accountant with several years’ experience at a senior level in auditing or accounting, preferably in the public sector. This is reinforced by the fact that the Companies Act requires the external auditor of a company to be a member of the Institute of Chartered Accountants of Guyana and in receipt of a practicing certificate from that body.
The Audit Act provides for the Auditor General’s compensation package to be the same as that of the Chief Justice. Recently, the salaries of both the Chief Justice and the Auditor General were brought in line with that of the Chancellor, making them the highest paid public servants, excluding some contracted employees. This implies that the level of remuneration offered must be commensurate with the Auditor General’s qualifications and experience. For example, the Indian Auditor General, Mr. Vinod Rai, has Masters’ degrees in Economics in India and Public Administration from Harvard University. He was also Secretary in the Ministry of Finance, a director on several State boards, and Principal Secretary (Finance) in the State of Kerala, among others.
Current situation in
the Audit Office
The position of Auditor General has been vacant since 2005, and the Senior Deputy Auditor General has been performing duties as Auditor General since then. This is a breach of the Constitution, if not in fact, in spirit. This apart, the continued acting arrangement militates against the Auditor General’s ability to be as critical as he would have liked of the operations of the Government since he is dependent on the Executive for a continuation of his acting appointment and perhaps in the hope that he will obtain a substantive appointment. For example, his reports over the years contain only three significant findings: the abuse of the use of the Contingencies Fund, without a detailed review of the related transactions; over-payments to contractors; and the procurement of drugs and medical supplies from the New GPC. These are not new findings but rather those of his predecessor.
It is therefore an independence issue so vitally important in the field of auditing. Independence of those whose work has to be evaluated is a fundamental audit principle. The acting Auditor General will therefore be hard-pressed to invoke Article 223 (4) of the Constitution requiring him not to be subject to the direction or control of any person or authority in the exercise of his duties. We saw how he overlooked his constitutional role and teamed up with the Executive in heading a task force to look at the Polar Beer fraud, the results of which were far from satisfactory in the eyes of the public.
We have also seen how the acting Auditor General accepted without any form of protest the unsolicited opinion of the Attorney General on the Lotto Funds and ceased reporting on the failure to pay over the proceeds into the Consolidated Fund and the incurrence of expenditure without Parliamentary approval. A similar situation exists in respect of NICIL where he seemed to have concurred that the Management Co-operation Agreement between the Privatisation Unit of the Ministry of Finance, NICIL and the Government of Guyana, could override the law and the Constitution. This resulted in the diversion of billions of dollars in proceeds from the sale of State assets into the coffers of NICIL instead of being paid over to the Consolidated Fund. In addition, we are yet to hear about the results of any review of the expenditures of the Cricket World Cup, the 2005 Flood Relief, Carifesta, and a host of others. Perhaps the most significant issue relates to the conflict of interest that exists in the Audit Office since 2006, which the acting Auditor General also seems incapable of resolving.
The acting Auditor General will attain the age of 55 in a few months’ time, and in keeping with the Pensions Act, he is obliged to retire then. Retirement age and superannuation benefits are based on substantive appointments and not acting ones. Section 17 of the Audit Act states that officers and employees of the new Audit Office are no longer public officers, and service within the Audit Office shall not be pensionable service for the purposes of the Pensions Act. They shall receive superannuation for pensionable service prior to the date of coming to effect of the Act on attaining the age of 55. Within the framework of the budget, the Auditor General may make provision for payment of pension, gratuity or other allowance thereafter.
The acting Auditor General therefore has to demit office very soon unless he is substantively appointed before he reaches 55. However, the latter is unlikely since he only has a Bachelor’s degree in accounting from the University of Guyana. He did attend a nine-month fellowship programme in the Canadian Audit Office, which, though useful, hardly counts as a formal qualification. In addition, his performance over the last seven years as the watchdog of public accountability, indeed the eyes and ears of the taxpayer, has also not been one of which the public can feel proud.
Setting term limit for the
Auditor General
Because of the two extensions to the retirement age of the Auditor General, Mr. Farnum served for 21 years from 1969 to 1990. I was appointed Auditor General at age 41, and had I not opted for early retirement, I would have served for 24 years. It is clearly undesirable for someone to serve for so long in such an important constitutional position, and in the Guyanese context, the risk of political alignment and ostracism is significant.
It is mainly for this reason that the current trend in other jurisdictions is for setting term limits. For example, the South African Auditor General cannot serve for more than seven years while in Canada, it is ten years. India also has a term limit of six years. At the United Nations, members of the Board of Auditors serve for a term of six consecutive years not immediately renewable, while the term of appointment of the Head of the Internal Oversight Services of the UN is five years.
Term limits do enhance the independence of the Auditor General in that he/she brings to bear on the work of the Legislative Audit his/her professional training and experience without fear of any attempts to restrict his/her ability to discharge his/her responsibilities. The Auditor General gives of his best, tries to leave a lasting legacy, and makes way for someone else to carry the torch.
Conclusion
It is clear from the above that a new Auditor General needs to be appointed within the next few months. However, before the appointment is made, it would be preferable for the relevant legislation to be amended to provide for qualification requirements as well as a restriction in the tenure of office, preferably ten years.
Since the Auditor General serves the Legislature and not the Executive, it would be necessary for the National Assembly to have a say in the selection process. In this regard, the relevant legislation should be amended to allow the Public Accounts Committee to select three candidates from Guyanese applicants, home and abroad, in response to a public advertisement. This will enable the President to make the appointment which should be subject to the approval of two-thirds of the elected members of the National Assembly. In this way, the appointed official enjoys the full confidence of the Legislature.
