Before proceeding with today’s article, I refer to the comment by parliamentarian Juan Edghill in connection with the forensic audits being conducted at various government agencies and departments. The Government had correctly stated that the auditors do not need practicing certificates from the Institute of Chartered Accountants of Guyana because the audits do not require expressions of opinion on the financial statements of the concerned entities. Mr. Edghill, however, contended that “…yet every day we are being treated to an opinion or recommendation being reported in the press”.
Every entity (whether incorporated under Company Law or by specific legislation) has to appoint external auditors whose responsibility it is to audit the annual financial statements prepared by management and to express an opinion of their truth and/or fairness in compliance with applicable laws, regulations and circular instructions. In contrast, the forensic audits being conducted are not directed towards a set of financial statements. Rather, they are to a large extent managerial in nature, and it obvious that emanating from these audits would be a set of conclusions and recommendations to remedy any shortcomings identified. The forensic audits are not internal audits but are dedicated studies conducted by experts external to the organization. In accordance with Section 4(3) of the Audit Act, the Minister of Finance may request the Public Accounts Committee (PAC) to cause an additional audit to be conducted by an auditor other than the Auditor General. Suffice it to state that at the time the decision was taken to conduct these audits, no PAC was in place.
Mr. Edghill sought to question the competence of Minister Sharma to oversee the forensic audits. While he is not a qualified accountant, Minister Sharma displays a deep understanding of auditing, having worked in the Audit Office during my tenure of office. In my discussions with him on the results of the forensic audits that I have undertaken, Mr. Sharma has displayed a remarkable degree of sharpness. When asked about this source of sharpness, he reminded me that he was a member of the Public Accounts Committee.
There was a letter to the editor of another newspaper from the Accountant of the 2007 Cricket World Cup Inc. in which he sought to defend the former Minister for the statement the latter had made in relation to the removal of the qualifications on the accounts of the World Cup. Suffice it to state that after eight years the audit of these accounts are yet to be finalized. NICIL had embarked on a meaningless exercise of preparing consolidated accounts involving itself and the public corporations that were vested in it. Since 2006, no further progress had been made because, among others, the World Cup accounts were yet to be finalized.
Last Thursday, the National Assembly convened mainly to consider three pieces of proposed legislation, namely, the Municipal and Local District Councils and Local Authorities (Elections) (Amendment) Bill; the Anti-Money Laundering and Countering the Financing of Terrorism (Amendment) Bill; and the Anti-Terrorism and Terrorist Related Activities Bill. The Government had indicated that it would request a suspension of the Standing Orders to enable all stages of these Bills to be dealt with in one sitting because of the need to have the Bills passed before year-end.
Prior to the convening of the Assembly, concerns were expressed about the apparent haste in having these Bills passed. The Opposition contended that the Bills were not circulated in time to enable them to go through the contents so as to make a meaningful contribution to the debate.
The Guyana Human Rights Association (GHRA) and the Private Sector Commission (PSC) have also had cause to criticize the Government’s action, especially as regards the Anti-Terrorism and Terrorist Related Activities Bill.
Municipal and Local District Councils and Local Authorities (Elections) (Amendment) Bill
When the Minister of Communities rose to present the above Bill, the Opposition walked out of the Assembly and only returned to their seats when the Bill was passed. However, there appeared nothing contentious in the Bill that warranted such action, considering that Local Government Elections are scheduled to take place in three months’ time. The Bill merely sought to amend the Municipal and District Council Act to provide clarity regarding its application with respect to the new local government system. It also sought to amend the Local Authorities (Elections) Act to ensure consistency in its application vis-à-vis the Municipal and District Councils Act and the constitutional requirements relating to Local Government Elections.
The last Local Government Elections were held in 1994 although the law requires them to take place every three years. Therefore, for 21 years, citizens were denied their constitutional right to determine who amongst them should be responsible for managing the affairs of their communities. When the previous Administration was not satisfied with the performance of elected members of the Neighbourhood Democratic Councils and Municipal & District Councils, it replaced them by handpicked loyalists. It is public knowledge that local government administration is in a state of complete disarray, especially as regards financial accountability which has been the subject of several articles in this column. It is against this background, and to restore some measure of respectability in our system of local governance, the Opposition should have rendered whatever support was needed to facilitate the long overdue Local Government Elections. Thursday’s walkout has sent mixed signals about the Opposition’s commitment to ensure that a thriving and vibrant system of local democracy is in place.
Anti-Money Laundering and Countering the Financing of Terrorism (Amendment) Bill
The Opposition staged a similar walkout exercise when the Minister of Legal Affairs introduced the above Bill in the Assembly. It will be recalled that the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Act 2009 was found to be deficient in many respects. As a result, the Caribbean Financial Action Task Force (CFATF) had requested Guyana to remedy the deficiencies to bring the Act in line with international best practice.
The extent of the amendment was subject to intense disagreement between the then Administration and the political Opposition, with the former insisting on minimal changes to remedy the deficiencies identified by CFATF while the latter insisted on a comprehensive amendment in view of the extent to which drug trafficking and money laundering were perceived to have existed in the Guyanese society. Drug trafficking is linked to money laundering which fuels organized crime and corruption. The disagreement was not resolved at the time of the 11 May 2015 National and Regional Elections.
When the new Administration took up office, one of its first tasks was to effect the long awaited amendments to the Act. Two important aspects of the amendments relate to the creation of an Anti-Money Laundering Authority to provide for oversight of the Financial Intelligence Unit (FIU) and for the ratification of the appointment of its head by the National Assembly. The objective is to insulate the FIU from political interference and direction, and to this extent the amendments represent a significant improvement. However, from the perspective of the CFATF, more improvements needed to be made, hence the proposed amendments.
According to the Minister of Legal Affairs, there were three main issues that needed to be addressed more comprehensively (customer due diligence; ownership of legal entities; and targeted financial sanctions) and that the Act did not adequately address the identification, and listing and freezing assets of persons identified as terrorists. The proposed amendments sought to, among others:
- Redefine the term “beneficial ownership”;
- Require a reporting entity to identify and verify the identity of a customer when establishing a business relationship;
- Reduce the period from seven days to five days within which the DPP has to apply for a freezing order;
- Provide for an application for a freezing order to be made ex parte to a Judge in Chambers;
- Provide for a Judge granting the freezing order to apply the standard of proof on the balance of probabilities;
- Require the DPP to immediately serve on the reporting entity a copy of the freezing order and to make an ex parte application to the High Court for a freezing order; and
- Make it clear that gold smuggling is a serious offence under the second schedule;
Regrettably, the Bill had to be dealt with in all its stages without any contribution from the Opposition.
Anti-Terrorism and Terrorist Related Activities Bill
After the above Bill was read for the first time and before the debate on it was to begin, the Opposition MPs staged a third walkout on the grounds that there were inadequate consultations with key stakeholders and that the criteria for the proposed suspension of the Standing Orders to facilitate dealing with the Bill in all its stages were not met. Ms. Gail Teixeira made some very valid arguments against the proposal and felt that the Bill should be referred to a Select Committee for detailed contribution.
GHRA was vociferous in its criticisms about the lack of effective consultations on the Bill, citing some 30 recommendations for amendments to the Bill, none of which were taken on board. It contended that in its present state, the Bill “would allow the State to perpetrate serious violations of due process and fair trial rights and should not be allowed to pass into law.” The PSC also bemoaned the lack of consultations with the business community. The Government was, however, quick to point out that the Bill was sent to the PSC which did not offer any comments.
In the end, good sense prevailed, as the Government decided to abandon attempts to have all the stages of the Bill dealt with in one sitting. All of this could have been avoided had there been prior and proper consultations with key stakeholders. From now on, we will hold the Prime Minister to his words in relation to future matters:
We agree after listening, reading some of the positions taken that more time is needed for civil organisations to study the bill then we on this side would be prepared to oblige… This is how democrats behave, we listen, we learn and we make decision.
