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The ongoing saga of the auditor general and the understatement of the country’s revenue reveal the quality of our leaders.
Did Dr Keith Rowley exhibit due diligence in approving the nomination? We have long harped on the notion of seniority in promoting leaders. But is that the best approach?
Photo: OPM
In the case of the incumbent auditor general, she had acted several times and was in the position since July 2023. What did he see that commended her to be appointed? What has given rise to what he now calls ‘unnecessary bacchanal’?
The former auditors general have served us well, so we should ask what is different about this person. It is difficult for the public to assess since this incumbent did not appear before the Public Accounts Committee (PAC) on the last two occasions the Auditor General’s Department (AGD) presented its annual report.
Based on the last two presentations before the PAC, it is fair to assume that the accounting officers were gaining a better appreciation for what the AGD needed.
The struggles with the manual data entry and bookkeeping systems gave rise to the irregularities noted. The exit meetings and the management letters mainly centred on the inadequacy of the manual data entry system.
It was acknowledged that the Ministry of Finance supported resolving the AGD’s needs. The AGD’s Lead in that November 2023 meeting indicated that pre-planning meetings for the 2023 audit required three months of work.
Under chairman Dave Tancoo, the PAC highly praised the AGD’s work for the audit year 2022. There was no dissent.
(Copyright Office of the Parliament)
Auditor general Ms Lorelly Pujadas, in 2022, identified the significant risk areas as revenue collection and the Works Ministry’s expenditure. That discussion also noted the slow implementation of the Integrated Financial Management Information system. This initiative had stalled by the time the PAC met in 2023.
It was pointed out in both years that the Board of Inland Revenue impasse regarding revenue disclosure had not been resolved.
The discovery of the significant underreporting of revenue triggered the Minister of Finance and the Auditor General to rash actions.
Photo: Office of Parliament 2023
If the AGD had followed best practices in public accounting, the Auditor General would not have escalated the dispute. This dispute would have been handled at the engagement manager’s level.
The auditor general’s role is to engage with key players such as accounting officers, accounting authorities and executive authorities to avoid or settle judicial processes that may unfold once the audit dispute remains unresolved at that level.
The Finance Minister should not have gone on his initial trip to Parliament except to ask for a change in reporting dates. No description of actions by any party was needed. What was his brief to the Attorney General?
(Copyright Office of the Parliament 2023)
Why did the Attorney General advise the Auditor General to seek legal advice elsewhere? What did he know that we do not? Did he not remember that he has a dual responsibility in that position?
He has a governmental role and a role as the guardian of the public interest. How was the public interest to be served in this incident?
He may have seen the issue as a narrow constitutional point. But did he not expect that, given the precedent with the chief parliamentary counsel, the Auditor General would not have engaged Ramesh Lawrence Maharaj or Douglas Mendes, our leading constitutional lawyers?
The battle was destined to be fought in the court of public opinion.
Much has been made of the constitutional independence of the auditor general. However, it should be noted that “a very effective supreme audit institution combined with a weak parliamentary accounts committee cannot have any significant impact”. (All quotes, INTOSAI, the global public accounting body.)
The stark reality is that our PAC is weak in understanding its role and that of the AGD relative to the Parliament. Follow-up on outstanding matters is virtually non-existent.
How can the sitting PAC chair, Mr Dave Tancoo, believe he can chair future discussions when he has publicly adopted the yet-to-be-proven backdating position alleged by the Auditor General’s lawyers? Has reason fled?
“Independence does not mean an adversary relationship… Collaborative spirit must be the governing rule. Good relations can help […] to obtain better results.
“Independence is not only a privilege – it also entails obligations and should not be viewed separately from other values, such as transparency, accountability, ethics, and quality.”
(via OTP)
Has the Auditor General adhered to this guidance?
The Lima Declaration asserts that absolute freedom is impossible in the context of political, legislative and administrative constraints. The auditor general cannot be completely independent because it is a part of the state.
Given her lawyers’ free-ranging forays, has the Auditor General become a political actor?
Given the potential impact of this unresolved situation, the nation is at risk in its dealings with the multilateral institutions. Do these dealings preserve the reputation of the financial system? Is the public being enlightened or misled?
None of our leaders covered themselves in glory.
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