In this letter I will seek to conflate two issues involving the President and the Auditor General (ag), Mr Deodat Sharma, which taken together convince me that neither of them understands key provisions of the constitution or the Audit Act 2004, hardly a trivial issue. My conclusion is based firstly on a report in the Stabroek News of January 13, 2009 under the caption ‘Customs workers facing forensic audit as bribery probe widens,’ in which Mr Sharma is quoted as saying that the process of a forensic audit into the assets of employees at the Customs and Trade Administration (CTA) needs to be thorough since, “President Bharrat Jagdeo would expect nothing less.” The second is also an article in the same newspaper of January 20, 2009 in which questioned about the commissioning of a report into the related Customs bribery probe, President Jagdeo is reported as saying that this particular report was “a bit different than the routine annual audit,” while Mr. Sharma said it was “unlike regular reports from his Office.”
Regarding the first issue, both the President and Mr Sharma need to be reminded that the constitution makes the Audit Office “not subject to the control or direction of any person or authority.” It goes without saying that that includes the President.
The Audit Act 2004 provides for two types of audit – financial and compliance audits and performance and value-for-money audits (under section 24 (1)) while section 24 (2) provides for the scope of work and broad methodology for the two types. Section 25 of the act sets a deadline of September 30 for submission of the Auditor General’s report on the consolidated financial statements and accounts of budget agencies, while section 26 provides that, “During the year, the Auditor General may choose to conduct special audits and at his discretion prepare special reports when such audits are completed.”
Where the Auditor General and the President fall into error with the President saying it was a debating point, is the scope of section 28 which provides as follows: “The Auditor General shall [N.B. not may], in accordance with article 223 of the Constitution, submit his reports to the Speaker of the National Assembly, who shall cause them to be laid before the Assembly.” That section refers to all reports and “whether it goes through the Speaker or Minister of Finance” as the President said, is more than semantics or a procedural issue. It is the result of a constitutional amendment designed to strengthen the independence of the Audit Office so that he reports not to the executive but to the National Assembly. Sadly, neither President Jagdeo nor Mr Sharma seems to appreciate the distinction.
To any reasonable person it must be clear that together the constitution and the Audit Act make the issuing of instructions by the President to the Auditor General to undertake an investigation into the Fidelity fraud allegations, to carry out so-called forensic audits of the assets of the employees of the CTA and the submission of reports by the AG to the President, unconstitutional and unlawful. After the sterling work done by his predecessor, Mr Anand Goolsarran, Mr Sharma is allowing President Jagdeo to bring the Audit Office into disrepute and it only takes a legal action by any officer called upon to submit to Mr Sharma’s “forensic audit” to have the whole process thrown out. In no country but Guyana would the head of the state audit with responsibility to audit often complex transactions in excess of two hundred billion dollars not hold a professional accounting qualification. One of the reasons for such a requirement is that the holder is subject to a professional code of conduct regulating the quality of his work and the integrity and independence he displays.
It is not that Mr Sharma has time on his hands or no work to do. In a review of the ‘Report of the Auditor General on the public accounts for the year 2006’ carried in Sunday Stabroek’s ‘Business Page’ of August 24, 31 and September 7, 2008, I pointed out some glaring weaknesses − errors of omission and commission of a professional nature in the work of his office. Perhaps a few examples drawn from those columns would suffice. The full articles are available on the Stabroek News website or at ChrisRam.net.
1. That the report did not mention the failure by the Privatisation Unit/NICIL to account for hundreds of millions of dollars, a fundamental breach of the constitution that ranks and rankles with the infamous Lotto Funds;
2. $6.513 billion advanced from the Dependants Pension Fund Deposit Fund at December 31, 2006 not being substantiated while the old Consolidated Fund bank account NO 400 had not been reconciled since 1988;
3. The failure by the Audit Office to report on the financial statements of entities in which the Government has a controlling interest;
4. Non-reporting of the hundreds of millions of flood funds which Mr Sharma had promised more than three years ago;
5. No report on concessions granted under the Investment Act, 2004, including the illegal concessions granted to Queens Atlantic Investment Inc, the saga of 2008;
6. No audit report on World Cup Cricket even as another cricket spending spree is planned next year.
The Guyanese public is accustomed to being misled by fancy-sounding but uninformed statements by public officials, some of which confuse even lawyers of the main opposition parties. The statement about forensic audit falls in that category when looked at against the quality of work referred to above and the persistent failure by the Audit Office to carry out its mandate. Mr Sharma it seems prefers to dabble in matters improperly referred to him by the President while neglecting his constitutional and statutory responsibilities such as his report for 2007 on the public accounts, already overdue by several months, and any value-for-money audits.
The Minister of Finance is a former Deputy Auditor General who served under Mr Goolsarran, and the government must therefore be aware of the several professional and personnel limitations of the Audit Office and those who control it. But since the government transacts business involving billions of dollars, often outside the norms of proper accounting, the constitution and the Financial Management and Audit Act, it is unlikely that it would like strong and independent oversight of such spending. So, really it is convenient for the government to have someone like Mr Sharma heading the Audit Office. In addition, the wife of the Senior Minister of Finance is employed as the only professionally qualified accountant in the Audit Office. By definition she is not independent and it is absolutely incompatible for her to be in the Audit Office while her husband is Minister of Finance.
To allow such serious farce in the Audit Office in my view shows contempt for the people of our bleeding country. All the talk of forensic audit is meaningless. On top of all of this, the parliamentary oversight body, the Public Accounts Committee seems completely out of its depth. Do Guyanese really deserve this?
I will deal with the President’s uninformed and misguided call for “MP’s to declare assets within two weeks or face the courts” in later correspondence.