Introduction
Last week, we looked at the limitations to the effectiveness of the Audit Office as highlighted in the Guyana 2012 Human Rights Report and discussed the possible causes which we identified as follows:
● The Public Accounts Committee (PAC) needs to expedite its work and issue its reports in a timely manner. This is necessary for the Treasury Memorandum to be issued, setting out what actions the Government has taken or proposes to take in relation to the PAC’s findings and recommendations. The last Treasury Memorandum to be issued was in respect of 2008, and therefore the recommendations would have been overtaken by time. A review of past memoranda also indicates a similar pattern in terms of timeliness, and many of the responses were vague and generalized;
● Apparent lack of serious commitment by the Government to address the deficiencies and discrepancies in public financial management that were identified; and
● The Audit Office’s failure to capitalize on its semi-autonomous status to upgrade the skills of its officers that are needed to produce high-level reports with good quality findings and recommendations. This is despite all the reform initiatives as well as institutional strengthening undertaken over years and the offer of competitive salaries to attract and retain qualified and experienced persons.
Today, we examine the French model of state audit and consider whether we can adopt some aspects of it in addressing the concern raised in the above-mentioned report.
Brief historical background
The French equivalent of our Audit Office is the Cour des Comptes of France, or the French Court of Accounts. About one-third of state audit institutions worldwide use this model, mainly in Europe, Africa and South America. The court system can be traced to the 13th century with responsibility for monitoring royal revenue and expenditure. A distinguishing and unique feature is that the Court not only passed rulings on the accounts in terms of legality and propriety but it also carried out prosecution, and imposed penalties and fines.
In 1807, Napoleon established the present Court of Accounts in the aftermath of the French Revolution after decades of decay, deterioration and the absence of accountability in relation to the state’s accounts. Over the last two centuries, the Court underwent gradual changes in recognition of the principle embodied in article 15 of the Declaration of Human and Civic Rights of 26 August 1789: Society has the right to ask any public official to account for his administration.
Today, members of the Court are independent magistrates appointed by the President. They enjoy security of tenure of office. If they are of the opinion that the transactions they have reviewed are legally in order, the officials concerned are discharged from further liability. If not, they impose penalties or fines through the issuing of judgments on: (a) financial transactions undertaken in compliance with the written code; and (b) decisions by managers on budgetary and financial discipline.
The magistrates have diverse skills in law, accounting and auditing and most of them are recruited from the École nationale d’administration (ENA) which is responsible for training top French civil servants. The magistrates are assisted by reputable auditing firms on financial audits as well as by experts in customs and taxation on revenue matters.
École nationale d’administration
The interim administration of Charles de Gaulle created ENA in 1945 in the aftermath of World War II to strengthen the French civil service through “a transparent procedure and without any suspicion of political or personal preferences”. The system is based on academic proficiency and competitive examinations both in terms of the selection of students and during the course of their studies. The period of study is 27 months including a 12-month internship. ENA is ranked ninth among institutions of higher education worldwide.
Students who have performed exceptionally well in their written and oral examinations are allowed to choose the institutions at which they would like to be employed. Not surprisingly, most of them tend to choose the French Court of Accounts.
Many auditors, senior diplomats and politicians are graduates of ENA. French law makes entry into politics simple, since officials do not have to resign, and they can easily return to their positions in the Civil Service or industry. Some serve as aides to ministers and other politicians thereby making it easy to transition into politics.
The mandate of the Court of Accounts
The Court assists Parliament in controlling Government’s action. It also assists Parliament and the Government in enforcing finance laws and in implementing laws on the financing of social security as well as in assessing public policies. In addition, the Court contributes to informing the citizens through its public reports.
The Court issues several annual reports, including:
● a report on the fiscal balance and enforcement of finance laws;
● a report on the situation and prospects of public finance;
● reports on Social Security; and
annual audit opinion of the state’s accounts.
The Court’s audits involve: (a) examining the regularity, efficiency, and effectiveness of the management of state agencies as well as their public policies; and (b) certifying the financial statements of the accounts of the State as well as Social Security accounts in terms of fair presentation. The Court may produce reports at Parliament’s request, but no more than about 15 such reports can be requested per year. It also publishes an annual report that highlights the results of the audit for about 20 cases. In addition, the Court issues letters to ministers on a regular basis highlighting specific issues uncovered. These letters are made public after two months. Four to six thematic reports are also released every year.
Organisation of the Court
The Court consists of seven presidents for each chamber responsible for a specific area such as health or education, in addition to the head who is the First President. Decisions are made collegially when the members of the Court or the chamber concerned are gathered, and there is a right to respond.
The General Prosecutor’s Office provides advice on, among others, the Court’s organization, the chambers’ remits, rules of procedure, and work programmes. It also monitors the enforcement of the Court’s work. All reports are officially sent to the General Prosecutor’s Office to check their conclusions, especially the completion of the fair hearing process and the verification of the procedures before the collegial deliberation. The office also acts as an intermediary with other judicial authorities when criminal follow-ups are considered.
Relationship with the legislative and executive branches
Unlike the Westminster model, the Court is independent of the Parliament. It is also independent of the Executive and formulates its own annual plans and audit programmes which are debated and decided on collegially by the seven presidents. In addition, the Court decides on what to publish and what form it should take. However, Parliament can also request annual reports on specific topics.
The Court’s budget is aligned to that of the Prime Minister and not the Ministry of Finance, and negotiations involving the Court, Parliament and the government take place every three years on the level of resources needed. The Court then decides on its organization and the allocation of its budget without any external interference.
Conclusion
There are certain good features of the French model of state audit that are worth considering in any attempt to enhance the Guyana Audit Office’s effectiveness. There is the need to attract and retain quality staff not only for the Audit Office but also throughout the Public Service. Perhaps a Guyana version of the École nationale d’administration would be a worthwhile reform initiative. Pakistan also has a public service training institute for its public servants, and the same applies to several other countries.
Unless the Audit Office is staffed with highly trained and skilled officers to assist in the production of quality reports, its findings and recommendations will continue to be mundane. Consequently, the rate of implementation of its recommendations will continue to be low, and the Audit Office’s effectiveness will remain an elusive concept.
The powers of prosecution may be premature to consider at this time. However, the apparent ineffectiveness of the work of the Public Accounts Committee to force the Government to act in a timely manner on not only its recommendations but also those of the Auditor General, raises the question: What other mechanisms are there to force the Government to address expeditiously the deficiencies and discrepancies in public financial management?
The Audit Act 2004 provides for the Audit Office to publish the responses of the various government agencies to its findings and recommendations. In most cases, the responses were unsatisfactory and did not address the specific issues raised. In the haste to meet the deadline, the Audit Office appears to take a mechanical approach of including the responses in its report without evaluating their appropriateness. Had it done so, there would have been an outright rejection of most of the responses. This is also a major contributor to the limitations to the effectiveness of the work of the Audit Office. We eagerly await improvements in the next round of the Auditor General’s report.
