Serious conflict of interest around Ashni Singh, wife -transparency body tells OAS

Transparency Institute of Guyana Inc (TIGI) on Tuesday told a visiting Organization of American States (OAS) team here for a review of Guyana’s actions under the Inter-American Convention Against Corrup-tion that there is a serious conflict of interest around Finance Minister, Dr Ashni Singh and his wife which must be resolved.

In its submission, TIGI also called for the Audit Act of 2004 to be amended to include qualification requirements for the appointment of the Auditor General. It said that the Auditor General is required to audit annually the public accounts of Guyana and to submit his reports to the National Assembly.

“The Constitution defines the public accounts to include: (a) all central and local government bodies and entities; (b) all bodies and entities in which the State has controlling interest; and (c) all projects funded by way of loans or grants by a foreign State or organization.  The Auditor General’s mandate is therefore very wide and the task is highly complex technically, professionally and otherwise, requiring the services of a highly trained, skilled, competent and respected person with a proven track record to serve as Auditor General,” the TIGI submission said. “This is why the Auditor General’s salary, superannuation, benefits and other conditions of service are commensurate with those of the Chief Justice, recently upgraded to those of the Chancellor of the Judiciary. In addition, the Auditor General needs to be supported by a well-resourced, competent, efficient and effective Audit Office,” TIGI said.

The body noted that while the current Auditor General has been making some efforts to discharge his responsibilities, he has shortcomings. “He is not a professionally qualified accountant although he is required to supervise the work of Chartered Accoun-tants in public practice contracted by him. In addition, unlike several other countries, there are many State-owned/controlled companies, statutory bodies and public corporations for which the Auditor General has audit responsibility,” it said.

“However, the Companies Act requires the auditors of companies to be issued with practising certificates from the Institute of Chartered Accountants of Guyana before undertaking the audits of companies. Since he is not a professionally qualified accountant, the Auditor General is not in possession of such a certificate. Regrettably, neither the Constitution nor the Audit Act 2004 specifies qualification requirements for appointment as Auditor General,” TIGI said.

The body said that the effect of not having a suitably qualified person to serve as Auditor General is the inability to attract and retain suitably qualified and trained persons to serve under him or her. “This would therefore have an adverse effect on the quality of the work undertaken and the reports issued,” TIGI said. “To a large extent, this is true of the Guyana Audit Office, as many of the findings are routine findings resembling those of internal audit,” TIGI said, noting that several significant issued on national importance are given “superficial treatment or are avoided in their entirety.”

“TIGI recommends that the Audit Act be amended to include qualification requirements for appointment as Auditor General. The person to be appointed should possess at least a professional accounting qualification such as the ACCA (UK), CPA (USA), CGA (Canada). He or she must also have appropriate experience in an external audit environment at a very senior level, preferably at the level of a partner of a reputable chartered accounting firm. Alternatively, in addition to having an advanced degree in one of the related disciplines – accounting, finance, economic and public management – the person should be an expert in public finance and administration,” TIGI said.

Noting as well that the current holder of the post at the helm of the entity acted in that position for over seven years, TIGI recommended that the Audit Act 2004 be amended to make it a requirement that in the event of the position of Auditor General being vacant, any acting arrangement should not exceed six months.

 

PAC

 

It also recommended that all future appointments for Auditor General be based on a recommendation from the Public Accounts Committee (PAC). “In this regard, the Committee could propose three candidates from which the President makes a selection, subject to ratification by two-thirds of the membership of the National Assembly,” the TIGI submission said.

TIGI also pointed out to the OAS reviewers that the conflict of interest situation that currently exists must be rectified. “The Minister of Finance is responsible for preparing, certifying and submitting the public accounts of Guyana to the Auditor General for audit. His wife is, however, the only professionally qualified accountant in the Audit Office and holds the position of Audit Director which is the next level position below the Auditor General,” the body said.

“Given that the Auditor General is not a professionally qualified accountant, the general view is that wife of the Minister is the de facto head of the Audit Office. In addition, she has overall responsibility for the audit of public enterprises of which the National Industrial and Commercial Industries Ltd (NICIL) is one such entity,” said TIGI. “The Minister of Finance is the Chairman of NICIL. The operations of NICIL are shrouded in controversy involving the vesting of State properties and other assets, their disposal and the retention of the proceeds to meet expenditure in complete violation of Articles 216 and 217 of the Constitution,” it said.

“We view this situation as a serious conflict of interest,” said TIGI. “TIGI recommends that the Auditor General, in collaboration with the Government, take appropriate measures to remove the conflict of interest that has been existing in the Audit Office since the appointment of the Minister of Finance in 2006,” it said. “This could be done by re-assigning the Minister to another ministerial portfolio, or if this is not considered desirable, having the concerned officer relocated to another State-owned/controlled entity,” TIGI said.

TIGI also recommended that consideration be given to revising the timetable for the various activities, from budget preparation and approval to the issuance of the Treasury Memorandum, so as to facilitate the National Assembly’s more informed consideration of the National Estimates and approval before the fiscal year begins.

TIGI recommended too that that the PAC’s examination of the public accounts be extended to include all statutory bodies, public enterprises and other bodies in which controlling interest vests with the State.

The body recommended that the term of office for members of the NPTAB be extended to three years and that no member should serve for more than two consecutive terms. It also recommended that to the extent that the Cabinet retains the right to review all procurements in excess of $15 million, the Minister of Finance should divest himself from the appointment of members of the NPTAB and its reporting relationship to him. “In the circumstances, it would be more appropriate for the PAC to appoint members of the NPTAB and to oversee its work,” said TIGI.

Further, TIGI recommended to the OAS that the PAC take urgent measures to advertise both locally and internationally for suitably qualified and experienced Guyanese in public procurement to express an interest in becoming a member of the Public Procurement Commission.

“Based on a system of short-listing and interviews, the five candidates should be selected for the President to make the appointment. Once the appointments are made, the names of the persons are submitted to the National Assembly for ratification,” the body said in giving its recommendation.

 

Contract employees

 

The body also brought to the reviewers the issue of contract employees and disclosed that on an overall basis, out of 18,809 employees, 3806 or 20 per cent are contracted employees. It said that for individual Ministries, Departments and Regions, the figure varies from five per cent for Region 4 to as high as 100 per cent for the Ministry of Natural Resources and the Environment.

“In terms of actual numbers, the Ministry of Health topped the list with 749 contracted employees, followed by Region 6 (284); the Georgetown Hospital Corporation (240); Ministry of Culture, Youth and Sport (222); and Ministry of Labour (214),” said TIGI.

It noted that the Office of the President has 156 contracted employees out of 238 staff, or nearly two-thirds, and their emoluments account for 88 per cent of the wages and salaries paid by that office. “Similarly, at the Ministry of Finance, contracted employees account for a little over 50 per cent (124 out of 236) and their emoluments represent 69 per cent of the wages and salaries,” the submission said.

It noted that an examination of the estimates of expenditure for 2012 indicates that there are over 22,000 authorised positions that fall under the jurisdiction of the three Service Commissions in terms of appointment, discipline and removal.

“TIGI recommends that the Government severely restrict the appointment of contracted employees. Where it is considered necessary to do so, the Public Service Commission should be involved in the recruitment of these employees and in the setting of their remuneration,” the submission of TIGI said. “The ultimate objective is to have a unified, open and accountable system in place for the hiring of all government employees,” it said.

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