Goolsarran stands by NICIL audit report

-says incorporated explanations by Brassington though hostile response created severe restrictions

Forensic auditor Anand Goolsarran yesterday defended his report on government’s holding company NICIL saying that the findings are backed by legal support and despite a hostile response from NICIL which placed a severe restriction on the audit, he tried his best to incorporate as many explanations as possible provided by the entity.

National Industrial and Commercial Investments Ltd (NICIL) Executive Director Winston Brassington on Monday defended his leadership of the entity saying he broke no laws and the audit report is not backed up with evidence. The damning report had recommended criminal charges and disciplinary action for breaching several laws.

“As far as I know, and in good faith, I have not broken any laws and if Mr Goolsarran is suggesting it, then I believe I have a clear defence on why what we did was properly done and we should not be held responsible and the only way this matter can be determined is if this matter goes to court and be heard and no one has ever challenged us,” Brassington had told reporters at a press conference at NICIL’s head office in Kingston.

Although the report which was obtained by Stabroek News and reported extensively on, had included some comments from NICIL, Brassington charged that the audit report did not take into account NICIL’s comments and sought to dismiss the findings. He had declared that Goolsarran’s comments were not backed up by evidence.

“A lot of what is being said by Mr Goolsarran are opinions of a legal nature which are not backed up by evidence. On the other hand, we have many years of practice where these things have been happening. We have legal opinions that state that we are within our jurisdiction to conduct these transactions, we have clean audit reports for many years which indicated that NICIL’s accounts were prepared in accordance with proper accounting standards, audited and we have clean opinions,” Brassington said.

Responding to Brassington yesterday, Goolsarran, a former Auditor-General defended his work, outlining the series of events that preceded his issuance of the final report.

He said the report to which Brassington referred is the final report and not a draft. He recalled that a preliminary draft report was issued on 30 September 2015, and a response was received on 19 October 2015.

“Although I was taken back by the tone and language of the response, I nevertheless remained calm; studied the response carefully vis-à-vis my findings, conclusions and recommendations; and made appropriate amendments to the report. On the basis of this, I prepared my final report and issued it to the Minister of Finance. The report was copied to the Minister within the Ministry of Finance, the Chairman of NICIL’s board and the Finance Secretary. It is therefore not true that NICIL did not receive of a copy of the report,” he said.

Brassington had said that a final draft was only presented to him last week.

Goolsarran related that in his transmittal letter to the Minister, he stated that a formal response to the report was expected with 14 days, and when received, it would be appended to the report and resubmitted to the Minister.


Hostile reactions

“Regrettably, as of today’s date, I am yet to receive the formal response. This approach was discussed and agreed upon with (junior) Minister (of Finance Jaipaul) Sharma, considering the hostile reactions of NICIL in relation to my findings, conclusions and recommendations. I have had several rounds of discussions with him in relation to the contents of the report,” he said.

“I have tried my best to incorporate as many explanations as possible provided by NICIL where, in my professional judgment, such explanations are considered necessary for a better understanding of the report and to ensure as far as possible that the report gives a balanced view,” he added.

The former AG noted that instead of focusing on the findings and recommendations, Brassington, chose to make “elaborate” and “demeaning” comments in relation to his selection to undertake the assignment, the methodology used, the structure of the report, and the findings, conclusions and recommendations.

“He then chose to attack me (the messenger) rather than dealing with the message, in the hope of destroying the credibility of my report. I am prepared to make available a copy of Mr Brassington’s response to any interested person/entity to attest to his attitude towards the draft report,” Goolsarran asserted.

He said that almost every finding was “vigorously” and “arrogantly” disputed, with comments such as “this is opinion and should be struck out from the final report” or “the forensic auditor is not qualified to pronounce on these matters”.

The former AG said that in all his career in auditing, he has never received such hostile reactions from any client, as in the case of NICIL, despite the fact that he extended all due courtesies in the conduct of the audit.

“Suffice it to state, there is always going to be some degree of disagreement between the auditor and the client, and it is incumbent on the latter to explain his/her position in the most courteous and professional way. Hostility and arrogance have no place in any relationship between the auditor and the client. In the final analysis, it is the auditor’s views that will prevail because he/she is external to the organization and because of the degree of independence, objectivity and professionalism that are brought to bear on the audit,” the former AG asserted.


Note takers

He said that he had a number of meetings with Brassington, and on each occasion he would have his senior management team present with their computers working away as well as persons who appeared to be note takers.

“Apart from the occasional comment from his Deputy, no one spoke at the meetings, except him. The atmosphere appeared to me very intimidating and was indeed not welcoming. No one was also allowed to provide any information to me without the approval of Mr Brassington. Once I had requested to see the organization chart of NICIL, and was told that the information could not be provided without such approval. Mr Brassington was overseas at the time. As a result of this state of affairs, a severe restriction was placed on the audit, and I had no alternative than to rely almost exclusively on the use of questionnaires to solicit information and to request documents. Even this approach presented some difficulty,” he said.

“As regards the contention that the report contains opinions that are not backed by legal support, especially as regards Articles 216 and 217 of the Constitution, the report is there for the public to draw their own conclusions,” Goolsarran said.

He added that Brassington indicated that NICIL had over the years the benefit of legal advice from five law firms but did not mention the names of the firms in question. Goolsarran said on the other hand, paragraph 4.2.18 of his report dealing with Article 216 referred to the fact that his conclusion was based on legal advice that he had received.

Further, he said in relation to Company Law requirements, Brassington referred to the opinion of a Chartered Accounting Firm in support of consolidation but he has identified the relevant section of the law where consolidation is not required. “I also referred to the “matching principle” and “substance over form” in support of my arguments. The issue is more of an accounting one rather than a legal one,” Goolsarran said.

He said that despite all the financial management issues raised in his report, Brassington contended that NICIL has been receiving clean audit reports over the years which he felt was conclusive evidence that finances of NICIL are in order.

In this regard, Goolsarran pointed to comments of the Transparency Institute Guyana Inc. in its column in yesterday’s Stabroek News.

The entity wrote that both former President Bharrat Jagdeo and Brassington have boasted that NICIL has been receiving unqualified (“clean”) audit reports and therefore nothing is wrong as regards the financial management of the entity and its financial reports. However, it said, this assertion is at complete variance with the results of the recently concluded forensic audit of the entity.

It also noted that there are several other issues namely that the spouse of the then Chairman of NICIL had overall responsibility for the audit of NICIL; the Chairman instructed that the audits of all public corporations vested in NICIL be contracted out to Chartered Accountants in public practice but the audit of NICIL must remain with the Audit Office where his spouse holds the number two position; as at September 2012, NICIL was ten years in arrears in terms of financial reporting and audit; and following a National Assembly resolution of June 2012 calling on the Minister of Finance to take steps to bring all outstanding accounts of NICIL brought up-to-date and the related reports presented to the National Assembly, on 27 September 2012, the Auditor General issued “clean” audit reports on NICIL’s accounts for four consecutive years, i.e. 2002 to 2005.



Further, Goolsarran said, contrary to the assertions made by Brassington, it is not the practice for audit reports to carry footnotes. “As auditors, we try to incorporate all references in the body of the report. As regards the structure of the report, readers will notice that there is an executive summary, introduction, terms of reference, scope and methodology, and findings and recommendations sectionised in the sequence of the items in the terms of reference. Mr. Brassington is out of order to seek to determine the structure of the report or to comment on it. He should instead focus on the message. The report was written using an analysis framework involving criteria (who should be), condition (what has happened), cause (analysis of the mismatch between criteria and condition), effect, conclusion and recommendation. It is therefore not true to state that the report is based on opinions,” he declared.

Goolsarran added that no effort to create diversion or seek to destroy the credibility of his report as a defence mechanism will succeed.




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