Legislation needed to protect auditors from victimisation - Financial Analysts

Legislation needed to protect auditors from victimisation – Financial Analysts

May 28, 2014 News

Considering the fact that a field auditor was sent on leave because he sent a report to President Donald Ramotar which

Former Auditor General, Anand Goolsarran

reportedly exposed corruption in the National Drainage and Irrigation Authority (NDIA), financial analysts are saying that it is only logical that one considers what this means for the internal auditors under the wings of the Ministry of Finance who are now tasked with cleaning up the seemingly weak systems of some ministries.
The Internal Audit Division, which was established last year, is a 14-member “system-corrector” which monitors and ensures compliance with procedures and laws. When there is room for improvement, the Division makes recommendations for enhancing processes, policies and procedures.
But the location of the Division has caused many members of the political opposition to question how independently the entity can act and unearth corruption without fear of victimisation when it falls under the directive of the Finance Ministry.
Analysts are calling for there to be the drafting of new legislation to protect the internal auditors from the “powers that be” so that they can be able to carry out their work without fear of being sent home for simply doing their job.
However, A Partnership for National Unity (APNU)’s Shadow Minster of Finance, Carl Greenidge, says that he does not believe that the introduction of a new law is enough to protect or insulate the internal auditors from any abuse they may suffer due to exposing corrupt practices or frauds.
“The truth is, the implementation of another law may not be enough to stymie the abuse of powers of Ministers to appoint and fire. We need to curtail the abuse of power. It will take the political will to stop this.”
Also, Former Auditor General, Anand Goolsarran, in one of his reports, pointed to the importance of an internal audit division for government operations. He had reportedly stated in an article that, “Internal audit is an integral part of the internal control system of an organization. Its primary role is to police the system to ensure that the controls in place are adequate and effective, and are working as intended.
Unlike external auditors, internal auditors are full-time employees of an organization who continuously review systems and procedures, identify deficiencies, and make recommendations for improvement. Where “red flags” are uncovered, the internal auditor’s role is to probe further to ascertain whether any irregularities have occurred. In this way, internal auditors provide an essential and necessary service to management.
“It would be unfortunate to ignore the role internal auditors can play in bringing about some degree of respectability in relation of our public finances. The Ministry of Finance’s initiative is therefore encouraging, and one hopes that the effort is not a cosmetic one to appease the international funding agencies that something is being done in relation to this oversight mechanism. The larger Ministries, however, need to get their act going to ensure compliance with the Law.”

APNU’s Shadow Minister of Finance, Carl Greenidge

Nonetheless, it is also feared by some members of the political opposition that the Internal Auditing Division may only serve to protect weak systems that encourage corruption.
On the question as to whether this “internal watchdog” will make a difference when it comes to the Auditor General’s Report for 2013, which is expected to be out in a matter of months, Leader of the Alliance for Change Khemraj Ramjattan said, “I am against any other parallel system that will be largely governed by the Ministry of Finance. It must be independent. The Constitution does not mandate parallel intermediate audit interventions.”
The Member of Parliament said, “If there is found to be a problem then all the necessary resources should be provided to the Auditor General so that he can carry out the functions as the guard of the national purse.
“To now go and give a parallel audit mechanism to these budget agencies might not be in the best interest, because I rather suspect that government is going to treat these auditors like they did in other instances where auditors were sacked for exposing corruption…We must have one audit department which is going to be professionally strong enough to give very independent and professional opinions and strong enough to ensure its recommendations are complied with.”