Auditing the Audits

Oct 12, 2015 Features / Columnists, Peeping Tom

A great many audits are taking place. The government is wasting a lot of time and a lot of money on these audits instead of creating a more transparent and accountable system.
These audits are premised on the belief, a belief bordering on a philosophy that the previous administration was so deep into skulduggery that almost all of the institutions of the State were tainted with financial wrongdoing.
The establishment of Audits, with a Minister specially designated to this task, has been going on since the new APNU+AFC government came to power. It is said that there is likely to be more than sixteen more audits.
This means that the audits are likely to continue until the end of the first term of the new government and will most likely cost of healthy sum of money. Will this money be recoverable from the State Assets Recovery Unit which has also been established and whose administrative costs are likely in the long–run to exceed what the unit can conceivably be recovered.
These audits and asset recovery attempts may end up turning into a scandal. In Canada recently, the Auditor General conducted an audit into spending by Senators. The audit cost come 23 million dollars and was only able to recover a mere one million dollar.
Just how much has been spent on the private audits undertaken by the government so far is not clear. It is also not clear whether the confidentiality of these audits have been compromised. Ever so often we are reading about reports of audit findings.
There is an Office of the Auditor General in Guyana. This Office is an independent constitutional office. It is supposed to carry out audits of government Ministries, Departments and Agencies. It has a statutory responsibility to report the findings of its annual audits of government to the National Assembly.
The Auditor General has been doing a great job so far in his audits. His annual reports have been used extensively as evidence that all was not well with accountability under the PPP. The annual reports of the Auditor General have revealed many areas which need strengthening.
One would have expected that the new government would have been more interested in plugging these loopholes within the system and strengthening the Office of the Auditor General so that it can better do its work.
Instead the new administration seems bent on trying to duplicate the work of the Auditor General by contracting out to private firms the audits of government agencies.
Government, should not, as was done in the past under the PPPC have had to summon the Auditor General to investigate instances of fraud. It only needs to advise the Auditor General of this but the Office of the Auditor General has the option to deciding whether it wishes to undertake an audit of a fraud of whether it will leave this to the police.
The new government obviously has some political interests in pursuing certain audits. The audit into the procurement of medicines within the public health system is one such audit which is ongoing. But it really did not need to be doing this because the Auditor General’s Office could have done this.
The government however has justified these audits on the grounds that they are more than ordinary audits. The government has said that they are forensic audits. But the government has never said just how different the audits conducted by the Office of the Auditor General are from these forensic audits that it is undertaking at the moment and which are likely, as mentioned before, to go on for the next five years. Just what is a forensic audit, and does Guyana have accounting firms with the experience and technical wherewithal to undertake such audits.
When Trinidad and Tobago was conducting its audit into the airport project, it was forced to hire a foreign firm. That was a long time ago and the court cases resulting from that investigation are still not yet completed.
Guyana has also established an Asset Recovery Unit. It would be interesting to know just how much money has been budgeted for this unit and how many assets this unit has so far recovered. This unit may end up costing far more money to run than it is able to recover.
What is needed is a strengthening of the Office of the Auditor General, the establishment of internal audit divisions within major government entities and improving audit systems.

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Auditing the Audits

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