Cabinet did not blunder in asking Auditor General to conduct detailed NICIL audit

Jan 30, 2017 News

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– Finance Minister

Finance Minister, Winston Jordan has rejected claims that Government blundered in handing over the transactional audit into the National Industrial and Commercial Investments Limited (NICIL) to Auditor General, Deodat Sharma.
He was at the time, responding to local anticorruption activists who are against the decision.
Their aversion to government’s decision is rooted in the fact that it was Sharma who in previous years gave NICIL a “clean bill of health”.
It was a 2015 forensic audit commissioned by this very government which uncovered nothing but damning acts of corruption at the said entity.
But in spite of what Sharma did in the past, there was simply no avoiding him when it comes to the transactional audit that was recommended by the NICIL forensic audit report. This is according to Finance Minister, Winston Jordan.
Jordan told this newspaper that in the case of the transactional audit, the appointment of anyone besides the AG would require Sharma’s permission.

“The Director of Public Prosecutions (DPP) would have to give a fiat if the Government wants to employ private prosecutors. She has to give you the clearance. It is similar with the Auditor General.  The AG would have to give you the clearance to go to other persons for the transactional audit and he would even have to appoint them.”
“I am sure you would have observed that in some instances, the AG cannot do the audit for everyone so what you would find is that he would contract the audit to other firms. Under the Constitution, he could appoint others to do it. The government couldn’t just ask anyone else to do the transactional audit.
“In the case of the forensic audits, the Audit Act allows government to do the forensic audits. So cabinet did not err in asking the AG to do the transactional audit. Cabinet cannot take the transactional audit any place else. It is up to the AG if he is overwhelmed to pass it on to someone else.”
But Chartered Accountant, Anand Goolsarran is of the firm conviction that the Government blundered in assigning the NICIL transactional audit to the office of the Auditor General.
Goolsarran said that it was this very Auditor General who in the first place, carried out the financial statements audit and subsequently issued a “clean bill of health” on NICIL over the years in question.
The former Auditor General stressed that it was also Sharma who found nothing wrong with NICIL’s transactions and reported this accordingly to NICIL’s board and to the National Assembly.
The Chartered Accountant said that in spite of being aware of this, the Government still asked the Auditor General to carry out an audit of these very transactions. With this in mind, Goolsarran said that this perhaps explains the lack of progress in the transactional audit and the apparent shifting of blame. He noted too that it has been more than a year since the decision was taken, and citizens are yet to be informed of the results of the said audit.
The financial analyst said that he observed the Officer-in-Charge of NICIL, Horace James making comments in the media to the effect that the Auditor General was having  difficulty in proceeding with the audit because the related documents were with the Special Organized Crime Unit (SOCU) and that original documents were needed. He noted too that a few months ago, the Minister of Finance, Winston Jordan made a similar assertion.
SOCU has since cleared the air that it handed over the documents requested by NICIL and the Auditor General’s office since last year November.
Goolsarran said that the transactional audit involves the examination of vouchers and related documents in support of the expenditure incurred.
In this regard, he said that it is unlikely that these would have been in the possession of SOCU since they have no bearing on the results of the original forensic audit.
Additionally, Goolsarran said that it remains unclear whether the Auditor General formally notified the Cabinet of the difficulties he was experiencing. Goolsarran also stated that there was no mention of this in Sharma’s 2015 report to Parliament which was presented to the Speaker on 30 September 2016.
The investigations by SOCU and the transactional audit by the AG’s office were as a result of the damning findings stemming from a forensic audit into NICIL by Goolsarran.
During the forensic audit, Goolsarran discovered that in relation to the expenditure on the 2007 Cricket World Cup, NICIL had transferred amounts totaling $650 million to the Local Organizing Committee, but failed in its responsibility of ensuring that there was proper accountability for the amounts transferred.
As regards the construction of the controversial 44 High Street property, the forensic auditor found that the contract was awarded in 2007, but at the time of reporting, the building remained substantially incomplete.
Goolsarran stated in his report that the building was abandoned, and the structure was expected to be torn down because the floors were not constructed to the required specifications. As the “Project Executing Unit”, he said that NICIL’s role was to ensure that the works were executed according to the agreed specifications, and the entity had again failed to discharge its responsibility for this project, resulting in some $350 million of taxpayers’ funds being wasted.
Goolsarran in his report also stated that despite the size and complexity of its operations, NICIL does not have its own procurement rules, which is key requirement of the Procurement Act. In the circumstances, he said that it would have been more appropriate for NICL to involve the National Procurement and Tender Administration Board (NPTAB) in the assessment of tenders received for the award of contracts. Instead, the assessment of bids was done internally and would have lacked the level of independence, especially for large projects such as the Marriott Hotel.
Given the aforementioned findings among others, Goolsarran recommended that Government commission a further independent audit to examine in detail transactions over the last six years under NICIL.
He also recommended that the relevant authorities institute criminal/disciplinary actions against all those responsible for other violations, including the failure to properly account for State resources under their control.

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