Novel audit office bill for more scrutiny
Value-for-money checks coming By Johann Earle
Stabroek News
March 20, 2004

Related Links: Articles on economic concerns
Letters Menu Archival Menu





A bill to set up an independent audit office that would undertake value-for-money checks among other innovations was yesterday sent to a select committee of Parliament for closer scrutiny.

Following a second reading, the National Assembly referred the Audit Bill 2004 to a Select Committee after opposition members voiced concerns about its implications for Guyana's Constitution.

April 13 is the date set for the Select Committee's report on the legislation. The Bill, No. 5 of 2004, will also seek to introduce new and comprehensive legislation on the subject of the independent auditing of public finances of Guyana. It is geared at strengthening parliamentary oversight of the workings of the Auditor-General and regulating other matters connected with or incidental to the independent auditing of finances in Guyana.

At the start of the parliamentary session, members of the PNCR congregated at the door of the Ocean View Convention Centre at Liliendaal, while Leader of the Opposition Robert Corbin spoke to reporters. He said that the party was concerned with some of the provisions of the Bill, which may have implications for the county's Constitution. He said professional accounting bodies have also raised serious objections about the Bill which need to be considered. The PNCR boycotted the sitting in response to Speaker of the National Assembly Ralph Ramkarran's refusal to allow a debate on the death squad allegations.

During the debate in Parliament, lone opposition speaker Sheila Holder of GAP/WPA said government's promulgation of the Bill signals an embracing of the concept of checks and balances. She said the Bill assumes the principle of separation of powers and she commended the oversight role given to the Public Accounts Committee of Parliament within the legislation. However, Holder said she had concerns about the disbursement of funds for the Audit Office and the financial pressure that can be applied to that office. She alluded to a Guyana Elections Commission situation where payment of salaries was affected. "I am aware of the fact that a similar problem is likely to arise with the disbursement of funds... how funds will be disbursed in keeping with government's financial regulations," she said. Holder said she wanted to know how government proposes to maintain the independence of the Audit Office.

In response, Minister of Tourism, Industry and Commerce Manzoor Nadir said the GAP/WPA member was confusing financial sustainability and independence. "One has to be sure that salary scales are not put outside the reach of the government. We have to be able to sustain the financial independence as, in the end, taxpayers have to pay," he said. Nadir said the legislation has its roots in the Constitution reform process.

According to Section 40 of the Bill, "The expenditure of the Audit Office shall, in accordance with article 222A (a) of the Constitution be financed as a direct charge on the Consolidated Fund, determined as a lump sum by way of an annual subvention approved by the National Assembly after review and approval of the Audit Office budget as part of the process of the determination of the national budget."

Minister of Health Dr Leslie Ramsammy said it was unfortunate that the members of the PNCR were not present for the debate on the Audit Bill. "If we are to serve the people of this country, it is important that we represent their interests," he said. "€¦not being here is abrogating their duty to the House and the people of this country and I condemn [it]."

Minister of Finance Saisnarine Kowlessar, who presented the Bill for its second reading, said it strengthens the objectives of the Public Procurement Act passed last year.

He said the Public Accounts Committee of the National Assembly will have a direct input in the budget of the Audit Office. He said too the Audit Office will have to submit reports to that committee.

In response to Holder's questions on the Bill's exclusion of specific qualifications for the Auditor-General, Kowlessar said: "As far as I understand, you don't legislate the qualifications [as] the procedure for the appointment of the Auditor-General is laid out in the Constitution."

He said the Public Accounts Committee will exercise general supervision of the Audit Office. Clause 13 (3) says that the Auditor General's appointment and disciplining of all senior officers and employees "shall be subject to approval by the Public Accounts Committee".

According to the minister, the Bill has been with the Public Accounts Committee for over a year.

The Bill states that before the prescribed date, "the Auditor-General shall identify such officers and employees of the existing office of the Auditor-General as he wishes to re-employ in the Audit Office with effect from the prescribed date and the terms and conditions of such re-employment." It says too that the Auditor-General will notify every officer and employee in writing as to whether approval has been granted for re-employment and the terms and conditions, if re-employed.

The Bill states that anyone who did not get an offer, or who would have turned down an offer will be referred to the Public Service Commission for the appropriate action by the commission.

It sets out the functions and independence of the Auditor-General and provides for the making of regulations by the Auditor-General, subject to approval of the Public Accounts Committee and confirmation by the National Assembly.

The Bill, which was tabled in the National Assembly on Monday, details the different types of audits that the Auditor-General may conduct and sets out the powers of the Auditor-General in conducting such audits, including the powers to obtain information and evidence.

In respect of value-for-money (VFM) audits, clause 24(3) says that the Auditor General "shall examine the extent to which a public entity is applying its resources and carrying out its activities economically, efficiently, and effectively and with due regard to ensuring effective internal management control". VFM has been a long sought addition to state audit legislation.

Clause 33 of the bill gives the Auditor General the authority to "examine or audit the account of any person in any bank if the Auditor General has reason to believe that moneys belonging to a public entity have been fraudulently or wrongfully paid into such person's account".

Enshrined in clause 34, is the authority to enter and remain on a public entity's premises for the purpose of obtaining documents, information or other relevant evidence. The audit office would be authorised to search for, examine and copy documents.

Another innovation - clause 7 - will see the Auditor General taking the relevant oath before the Speaker of the National Assembly.

Part 4 of the Bill states that in the discharge of his functions, the Auditor-General may engage the services of technical experts and Chartered Accountants in public practice to serve on a contractual basis for limited audit engagements, including those required as part of agreements with international organisations.

Sources say one part of the bill likely to raise eyebrows is clause 4(2) which says that while the Auditor General will be the external auditor of the public accounts of Guyana "the government may cause an additional audit to be conducted by an auditor other than the Auditor General where an agreement entered into between the government and an international financial institution so dictates".

In recent years several internationally-funded projects came under the audit office microscope.

The Bill seeks to repeal the remaining provisions of the Financial Administration and Audit Act, Cap. 73:01, and authorises the Minister of Finance to make orders or issue directions to remove any difficulty in implementing this act.

Yesterday, Parliament also passed the Customs Duties Amendment Validation Bill and carried motions on three financial papers for supplementary estimates for current and capital expenditure and for three Customs Duties Amendment Orders. The House also carried motions for the ratification of the Guyana/Brazil partial visa abolition agreement, the Convention on the Safety of United Nations and Associated Personnel and the Exclusive Economic Zone Cooperation Treaty between Guyana and Barbados.

€¦ Budget Day is March 29

Finance Minister Saisnarine Kowlessar told Stabroek News just prior to yesterday's sitting that he would present the National Budget on Monday, March 29.

Minister of Parliamentary Affairs Reepu Daman Persaud also made an announcement to this effect, during the sitting.