The Public Accounts Committee, a standing committee of the National Assembly is currently reviewing the report of the Auditor General on the audits of the ministries, departments and regions. The composition and terms of reference of the PAC are set out far too briefly in Standing Order No. 82 of the National Assembly which provides for a committee of not less than six or more than ten members. The function and duty of the committee is to examine the accounts showing the appropriation of the sums granted by the National Assembly to meet public expenditure and such other accounts laid before it as it may refer to the committee together with the Auditor General’s report thereon. The Chairman of the Public Accounts must be a member of the main opposition in the National Assembly.
From this it is clear that unlike legislation which the National Assembly makes requiring the specific qualification, experience and competence appointees to boards, commissions and committees must possess, there is no specific requirement for eligibility to membership of the PAC. Nor is there on members an obligation to attend meetings of the PAC or measures for recall so that once a person is appointed, that is good for the entire parliamentary period. Readers may recall that in a Business Page column done on the 2008 report I highlighted the unacceptable failure of key members of the committee, including Mr Stanley Ming of the PNCR and PPP/C presidential candidate Mr Donald Ramotar to participate in the meetings of the committee under the previous Parliament.
Important and challenging
Hobbled as it is by archaic and inadequate rules, this key committee clearly requires persons of competence and commitment to look after the public interest in the finances of the country. That this committee has one of the most challenging mandates of any committee cannot be an excuse for what has amounted to a dereliction of duty by its members.
At the same time, it is clearly unfair to lay the blame solely on the members. The PNCR has chaired the PAC since 1992 and that party must be aware of the egregious financial mismanagement in the country, the pervasive corruption, major deficiencies in the Audit Office – an Auditor General who does not hold a professional qualification, about 80% of the office-holders being acting appointments, non-compliance with its own act, etc – a President and a government which routinely breach to the point of recklessness the financial provisions of the constitution, the Fiscal Management and Accountability Act, the Procurement Act and several other pieces of legislation. The PNCR must have known therefore that the chairing of the PAC requires a person of considerable technical competence, professional expertise and strong personality, qualities which with the greatest of respect to Ms Volda Lawrence, I do not believe she possesses. What is worse is that the PNCR has not replaced the formidable and late Winston Murray, economist and attorney-at-law who was arguably the best chairman the PAC has ever had.
For the records, the current members of the PAC are PPP/C appointees Ms Bibi Shaddick and Indra Chandarpal and Messrs Komal Chand, Nokta and Seeraj; PNCR appointees Volda Lawrence and Ernest Elliot and from the AFC Mr David Patterson. The PAC has no secretariat and must rely on the Auditor General Deodat Sharma and the Finance Secretary Nirmal Reekha as resource persons. The ethnic composition of the sides is certainly interesting. None of this makes for an effective PAC, something which no one in our society seems to care about.
The PAC seems further hobbled by some inherited misunderstanding of its obligations. As noted in the introduction above, the duty of the PAC is “to examine the accounts showing the appropriation of the sums granted by the Assembly to meet public expenditure and such other accounts laid before the Assembly as the Assembly may refer to the Committee together with [emphasis mine] the Auditor General’s report thereon.” What the PAC does is to examine only the Auditor General report by inviting public officers to appear before them to defend their ministry, department or region. That is a horrible and expensive misunderstanding of what the PAC is required to do. In my view it is required to examine the accounts whether or not the Auditor General has chosen to do so or more often, chosen not to do so. This column has already pointed out that the Audit Office turns a Nelson’s eye to the Office of the President and much of the discretionary spending that goes on in ministries and departments.
The problem with the approach taken by the PAC is that it assumes – wrongly – that we have a real Auditor General, that he acts as a professional auditor would and that the constitution and other laws are observed. It also assumes that the spending authority is the public officers when we all know that the financial system has been turned on its head and it is the ministers who make many of the discretionary spending decisions. In my view ministers too should be brought before the PAC to answer for their mismanagement and non-accountability of public funds.
Petty cash versus the real thing
I hope the members of the PAC read recently where the President and his docile cabinet told the Minister of Finance to go and find $300 million dollars to make a payment that is not only outside of the law but that suggested that the Minister commands some secret funds from which he can just pull $300 million.
In a democracy, the head of the PAC should have an open line with the Minister of Finance to discuss matters of current concern rather than a review of transactions that have taken place sometimes years earlier.
One wag once said that a $200 expenditure usual attracts more attention than a $200 million transaction, simply because that is how the ordinary mind works.
That seems to hold very true for our PAC, and only a couple of days ago Ms Bibi Shaddick was blasting one region over vehicle log books while Ms Chandarpal was raising questions about some mystery “Economic Fund” and raising questions about advances of “amounts such as $400, $600 and $1,000,” and Chairperson Lawrence was questioning an advance of $60,000. That is like auditing the petty cash and ignoring the bank accounts.
Monkey see, monkey do
It probably is a combination of an absence of institutional memory or relevant knowledge by the PAC but yet one must ask whether politics get in the way of its insisting that the government and its relevant ministries provide proper accounts for audit. For example, the government is yet to reveal the audited accounts for the expenditure associated with the 2005 flood, the 2007 World Cup and the Carifesta X festivities held here, despite repeatedly promising to do so.
This is no petty cash; it involved billions of dollars, and is it insulting to the nation that Dr Frank Anthony is not even asked for an explanation for his egregious failures in relation to the latter two events.
This is the same Minister for whom, in their role as legislators, members of the PAC vote $100 million annually which he uses as a fund to give to whomever he pleases. But because the Audit Office ignores the $100 million fund, the Carifesta X activities and the World Cup 2007, the PAC ignores them as well.
And will someone remind the three ladies on the PAC – who are the only persons who are quoted in newspaper reports – that they were supposed to have followed up uncleared travel advances for the President and his ministers. Do they recall that the President had threatened to publish in the newspapers the names of persons who had not cleared their advances within a month? Does Ms Lawrence remember that nearly three years ago she had expressed the “hope” that the government would soon advertise to fill the vacancy of Auditor General so that the work of the Office of the Auditor General (AG) would be carried out on a more professional basis and in keeping with the constitutionality of the office”? Does she feel good that her hope was in vain?
The Audit Act
To serve competently on the PAC requires a familiarity with the Audit Act 2004 and the obligations of the Auditor General to the committee. The PAC also has an obligation to the Audit Office and should have taken steps to prevent the emasculation of the office’s independence by the Fiscal Management and Accountability Act. It has failed to do so in the same way that it has failed to ensure that the Audit Office complies with its own act. It is a circle of non-compliance.
The PAC is not without its more mundane absurdities and the one that stands out is Local Government Permanent Secretary Nigel Dharamlall, who in a matter involving seized wooden piles asked that “the details regarding the species of the wood, and their dimensions be provided.”
For all its serious and fatal weaknesses the PAC is all we have in the National Assembly in terms of overseeing the controls over public funds. I hope that it will go beyond the limited scope it has imposed on itself and look forward to the early publication of its report.
If the May 21 prediction does not materialise and we are still around to read this column, I share the hope of the writer of the September 2008 letter that, “exemplars [such] as the Private Sector Commission, the Guyana Manufacturing and Services Association, the Chambers of Commerce and Industry and the Institute of Chartered Accountants” would take some real interest in the reported gaps in the management of our fiscal and financial systems and procedures and that the PAC will wake up to its responsibilities. But it will need help, lots of help.