By Correspondent
Over the years, Guyana’s financial systems have been riddled with hundreds of fiscal transgressions. Some are exposed sooner rather than later, with time for corrective action to be taken while others slip through the cracks in the systems only to be revealed when it is too late and nothing can be done.
Glaring examples of these can be seen with just a perusal of any of the annual reports prepared by the nation’s Auditor General, Deodat Sharma.
In the mean time, take for example, Section 11 of the Fiscal Management and Accountability Act. That part of the law imposes on each Head of a Budget Agency, a duty to “manage the affairs of that budget agency in a manner that promotes the proper use of the public resources…” and for the said person “to maintain an effective internal audit capability within the budget agency.”
That Act was passed in 2003. But to date, few budget agencies, if any at all, can boast a proper system of internal audit that meets the test of competency, independence and professionalism required for the oversight of the spending of hundreds of millions of dollars.
Unfortunately, when the National Audit Office was racked by a crisis of confidence brought about by conflicts of interest, a crisis of competence for its failure to attract a sufficient number of professionally qualified accountants and auditors and weak leadership, the necessary internal audit capacity to compensate for those deficiencies and defects was unfortunately missing.
As such, internal auditing has become a factor of the new accountability and control era.
This was agreed to by Finance Minister, Winston Jordan. He said that the manner in which public sector entities maintain internal control and how they are held accountable has evolved to require more transparency and more accountability from these organizations that spend taxpayer funds.
The economist said that the role of internal auditing has evolved from an administrative procedure with a focus on compliance, to an important element of good governance. According to Jordan, the Finance Secretary, Mr. Hector Butts, will head a project to review the needs and capacity of each budget agency or cluster of budget agencies, to implement a proper system of internal audit in the future.
Turning his attention to the area of external auditing, the Finance Minister said that the Auditor General’s Office must gear itself to play a bigger role in the new accountability and transparency culture which the Government is seeking to instill.
He said that the office must remain true to its mission to “promote good governance including openness, transparency and improved accountability …”
To assist it in achieving its mission, the Finance Minister said that the Audit Office will implement the fourth phase of a project designed to strengthen and modernize its systems, processes and procedures.
More specifically, Jordan explained that the project will: enhance the efficiency and efficacy of its auditing processes through the use of information technology; and institutionalize best practices, knowledge and skills for sustainable operations.
In this regard, he noted that staff will be trained to produce higher quality reports, undertake forensic auditing, and investigate and detect fraud; and (raise the institution’s visibility to ensure the collaboration of its stakeholders.
The Finance Minister said that the objective is to raise awareness about the Audit Office’s roles and functions through the design and implementation of awareness raising workshops.
Jordan also commented that the public sector landscape is rapidly changing with an increasing emphasis on fiscal management and discipline, prioritization of expenditure and value for money.
He said that even the smallest budget agency now has at its disposal several millions and, in the case of even medium-sized agencies, billions of dollars in public funds which taxpayers expect will not only be properly spent but will be properly recorded and reported.
Jordan said that equally important is the need for the public financial accounting system to deliver faster and better accounting information to public sector managers to enable them to make real time decisions.
He stressed that good financial management is responsible for not only protecting, developing, using resources, pushing and maintaining economic growth and increasing income, but also managing effectively and efficiently all national resources.
