The Auditor General and the THA

Faces and portfolios in the 2013/7 Tobago House of Assembly (THA) administration were somewhat different from those before, but there was a dispiriting sameness in the Auditor-General’s (AuG) report of early May on the THA’s financial statement for the year ended September 30, 2015.

“An audit,” the AuG first explained, “involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement … (It) also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.” He then listed several deficiencies in the THA submission: cash books, lists of paid and unpaid cheques, bank statements, payment vouchers, vote books, ledger cards etc “not produced” for audit; a difference of $20.8 million in figures given for unspent balances “not ascertained;” a sum of $2.48 million in a bank account “not disclosed;” and so on.

He also found that THA Financial Rules had not yet been laid in Parliament, despite the requirement in the 1996 THA Act that this be done within two months of the coming into force of the Act.

Further, the THA had, in his view, breached the Financial Regulations, the Financial Instructions, and directives from the Ministry of Finance in areas such as overseas travel, maintenance of a register of contracts, vote control etc.

And, in expressing an overall adverse opinion on the THA offering, he concluded that “the Financial Statement of the Assembly does not fully comply with International Public Sector Accounting Standard (IPSAS) Financial Reporting under the Cash Basis of Accounting…” The last THA financial statement before this 2015 one was for fiscal 2006; it was prepared only in early 2015. (What about the intervening years, I wonder?) That 2006 statement, on which the AuG had declined to express an opinion, was frightening enough: the THA was unable to provide, for audit examination, documents and records to account for nearly one billion dollars of taxpayers’ money. One billion! In reaction, then chief secretary Orville London requested a report on the matter. Is it ready yet? Replying in April 2015 to the AuG’s highly critical report on the 2006 statement, the THA gave the sublimely ironic assurance that it was “cognisant of its responsibilities to properly and accurately account for the public funds entrusted to it in the execution of its mandate.” (To be “cognisant of ” is one thing; to “fulfil” is another.) One of the elements of the “corrective action plan” it also put forward then was the “full adoption” by 2017 of the same IPSAS mentioned above, with which the AuG now says it is not in full compliance.

Will the THA now argue that fiscal 2017 is not yet over, and that there is still time to meet its “responsibilities?” “But none of this is new,” I wrote in an Express article of April 15, 2015, after the AuG’s report on the 2006 statement appeared.

“The AuG’s reports on the THA for 2003, 2004 and 2005 contain virtually the same language of dissatisfaction with the Assembly’s financial behaviour … Against that background, many would find it difficult to escape the conclusion that the THA has been adopting a cavalier attitude to the use of what we must always remember is the money of the Trinidad and Tobago taxpayer…and thumbing its nose at financial rules and regulations, at the AuG, and indeed at the public.

Why, it might be asked, has this been allowed to continue?” Chief Secretary Kelvin Charles has said that the AuG’s 2015 report “found no instances of fraud… or misappropriation of funds.” Such a response isn’t new, either.

In an August 2008 article, following the AuG’s report on the THA’s financial statement for fiscal 2003, I wrote: “In his remarks…on the report (THA Secretary of Finance and Enterprise Development), Dr (Anselm) London said that ‘we are very pleased that the report makes absolutely no reference to (or even vaguely suggests) fraud, … financial impropriety, or … any form of financial wrongdoing on the part of anyone anywhere in the Assembly …’” I commented as follows: “It should … be noted that what the AuG normally conducts … are purely financial audits … (not expeditions) for fraud. But (such) audits can of course indicate the possibility or probability of official misdealings as distinct from inefficiencies.

In that case, you would need a value-for-money audit and perhaps (more) as well.” In 2001 Orville London, newly in office, proposed a comprehensive audit of the THA. But last March, 16 years later, Parliament’s Public Accounts Committee flagellated the THA’s “sloppy and laissez-faire financial management.” It’s what I’ve been saying for most of those 16 years. I say also: early implementation of London’s p r o p o s a l is a crucial p r e r e q - uisite for i n t e r n a l s e l f - gov - ernment.