This is my fourth and final article on the above subject in an attempt to set the records straight as it relates to the history of public accountability in Guyana from December 1987 onwards, amid persistent attempts to rewrite the said history and distorting what really happened during this period. Last week’s article ended by describing the meeting the Accountant General and I had with the then Head of the Presidential Secretariat, the late Dr. Roger Luncheon, to discuss my proposals for the restoration of public accountability in Guyana after a lack of accountability during the period 1982 to 1991 when there were no audited public accounts. Reluctantly, the Accountant General was forced to accept my proposals for a restart of the process.
Actual restoration of public accountability
It was not until 26 February 1993, after another meeting with the Minister of Finance, that a circular was issued to all accounting officers and principal receivers of revenue, advising them to comply with the requirements of Section 7 of the FAA Act relating to financial reporting for 1992. Despite this, I encountered severe difficulties and resistance to having the draft accounts for 1992 prepared and presented to me for audit. I had to almost single-handedly lead the effort.
As was expected, the submission of the draft public accounts for 1992 was somewhat incomplete in that of the 12 consolidated statements comprising the public accounts, two were not presented for audit.However, all the other public accounts statements as well as the individual statements of revenues and expenditures of all Ministries, Departments and Regions, which numbered some 200, were submitted. Under my supervision, the Audit Office completed the audit of these statements.
I then compiled my report and submitted it along with the audited accounts two weeks before the statutory deadline of 30 September 1993 to the then acting Minister of Finance, the late Shree Chan, for laying in the Assembly, thereby ending ten years of lack of public accountability at the national level. My efforts to restore public accountability have been well documented at paragraphs 7 to 20 of my 1992 report to be found at https://audit.org.gy/site/images/AG/AnnualReport1992.pdf.
As was expected, the state of the accounts was such that I was unable to issue unqualified opinions, that is, a clean bill of health, on them. Three sets of financial statements constituting the public accounts were given disclaimers of opinion while the remaining statements were all given qualified opinions. This notwithstanding, the availability of these audited accounts was an important starting point in the hope that there would be gradual improvements over time. However, little or no improvement was recorded, compared with the situation at the end of 1992. For example, for the 2003 audited public accounts, which was the last audit I performed before demitting office, two sets of statements were given disclaimers of opinion, while the rest were given qualified opinions. The Authorities appeared to be content with having the country’s accounts audited and reported on annually, without due consideration of the quality of such accounts.
In relation to the backlogged accounts for the years 1982 to 1991, the Ministry of Finance did set up a task force to prepare those accounts. However, little progress was made, and the effort had to be abandoned, resulting in a significant blemish in the history of public accountability in Guyana.
My report on the audit of the 1993 public accounts was issued on 12 September 1994, a little over two weeks before the statutory deadline on 30 September 1994. In terms of content, it was as critical as that of 1992 because the issues raised remained unresolved.
PAC scrutiny of the audited public accounts for 1992 and 1993
The restoration of public accountability was not without its fair share of criticisms. Because my 1992 report was extremely critical of the government’s management of the country’s finances, Opposition members of the PAC vigorously sought to challenge the legality and validity of the 1992 accounts on the grounds that: (i) they had to be presented as a whole; (ii) the omission of two important statements rendered them invalid; (iii) it was unprecedented to have financial reporting for a later year without the earlier years being reported on first; and (iv) in any event opening balances were needed. These members were clearly siding with the Accountant General.
The Chairpersonship of the PAC was held by a senior Minister of the previous Administration, the late Dr. Kenneth King. The reality was that Dr. King was chairing a committee that was examining the Auditor General’s report covering a greater part of the fiscal year for which his party was in government. Regardless of how embarrassing it was for him and the other Opposition members that annual financial reporting and the auditing thereof were restored, it was a glorious opportunity for them to rise to the occasion, to reflect on the words of the late Sir Harold Wilson, former British Prime Minister and Chairman of the UK PAC (1959-1963). Political expediency, however, took precedence over the broader interest in that those members took an extremely defensive position and vigorously sought to discredit my report. Instead of the Accountant General and accounting officers being asked to explain the deficiencies identified in the report, they were encouraged, indeed prodded, to disagree with my findings. In reality, I was placed on trial for doing my job, while the Government members of the Committee chose to remain silent!
Paragraph 7 of the 1992 PAC report, which was prepared by Dr. King, captures the extent to which the Committee sought to attribute blame on me for the failure by the Government to ensure proper accountability for public funds:
Fourth, the very validity of the accounts had been questioned. The Auditor General himself in the Introduction to his Report on the Public Accounts for the fiscal year, 1992, had stated that in accordance with Section 31 of the Financial Administration and Audit Act, Cap 73:01 of the Laws of Guyana he was required to base his Report on a number of statements and accounts. However, because of the apparent inadequacy of the statements provided him by the Accountant General and the Debt Management Unit, the Auditor General was unable to determine the true nature of the Public Debt of Guyana. Indeed, the Accountant General fiercely challenges the amount presented in the report which was tabled in Parliament. In addition, the Auditor General was unable to verify the statement of outstanding loans or credits that had been guaranteed by the government, and the statement of outstanding loans and advances that had been made from the Consolidated Fund. On top of all of this, the Auditor General could not determine also what balances on deposit, at the end of 1992, were held by the Accountant General and what outstanding advances had been made. He could not even certify the current assets and liabilities of the Government.
The impression Dr. King gave was that, if the Auditor General was unable to certify a set of financial statements, it was the Auditor General who was at fault and not the Government which is responsible for the preparation of the accounts. Dr. King was clearly demonstrating a lack of understanding of the role of the external auditor who is required to examine the financial statements of an organization, as presented by management, and to carry out whatever tests he/she considers necessary to express an opinion on their fair presentation. If the accounts are in a bad shape, the external auditor either disclaims his/her opinion on the financial statements or issues a qualified/modified opinion on them, depending on the severity of the issues involved. If the issues are fundamental to the overall fair presentation of the financial statements, the external auditor disclaims his/her opinion on them. If the issues are material and relate to specific items in the financial statements but without affecting their overall fair presentation, the external auditor issues a qualified/modified opinion on them.
Because of the hostility of the Opposition members of the PAC towards me, during the rest of the Committee’s hearings on the 1992 and 1993 public accounts, I declined to participate in the deliberations and informed the then President accordingly. At the same time, I dispatched a letter to the Leader of the House for Government Business, the late Reepu Daman Persaud, explaining the reasons for my decision in not returning to participate in the PAC hearings. The Stabroek News article of 14 February 1994 reported Mr. Persaud as having stated that ‘[s]uch a situation has never arisen’ and that my input as the holder of a constitutional office and principal advisor to the PAC could not be ignored, especially as regards the compilation of the PAC report. Mr. Persaud had decades of experience as Chairman of the PAC during the period 1968 to 1992 elections.
The Stabroek News article of 9 February 1994 reported that my entire team and I walked out of the PAC meeting because of the way the hearings were conducted and the Chairman’s attempt to muzzle me when I sought to defend my report. And in another Stabroek News article of 23 January 1994, it was reported that 17 senior officers of the Audit Office dispatched a letter of protest to Dr. King. The main contention was that the PAC was focusing almost exclusively on my report rather than on the public accounts per se with the sole objective of faulting my work.
It had been the practice for the Auditor General to prepare the first draft of the PAC report for consideration by the Committee. However, I was not requested to do so in respect of the 1992 report, notwithstanding that I had drafted three PAC reports covering the period 1974-1981. I recall seeing Dr. King leaving the Audit Office after a meeting with one of my senior officers. That officer did not inform me of the proposed meeting, did not seek my permission to hold such a meeting, and didn’t brief me on the results of the meeting. It was a conspiracy in an attempt to undermine my decision to refrain from participation in the deliberations of the PAC.
As indicated above, the 1992 PAC report was drafted by Dr. King, and the final report was presented to the Assembly in September 1995. Paragraph 21 of the report makes interesting reading:
The Committee is adamant that financial reports must be presented on a timely basis. It recommends that if all the necessary reports and statements are not prepared by the statutory deadline, those reports which have been finalized should be presented, audited and reported on. Because the Committee is unable to decide whether the Auditor General should, in these circumstances, submit a Special Report or report in the routine manner, it recommends that the Attorney General’s Office be urged to advise on the legality of the Auditor General’s Office presenting, in future, reports that are known to be deficient in the required statements and accounts, as the Public Accounts of Guyana.
Despite these criticisms of my attempts to almost single-handedly restore public accountability, the effort was a landmark achievement, ushering a new era in public accountability in Guyana. The ten-year gap would remain a significant blemish for the country, and an indictment against the decision-makers and those responsible for maintaining the public accounts. I shudder to think what would have been the position today had I not been successful in my efforts.
My report for the fiscal year 1994 was also presented to the Assembly within the statutory deadline. In terms of content, it was as critical as those of 1992 and 1993, especially as regards the failure of the Government to submit two important statements. However, the PAC report on the 1993 public accounts, which was also finalized in the same month as that for 1992, took a dramatic change in tone. Paragraph 10 reads as follows:
The Committee commends the Auditor General and his staff for preparing a report on the several statements and accounts submitted to their office. The Committee notes with approval that, because of the omission of two statements, the Auditor General has properly qualified the accounts and statements which the Minister of Finance has laid in Parliament. The Committee emphasizes most strongly that it does not wish to discourage the Auditor General from presenting and commenting on the reports that are made available to him. It urges, however, that it be always made clear that the reports do not represent the public accounts in their entirety, and that those accounts and reports are of crucial importance.
How does one explain the contradictions contained in these two PAC reports which were issued around the same time? The public accounts for 1993 were no longer those of the previous Administration. Because my report on these accounts was as critical as that of 1992, it did not serve the interest of the Opposition members of the PAC to continue to put me on trial and to defend the Accountant General and accounting officers. These members must have also felt that I had political motivations when I produced the 1992 public accounts. Since my reports remained consistent in my criticisms of the public accounts for 1993 and 1994, those members must have realized how badly they misread my intentions and efforts.
Following the not-surprising resignation of Dr. King, the late Mr. Winson Murray assumed chairpersonship of the PAC. With this change, the Committee set aside partisan political interests and was genuinely seen to be functioning in the national interest. At the conclusion of the Committee’s examination of the public accounts for 1994, I was requested to draft the report the final version of which was laid in the Assembly in March 2000.
Through the continuous efforts of the Audit Office to influence the Accountant General to prepare and submit these two statements, it was not until 1996 and 1999, respectively, that they were eventually included in the public accounts. Complete and full financial reporting was therefore not achieved until seven years later, though this could have been achieved much earlier with a more receptive Accountant General’s Department.
The important lesson to be learnt is that those responsible for overseeing the financial management systems in government need to be receptive to new and improved ways of doing things. They may not be faulted for regarding themselves as the experts of existing systems and procedures. However, to the extent that those systems and procedures have outlived their usefulness and are not producing the desired outcomes, these officials need to embrace change and to be innovative and creative in the search for alternative solutions.
Finally, it is my sincere hope that readers will not be swayed by sentiments expressed from time to time by politicians, some of whom seek to take credit for the effort to restore public accountability, while others seek to cast blame.
Discussion