CAG's case of audit objections
Saturday, 4 August 2007
Qazi Azad
VALID audit objections about financial defaults in the public sector including ministries, government departments and other state offices are useful for perception of the extent of financial mismanagement and corruption. May be, these are also helpful to the Transparency International in finding a basis for categorising countries in its perception index as the least corrupt, moderately corrupt, corrupt or the most corrupt. These are also useful in checking corruption, managing and monitoring organisational performance from a distance and in enforcing financial discipline and rules.
On the other hand, misty audit objections, which are not tenable in the light of modern management practices, operational nature of many a organisation, profit-and-loss consideration of various management steps involving expenditures and because of wrong interpretations and applications of financial rules by auditors, unduly taint the image of the country beyond its borders. These also unnecessarily cause loss of public trust in the honesty of the government, which is broadly represented by its offices and organisations.
A recent press report said the move to recover Tk 125.81 billion of state money from individuals and organisations on the basis of audit objections faces uncertainty, as there is no Public Accounts Committee (PAC) now to monitor its progress. The immediate past PAC, comprising members of the parliament became defunct as soon as its mother body-the parliament itself expired on completion of its normal tenure.
The defunct PAC, in course of its life for three and a half years, until October 2006, reportedly made several ministries recover about Tk 0.64 billion. During the same period, the report said, audit objections involving about Tk 1.58 billion were adjusted, which means the objections were withdrawn and settled after some additional paper work. It also means that these objections were weak and could be avoided.
The auditors of the office of the Comptroller and Auditor General (CAG) could have withdrawn those objections on having the necessary paper work done at the time of audit or subsequent exchange of views in writing on their audit objections with the offices concerned or in course of the tri-partite meetings held involving the representatives of the ministry, the department or office concerned and the office of the CAG. It is open to question whether they refrained from doing so to aid the Transparency International in having a magnified perception of corruption in this country.
Any patriotic citizen, who would never like to see the image of his or her country unduly tarnished, may ask the office of the CAG about whether or not it has taken actions against the auditors concerned for raising those avoidable and improper objections whose bases were too weak to collapse on doing some additional paper work. Unless a system of accountability for making them answerable for raising weak audit objections is introduced, auditors of the office of the CAG may not feel the due urge to learn their job-knowing financial rules thoroughly well, operational systems of the organisations they audit and the requirement to consider the matter of profit from prompt actions and loss for delayed or no actions in some cases, which may involve expenditures in certain organisations like repair works in the Power Development Board.
Such an accountability system would substantially discourage the apparent tendency among many auditors of raising improper audit objections driven by arrogance, ill motives or without being adequately serious for understanding the organisational management system, its nature of functioning and its compulsions. As time has changed requiring every organisation of the country to compete with the fast moving world, the auditors should know where a stitch in time would save nine to actually result in saving of state funds.
There is no denying of the hard fact that the low pay structure of the post of auditors under the office of the CAG does not usually attract the bright within its rank. Many of the existing auditors are said to be general graduates. Some of them are post-graduates. But most of them are mediocre. Some are even said to be below average. Just a few of them have the commerce background. But most of the government financial rules are in English. Englishmen drafted those rules during the colonial days, sometimes in easy English and sometimes in obscure English. The judicious applications of these rules depend on their proper interpretation on piercing their obscure veneers.
The office of the CAG would do well to educate its auditors well on all those rules and on the many aspects of modern management of complex organisations for enhancing their ability to raise meaningful objections. As auditors are transferable from accounts to audit and vice versa, all auditors, whether engaged in accounts or audit, should receive equal attention from the office of the CAG in the matter of training on financial rules and important aspects of modern management so that all of them are fully equipped to undertake their functions as efficiently as desirable now. All examinations arranged for assessment of outputs of such training should be seriously conducted and the answer scripts thereof may be strictly scrutinised so that those who pass out and qualify for permanent absorption and promotions are indeed versatile on their professional matters.
The pertinent press report indicated that the audit objections raised by the office of the CAG from fiscal year 1995-96 to 2001-02 involved about Tk 1.32 billion. This figure gives the ground to suspect whether the actual recoverable amount on the basis of audit objections is as big as quoted in the report. However, scanning so many objections by the PAC may take many years. Many of those responsible for the suspected irregularities would possibly pass into the next world before one tenth of these huge audit objections have been studied and recommendations made on the basis of final findings.
The fact that the now defunct PAC made several ministries recover Tk 0.64 billion and adjust audit objections involving a bigger amount, more than twice that figure, which is Tk 1.58 billion, means the filtration process of audit objections is yet too defective to be really workable. Otherwise, how could it be possible that so many audit objections were found misty by the defunct PAC, which could be and were settled through some additional paper work only?
VALID audit objections about financial defaults in the public sector including ministries, government departments and other state offices are useful for perception of the extent of financial mismanagement and corruption. May be, these are also helpful to the Transparency International in finding a basis for categorising countries in its perception index as the least corrupt, moderately corrupt, corrupt or the most corrupt. These are also useful in checking corruption, managing and monitoring organisational performance from a distance and in enforcing financial discipline and rules.
On the other hand, misty audit objections, which are not tenable in the light of modern management practices, operational nature of many a organisation, profit-and-loss consideration of various management steps involving expenditures and because of wrong interpretations and applications of financial rules by auditors, unduly taint the image of the country beyond its borders. These also unnecessarily cause loss of public trust in the honesty of the government, which is broadly represented by its offices and organisations.
A recent press report said the move to recover Tk 125.81 billion of state money from individuals and organisations on the basis of audit objections faces uncertainty, as there is no Public Accounts Committee (PAC) now to monitor its progress. The immediate past PAC, comprising members of the parliament became defunct as soon as its mother body-the parliament itself expired on completion of its normal tenure.
The defunct PAC, in course of its life for three and a half years, until October 2006, reportedly made several ministries recover about Tk 0.64 billion. During the same period, the report said, audit objections involving about Tk 1.58 billion were adjusted, which means the objections were withdrawn and settled after some additional paper work. It also means that these objections were weak and could be avoided.
The auditors of the office of the Comptroller and Auditor General (CAG) could have withdrawn those objections on having the necessary paper work done at the time of audit or subsequent exchange of views in writing on their audit objections with the offices concerned or in course of the tri-partite meetings held involving the representatives of the ministry, the department or office concerned and the office of the CAG. It is open to question whether they refrained from doing so to aid the Transparency International in having a magnified perception of corruption in this country.
Any patriotic citizen, who would never like to see the image of his or her country unduly tarnished, may ask the office of the CAG about whether or not it has taken actions against the auditors concerned for raising those avoidable and improper objections whose bases were too weak to collapse on doing some additional paper work. Unless a system of accountability for making them answerable for raising weak audit objections is introduced, auditors of the office of the CAG may not feel the due urge to learn their job-knowing financial rules thoroughly well, operational systems of the organisations they audit and the requirement to consider the matter of profit from prompt actions and loss for delayed or no actions in some cases, which may involve expenditures in certain organisations like repair works in the Power Development Board.
Such an accountability system would substantially discourage the apparent tendency among many auditors of raising improper audit objections driven by arrogance, ill motives or without being adequately serious for understanding the organisational management system, its nature of functioning and its compulsions. As time has changed requiring every organisation of the country to compete with the fast moving world, the auditors should know where a stitch in time would save nine to actually result in saving of state funds.
There is no denying of the hard fact that the low pay structure of the post of auditors under the office of the CAG does not usually attract the bright within its rank. Many of the existing auditors are said to be general graduates. Some of them are post-graduates. But most of them are mediocre. Some are even said to be below average. Just a few of them have the commerce background. But most of the government financial rules are in English. Englishmen drafted those rules during the colonial days, sometimes in easy English and sometimes in obscure English. The judicious applications of these rules depend on their proper interpretation on piercing their obscure veneers.
The office of the CAG would do well to educate its auditors well on all those rules and on the many aspects of modern management of complex organisations for enhancing their ability to raise meaningful objections. As auditors are transferable from accounts to audit and vice versa, all auditors, whether engaged in accounts or audit, should receive equal attention from the office of the CAG in the matter of training on financial rules and important aspects of modern management so that all of them are fully equipped to undertake their functions as efficiently as desirable now. All examinations arranged for assessment of outputs of such training should be seriously conducted and the answer scripts thereof may be strictly scrutinised so that those who pass out and qualify for permanent absorption and promotions are indeed versatile on their professional matters.
The pertinent press report indicated that the audit objections raised by the office of the CAG from fiscal year 1995-96 to 2001-02 involved about Tk 1.32 billion. This figure gives the ground to suspect whether the actual recoverable amount on the basis of audit objections is as big as quoted in the report. However, scanning so many objections by the PAC may take many years. Many of those responsible for the suspected irregularities would possibly pass into the next world before one tenth of these huge audit objections have been studied and recommendations made on the basis of final findings.
The fact that the now defunct PAC made several ministries recover Tk 0.64 billion and adjust audit objections involving a bigger amount, more than twice that figure, which is Tk 1.58 billion, means the filtration process of audit objections is yet too defective to be really workable. Otherwise, how could it be possible that so many audit objections were found misty by the defunct PAC, which could be and were settled through some additional paper work only?