Published On:Thursday, January 26, 2012

By NEIL HARTNELL

Tribune Business Editor

THE Auditor-General is being "robbed of administrative independence" because he cannot initiate prosecutions where corruption and fraud involving public monies is suspected, a Public Accounts Committee report noting that staff shortages meant his office "had to be selective in matters it pursued".

In its interim report, tabled in the House of Assembly yesterday, the Public Accounts Committee urged that the Financial Administration and Audit Act be amended to give the Auditor-General "the requisite authority to initiate prosecutions where and when he deemed it necessary".

This would bring the Auditor-General's powers into line with those of his UK counterpart. Under the current system, if the Auditor-General and his office uncover irregularities with regard to the spending and use of government funds, their only option is to forward a report to the Permanent Secretary of that agency, plus the Treasurer and Financial Secretary.

And, if legal or criminal action is decided upon, the matter then has to be referred to the Attorney General's Office.

Noting that the Financial Administration and Audit Act "did not empower the Auditor-General to request investigations by the police, which lead to prosecutions in cases where corrupt, fraudulent or irregular practices were suspected", the Committee said: "This robbed the Auditor-General of the administrative independence that the office required."

During two meetings with the Public Accounts Committee, on June 28, 2011, and July 5, 2022, the current Auditor-General, Terrance Bastian, and his number two, disclosed that their office kept on losing staff to the private sector because salary levels were "not very attractive".

While the Government had provided funding to allow the Auditor-General's office to outsource some functions, the report added: "Admittedly, because of the shortage of professional staff, the department had to be selective in the matters it pursued.

"His department was independent, and its independence had never been put in question by either of the two administrations he had served. Nevertheless, it was awkward to have to audit a ministry or department, and then have to rely on that same agency for personnel or funding."

Describing the fact that the Auditor-General had to be "selective" in the public finance issues it investigated as "unacceptable", and urging that he be provided with more resources, the Committee said it was "very concerned" about the situation.

The issues raised go to the heart of accountability and transparency in government, especially when it comes to dealing with the people's (taxpayers) money. During their meetings, the Auditor-General had suggested that the Public Accounts Committee "serve as a bridge" between himself and the public.

This, Mr Bastian indicated, could show "there were consequences for persons who were negligent or fraudulent with government funds". And Bahamians would see public officers being held accountable.

"This would assist in building trust in the system, as the absence of consequences was a major factor in much of the irregularities present in the public system," the Public Accounts Committee's report said of the Auditor-General's suggestions.

Elsewhere, the Auditor-General said he had been unable to issue an unqualified opinion on the Government's financial accounts for several years, as some reconciliations had proven impossible.

"Some of the documents had been damaged by water when the Treasury was located in the Adderley Building, and others could not be found. The old accounts were still being carried on the books because there was no legal authority to write-off the accounts," the Committee's report said.

Mr Bastian said amendments to the Financial Administration and Audit Act should give the authority to write-off old, dormant accounts, enabling him to certify the Government's financials.

Mary Mitchell and Miriam Curtis, senior deputy treasurer and deputy treasurer respectively, during a November 2011 meeting with the Public Accounts Committee, said some of the dormant accounts went back as far as 1973. All had been closed with zero balances.

Two attempts had been made since 2000 to provide the legislative authority to write-off the problem accounts, and Ms Mitchell agreed with the Auditor-General that the Financial Administration and Audit Act should provide the powers to write-off the dormant account during the current fiscal year.