Should the Director of Audit, audit the IADC?
from page 3
Audit Act, 2005- Section 19 -
Government Owned or Controlled
Corporation
In section 19 of this Act, called POWERS OF DIRECTOR
OF AUDIT, other functions of the DOA are outlined and
remember, the constitution says the DOA MUST audit the
accounts of bodies established by law for public purposes,
in harmony with other functions prescribed by parliamentary
law. Section 19 gives the DOA legal Access to information
of a recipient of government money and a government
owned or controlled corporation. This information
includes access to records of and electronic data processing
equipment.of the body. It also mandates that the bodies
mentioned above, SHALL give to the Director of Audit
any information, records or explanations that the DOA
considers necessary to enable him to carry out his
responsibilities under the Act. -Sub-sections (1) and (2). It
even goes as far as saying, in sub-section (3) that the DOA
has power to station any employee or professional
auditor...in the offices ofa recipient of government
money... and a government owned or controlled
corporationfor the purposes of enabling the DOA to
carry out his responsibilities under this or any other Act
more efficiently.
Page 4 THE NEWS Friday May 19, 2017
Powers of Director of Audit
So, is the IADC a government owned or controlled
corporation? The interpretation section defines such as,
government owned or controlled corporation means a
corporation incorporated under the Companies Act
1994 that is controlled by the Government;
The IADC is incorporated under the Companies Act 1994
according to its incorporation documents on the date of
incorporation 24th November, 2004. What about the
expression that is controlled by the Government? The
interpretation section requires that we prove that government
owns more than 50% of the shares to which votes are
attached and which allows it to elect a majority of the
directors of the company/corporation, in order to prove that
the corporation is government controlled. Is the IADC
government controlled? Yes!
IADCs website describes it thus, The IADCL is a private
limited liability company wholly owned by the government
of St. Vincent and the Grenadines. In the LOCAL
COMPANY ANNUAL RETURN, SHARE CAPITAL
SCHEDULE form of the IADC, for the reporting period
ending December 31st, 2016, the NAMES OF PAST AND
PRESENT SHAREHOLDERS listed are:
Government of St. Vincent and the Grenadines; Held
in Trust by Dr. the Hon. Prime Minister Ralph E.
Gonsalves.
It goes on to show that government owns 100 issued
common shares. Furthermore, a look at the incorporation
articles of the IADC shows this under (6) Any invitation
to the public to subscribe for shares or debentures of the
company is prohibited. Clearly the IADC is controlled by
the Government of SVG who owns all the shares and
prohibits members of the public from owning any shares
under the terms of this Company; IADC is a government
controlled corporation. As such the IADC must be audited
by the DOA and its audited reports must be submitted to the
Minister of Finance and laid before the House of Assembly.
What Does The DOA Say?
My first reference is the last annual report of audit of
government accounts for the years ending 2009 and 2010;
now a public document since it was laid in parliament in
2014. In it are confessions from the DOA which prove that
her office understands its duty to audit government controlled
companies but have been challenged in so doing due to
certain financial and human resources limitations. She said
under General Issues at 1.14 and 1.11 respectively:
Lack of resources to conduct audits
The mandate of the audit office has been extended to
include the audit of Statutory Bodies and Government
controlled companies. The DOA goes on to explain that
she was not able to carry out her duties properly due to the
lack of adequately trained and qualified personnel on
staff and that only 3 statutory bodes were audited for the
purposes of that report by hiring private sector accounting
firms to do so. She also said all the audit activities planned
for the years 2009 and 2010 were not completed due to
inadequate human and financial resources.
This is instructive; the DOAs office is clearly not adequately
outfitted to carry out the wide powers and duties of the Audit
Act, 2005 which are duties backed by the Supreme law of
the Constitution of our land. Who is to be blamed? The
Minister of Finance and the Parliamentary committee
provided for in law for approving estimates to run the Audit
office, of course! See section 27 of the Audit Act which
affirms this.
Additionally, Estimates of Revenue and Expenditure have
shown since about 2014 that the DOA knows her office can
audit a recipient of government money. A look at the 2014
estimates document, at page 23, shows that as one of its
Result Indicators for the year 2014 the Audit Office said it
would, Conduct Financial Audit of one (1) recipient of
Government Money. One (1) report issued to the
appropriate authority by December 31, 2014. Here it is
clear that the DOA understood it was a part of her duties to
audit recipients of government money. We do not know
which one they would aim to audit in 2014. However, a look
at the 2016 estimates, at page 22 shows that a similar thing
was aimed at in 2015. Its terms and status report are as
follows:
Conduct Financial Audit of one (1) recipient of
Government Money. Issue one (1) report to the
appropriate authority by December 31, 2015. And the
status says, Audit in progress at Kingstown Town
Board. Unfortunately nothing is said in the 2017 estimates
to update us further on this. Was the Kingstown Town
Boards audit as a recipient of government money completed?
We do not know.
Finally, the 2014 and 2016 estimates at pages 23 and 22
respectively also show the Audit office embarked in 2014
and 2015 on auditing capital projects. In the case of 2015
see this,
Conduct audit of one (1) Capital Project and issue one
(1) report by December 31, 2015. Status update read thus,
Audits were conducted on two (2) capital projects.
Reports to be issued by February, 2016. Which capital
projects are these? We do not know. However, since the
DOAs office speaks of Auditing Capital projects as a part
of its plan for the years in question, it is reasonable to expect
that the IADC responsible for the biggest Capital Project of
SVGs history would also be audited by the IADC. Let us
remember that under the Audit mandate paragraph 1.6 of
the last audit report, the DOA said this, The Director of
Audit is the independent auditor of the Government, acting
on behalf of the taxpayer, through Parliament and it is
upon her investigation that Parliament has to rely for
assurance about the fairness and regularity of the Public
Accounts. Note that it is not CIPO that gives assurance of
fairness and regularity of public monies; it is the DOA and
HER investigation laid before parliament that will assure
the people, through their representatives, of propriety and
good behaviour in relation to public monies.
I rest my case.