The 2017 Auditor General’s Report (Part I)

The Auditor General completed his audit of the Government’s accounts for the year ended 31 December 2017. He presented his report on 28 September 2018 to the Speaker of the National Assembly who laid in the Assembly on 18 October 2018. Since then, the media has been highlighting various aspects of the report.

Article 223 of the Constitution defines the public accounts to include the accounts of: (i) all central and local government bodies and entities; (ii) all bodies and entities in which the State has a controlling interest; and (iii) all projects funded by way of loans and grants by a foreign State or organisation. Central and local government bodies include Ministries, Departments and Regions as well as the municipalities, the Neighbourhood Democratic Councils (NDCs), and district and village councils. On the other hand, entities in which controlling interest vests in the State include public corporations, government companies and statutory bodies, while foreign-funded projects are those of the World Bank and Inter-American Development Bank, among others.

The Auditor General is in effect the external auditor of the entire public sector. Given the enormity of his mandate, there is provision for the engagement of Chartered Accountants in public practice to audit on his behalf and under his supervision, any of the accounts referred to above. It has been the practice for the audits of public enterprises to be contracted out to Chartered Accountants because of their greater expertise in commercial-type audits.

The report for 2017, as in previous reports, covers Ministries, Departments and Regions only since the other entities - the six municipalities, the 65 Neighbourhood Democratic Councils, the 215 Amerindian Village Councils as well as the several foreign-funded projects are required to have separate financial reporting and audit. This is because these entities are governed by separate legislation, such as the Public Corporations Act, the Companies Act, Municipal and District Councils’ Act, the Local Government Act and the Amerindian Act. Statutory bodies, such as the Bank of Guyana and the Guyana Revenue Authority, also have their own legislation. Foreign-funded projects are, however, the subject of separate agreements with the Government.

Given that the mandate of the Auditor General relates to the public accounts in their entirety, in principle, the audited accounts of these other entities should also be laid in the Assembly and referred to the Public Accounts Committee (PAC) for detailed examination. However, this is not being done. That apart, most of these entities are significantly in arrears in terms of financial reporting and audit, and some do not have audited financial statements since they were established. These include the NDCs and the Amerindian Village Councils. In the circumstances, one must not view the Auditor General’s report as having fully satisfied constitutional and legislative requirements relating to public accountability. This is an issue that should be discussed and resolved by the PAC.

The public accounts, as contained in the Auditor General’s report, comprises the consolidated financial statements of the Government and the accounts of Ministries Departments and Regions. The report is entitled “Report of the Auditor General on the Public Accounts of Guyana and the Accounts of Ministries/ Departments/Regions…” This title was framed during the finalization of the 1992 report because at that time the public accounts were considered the consolidated financial statements of the Government only. Given the constitutional amendment of 2001, it would be more appropriate for the report to be captioned “Report of the Auditor General on the Consolidated Financial Statements of the Government and the Accounts of Ministries, Departments and Regions…” One hopes that this amendment will be reflected in the Auditor General’s 2018 report.

The culmination of the work of an external auditor is the expression of an opinion on the financial statements of the organisation in terms of their fair presentation and compliance with applicable laws, regulations and circular instructions as well as adherence to any contractual obligations. The Auditor General is the external auditor of the Government. His 2017 report is contained in two volumes and covers 734 pages. However, the actual report is of 444 pages in length, while the remaining pages comprise the audited accounts. The report begins with the Auditor General’s opinion of the financial statements, followed by an executive summary, then the detailed findings and recommendations.

Of the ten sets of financial statements comprising the consolidated accounts, the Auditor General issued an unqualified opinion or a ‘clean bill of health’ on only two statements - Receipts and Payments of the Contingencies Fund; and Schedule of Issuance and Extinguishment of all Loans. He has also disclaimed his opinion on two other statements - the Deposits Fund; and the