Some thoughts for the newly appointed Public Accounts Committee

The essential fact is this Committee is a Committee of the House responsible to the House as a whole, and is not a battleground for party faction…I believe it is true to say that the authority of the Committee is greatly enhanced by its unanimous character and I hope the complete objectivity of its report. It is fair to say that many Honourable Members of both parties have made great endeavours and have sometimes sacrificed personal views to ensure that this shall be so.

Sir Harold Wilson, former British Prime Minister & Chair of the UK PAC

Last week, Parliament Office announced the appointment of members of 14 Standing Committees of the National Assembly, including two important committees, namely, the Parliamentary Standing Committee for Constitutional Reform; and the Public Accounts Committee (PAC). Both committees have urgent tasks ahead of them. In relation to the former, considering the events that took place since the 21 December 2018 vote of no confidence as well as the requirement for local government elections to be held next year, it is imperative for the Elections Commission to be reformed to make it a truly independent, autonomous and impartial body.

The excessive powers of the President also need to be addressed, including the various immunities from prosecution. Indeed, there should be provision for sanctions for any constitutional violation. One recalls the case of a former Brazilian President Dilma Rousseff who was impeached and removed from office for breaching the country’s budget laws. Additionally, Ministers of the

Government must face prosecution if they violate Guyana’s financial and budget laws as well as the related constitutional provisions. Regrettably, the Fiscal Management and Accountability Act does not include a Minister in its definition of an official as it relates to offences under Section 85.

In today’s article, we focus on the work of the PAC, drawing heavily on our column of 9 July 2012 and included in this columnist’s book, “Public Accountability at the Crossroads: The Guyana Experience” and available at the Parliament Office’s library.

Some historical background information

The PAC is a creature of the UK parliamentary system which most, if not all, Commonwealth countries still embrace. In the UK, the PAC scrutinises the economy, efficiency and effectiveness of public spending and holds the government and its civil servants to account for the delivery of public services. It draws heavily on the work of the UK National Audit Office. The PAC plays a critical role in the democratic process by assisting Parliament in scrutinising the work of the government. In particular, it scrutinises the expenditure of the government using taxpayers’ funds, ensuring transparency and accountability within Government, and making recommendations to ensure taxpayers receive best value for money on government spending. The PAC is viewed as the crucial mechanism to ensuring transparency, accountability and honesty in the operations of government. It is imperative therefore for its members to have relevant technical expertise to ably discharge their responsibilities to the citizens of the country.

The concept of a PAC dates back to 1857 when a recommendation was made for the creation of a parliamentary committee to provide oversight of the government’s accounts. The leading proponent was Sir Francis Baring, and the idea was taken up by William Gladstone as part of the reforms he had initiated when he became the Chancellor of the Exchequer. The first PAC was established in 1862 under the chairmanship of Sir Francis by the following resolution of the House of Commons:

There shall be a standing committee designated “The Committee of Public Accounts”; for the examination of the Accounts showing the appropriation of sums granted by Parliament to meet the Public Expenditure, to consist of nine members, who shall be nominated at the commencement of every Session, and of whom five shall be a quorum.

The UK PAC now comprises 15 members while in India, it consists of not more than twenty-two members, fifteen elected by Lok Sabha (lower house of the Parliament) and not more than seven from the Rajya Sabha (upper house).

Guyana Public Accounts Committee

In accordance with the National Assembly’s Standing Order 82, the PAC is to consist of not less than six or more than ten Members of the Assembly to be nominated by the Committee of Selection as soon as possible after the beginning of each National Assembly. By convention, the composition of this committee mirrors the representation of the political parties in the Assembly. The Chairperson is usually a member of the main Opposition party in the Assembly, normally a former Minister of the Government.

The PAC’s key responsibility is to examine the accounts showing the appropriation of the sums granted by the Assembly to meet public expenditure and such other accounts laid before the Assembly as the Assembly may refer to the Committee together with the Auditor General’s report thereon. There is no timeline for the examination of the accounts referred to it by the Assembly, which is rather unfortunate. However, within ninety days of the presentation of a report from the PAC, the Government is required to table a Treasury Memorandum, setting out the actions it has taken, or proposes to take, in relation to the findings and recommendations of the PAC. It is only when this happens that the public accountability cycle is complete, and the Government is considered to have discharged completely and fully its stewardship responsibilities to the citizens of the country.

As they execute their duties, members of the newly appointed PAC need to be reminded of the need to avoid taking political positions. Indeed, the overriding consideration should always be to protect the public interest. In this regard, the words of the former British Prime Minister Sir Harold Wilson when he was the chairman of the UK PAC, are a timely reminder:

The essential fact is this Committee is a Committee of the House responsible to the House as a whole, and is not a battleground for party faction…I believe it is true to say that the authority of the Committee is greatly enhanced by its unanimous character and I hope the complete objectivity of its report. It is fair to say that many Honourable Members of both parties have made great endeavours and have sometimes sacrificed personal views to ensure that this shall be so.

The PAC’s other responsibilities

Two other responsibilities have been assigned to the PAC, following the constitutional amendments of 2001. The first relates to the exercise of supervision over the functioning of the office of the Auditor General in accordance with the Rules, Policies and Procedures Manual of that office, as approved by the PAC. In this regard, the Auditor General is required to submit reports to the PAC on a quarterly basis on the performance and operations of his office. Additionally, he must submit annually a copy of the Annual Systems and Financial Audit Report. These provisions are contained in Articles 224 of the Constitution. The PAC must also ratify all senior appointments, as provided for by Section 14 (3) of the Audit Act 2004.

The second other responsibility relates to the appointment of a five-member Public Procurement Commission (PPC) from among persons with expertise and experience in procurement, legal, financial and administrative matters. By Article 212X (2), the President appoints the members of the PPC, nominated by the PAC and approved by not less than two-thirds of the elected members of the Assembly. The tenure of appointment is for three years. However, of those members first appointed, two shall hold office for four years. Members are eligible for re-appointment for one other term of office, not earlier than three years after the end of their first term. The first appointments were made in October 2016. Therefore, the Commission has been without the services of three commissioners for a whole year since no appointments were made upon the expiry of their tenure of office. The other two members’ tenure expires this month. It is hoped that the PAC will take steps expedite the appointment of new members of the Commission to provide the much-needed oversight of the procurement process to ensure transparency and competitiveness in the award of contracts for the procurement of goods, services and the execution of works.

The inheritance of the newly appointed PAC

The nine members of the newly appointed PAC are as follows: PPP/C: Gail Teixeira (Minister of Parliamentary Affairs and Governance), Juan Edghill (Minister of Public Works), Dharamkumar Seeraj, Vishwa Mahadeo and Sanjeev Datadin; and APNU+AFC: David Patterson, Juretha Fernandes, Ganesh Mahipaul and Jermaine Figueira. No doubt, Mr. Patterson will be the new Chairman, succeeding President Irfaan Ali when the PPP/C was in Opposition.

The PAC’s work has been badly neglected over the years, resulting in a build-up of backlogged examination of and reporting on the public accounts. The last report PAC report was in respect of the years 2012-2014. The PAC is therefore five years in arrears in relation to its work. This state of affairs is most undesirable, considering that the Government’s financial stewardship does not end until the entire public accountability cycle is completed. The cycle includes budget execution; mid-year and end-of-year reporting on the execution of the budget; annual financial reporting, ex post evaluation by the legislative auditor and reporting to the Assembly; PAC examination and reporting and reporting back to the Assembly; and the Government’s response via the Treasury Memorandum.

In principle, the cycle ought to be completed within 12 months of the close of the fiscal year to enable the full and complete discharge of the Government’s accountability responsibilities to the nation. It also facilitates consideration of the next fiscal year’s budget. It is undesirable for the National Budget to be considered in isolation of a detailed scrutiny of the results of the execution of the budget of the preceding year in the form of the legislative audit report, the results of the PAC examination and the Treasury Memorandum.

The following table shows the trend in reporting by the PAC of the public accounts over the years:

While it is somewhat understandable that the PAC’s reports for 1992 and 1993 were issued in September 1995, significant delays were experienced from 1994 onwards, with the PAC report for that year being issued six years later. To address the backlog, the PAC took the unprecedented action of considering several years together: 19951998, 2000-2001, 2002-2003, 2004-2005, 2007-2008, 2010-2011 and 2012-2014. Despite these efforts, the PAC is still to deliberate and report on the public accounts for the years 2015-2018. (The 2019 Auditor General’s report has been delayed due to the COVID-19 pandemic.)

Since 1992, the PAC has examined and reported on the Public Accounts in respect of 23 years, that is, it took on average 15 months to examine and report on each year’s accounts. At this rate, it will take another five years before the Committee completes its work for the four years of backlogged accounts by which time another five years will be added to PAC’s backlogged work.

By the time the PAC gets its act together, the findings and recommendations of the Auditor General would have been overtaken by time. Given the struggles we had to endure, indeed the battles that we had to fight, to restore public accountability after a 10-year gap, we must not only guard against any further slippages but also continuously strive to effect improvements in our system of public accountability.

The other disappointment is that the PAC does not examine the accounts of public corporations, other agencies in which controlling interest vests in the State, and statutory bodies. In all probability, these entities are in need of greater scrutiny by the Legislature, as the results of the 2015-2016 forensic audits will bear out.