New Act to check corruption:

More clout for Auditor General

by Ranil Wijayapala

The Auditor General's Department will be given the requisite powers to play its expanded role under the 19th Amendment to the Constitution, when the Audit Bill is passed in Parliament soon, said Auditor General Gamini Wijesinghe who assumed duties as the 39th Auditor General of Sri Lanka on November 27.

Auditor General Gamini Wijesinghe Pic: Thilak Perera

The former Director General of Sri Lanka Accounting and Auditing Standards Monitoring Board, Wijesinghe, a Special Grade officer in the Public Administration Service is experienced in auditing and has gathered vast knowledge after serving in key public institutions mainly in the Inland Revenue Department.

He has experience in the private sector and also abroad.

Under the expanded role, the Auditor General's Department is expected to audit companies where the government holds more than 50 percent of shares and in the future, auditing will not be confined to financial auditing but will expand to management auditing and value for money auditing

He told the Sunday Observer the Auditor General's Department is committed to ensure accountability in the public sector, a key component of the good governance policy.

Excerpts of the interview:

Q:The Auditor General's Department is a key institution that ensures accountability under the good governance policy of the present government. What is the Auditor General's Department's plan for good governance being adhered to in public sector institutions after your appointment?

A: The Auditor General's role is to address accountability rather than responsibility. In that respect we monitor the state sector. Government expenditure is audited by the Auditor General.

Revenue is also audited. According to the present structure, we look into the all institutions concerned, not only the line Ministries but also Provincial Councils, Pradeshiya Sabhas and all monies or assets owned by the government but under the 19th Amendment that responsibility has been devolved on companies where more than 50 percent of the shares are owned by the state.

This is a big challenge but it will ensure accountability under the good governance policy.

Q: How many companies and institutions will be audited in the future?

A: So far we have identified more than 250 companies. SriLankan Airlines and Mihin Lanka also come under the AG's purview. Up to now these companies were audited by private audit firms.

Q: What are the new concepts that will be taken for proper auditing?

A: As far as accountability is concerned, we need to think from different angles. Up to now, the audit aspect was only with regard to financial resources. But now, we have to see whether social responsibilities are fulfilled and see that all aspects are covered.

With the setting up of the new commission, we need to check management audit and see whether the assets have been properly utilized.

Most of the accounting standards have changed. This framework is far bigger than the existing one. We will consider the current value of the assets rather than look at the historical basis.Ministries and Departments only show expenditure for auditing. In such an instance Balance Sheets are not shown. That has not been properly identified and so it is an issue. We are supposed to develop the assets base of every Department and Ministry. It is a big challenge.

Q: How will you take up that challenge at Departmental level and what sort of legal framework do you need to have?

A: This is a crucial point. The Audit Commission has been formed to sort this out. They have to play a big role. The Audit Act will be passed soon. It will provide a proper framework.

Q: When can we expect the new Audit Act which is long overdue?

A: It will be passed soon. It is still with the Attorney General's Department and will be tabled in Parliament soon.

Q: What areas will the Act cover?

A: It will cover additional powers for good governance. When any wrong is committed , the Auditor General is empowered to surcharge wrongdoers. The Auditor General has been given clear demarcation over financial audit , value for money and management audit.

Q: The Act will give you the power to look into three audits, apart from financial auditing which the Department did earlier?

A: We only did the financial audit. This is why the Auditor General's Report was always criticised as many things were not clarified in the audit reports. This is because the overall picture was not seen in the audit reports.

Q: What is the role of the Audit Commission? Does it have power to supervise the system?

A: The Audit Commission has no impact on auditing. Its role is to monitor the Auditor General's Department, recruitment, promotions and transfers. Appeals of the Auditor General's Department will be heard by the Commission.

The Auditor General can take action without delay and decisions can be taken swiftly as there is a separate institution.

Q: Being the Chairman of the Audit Commission as well, how practical is it to monitor the Auditor General's Department?

A: The Audit Commission comes under the Constitution. I have to comply with the Constitution. At the same time I have to identify the two different roles and how best I could function in these two roles. It is a challenge. But it would not be a problem because I could identify the two roles.

Q: What reforms do you think are necessary to ensure that your work is politically free?

A: There is no problem and we can work independently. Only identifying information and getting information might pose a problem. In such circumstances, parties might be reluctant to provide information. Now all these barriers have been removed. The Auditor General has that power to do whatever he deems fit. That is why it will become a challenging job in the future and nobody could point an accusing finger at us.

Q:What steps can the Auditor General take against institutions which fail to take corrective measures on the recommendations of the Auditor General?

A: Our main role is to spot the irregularities and report to Parliament. Under the new Act some surcharging powers has been given to the Auditor General's Department.

Q:What action can the Auditor General take on institutions which do not follow proper auditing standards ?

A: As far as the public sector is concerned, there are no restrictions to apply all the accountancy standards.That is why the public sector comes under the Sri Lanka Accountancy Standard Monitoring Board and the Chartered Institute of Accountants. They issued a separate set of standards known as the Sri Lanka Public Sector Accounting Standards. Ten basic and important standards have been already issued to public sector institutions. We have more than 40 standards where accountancy standards are concerned.

Where the public sector is concerned there is no balance sheet. They issue statements. The Chartered Institute will issue another ten standards soon. I don't think we can apply everything to all institutions at once.We will first select Corporations and Boards as they already have balance sheets. Then we will move to the Ministries and Departments. I think we can expect balance sheets from public institutions and ds monitor them.

Q:The tender procedure followed by government institutions was the basis for corruption and misappropriation in the past. What action will the Department take to ensure that a proper tender procedure is adopted by state institutions?

A: That is an important part that lagged behind. We intend to educate our staff to focus more on that area. Foreign training will be given on the procurement procedure.

Q:There were many investigations on corruption and malpractices within the past year. How is the Auditor General's Department contributing towards these investigations?

A: The Auditor General is satisfied with the investigations and now I know the public are participating and providing information. I have to study this subject and pay attention to finalise these issues.

Q:How do you work with the COPE and COPA in Parliament ?

A:Their work depends on the Auditor General's final annual report. They can't go beyond that. If there are any queries we answer them during the COPE and COPA sessions. If further investigations are required, we provide the information.

Q:Your appointment as Auditor General has also come under criticism because you are not from the Auditor General's Department. What is your response?

A: I am the most experienced government official in the audit field. I have completed 30 years in government service in different Departments and Institutions mainly with the Inland Revenue Department. I covered the government sector as well as private companies also in the auditing field.

During the past one and a half years, I worked as Director General, Sri Lanka Accounting and Auditing Standards Monitoring Board. As far as accounting standards are concerned I am the most suitable person in the field. The appointment was made by the Constitutional Council.