Letter of the Day | The audits are not the same

THE EDITOR, Madam:

The impression given by those who support the auditor general remaining as a commissioner at the Integrity Commission is that the current external audit report provided by a contracted external audit firm is a suitable replacement for the audit that would have been provided by the auditor general, thus avoiding the potential conflict of interest that currently exists.

This view is not correct.

First, the ​​Auditor General of Jamaica is an independent constitutional officer appointed by the governor general (after parliamentary consultation) and is established by Section 120 of the Jamaican Constitution.

The auditor general is mandated by both the Financial Administration and Audit Act (Audit Act) and Public Bodies Management & Accountability Act). On the other hand, external auditors are appointed based on the Companies Act by the entity’s management, in this case, the commissioners.

They operate on a contractual basis and are governed by Jamaican Generally Accepted Accounting Principles, International Financial Reporting Standards, and International Standards on Auditing. Thus, their legal basis and appointments differ significantly from the auditor general.

GREATER INVESTIGATIVE, REPORTING POWERS

Second, the auditor general (AG)has unrestricted access to all government records (per the Constitution & Audit Act), can summon officials of the Integrity Commission for explanations (similar to a parliamentary inquiry), and its findings can lead to criminal investigations (eg, by the Major Organised Crime & Anti-Corruption Agency – MOCA).

External auditors have no such authority. The access to records by the external auditors is limited to what the commissioners, as their client, permits. External auditors have no legal authority or power to compel testimony, if required, and can only rely on the cooperation of their clients – the commissioners.

Finally, the AG report is tabled in Parliament and reviewed by the Public Accounts Committee, making it publicly available. In the case of the external auditors, the audit report is submitted to the members of the commission (commissioners) as seen in the latest Integrity Commission Annual Report for the FY 2023-2024.

Quite significantly, the external auditor report does not disclose to the public any significant deficiencies in internal control, fraud or irregularities that are identified during its audit. Unless the auditor general conducts the audit, the public will never be able to ensure accountability and transparency in the use of public funds.

Clearly, while both the auditor general and external auditors promote accountability of the Integrity Commission, the auditor general focuses on public-sector governance, whereas external auditors only focus on financial integrity, which is a substantial limitation. The auditor general, by law, has greater investigative and reporting powers, while external auditors serve only to influence the commission’s transparency and public trust, thereby limiting the public scrutiny required.

The audits are not the same.

GARFIELD A EDWARDS, FCCA,

EMBA

Chartered Accountant