The role of an au­di­tor is to ob­tain rea­son­able as­sur­ance that the fi­nan­cial state­ments are free from ma­te­r­i­al mis­state­ments, whether due to fraud or er­ror and to is­sue a re­port there­on. Mis­state­ments can arise from fraud or er­ror and are con­sid­ered ma­te­r­i­al if, in­di­vid­u­al­ly or in the ag­gre­gate, they could rea­son­ably be ex­pect­ed to give a mis­lead­ing im­pres­sion as to the re­li­a­bil­i­ty of the fi­nan­cials. Fi­nan­cials are used for a va­ri­ety of pur­pos­es and could in­flu­ence de­ci­sion-mak­ers. There­fore, the au­di­tor must plan the au­dit fol­low­ing au­dit stan­dards or guide­lines that re­flect best prac­tices to fa­cil­i­tate that rea­son­able as­sur­ance. 

The Gov­ern­ment’s fi­nan­cial af­fairs are gov­erned by the Au­dit and the Ex­che­quer Act (69:01). This act pro­vides “for the con­trol and man­age­ment of the pub­lic fi­nances of Trinidad and To­ba­go; for the du­ties and pow­ers of the Au­di­tor Gen­er­al; for the col­lec­tion, is­sue, and pay­ment of pub­lic mon­ey; for the au­dit of pub­lic ac­counts and the pro­tec­tion and re­cov­ery of pub­lic prop­er­ty; for the con­trol of the pow­ers of statu­to­ry bod­ies; and mat­ters con­nect­ed there­with.”

Part 1 of the act de­fines terms used in the act and de­fines “Trea­sury” as “the min­is­ter, and in­cludes such of­fi­cer or of­fi­cers in the Min­istry of Fi­nance as may be de­put­ed by the min­is­ter to ex­er­cise pow­ers and to per­form du­ties un­der this act.” Sec­tion 3 of the act makes the min­is­ter re­spon­si­ble for the pub­lic ac­counts. It says that “… The min­is­ter shall, sub­ject to the Con­sti­tu­tion and this act, have the man­age­ment of the Con­sol­i­dat­ed Fund and the su­per­vi­sion, con­trol and di­rec­tion of all mat­ters re­lat­ing to the fi­nan­cial af­fairs of the State which are not by law as­signed to any oth­er min­is­ter.” 

This min­is­ter is the Fi­nance Min­is­ter. He is re­spon­si­ble for lay­ing all fi­nan­cial state­ments of statu­to­ry cor­po­ra­tions, state en­ter­pris­es, and any gov­ern­ment min­istry or de­part­ment in Par­lia­ment. 

Part 3 of the act (Sec­tions 7 to 11) ex­pands on the role of the Au­di­tor Gen­er­al as set out in S116 of the Con­sti­tu­tion. S116 (6) of the Con­sti­tu­tion notes that in the ex­er­cise and the per­for­mance of his func­tion un­der this Con­sti­tu­tion, the Au­di­tor Gen­er­al shall not be sub­ject to the di­rec­tion or con­trol of any oth­er per­son or au­thor­i­ty. S116(2) makes the Au­di­tor Gen­er­al (and any­one au­tho­rised by him) re­spon­si­ble for the au­dit of the pub­lic ac­counts and “of all of­fi­cers, courts, and au­thor­i­ties of T&T.”
Al­so, the Au­di­tor Gen­er­al (or any­one au­tho­rised by him) shall have ac­cess to all books, records, re­turns, and oth­er doc­u­ments re­lat­ing to those ac­counts. S116(3) ex­tends these re­spon­si­bil­i­ties to all oth­er cor­po­ra­tions owned or con­trolled by or on be­half of the state. 

Pur­suant to these re­spon­si­bil­i­ties, the Au­di­tor Gen­er­al must sub­mit his re­port an­nu­al­ly to the Speak­er, the Pres­i­dent of the Sen­ate, and the Min­is­ter of Fi­nance, who must lay this re­port be­fore Par­lia­ment. S24 and S25 of the Au­dit and Ex­che­quer Act give the time­lines for the prepa­ra­tion and de­liv­ery of the pub­lic ac­counts to the Au­di­tor Gen­er­al for au­dit. The pub­lic ac­counts for the year end­ed Sep­tem­ber 30 must be com­plet­ed and sent to the Au­di­tor Gen­er­al by Jan­u­ary 31. The au­dit must be com­plet­ed and the re­port sent to the Pres­i­dent of the Sen­ate, the Speak­er, and the Fi­nance Min­is­ter by April 30. 

All of this is straight­for­ward. It is im­por­tant to fa­cil­i­tate the ac­count­abil­i­ty process en­shrined in the Con­sti­tu­tion and for­ti­fied by the Au­dit and Ex­che­quer Act. The Ex­ec­u­tive is re­spon­si­ble for pi­lot­ing the Ap­pro­pri­a­tion Bill which gives the Gov­ern­ment (the ex­ec­u­tive/Cab­i­net) the pow­er to tax and spend in ac­cor­dance with its pri­or­i­ties. The Au­di­tor Gen­er­al’s re­spon­si­bil­i­ty is to pro­vide a re­port on how that pow­er was ex­er­cised, whether pub­lic mon­ey was spent as au­tho­rised, and all mon­ey re­ceived. The Au­di­tor Gen­er­al’s re­port comes af­ter the fact and does not af­fect how the ex­ec­u­tive op­er­ates.

That is why the Au­di­tor Gen­er­al shall not be sub­ject to the di­rec­tion or con­trol of any oth­er per­son or au­thor­i­ty. The in­de­pen­dence of that of­fice must be pre­served and de­fend­ed be­cause the Au­di­tor Gen­er­al is, in ef­fect, the eyes and ears of the pub­lic, who have no di­rect in­flu­ence on how funds are spent. The Pro­cure­ment Act is now part of that op­er­a­tional frame­work. 

I re­it­er­ate last week’s com­ment that the cur­rent im­passe be­tween the Au­di­tor Gen­er­al, the At­tor­ney Gen­er­al, and the Fi­nance Min­is­ter has, at its core, poor­ly im­ple­ment­ed soft­ware at the Cen­tral Bank where the op­er­at­ing con­trols to en­sure ac­cu­ra­cy were ei­ther in­ad­e­quate or failed. It is im­por­tant to note that the soft­ware tools at the heart of this “er­ror” have been used by banks world­wide for the last 20 years with­out this con­fu­sion.

In­deed, in­ter­bank set­tle­ment sys­tems man­age and rec­on­cile tril­lions of USD elec­tron­i­cal­ly, dai­ly. Oth­er­wise, the in­ter­na­tion­al pay­ment sys­tem would be a dis­as­ter. 

This soft­ware “glitch” is the key to the Au­di­tor Gen­er­al au­dit dis­claimer. This sim­ply says that the doc­u­men­tary ev­i­dence sup­port­ing the re­port­ed in­creased rev­enue could not be ver­i­fied. The pub­lic need not be dis­tract­ed by the “noise” caused by the pub­lic re­la­tions war and the ex­change of le­gal let­ters. What the pub­lic needs now is as­sur­ance from the fi­nance min­is­ter that this “glitch” will be cor­rect­ed.

Mar­i­ano Browne is the Chief Ex­ec­u­tive Of­fi­cer of the UWI Arthur Lok Jack Glob­al School of Busi­ness.