CAG and ACC can team up to crack down on swindlers

A common platform comprising the Office of Comptroller and Auditor General (OCAG) of Bangladesh and the Anti-Corruption Commission (ACC) is on the cards to apprehend the financial wrong-doers and punish them, said the country's top auditor.

However, there is a legal issue since the ACC is a prosecuting body, while the OCAG is not, Mohammad Muslim Chowdhury, the Comptroller and Auditor General (CAG) of Bangladesh, told The Daily Star in an interview recently.

"Audit findings are a work in progress until finalisation of the audit report, so if the ACC carries out prosecution on that basis, the move may face legal challenges."

But if the OCAG can make audit reports up-to-date, things will not be that much late and the ACC will be able to take actions on the basis of the reports. The ACC is already doing that, he said.

The OCAG has completed the audit for fiscal 2017-18.

The top auditor feels that the faster the audit report is produced the higher the impact of audit on all stakeholders.

"It will take time. It will not happen this year. But we will try next year to analyse the transactions of the first six months during the second half with the help of iBAS data and perform audit in the same year."

The iBAS is the Integrated Budget and Accounting System and Chowdhury was engaged in a supervisory role during the development and implementation of the programme.

The system is a fully automated web-based platform, which captures and processes all government transactions as soon as they take place.

The iBAS++, which is its updated version, is working as an excellent electronic platform for automated budget control, online pay bill submission, report generation and employee database, including that of pensioners.

Balances for general provident fund are now maintained centrally.

The CAG has supervisory role on the country's accounting and payment systems and is collaborating with the finance division for improving the infrastructure.

"When it comes to payment and accounting systems, our target is to gradually stop people from visiting government accounts offices for payments. The culture has already started."

Thanks to recent changes in the country, pensioners are receiving monthly pension through electronic fund transfer (EFT), a payment system that directly credits amount to the client's chosen bank account.

Payments related to social safety net and pay and allowances of government employees are also disbursed through the EFT.

"These are big positive signs for improvement of public services. In the future, contractors or suppliers will also receive their claims online instead of manual cheques."

Audits are also benefiting from consolidated as well as individual voucher level information on expenditure, revenue reported in iBAS++.

Now, sensitivity and materiality are clearly identified for risk analysis at the audit planning stage using iBAS data without visiting the offices physically before field audit.

It will help detect critical audit areas in advance and reduce the cost of audit.

"I have put thrust on this issue since I joined as the CAG."

Bangladesh is gradually moving away from traditional approach and zeroing in on high-impact auditing with a view to ensuring value for taxpayers' money, he said.

"Audit is changing. We are moving towards a more focused and risk-based approach."

The CAG is a constitutional body and entrusted with the duty to provide independent assurance over whether taxpayers' money has been spent in the best interest of the citizens and applicable rules are complied.

He reports the findings to the parliament through the President.

The reports are discussed in the public accounts committee (PAC) and the public undertaking committee (PUC) of the parliament. The committees examine witnesses and makes recommendations to take corrective and preventative actions.

"If the PAC and PUC work effectively, checks and balances can be ensured. It is also critically important that the recommendations made by the PAC and PUC are complied with by the government."

There has been a rise in instances of unnecessary procurement -- with no any link to the need.

"There is no dearth of laws and regulations. There is a lack of checks and balances. Time has come to ask questions on whether a procurement was necessary."

Taxpayers are not paying taxes for unnecessary expenditure -- they are giving taxes for a return.

"Constitutionally and by spirit, this is taxpayers' money and should be spent for the benefit of the public."

The country's 12th CAG pioneered public sector financial management reform. He was awarded Jonoproshashon Podok for his contribution to the improvement of public service delivery.

A highly accomplished person with an illustrious career in the civil service spanning 33 years, Chowdhury has had an in-depth and broad-based knowledge and experience on matters of public financial management, administration and governance.

He was a member of the Bangladesh Civil Service (Audit and Accounts Cadre) 1984 batch. Prior to assuming the office of the CAG in July 2018, he was the finance secretary.

According to Chowdhury, there are question on whether the OCAG is conducting the audits with skilled personnel, in a proper way and in a timely manner.

"There is also governance issue on whether the institutional capacity of these committees is strong enough to work effectively."

Under Chowdhury, the audit directorates have been re-organised; their numbers have been increased to 17 from 10 to properly align audit assignments with various areas of public expenditure such as education, health, agriculture etc.

There has been an unfortunate practice of delaying sanction of pension of an employee if their last work stations are not audited, he said. 

"We have made it clear to the government (the finance division) that sanctioning of pension has nothing to do with audit pendency."

Audit must be performed based on significance and national importance, and not as a customary routine work to add an unnecessary layer to pension sanctioning process, said Chowdhury, who holds a Master of Science degree in finance and accounting from the University of Birmingham in the UK.

Although there is no complete database, there are about 8 lakh unsettled audit observations as of 2015 and at least half of them are not serious financial irregularities in nature and are more of technical or general observations, the top auditor said.

Huge amount of time and other resources are spent in pursuing these observations every day. Ultimately, the cost is higher than the benefit. Secondly, people who were responsible for the general irregularities couldn't be traced now.

"In no way it is helping in improvement of public service delivery. So, it is better to drop them off instead of pursuing them. I have planned to shelve the general audit observations as of 2015," Chowdhury said.

Now, the OCAG will scrutinise this particular group of observations. If they are found to be really serious they would be included in the future audit reports as old observations.

"If not, we will hand them over to the ministries and tell them to take corrective measures about them. As a result, there will not be huge volumes of backlogs in the future and more attention could be given to fresh audit to address contemporary crucial issues."

For performance audit, a higher level auditing that looks at economy, efficiency and effectiveness, skilled people have to be developed.

"The OCAG will carry out performance audit selectively like it did in the past."

Financial audit is also yet to be covered effectively by the OCAG.   Countries like Bangladesh may not be able to run audits like those in developed countries by embracing best international practices because every nation has different levels of absorptive capacity, Chowdhury said.