Dec 13, 2015 News
For years, the People’s Progressive Party (PPP) boasted that the National Industrial and Commercial Investments Limited (NICIL) has always received a clean bill of health from the country’s Auditor General, Deodat Sharma.
However, the “nauseating” findings documented in a forensic audit report on the entity, prove that Sharma deliberately overlooked or hid areas of corruption, says economist, Dr. Clive Thomas.
In a recent interview, the Presidential Advisor on Sustainable Development said that the damning findings of the NICIL forensic audit report is more than enough evidence to prove that the country’s AG cannot be relied upon to “be transparent and expose all areas of corruption without fear or favour.”
The Head of the State Assets Recovery Unit (SARU) said, “Whenever someone challenges the nastiness that is going on at NICIL, Opposition Leader, Bharrat Jagdeo is always quick to defend his baby. He is quick to cry out that NICIL has received a clean bill of health for several years and the audited reports of the company have been laid in the National Assembly as the law stipulated.”
“However, the forensic audit report which was done by Chartered Accountant, Anand Goolsarran, comes like a sharp slap in Jagdeo’s face. It shows that sickening areas of corruption were overlooked or deliberately hidden by Sharma and that very fact does not bode well for this nation.
It puts us on a dangerous precipice when we cannot trust the auditor of the nation’s purse. And that is the position Sharma has put himself in.”
Goolsarran, in his report on NICIL, said that the country’s financial laws provides for a Government company to present to the Minister, audited accounts within six months of the close of the financial year and for those accounts to be laid in the National Assembly not later than three months thereafter.
He said that NICIL is a Government company. As such it is required to follow the above requirements. In spite of this, he noted that financial reporting and audits by the company were eleven years in arrears as at the end of June 2012.
The Chartered Accountant recalled that the lack of accountability on the part of the company even forced the National Assembly to pass resolution No. 14 dated June 27, 2012 which called on the former Minister of Finance, Dr. Ashni Singh, to provide the House with all outstanding audited accounts of NICIL.
On September 27, 2012, three months later, the Auditor General issued his reports on the financial statements of NICIL for the years 2002 to 2005.
Goolsarran said that these statements as well as those of subsequent years were given unqualified opinions. This is equivalent to having a “clean bill of health” notwithstanding serious concerns raised over the years regarding NICIL’s “reckless and lawless” behaviour with taxpayers’ moneys.
He said that NICIL provided a schedule indicating that it had submitted draft financial statements within two to three months of the close of the financial year and had responded to the queries from the Auditor General also within a period on average of two to three months of the receipt of the queries.
In May 2012, NICIL had also recalled the draft financial statements for 2002 and 2003 and replaced them with a revised set of financial statements prepared in a new and more detailed format in compliance with the International Financial Reporting Standards (IFRS).
“It could, however, not be determined whether subsequent years were also withdrawn and replaced, and efforts to obtain information from the Audit Office were not successful. However, it stands to reason that this would have been done, as years subsequent to 2003 were all prepared and audited in compliance with the IFRS,” expressed the forensic auditor.
Goolsarran was also concerned that the Auditor General issued his reports on the financial statements of NICIL for the years 2002, 2003, 2004 and 2005. He said that this arduous task was completed in as much as his office had done a significant amount work on the original draft financial statements for 2003 and 2004 as well as subsequent years.
He said that the revised set of financial statements would have required a substantial amount of additional audit work, given the level of detail involved as required by the IFRS, hence his concern that the audit opinions for four consecutive years were issued on the same day.
He said, too, that attempts to obtain the original draft financial statements submitted to the Auditor General were unsuccessful.
“It is relevant to note that during the period August 28, 2006 to May 15, 2015, the Chairman of the Board of Directors of NICIL was the former Minister of Finance. His spouse was an Audit Director in the Audit Office with overall responsibility for the audit of public enterprises which includes the audit of NICIL,” said Goolsarran.
He added, “This arrangement presented a serious conflict of interest. The minutes of NICIL’s board meeting of April 27, 2007 recorded the former Minister as having stated that “he supports outsourcing of the audits of the subsidiaries, but NICIL accounts need to be audited by the Auditor General.”
“Given the state of affairs to have existed in the Audit Office, it would have been more appropriate for the audit of NICIL to have been outsourced.”
Goolsarran said that NICIL has produced consolidated accounts of itself and its “subsidiaries” from 2002 to 2006.
“An examination of these consolidated financial statements for 2002 showed that the Board approved the accounts on March 12, 2010 while the Auditor General issued his opinion on them on June 15, 2010,” he said.
However, Goolsarran said that the Auditor General’s opinion on the accounts of NICIL as an individual company was issued on September 27, 2012, that is, 15 months later.
He explained, “It should be emphasized that the audited consolidated financial statements could not have existed before the date when the accounts of NICIL, as an individual company, were certified by the Auditor General. A similar observation was made in relation to the consolidated accounts of NICIL for 2003, 2004 and 2005.”
“The Auditor General has acknowledged that he issued his opinions on the consolidated financial statements of NICIL for the above years before his opinions on the financial statements of NICIL as an individual company,” expressed the Chartered Accountant.
He said, however, that Sharma did not provide a satisfactory explanation as to why he had done so. Goolsarran said that NICIL’s board was also complicit in the violation of this fundamental principle regarding the preparation of group accounts when it approved the consolidated financial statements without ensuring that NICIL as an individual company was audited first.
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