AG Biraro: Govt enterprises must strive for clean audits

Auditor General Obadiah Biraro. File.

Last month, the National Leadership Retreat recommended shoring up measures to fight fraud in the public and private sectors as well as recovery of embezzled resources. The retreat resolved that the Government should come down hard on individuals or entities that do not abide by Office of the Auditor General’s recommendations regarding fighting corruption.In an interview with The New Times’ James Karuhanga, the Auditor General Obadiah Biraro shed light on the renewed effort against graft. Below are excerpts:

Q. Resolution number two of this year’s national leadership retreat was about upping the tempo in fighting corruption. And you attended the retreat…what was your take?

A. The take is that there is all that seriousness; more serious than ever before. Not that there has ever been lack of seriousness; but that there is more seriousness.

Q. So, you made a presentation at the retreat; tell us what you exactly tackled…

A. I was in a team. On the agenda were the anti-corruption institutions; Transparency International, the parliamentary public accounts committee, the Office of the Auditor General, and the Chief Ombudsman.

 Each of us made a presentation on how we see things; what is happening, what is not happening, some recommendations...

Q. Given that you all observe things in the same country, from what you gathered from presentations by four different institutions, do you all see what is happening in the same frame?

A. Yes we do. And, this time around, you could see these four presenters, or three plus me, are coming up with some initiatives and strength than there has been.

In management accounting we call it incremental. Not that it is more important than before, but you are having something to add.

What do I mean? People would easily go to slumber and only celebrate that Rwanda is number three in Africa behind Mauritius and Botswana.

And we [Rwanda] are number one in east Africa, and people would be like ‘oh, I think we have done a kill!’ but if you saw the manner of presentations and the vigor people put in it, and the discussions, it is serious.

Q.What’s the real evidence for the seriousness?

A. The evidence of the seriousness is what each individual presented. We had to put across cases. It is not just talking. One had to focus on examples.

The presentation was based on reports normally presented to parliament and which reports are participatory in nature, between the Auditor General and the accounting officers.

The presentation was focused on the subject matter; manifestation of corruption. And this presentation is made in front of the President.

Q. What new elements were put on the table as regards fighting corruption?

A. From my end, I said, and I will repeat the same in Parliament around the beginning of May; there are 13 very important institutions in the country that should, as a matter of urgency, work for a clean audit opinion.

Now I can’t produce the list but these are the giants that you live with every day. Go look at the list of GBEs [Government Business Enterprises]. That’s it.

Q. The ones that have failed to get an unqualified audit report over a long period of time?

A. Failed for a long time, since their inception, and yet, they are the main drivers, sector by sector, of service delivery.

The gist of the matter was that international standards on auditing or better still, international supreme auditing standards, do not require or allow the Auditor General to state the word ‘corruption’ because that would amount to fraud and investigation thereafter.

But again, the same standards compel the Auditor General to have a chapter of the opinion that brings out where corruption manifested and how the manifestation has affected the principles of the economy, efficiency and effectiveness in use of scarce public resources.

That was my opening sentence and therefore, the following institutions as I said, the GBEs, have not been able to convince the Auditor General to sign an unqualified audit opinion, year in year out.

Q. And how does this state of affairs lead to corruption? I said, mismanagement of public finances is a vehicle that facilitates corruption. What do I mean? You are managing like Rwf400 billion, what percentage is it equivalent to in the annual budget?

A. I bring this so as to get people to know the gravity of the matter. So who knows; those commissions or omissions might have facilitated, most likely, corruption to happen in whatever transactions you have been undertaking.

Accounting is a fundamental pillar of transparency. A fundamental pillar of good corporate governance, which corporate governance delivers the goods and services to the intended beneficiaries at the minimum coast, a cost the country can afford.

Q. Any headway in the recovery of lost or embezzled public funds?

A. That also featured in the Ombudsman’s presentation. For example, there is a case in the media regarding Rwf170 million that was stolen at the University of Rwanda.

Recovery is a very hard undertaking because, you see, fraudsters are these corrupt traffickers of transactions either as management or outside management.

Those guys are highly crafty. Recovery is not easy and that’s why we as auditors we are a proactive institution. We prevent and don’t wait to recover.

How much are we supposed to recover anyway? It is so hard to come up with a figure but it is a big one, and in billions. For example, a case to mention evolved from an abandoned contract of Rwf5.2 billion, in the energy sector.

We were saying, here is Rwf5.2 billion paid to some contractor who disappeared. How easy is it to recover it yet you could not prevent it from going? We know how hard it is.

Q. How hard could it be since the contractor who disappears is a national somewhere, we have Interpol…?

A. Experience has been that it is not easy. And that’s why for us we are saying that all these institutions are put in place and work on a daily basis and report at a certain designated date and time, to prevent such.

For years now, there have been cases of entities not paying due attention to recommendations you put in your annual reports…

That’s true. This is as required by Article 69 of the organic law governing public finance management. This clause requires the Auditor General to make recommendations to accounting officers and, it becomes law for implementation.

People responsible for making things happens, given our scarce resources, must always remain alert.

Rwandans will say that this Rwf5.2 billion that was taken by a person who we don’t know, ‘can’t it put up a hospital, maybe in nine months?’ Our focal point, as ever, is prevention.

Q. Why do countries like Mauritius or Botswana do better? Is it because of better controls that we don’t have? What can Rwanda learn from them, if you have considered their cases?

A. You see, Rwandans; first and foremost, let’s be fair with ourselves. Historically, when was this office [AOG] established?

But this is not to imply that 18 years down the road (after the office was created) is too short a time that accounting officers shouldn’t be complying fully.

Q. What, then, do we need to do?

A. What we need to do is sustain the achievements. Rwanda, for the last 20 years has been working hard to attain that level [of fighting corruption] but the issue at hand is recognition of the fact that it requires more hard work to remain top.

And once you sustain that it means you are headed for; I don’t know what is better than number one. The needs are ever increasing.

So, chief budget managers should have what it takes to discern the priorities, spend accordingly and be able to bring results.

Agency theory is such that whoever acts as an agent, acts as if working for oneself, and the beneficiaries expect equity, or fairness, in delivery of goods and services at the minimum or appropriate cost.

There is need for people to bear in mind the need for the economy, efficiency and effectiveness while using scarce public resources.

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