Government Controls What He Audits And When He Goes Out To Pee – Good Doggy!
The hits on our three part series on the Constitutional changes have gone crazy. The overwhelming majority express frustration and anger at the government for the disdain being shown regarding a matter that is on everyone’s minds i.e. that government borrowing and spending are out of control. I guess it is not a surprise that few think the DLP would do anything to change things, at least the way they are going right now.
Everyone knows that the only way to get spending and debt back under control is to prescribe and take some bitter medicine. On a personal scale people are willing to do that in order to stave off disaster and avoid suffering the anguish of losing it all. Out here in poor people country we call it ‘time to cut up the credit cards and hunker down – spend less than what we take in -use the difference to pay off debt.’ It hurts but it works.
But the Illusionist sees it another way. While things keep getting worse brag that your new changes in the law are fixing everything. Little noticed in the furore over the changes to the Constitution is the companion Financial Management and Audit Act, 2007. According to all the huffing and puffing in the preamble to this bill we find great pompous reassurances. The stated purpose of this baby that the government is about to foist on us is to provide “greater accountability and greater transparency” and “the fuller disclosure of government’s financial activities”. It is also advertised to give the Auditor General “a greater degree of financial independence”.
The Auditor General Has Greater Independence? … Afraid Not
After wading through pages and page of mind numbing legalese and starting to think that maybe some progress was being made in this new bill we came to Section 48. Now correct us if we are wrong but we thought that the Auditor General’s job was to check up on what the Government, including the Cabinet, was doing with our money. So you’d think that it might be a good idea that the Auditor General and department would be given independent power to look wherever they thought necessary; that they could compel production of any information they required and generally look in every nook and cranny, even under the carpets. That would be the way, we would think, to be sure the job got done and we would receive a financial report card that we could rely on.
But that is not the way the Illusionist Owen Arthur is going to have it done.
According to section 48 the Cabinet is in charge of telling the Auditor General what he can and can’t do, what books he is allowed to see and what questions he is not allowed to ask.
Reminds us of the joke of the fox being in charge of the chicken house.
Or the time one of our young nephews ‘lost’ his report card and managed to concoct one of his own (got caught though because his parents are not as dumb as they look).
According to Owen Arthur’s new law the Auditor General will get its marching orders, including its orders to stop marching, from the very people that he is meant to be checking up on!
Oh and guess who approves the Auditor General’s budget including those handy perks such as free cars, trips, etc? If you guessed ‘the Cabinet’ you get a prize which, unfortunately, is a front row ticket to the show put on by the Illusionist which we are calling ‘Arthur in Wonderland.’ The way things are going now, we are sad to announce, in the second act the Auditor General will no longer have a part.
In the last of the three part series the other day we wanted to see if we would get answers to a few simple questions. We regret to advise that instead we got bafflegab. Maybe we should ask the Auditor-General, with its new ‘powers’ to get the answers and report to us. Is it too much to ask for an honest report card?
13 Comments
March 15, 2007 at 1:37 pm
Can the pantomime continue until after World Cup is over or will the world see first-hand via the international media what is really going on in Barbados?
Election damage control at the same time as World Cup.
Very risky!
March 15, 2007 at 2:20 pm
On the lighter side, think I saw Owen promising somewhere that we won’t be borrowing on the international markets for the next five years.
Maybe he knows something we don’t!!
March 15, 2007 at 4:35 pm
John: Barbados won’t be borrowing any money? Ha, ha.
The sad part is that may be true only because no one in their right mind will lend to someone who is bankrupt as we are. Everything is already mortgaged and we can’t make the payments.
March 15, 2007 at 6:04 pm
John say – think I saw Owen promising somewhere that we won’t be borrowing on the international markets for the next five years.
John, the PM mussee know bout a winfall we ent hear bout yet.
How come he din tell us yesterda?
March 15, 2007 at 6:54 pm
Hey Man COW got zillions in the USA, maybe he gine send back some to Aruthur to keep he afloat. He does buy he the ESA Fields see thru, so he gine ge he some pocket money
March 15, 2007 at 7:55 pm
Actually if you look at out debt ratio to GDP and compare relative to countries in our peer group we are OK. As far as I know when Barbados has to go to the capital markets our paper is still sought after which is always a good sign that the world views Barbados as a good risk.
March 15, 2007 at 9:01 pm
Much as I agree with BFP’s analogy of the fox looking after the chickens, I cannot see what alternative there is to Cabinet controlling the Auditor General.
I doubt there is precedent for any independent entity (IMF, Price Waterhouse, Office of Ombudsman, Chief Justice, Bishop of Barbados or what-have-you) checking up on a nation’s finances.
BFP- do you have an alternative to suggest?
March 15, 2007 at 9:26 pm
If Bystander is right why bother having an auditor general at all? Why not just trust the cabinet’s version of the finances.
Or….
Let the cabinet do the books and then give them to an independent auditor-general who is answerable only to the people of Barbados and not to the government. He can look anywhere he wants without interference from the Cabinet. That way there is a check and balance. Seems that is what an auditor is for i.e. to check any accounts that look suspicious.
March 15, 2007 at 9:37 pm
Bystander – The Auditor General should be like the Director of Public Prosecutions, who as I understand it is entirely independent and does not take any instructions from the political directorate.
March 15, 2007 at 9:50 pm
Pogo
In a company, the directors are responsible for producing the books. They can hire an accountant or have it done inhouse.
The shareholders at the AGM appoint an independent auditor to audit the accounts produced by the board, provided the company is of a size to require an audit.
The audited accounts are presented to the shareholders who then adopt them at AGM once they are acceptable and reappoint the auditor if they are happy with him.
In the case of a public company, the audited accounts are presented in the newspaper for the public to see.
Whether the company is private or not, if it is above a certain size, the audited accounts are filed with Corporate Affairs, and the public can view them.
This provides not only for accountability and transparency but also is to the benefit of the company, its shareholders and its directors as any one can then offer to buy the shares at a price determined by a transparent process and in line with the value of the company.
It also ensures that companies who control major assets in the country are always up front with their use and do not undermine the country by shady dealings.
In theory it works, but seems to be a bit too straightforward and open for Bim.
Maybe the auditor should be an elected official with the appropriate qualifications to audit, …. who can be changed yearly, at the AGM of Barbados Inc., by the people, the shareholders in Barbados Inc. if they find him lax in the execution of his duty to them.
Hope my interpretation of the Companies Act is correct.
March 16, 2007 at 12:02 am
BK
What is our real debt ratio and GDP?
Does debt include assets like Gems, Barracks, Hilton Hotel etc etc that cannot pay interest let alone principal?
What are the real market value of those assets if disposed of today?
If an individual or corporation went to a Bank to borrrow money based on improper or incomplete statements, they simply wouldn’t get a loan.
If the world banking institutions are willing to loan
money to Barbados on the basis that it is the best of a bad lot, then it is because they are collecting fees and shifting the liability to unsuspecting clients who expect due diligence and integrity out of these banks.
The mortgage lending institutions in the US that lent money to people at 90-105% of value, without enough equity are now falling like dominoes into bankruptcy. Similarly, the international banking institutions need to be held accountable for their negligence in their loans to countries and their breach of fiduciary duties to their clients.
The US is now actively prosecuting the wrongdoers ( read that to mean corporate “tiefs” )
and is getting about a 90% conviction rate. This needs to extend to other countries and dishonest
politicians and their friends plus banks.
March 16, 2007 at 2:03 am
Read “Confessions of an Economic Hit Man” by John Perkins.
March 19, 2007 at 12:55 pm
This is what happens when sheep stay out to long to graze,sorry about the devaluation and having no resources to fall back on,now you belong to us.