Strong CAG office a must to fight financial irregularities

The Office of the Comptroller and Auditor General (OCAG) can help the government better fight financial irregularities involving taxpayer money if it is equipped with adequate workforce and administrative assistance.

The government spent Tk 115.66 crore in fiscal 2013-14 for the public spending watchdog. In return, it realised Tk 7,880 crore, meaning on average Tk 68 was realised or adjusted against every taka spent by the auditors.

“If the government spends more in order to strengthen the OCAG, it will be able to recover more money for the government, because there is a strong reason to believe that potential and high value financial irregularities are remaining hidden in the invoices not scrutinised by the auditors,” said Comptroller and Auditor General Masud Ahmed.

“We are working to persuade the nation to spend wisely,” he told The Daily Star in an interview recently.

The number of unsettled audit objections against 56 ministries and divisions is 853,314 involving Tk 615,606 crore, which is almost double the budget of the current fiscal year, Finance Minister AMA Muhith told parliament last month.

According to the minister, the audit objections remain unsettled for various reasons, including the executive branch not giving reply to the objections in time and inadequate workforce.

The OCAG is responsible for auditing government receipts and public spending and ascertaining whether expenditures have yielded value for money in government offices, public bodies and statutory organisations.

Alongside a traditional approach to carry out financial, compliance or regularity audits, the office is now conducting performance audit to determine efficiency and effectiveness in the management of public resources.

At present, the CAG office is tasked with auditing 22,431 offices, including all ministries and divisions and their field offices, all local authorities, statutory bodies, embassies, foreign offices of the state-run banks and Bangladesh Biman and also the whole expenditure of the development budget.

Besides, it has to cover about 1.5 million government employees.

But with 4,000 auditors, the OCAG has to resort to sampling given the limited number of workforce and it could cover only 10-15 percent of the auditee units.

“Sampling is also a normal procedure in the developed world,” Ahmed said.

The OCAG needs another 2,000 staff members to complete its tasks in the next decade, he said.

The auditors particularly look into high value and risky organisations where they have reason to believe that financial expenditures are not taking place in a proper way.

“Our suspicion usually comes true,” said Ahmed, who joined Bangladesh Civil Service in the audit and accounts cadre in 1981.

The constitutional body sent a proposal of a time-befitting manpower structure to the government nearly three years ago, which is still under consideration.

Ahmed said the lack of professionally skilled people is posing a challenge for the OCAG, as the huge expenditure of the country is going up substantially every year.

“Every year the country sees growth in its development and revenue budgets, but the workforce at the OCAG doesn't increase accordingly.”

There are problems on the auditees' side also -- audit observations are not always dealt with at the right time or properly.

“If they respond quickly with appropriate evidence, arguments and laws to back up their spending, some of the audit observations could be settled earlier, which will pave the way for recovering more money for the treasury.”

“It will also lessen the workload for the auditors as well as for the auditees.”

The OCAG has applied some new devices, computer software and methods to take care of the problems.

In recent years, the use of IT has gone up in government offices. As a result, the scope for the IT audit has also increased.

To keep pace with the auditees, the OCAG has created a core IT audit group.

“If we automate the OCAG and the bureaucracy, more tasks can be done with less people,” Ahmed said.

The work of the OCAG has speeded up in recent years. “We are trying to go for full automation. The accounting system of the auditee organisations also requires to be automated.”

He said supervision has been strengthened to ensure that the auditors conduct audits properly.

The OCAG has completed audits up to fiscal 2012-13. It realised Tk 12,597 crore in the year, which was Tk 7,143 crore a year ago.

Ahmed, who passed honours and masters in English from Dhaka University and earned a post-graduate diploma in accounting from the University of Ulster, UK, took charged of the OCAG in April 2013.

The OCAG cannot compromise the quality of a report by issuing it in a hurried manner, although the amount of the expenditure is growing, he said.

“It takes time to recruit people. You just can't hire and send them to audit an organisation. You need to train and equip them.”

He praised the parliament's public accounts committee for its support in helping recover more money and lower the number of unsettled observations of the OCAG.

He said money slipped through financial irregularities is recovered through due auditing process. “If one individual dodges it, he would surely be made to pay the money when he moves for obtaining pension.”

Ahmed said the auditors do not face any outside pressure while conducting audits. However, his office gets “recommendations” while recruiting people.

Also a writer and vocalist, Ahmed said the scope of performance audit is gradually widening to ensure the quality of the public expenditure.

The World Bank and several other development partners are providing financial assistance to the OCAG to update its audit and accounting manuals, helping speed up its work.

fazlur.rahman@thedailystar.net