ORDENANZA DEL DISTRITO METROPOLITANO DE QUITO

The most significant development in auditor independence was during this period (1970-1990). The 1970 Audit Act allowed the Auditor-General to:

(i) transmit special reports made on any matter incidental to his powers and duties under this Act (Audit Act 1970, section 12(3)), and (ii) citing serious irregularities in the disbursement and receipt of public funds arising through attest auditing (Audit Act 1970, section 10).

These provisions allowed him to report on non-calculative accounting matters. Evidence from Parliamentary Papers (Parliamentary Paper 22/90; Parliamentary Paper 2/89; Parliamentary Paper 14/79) and the media coverage of the Auditor-General’s (AG) audit findings during this period indicate that AG Bhim had on some occasions either requested special audits or transmitted special audit reports to the Parliament (Parliamentary Paper 2/89). He also suggested that special inquiries be undertaken in financial operations of Public Works Department (“Account Query”, 1974; “Money Wasted”, 1975) and the Nausori Town Council (“Mayor, I Welcome”, 1980;). AG Bhim was able to ‘freely’ transmit special audit reports to the Parliament exercising the constitutional independence of the Audit Office. He was able to perform his accountability role4 in a powerful way by ensuring that he could select what to audit and report the findings. During the 1980’s AG Bhim was able to investigate non-accounting

4 _{AG accountability role refers to the audit and purpose of the audit of the public sector entities by the OAG to provide}

assurances to the public via parliament on the usage and management of the public sector entities, see 1970 Fiji Audit Act on Duties of the AG.

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matters such as fraud and inefficiency, which is not covered by traditional financial attest audit.

The Public Accounts Committee (PAC) under the chairmanship of Shah (an Indo-Fijian) supported the Auditor-General’s request for special reports (Public Accounts Committee Report, 1983). The PAC members also deliberated on the disclosures made in ‘Special Reports’ submitted by the Auditor-General and concurred with the contents of the Report (Public Accounts Committee Report 1980), thus implicitly supporting Auditor independence.

The PAC is a select committee of Parliament and performs the role of an oversight body (Standing Orders 72/1992; 168/1995) overseeing the accounts of the government and the audited reports. Table 5.2 summarises the existence and the authority of PAC over the 1970-2000 period.

110 Table 5-2: PAC Existence and Authority: 1970-2000

Sources: Derived from Audit Reports, Public Accounts Committee Reports, and media publications.

Years and audit focus Major Event Authority Ruling Government

1970-1986 Reporting irregularities Committee formed after Independence in _1970. Oversee government expenditure and _{reports including audit reports.} Mara led alliance.

1987-April 1991 Reporting irregularities Military coup led by Rabuka Committee _suspended. None. Rabuka led military.

Mara Led Interim, July-Sept 1987. Rabuka led Military Govt, Sept-Dec 1987. Mara led interim, Dec 1987-April 1991 May 1991 Focus on efficiency Committee reinstated continued. Oversee government expenditure and

reports including audit reports.

Rabuka led military government.

1992-1996 Focus on efficiency Democratic elections. Oversee government expenditure and

reports including audit reports. Rabuka led (SVT) democratic - under undemocratic 1990 Constitution. May 1999-May 2000 Reporting

irregularities and financial statements

Democratic elections. Oversee government expenditure and reports including audit reports.

Chaudry-led Labour Party, democratically elected. Under 1997 democratic Constitution.

May-August 2000 Civilian Coup led by George Speight. Oversee government expenditure and reports including audit reports.

Self-proclaimed leader, Speight. September 2000 Reporting irregularities

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The Committee members are the members of Parliament nominated by Parliament in consultation with the government leader of the day and the leader of the opposition party/ies. The PAC is comprised of eight to twelve members, 50% of the members are from the government in power and 50% from the opposition party. The Opposition party’s nominee is nominated as the Chairperson by the Parliament. Table 5.3 lists the chairpersons of the PAC and the Ministers of Finance during the 1970-2000 period.

112 Table 5-3: Time frame: PAC Chairperson and Minister of Finance

Time Period

Minister of Finance Chairperson of PAC and Opposition Party represented

October 1970-May 1987 (Reporting irregularities) Peter Stinson (European) Shah (Indo-Fijian National Federation party)

June 1987-September 1987 (Reporting irregularities)

Mahendra Chaudry(Indo-Fijian) Kahiyum (Indo-Fijian National Federation Party)

June 1987-September 1987 (Reporting irregularities)

Kamicamica- Financial Advisor

(Indigenous Fijian-chiefly family) Appointment of PAC suspended

September 1987-December 1987 (Reporting

irregularities) James Ah Koy (Indigenous Fijian)

December 1987-April 1992 (Focus on efficiency) James Ah Koy, Interim Minister

(Indigenous Fijian)

May 1992-March 1999 (Focus on efficiency) Ratu Kubuabola (Chief -Indigenous

Fijian) Khaiyum (Indo-Fijian National Federation Party)

May 1999-May 2000 (Reporting irregularities) Mahendra Chaudry (Indo-Fijian) Pickering - General Electors (Part-European)

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The Committee gets its authority from the Standing Orders of the House of Representatives’ (Public Accounts Committee Report, 1992, p. 1). As an oversight body the PAC shall:

examine the Accounts of the Government of Fiji in respect of each financial year together with any report of the Auditor-General thereon, and such other accounts laid before the Parliament as the Committee may think fit and shall report thereon to the House. (Public Accounts Committee Report, 1992, p.1)

The PAC Reports are derived from analyses raised in the Audit Report and therefore supplement the Audit Report. During these deliberations the PAC members seek explanations from:

(i) the Ministry of Finance on issues related to implementation and enforcement of financial regulations, (ii) the Audit Office on clarification of audit finding revelations, and (iii) the Ministry whose audit report is under discussion. (Public Accounts Committee Report, 1992, p. 1).

In Roberts’ terms (1996) the PAC was in a strong position to forward more arguments because a socialising form of accountability was taking place. This was through dialogue where the accountee (PAC) sought clarifications and explanations from the accountee (Ministry of Finance and the Ministry whose reports were under discussion) without threats. After deliberations PAC members prepare a Report and this is published as a House Paper and laid on the Table in the Parliament for its consideration. PAC therefore was in a position to influence changes in the way the auditees were held to account.

The PAC Reports during the 1970-1980 period tended to support the audit findings and disclosures of irregularities in record keeping. The AG’s audit reports (“Accounts in Chaos”, 1978; “Cost of Groundings”, 1978; “Council

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Accounts”, 1975; Money Wasted”, 1975) were validated by the PAC. This was undertaken by the process of deliberation, seeking explanations from the government and government agencies on the disclosures and reports of irregularities contained in the audit reports.

During this period the PAC was under the chairmanship of an Indo-Fijian and the government in power was dominated by and led by an indigenous tribal chief. The latter was keen on protecting the native rights and the former was probably pushing for Indo-Fijian recognition. In promoting the rights of their own ethnic groups there was a potential for conflict of supremacy. The PAC’s support for and validation of the audit disclosures can be interpreted as an attempt to legitimise public sector auditing via socialising form of accountability.

After the second coup in September 1987 the Rabuka led military government suspended the PAC and reinstated it in May 1992 after the general election (Parliamentary Paper 29/1992). This appears to have been done to create an illusion that the Rabuka government was keen to re-establish the bureaucratic structures to enable the accountee (PAC) to hold the accountors (bureaucrats, Ministers and government) to account. This gesture was also for the benefit of the international community, which was pressuring the Rabuka government to restore democracy in Fiji.

Prima facie, the PAC appeared to seek transparency via accounting. As a powerful body, the PAC was not able to influence changes in public sector audit practice.

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