Auditor general says cost key to approval of external audits

AUDITOR General Pamela Monroe Ellis says, due to its complexities, external auditing of Government entities comes at a significant cost to the public purse, and that she will only approve such requests when it is feasible.

She said there are a number of issues that are considered when agencies ask for an external audit, chief among them is the cost of these audits, based on the extent of the workload that auditors must assume in gathering information, which may be scattered across multiple Government ministries, agencies and departments.

“There are some entities that are outsourced… [but] when outsourcing these audits I still retain the responsibility because under the FAA [Financial Administration and Audit] Act, I have to retain the responsibility for sign-off of some of these audits,” she explained.

Monroe Ellis was outlining the mandate of her office and the auditing process at yesterday’s meeting of the newly convened Public Accounts Committee (PAC) at Gordon House.

The auditor general said while some entities may believe that they will get greater support from an external auditor, an audit can only be undertaken if the information is available.

“That is when you see the fees increase exponentially because the records are not available, or what is available is not correct. I don’t think the entities initially have a full understanding and appreciation for how audit fees can increase,” she advised.

She said for some entities, due to the absence of the information, as well as their interconnectedness with other agencies of government from which information must be sought, there is a challenge of access for external auditors.

“And on that basis I would say no [to an external audit],” she said.

She also explained that private audit firms do not audit appropriation accounts, a feature of executive agencies, which are required to submit 50 per cent of their earnings to the consolidated fund at the end of the financial year.

“It is a challenge that will emerge for other agencies that are required to do appropriation accounts,” she stated.

Monroe Ellis noted, too, that, in recent times, she has been giving approval for some entities to be audited by an external auditor, once their affairs are in a state that she believes an external auditor can effectively conduct an audit without severe budgetary implications.

Among the first audit reports to be examined by the committee at the start of 2021 are the performance audit report for the HEART/NSTA, which was tabled in October, the Jamaica Urban Transit Company performance audit report tabled in July, and the just-tabled performance audit report on roadworks under the Kingston and St Andrew Municipal Corporation.

PAC chairman and Member of Parliament for St Andrew South Eastern Julian Robinson promised that the committee will be fearless in pursuit of truth and the public’s right to know how their tax dollars are spent.

“Many of the members will be serving on the PAC for the very first time and I wish to remind you of what our primary responsibility is, which is to focus on the control and protection of the public purse and the manner in which public funds have been used in the implementation of agreed policies,” Robinson said.

“We are serving in very serious times, when the world is fighting a pandemic and the economic fallout, especially for developing countries like ours, is significant and ongoing,” he said.

He urged the members to approach the work of the committee in a bipartisan manner with primary focus on the protection of the taxpayers’ dollars.