Within the first month of his appointment as auditor-general, a few of us made an appointment, as citizens, and decided to meet up in his new office. All three of us were ex-government servants and we were tired of seeing the serious leakages and obvious failures in the administration of financial resources of the rakyat. We met him to raise and communicate our views and concerns about this perennial subject of frustration.

We discussed and brainstormed how to ensure that we can move towards improved governance in the public services and we told the auditor-general (who is a friend) that we will be watching and helping him from a distance.

Having now observed the slow but sure improved quality of Audit Reports, and the continued good role he has assumed this far, and having been reappointed for four terms as auditor-general, I wish to ask him some pointed questions as my response to further improve audit surveillance of public misdeeds.

Strategic-level audit in each organisation?

My problem with what appears to have now become a routine affair of financial audits, but only at the operational level, is the following:

  • These audits are usually after the fact, and usually after the crooks have bolted, or retired, or been promoted, and therefore too little done too late;
  • They are usually only taking an operational view, when there are always bigger or higher reasons and lines of questioning like: Why did the controlling officer allow such abuse of the due process of rules and regulations in the first place; and,
  • They appear to only look at financial expenditure but may not ask even more fundamental questions like, what was the rationale for such expenditure in the first place?

Therefore my suggestion to the auditor-general is: Should not your audit officers undertake a strategic audit perspective which looks at the role and function of the controlling officers? The Financial Procedure Act 1957, states in Article 51A inclusive of their responsibility as follows:

“To be the chief accounting officer in respect of all public monies collected or received or disbursed and all public stores received, held or disposed of by an account of the department or service for which the service is provided.”

Therefore also, my question to the Parliament’s Public Accounts Committee (PAC) is: Why not insist that the controlling officers of respective agencies answer queries from the PAC; who really represents all the rakyat and their tax monies being spent.

Indelible Ink procurement as case in point

Let me give one simple but clear example of what a strategic audit would entail. Let us take the recent general election and how the Election Commission (EC) changed and executed their policy and position on the use of indelible ink for the 13th general election (GE13).

Did the EC execute a new modus operandi of authentic citizenship and voting? Were the funds expended to achieve the specific intent of the new policy? Such a consideration would make it a strategic audit of this new programme.

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And how well was the programme executed? The rakyat found out after the GE that the indelible ink was not really so, but instead it was edible ink. The EC spent RM7.1 million on food colouring which was supplied as indelible ink.

If the auditor-general chooses to undertake a strategic audit, we will not only review purchasing expenditures but also consider the why and what of the policy for which the procurement was intended. He would audit for outputs, outcomes, and impact. Did the programme do what it was intended and mandated to do?

If such a strategic audit is done, then the PAC can invite the controlling officer or “the financially accountable authority” to answer questions.  Otherwise, the many annual Audit Reports are only good as a symbolic “trip to Abilene” 1 once a year and for the newspapers’ ceremonial front-page stories highlighting irrelevant details.

They highlight who was fed which fish instead of asking more fundamental questions about why were we not fishing in a different river or even the sea, if the goal was to grow the fishing industry. As we all do know the fish rots from the head.

A way forward?  

So, where is the “headship role” for this strategic audit fishing trip?

The auditor-general knows the answer to this question. It is the KSUs meeting (or meeting of all secretaries-general) chaired by the chief secretary to the government or KSN. Any Administrative and Diplomatic Service (Perkhidmatan Tadbir dan Diplomatik or PTD) officer worth his salt knows that this is the most senior meeting of all controlling officers of the ministries.

Actually, if any of the KSNs in the past knew their job; they could have simply held such a meeting with the Treasury secretary-general chairing the meeting and requesting the auditor-general to present a management report for follow-up actions.

All the Treasury secretary-general needs to affirm is that he and the KSN would review each KSU’s performance through “audit observations”. These KSUs’ promotion or any other form of recognition would be defined by this review.

Then we, as ex-PTD Officers, do not need to feel embarrassed with Raja Petra’s ‘Same S**t Every Year!’ condemnation for such work and the incumbents appear to lack political will to address the core issues. In fact, even ordinary citizens are now beginning to teach the auditor-general and all controlling officers how to conduct and carry through an audit.

Rama Ramanathan wrote on Facebook :

Do you see what’s missing in all the reports about and responses to the Auditor-General’s Report?

Is there a re-audit process? Is severity assigned to each issue observed? Is severity elevated if an issue from a previous audit is not fixed? Can auditees honestly claim they are surprised by some issues included in the Audit Report? Are there Corrective Action Plans? Is there a monitoring process? When and how will the audit be closed?

Finally, an audit is a sample taken at a ‘slice in time’. What about the processes which there was no time to audit? How big is the iceberg?

In 1985, while at Intan, we undertook a productivity measurement programme, the initiatives of which have subsequently become a series of Mampu circulars and guidelines for administrative reform. If these were simply followed by any controlling officer, we do not even need the KPI approach of Pemandu; as all of this was already done before.  

For every organisation, the CEO can define his organisation’s Vision, Mission, and Objectives or Goals and these will help define outputs, outcomes, and impact. All these could be measured and the audit evaluation by the auditor-general can provide such a strategic audit.

Therefore, what we really need is not more Audit Reports, but a political will by the auditor-general, the KSN and the Treasury secretary-general and this can and will become a thing of the past.

It is as simple as that. I agree with Tiger Talk; it is not that difficult a problem to handle, all we need is political will. 

1 Please see Jerry B Harvey, The Abilene Paradox and other meditations on management.