Honourable Members of Parliament,
ladies and gentlemen,
It was with great pleasure that I
accepted the invitation of the Auditor General to address this seminar,
particularly more so because concrete action by the Public Administration to
follow up on the recommendations of the National Audit Office was pioneered by
my office in late 2014 with the launch of administration-wide Governance
initiative. It was the first of its kind, and resulted in the publication of
the first Governance Report issued on 29th April 2016, a detailed report
outlining the action taken by the Public Administration on the NAO’s Annual
Report on Public Accounts for 2014. This is more than just a report: it
is a public statement and commitment towards the ongoing drive to strengthen
transparency and accountability as core values of the Public Administration.
It all started some four years
ago when, upon taking office, I was presented with a substantial number of
audit and other investigative reports covering the Public Administration that
were finalised prior to 2013. What stood out as a common denominator was
the lack of any follow-up, not to mention the implementation of the
recommendations contained therein. Amongst these reports there were also
those by the National Audit Office.
With particular reference to the
reports by the NAO, it was noted that, year after year, recommendations were
being repeatedly put forward by the Auditor General. This enforced the
implication that such recommendations were not being adequately acted upon, if
at all. This in turn implied a lack of, or a slacking, in
accountability. It was certainly far from a desirable situation and it
therefore necessitated immediate remedial action. It warranted a change
in the approach and the mentality in the way responsibility is assumed, and not
just with regard to audit matters.
Responsibility, transparency and
accountability do not stop with sound financial management, but are also
underlying principles for service delivery improvements. As such, we are
also targeting the culture and the mentality of “anything goes” within the
Public Administration, by defining intangible yet crucial concepts such as
quality; and we are determined to ensure that the principles and values of good
governance underpin all our systems and operations. Our focus is on sound
financial management and compliance, as well as, on a quality service delivery,
enhanced people and standards management, and improved performance.
In 2014, I had also stated that
the Public Administration was challenged by a leadership crisis, with a lack of
timely decisions or decisions which were not being pursued. This too
showed weakened accountability, which is a risk to good governance; the
situation, therefore, could not be allowed to remain the same.
It is within this context that we
energetically embarked on our journey to renew the Public Administration; to
transform it into a properly performing organisation with robust core values of
good governance. Following up on the recommendations of the Auditor
General is seen as one of the crucial elements to reach our goal of having an
efficient and effective Public Administration that is people-centric,
transparent and accountable.
Immediately after the NAO
published its Annual Report on Public accounts for 2014, all permanent
secretaries were required to submit feedback on the corrective actions taken
with respect to recommendations put forward to the departments and entities
falling under their Ministry. In those instances, where insufficient or
no action was taken by the management of the respective department or entity to
address the recommendations put forward by the NAO, they were required to
submit an action plan clearly indicating what actions will be implemented and
We did not rely only on the
replies given by the permanent secretaries. We deemed it necessary to involve
the Internal Audit and Investigations Department (IAID), in its capacity as the
internal audit arm of the Government, and with its expertise in conducting
financial and compliance audits within the Public Administration, to carry out
a review of management replies and to undertake the necessary testing so as to
ensure that such replies are actually reflected in the procedures being adopted
by the management. Moreover, when the corrective action taken or being
proposed by the management was found not to be sufficient to address the
respective recommendations, discussions were held between the internal auditors
and the audited entity to clearly explain the weaknesses and limitations
Extensive exit meetings attended
by the IAID and the senior management of the audited department or entity were
held, together with the respective permanent secretaries. The scope of
these meetings was to discuss the observations resulting from the review
carried out by the IAID and in each case to agree on an action plan that
ensures that the recommendations put forward by the National Audit Office are
adequately acted upon in a timely manner.
Only then did we publish the
account of how the recommendations in the 2014 report were addressed, including
details of all implemented actions, and set dates for those actions that were
yet to be implemented.
I must state here that there were
instances where the management did not agree with the NAO on particular
recommendations or specific aspects of a recommendation. These cases were also
reported in the Governance publication with an explanation being furnished by
the management as to why that particular recommendation was not being accepted
or could not be implemented.
An example of one recommendation
that was not accepted in the 2014 report was from an audit on personal
emoluments on the Office of the Permanent Secretary in the Ministry for Home
Affairs and National Security (MHAS). This concerned a claim by NAO of
“excessive” sick leave availed of by a pregnant employee prior to maternity
leave, which sick leave was duly covered by a valid medical certificate, and
hence management did not accept the recommendation on this case.
We did not stop with the issue of
the Governance publication in April 2016!
Action plans committed to be
implemented beyond April 2016 were duly followed upon post-publication and this
brought with it the need for a fresh cycle of verification audits.
The recommendations on which the
follow-up focused on at this stage were those that were still pending, that is
those which fell due between April 2016 and end December 2016. These
comprised a total of 18 audits and involved 13 Ministries.
Therefore, in November 2016, the
Internal Audit and Investigations Department (IAID) was once again engaged to
carry out another verification exercise on the implementation or otherwise of
the actions publicly committed to be implemented. As was done earlier,
the IAID were also required to give an opinion on whether the corrective
actions presented by the permanent secretaries and reviewed by the IAID
represented a true and fair view of the actions actually implemented and that
the actions included in the Governance Report 2016 were indeed addressed.
The publication of the NAO Annual
Audit Report, Public Accounts for 2015 heralded the start of a new follow-up
exercise, coordinated centrally by my Office, as was done previously. The
IAID were once again tasked to verify the actual implementation of actions as
well as the adequacy of the actions to address shortcomings and weaknesses
giving rise to the recommendations.
Once again, we had exit meetings
during which we ‘rapped’ those entities that were lagging behind in
Again, there were recommendations
by the NAO that the management did not accept, and, as on previous occasions,
the concomitant reasons for these rejected recommendations were fully explained
and included in the second Governance publication which was issued in April
For instance, the management at
the VAT Department within the Ministry for Finance did not accept a
recommendation by NAO a claim of anomalies in a signature of the authorising
officer because the officer concerned confirmed and insisted that both
signatures were his.
This time round, that is in the
2015 Audit Report, the entities audited were different from those of the
previous year’s report, and so, to a certain extent, the context changed, and
so did the sectors being audited. However, the principle of consistent
and persistent follow-up to implement the recommendations made by the NAO
To date, the result of the
actions taken collectively by the various Ministries to implement the NAO
recommendations is that of 80% implementation rate (for both the 2014 and 2015
Annual Audit Reports on Public Accounts).
We are pleased to note that now
that we have set the example and taken the lead in this area, the Auditor
General too is taking steps to follow up on the recommendations of audit
reports published by the NAO.
We sincerely auger that our
initiative, complemented by that of the NAO, will have a snow ball effect on
the implementation of audit recommendations that will result in the much
desired culture change and in nourishing accountability as the norm.
To aid and complement our
governance follow-up measures, my Office has furthermore commissioned a report
by a private consulting firm to determine to what extent the findings and
recommendations by the National Audit Office recur within a particular entity
in consecutive reports, and if these were also evidenced as recurring in other
The Audit Reports analysed
covered the years 2012, 2013 and 2014.
While the ensuing report was
useful to find out which areas constituted weaknesses for the Public
Administration, it did not yield patterns of recurring issues in same entities
and departments. This shortcoming was attributed to the change in
Ministerial portfolios in 2013 and again in 2014, and to the fact that the NAO
rarely audits the same entity or department repeatedly year after year in the
The report did however serve as a
hazard indicator of target specific areas that gave rise to weaknesses, issues,
and findings in financial and compliance audits, instigating action in these
One such weakness, repeatedly
identified by the NAO and one which also recurs in subsequent reports and
impacts several Government departments, was that of public procurement.
This led us to take measures to strengthen the capacity of departments to
ensure accountability and compliance with the Public Procurement Regulations.
Ministerial Procurement Units were set up. We started with two
Ministries, and then another three, and the rest will follow. The setting up of
these units is a concrete demonstration of our commitment to enhance
transparency and accountability while at the same time address shortcomings and
weaknesses in our systems.
The Ministerial Procurement Units
will carry out scrutiny of contracts to ensure transparency and compliance with
regulations, but this will not be their only task. They will also promote smart
procurement through better planning and coordination of commonly purchased
goods to achieve the best value for money.
I must say that we have not
limited ourselves to NAO reports in our quest to ensure accountability and good
Since 2014, my Office has
published a yearly account of the implementation of the Annual Budgetary
Measures. These measures are what is committed by government to be
implemented in each financial year, with some measures even running through
several subsequent years. Every Budgetary Measure owner is required to
prepare an action plan with milestones and a timeline to completion, which is
the basis of our monitoring.
Not only do we follow up
religiously every month on progress, highlighting those measures that fall
behind schedule and alerting Ministries about them, but we then publish a
report detailing quarterly progress for each measure for each financial year.
The public is then our “external
auditor” as we see this publication as a tool and a service for public auditing
and another means of being transparent and accountable to the tax payers.
Our most recent measure to
continue to ensure the strengthening of accountability and good governance in
the Public Administration is the systematic follow-up of internal audit reports
carried out by the Internal Audit and Investigations Department (IAID).
Previous to my Office taking the initiative in this area, there was practically
little follow-up on such audit reports. In our analysis of the problems
afflicting compliance, we found out that several issues and findings that were
published in the NAO Annual Reports on Public Accounts had already featured in
internal audit reports. We therefore arrived at the logical conclusion
that had there been due follow-up and action taken to address the findings
reported by the IAID, certain risks, weaknesses and issues, particularly with
regard to non-compliance, could have been addressed earlier and pre-empted from
featuring once again in the NAO reports.
We strongly believe in internal
audits as a main tool through which the Public Administration may nip in the
bud shortcomings that could give rise to bigger issues and promote it as the
proverbial ‘apple a day that keeps the doctor away’.
The Public Administration will
continue striving to be better by promoting good governance through
accountability and transparency measures. An effective Public Administration is
one which delivers in a timely manner whilst being duly responsible in the
delivery of its actions.
And this is what this
administration stands for.