New law should improve accountability

Lawmakers everywhere talk about the importance of good governance and the need to spend taxpayers’ money wisely.

Such talk, when not followed by action, is mere lip service that does nothing to prevent scarce community resources from being wasted.

That’s why we were pleased that the House of Assembly recently passed the Internal Audit Act, 2010. The law is relatively short — 14 pages — but if implemented and enforced properly, it will play an important role in ensuring that government is accountable to the public.

Among other measures, the act calls for the replacement of the existing Internal Audit Unit with a stronger Internal Audit Department.

As defined by Her Majesty’s Treasury in the United Kingdom government, the purpose of an internal audit department is to serve as an “independent and objective appraisal service within an organisation.” Such departments are charged with checking to make sure other agencies are spending their funds in accordance with pre-established objectives.

These functions are badly needed in the VI government, where careless spending is rampant. And a recent report on the existing Internal Audit Unit suggests that the body hasn’t been properly supervised. The unit was supposed to be overseen by an Audit Committee of permanent secretaries and department heads. But when that committee’s membership expired in 2002, the body stayed vacant for years under both the Virgin Islands Party and National Democratic Party governments.

Though the Ministry of Finance, the HOA’s Public Accounts Committee and the auditor general also play important roles in safeguarding government assets, they frequently review transactions months or even years after the fact. That’s often too late to detect inefficiency, overspending or even fraud.

The recently passed act empowers the new Internal Audit Department to audit “any ministry, department or institution in respect of which the government has control, holds shares, or supplies funds annually.” The law also creates the position of a director of internal audit and provides for oversight by an Internal Audit Advisory Committee, whose members are to be appointed by Cabinet.

The law, however, will only be effective if the new department is supported with the necessary funds and staff to adequately do its job. Moving forward, we hope that the advisory committee will be appointed soon, and that members will take their job seriously.

By the same token, other government agencies should comply with audits and heed the department’s recommendations. The law states that officials who do not provide requested information to the auditors could face fines or imprisonment — an important provision giving the auditors more teeth than before — but we hope that it does not have to come to that.

This year, government is operating under a $287 million budget. In a time of continued fiscal austerity and uncertain economic recovery, it is essential that government monies be spent wisely. Too often, we fear they are not, as delays and cost overruns plague major capital projects such as the new hospital, incinerator and greenhouses.

We welcome the passage of the Internal Audit Act and hope that it represents a trend of increased accountability at all levels of government.