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Wednesday, May 23, 2012

FORENSIC AUDIT OF COUNCILS ON THE WAY!



The Minister for Social Transformation must be complimented for his scientific approach to governance. His language, his methodology and his general demeanor all speak to that.
Minister Dalson

In his budget presentations, he spoke of evidence-based policies and programmes. According to him, these are policies and programmes driven by the data available; and he sounds not just very serious but he is on the ball.

Honourable Dalson (aka Major Mose) is indeed a major! He generally tends to be very unassuming and occasionally engages in repartee and occasional witticisms – a gift of a logical mind; but he does not mess around. He is never afraid to take bold decisions when they become necessary. Those who served with him in different spheres (Tourist Board, Soufriere Foundation, Soufriere Town Council, Soufriere Boys School and Soufriere Comprehensive School etc) can attest to that.

Honourable Dalson has ruled that he will subject the operations of city, town and village councils to a “forensic audit”.

A forensic audit is defined as “the application of accounting methods to the tracking and collection of forensic evidence, usually for investigation and prosecution of criminal acts such as embezzlement or fraud”. It is also referred to as “forensic accounting”.

It involves the investigation of fraud or presumptive fraud with a view to gathering evidence that could be presented in a court of law. A forensic audit - which can be ‘reactive’ or ‘proactive’ - is generally designed to prevent fraud by identifying and rectifying situations which lead to fraud.

I’m not aware of the terms of reference for the forensic audit; however, I expect the auditors to look into the three types of potential corruption fraud: conflicts of interest, bribery and extortion.

In a conflict of interest fraud, the fraudster exerts his/her influence to achieve a personal (and political) gain in a way that “detrimentally affects” the organisation. The fraudster may not benefit financially, but rather receives an undisclosed personal (and in our case political) benefit as a result of the situation.

In our case, it is alleged that that council approved contracts (to political cronies and even to its own members) for political advantage.

Bribery was seemingly also rampant, as money and contracts were allegedly used to exert political influence on behalf of a political candidate.

Extortion may also have been present – extortion is the opposite of bribery, and happens “when money is demanded (rather than offered) in order to secure a particular outcome”. I’m sure we remember the “bedroom bully” case.

The move by Honourable Dalson to commission a forensic audit into the financial operations of Local Authorities is highly commendable. It should not only act as a strong deterrent to potential malfeasance, but I also expect it to  contribute to much better corporate governance practices.

BRAVO! MAJOR MOSE!



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