SIDEBAR: The EFCL issue
The Board of EFCL was reported to have dismissed its CEO after he failed/refused to comply with their directions in a certain matter. There are allegations reported that the Cabinet attempted to direct the EFCL Board, which raises the perennial issue of the nature and extent of Cabinet authority over State Enterprises.
From both the Companies Act and the recent High Court/Appeal Court rulings in the eTECK matter, it seems clear to me that the Board of Directors have fundamental responsibility for the direction and control of the company. That is the legal position, but it seems that our fundamental political culture and conduct is in real conflict with notions of independent professional responsibility.
The State Enterprise sector is once again the subject of public concern on the good governance issues of accountability and transparency. Where does the power lie?
The two most striking issues emerging recently are the declaration of new accountability targets for State Enterprises and that the ‘EFCL Board fires CEO‘, reportedly in defiance of Cabinet directions.
The Accountability and Transparency Deficit is the first issue and it needs to be put into a timeline to illustrate the reality.
Mariano Browne, then a PNM Minister in the Ministry of Finance (with responsibility for State Enterprises), on the issue –
“…The ministry has mandated all State enterprises to establish audit committees to access (sic) the effectiveness of internal controls of these companies…As corporation sole, the Ministry of Finance is responsible for the managing of all State enterprises. However, it is apparent that there is reluctance by some companies to comply with these basic monitoring requirements…”
Winston Dookeran, then Finance Minister in the Peoples Partnership, addressed this issue in his first budget presentation –
“…Mr. Speaker, no coherent, co-ordinated planning or strategy for state enterprises exists. As a result we have begun to rationalise the state enterprises, including the special purpose companies, which will incorporate a new accountability system that goes beyond the presently operating company ordinances. It is these loopholes in public accountability that resulted in the UdeCOTT scandal. This must never again happen in Trinidad and Tobago…” (pg 22)
The revised State Enterprises Performance Monitoring Manual 2011 was published to guide the operations of these important companies. At 3.2.5. it is required that audited accounts be submitted to the Minister of Finance within four months of the end of the financial year, before open publication.
Those attempts to improve practices in the sector have yielded little, if any, respite in the flow of large-scale scandals in terms of loss and theft of Public Money, not to mention the consequent loss of trust. I know that there are many competent, hardworking and honest public officials at our State Enterprises, but the role of party financiers and supporters is a significant issue. Accountability is extremely elusive in that kind of situation, which is the problem at hand. So, what is the latest?
Dr Keith Rowley, current Prime Minister, stated on Wednesday 4th, after the Cabinet retreat that State Enterprises were now required to submit accounts by the end of March 2017, even if those were unaudited, to Corporation Sole. Dr Rowley was clearly disapproving –
“…As it stands now, even at the level of the Cabinet in many instances, we are informed of what goes on or what went on in a State enterprise when the media reports largely of something on wrongdoing or something of scandal. That is not how we run this very large part of our economy or this very large part of the State’s portfolio…”
It was also reported that…
“Rowley made it clear that the absence of a report on the basis that it is not an audited financial statement will not be tolerated and failure to comply with this directive would have serious consequences…”
Under the new rules, as declared by PM Rowley, the State Enterprises seem to have the option to prepare their own accounts, without independent audit, for the Minister of Finance. The current administration is openly resiling from the sound standards established in the 2011 Performance Monitoring Manual.
Just consider that Public Money should be managed and accounted for to a higher standard than Private Money. Try to imagine the Chairman of the Massy Group or ANSA/McAL announcing to shareholders and colleagues that they don’t need to bother with audits, just send in the figures. What we are seeing here is literally incredible. Incredible, but true.
The Minister of Finance needs accurate figures to navigate this worsening recession, but that pressing requirement cannot be allowed to eclipse fundamental standards. What is more, the declaration of the official decline in these crucial accountability standards came directly from the PM, which raises two important questions. Firstly, are we seeing that the 2011 policy, has in fact just been diluted for no given reason and without real research as to its effectiveness? Secondly, this 2011 policy has been unenforced since its establishment, so how seriously can one take the PM’s threat of ‘serious consequences’ if the proper standard could not be upheld?
4 thoughts on “Board Games again”
That actually is not what was put to the Boards. It was noted that only 15% of the organizations required to report do so, far less by the required date. So, the Boards are absolutely still required to report. Audited financial statements are still required, but in an effort to push for the 85% to submit, lack of audited statements will no longer be accepted as an excuse to put off reporting for years. Hopefully getting state enterprises to get financial statements of any kind submitted in time will lead to getting audited statements in time.
Of course I was not present and no doubt you were, so I was relying on the published reports…my reading of those was that the PM’s call was tantamount to a ‘lowering of the bar‘ which would be used by slackers to stymie any serious action in enforcing the rules in the 2011 manual. We are obliged to manage and account for Public Money to a higher standard than Private Money, so try to imagine a Chairman of a leading conglomerate making that declaration…that is the elusive part of this discussion…the theft and waste of our Public Money is a virtual ‘Tragedy of the Commons’…
Thanks for joining-in, please continue to follow and disagree when you see me going ‘wrong’…
I admire your willingness to listen to differing views, so few of our intellectuals are able to engage in discussions that does not agree with their original premise…thank you sir..
HI afra- monkey cant see the end of its tail! as we head towards failed state as reflected in POOR CPI scores
So just to add few insights based on my very past experiences with quasi state accountability during my short tenureship as TI local chapter (ttti) director ( when i raised issues during the Landate affair and was hounded both by local ttti directors and govt mp) ..one of whom is now PM!!
I recall Rowley attack about Calder Hart & UDECOTT … yet to date the Rowley Govt govt has made no attempt to pursue full steam the UDECOTT scandal via UFF report and do same with Colman report for CLICO !!
I left local TI chapter disillusioned but aware that it is all Politically self serving ..from JCC controlled Smoke screen white paper on procurement that allowed removal of Central board Act and the free fall of corruption in Manning engines of massive state corruption – beginning with UDECOTT …
so despite the much needed forensic audits & the independent commission of enquirers ( COLMAN & UFF) where are the outcomes? prosecution and all ..
White collar crime at state board level continues to be politically supported so it is no surprise the current regime are now backtracking on State audits … ( who more corrupt now?) ..for …….
we continue to refuse to debate fully the auditor general report.( as in colonial days) and refuse to give that independent office sanctions to deal with errant bodies..
just as this Rowley govt seek to allow CLICO man and Petrotrin man and UDECOTT man and even one Alexander Place MAN to walk despite the billions (?)of dollars of public funds misused without accountability and culpability
we allow the parliamentary watchdog dog committees under PAC & PAEC & JSC to become political vendetta rather that vigilant and unbiased watchdogs over accountability and culpability of GOVT
I await the forensic audit for 16 years of London THA finances -its failure to report and attend any watchdog ctte,, despite reported 46 billion dollars of taxpayers ( trinis and clacutta like) money in Tobago not accounted for publicly…
The corporation Sole has much to answer for ….in state corruption… .. ..
so it was heartening to see the public march of citizens in Romaina demanding and forcing its govt to withdraw its softening stand on state corruption
but in this politically bacchanal native county can we ever hope to achieve same ?
hopefully the pen is mightier than the sword and it will come to pass before we become truly failed state as per TI CPI ratings indicate ……
all the best
FMR locAL CHapter TTTI DIRECTOR