Culture of Government Auditors in Pakistan By Muhammad Akram Khan Former Deputy Auditor General of Pakistan Makram1000@gmail.com
Pakistan Audit department, the Supreme Audit Institution (SAI), represents government auditors in the country. The department has some cultural traits which limits its ability to achieve the objective for which it was set up more than a century ago by the British rulers and which since then has transformed into a modern audit office. However, the behavior of its auditors and top management is constrained by the cultural currents that have evolved over decades. The objective of the present paper is to enumerate some of the cultural traits of character of the auditors once they board the band wagon of the department and pick the hue of the department’s culture. By culture we mean the way the auditors behave, respond to internal and external stimuli, and perform their normal functions without any qualms of conscience. The culture is influenced by rules and regulations of the government, attitude of other service groups in the bureaucracy, broader social and economic currents in the society, ethical norms followed by political leaders and senior management in the government. The paper aims to suggest a number of measures for the Auditor General to overcome the constraints woven by cultural currents in the department. The culture is also reflected in the perceptions of the department’s clients and general public about the department. It is reflected in the outside image of the department. Culture is reflected in the behavioral norms. Some of the norms are held in high esteem. For example: They relish jobs with cars, even though all of them that they are not entitled to the official cars. Other norms are acceptable. For example, it is generally acceptable that officers travel on official expense on the pre-text of official work and attend social events like marriages of relatives. Some are just tolerated. For example, officers use office photocopiers and other stationery for private purposes. Everyone frowns but nobody objects.
Norms of Behavior Conditioned by Culture 1. Resistance to change 2. Treating auditee as a milk-cow and trying to squeeze as much from it as possible 3. Negative outlook: tendency to find faults. Opacity about any good thing noted in the auditee. Suppressing the achievements of the auditee and flashing the weaknesses
4. Inferiority complex: Feeling ashamed to be known as an auditor. Taking pride in being an officer, a bureaucrat; no sense of professional pride. In fact, professionalism is not part of the workimage, or of training or social cohesiveness; trying to remain away from professional auditors. 5. Priorities are: travel abroad at govt. expense; foreign positing; deputations; jobs with authority; jobs with cars, houses and other perks; do-nothing jobs; jobs with opportunities to oblige and get back rewards. Professional excellence and opportunity to learn and deliver better do not feature anywhere. 6. No sense of the role as deliverer of services. In particular: accounts offices are known for creating hurdles, piece-meal objections, making life hell for others; How not to be helpful. 7. Audit offices would like to hold on to the audit observations, howsoever unreasonable they are. They would not like to settle the observations. There is a pride in the number of paragraphs made and amount of irregularities pointed out. No one ever thinks that as a result of work of the audit, these figures should come down, if audit is delivering anything. 8. Learning and training is a low priority area. Posting in offices where you to train others is considered punishment. Similarly, the jobs that require intellectual input are considered lowpriority jobs. 9. Arrogance: Auditors think they are the best auditors on the earth. Other professionally trained auditors such as CAs, ACCA, ICMAs, CIAs, etc do not know anything. 10. No regard for public and private property: Mixing public and private property without any qualm of conscience. Sensibilities to distinguish between the two are almost non-existent. 11. Introversion: Most of the auditors are introvert. They are withdrawn, self-contained and introvert. They do not like to communicate with other stakeholders. They do not have any communication with auditees nor with the public to know what to audit and what is their perception about the auditors. 12. Interactive: The auditors only interact if there is a communication from the auditees. They are not proactive. The auditors never inform the auditee about what is the benefit of audit for them; how can they help improve things; no workshops or seminars for the auditees; for members of the PAC; no reports for the public; no communication with the media. In fact, there is no media policy. 13. Lack of courage to accept mistakes: “It is always someone else who is wrong. Auditors are never wrong�. They are always finding a scapegoat to lay the blame.
What should be done? 1. The Auditor General of Pakistan (AGP) should take steps to reduce auditors’ dependence on auditee for any facilities that they are taking from them. He should develop a Code of Conduct
for Auditors and make arrangements to monitor its compliance with strict action against those who violate it. The Code should emphasize difference between private and public properties. 2. The AGP should renew his policy statements about training and learning and attach incentives with jobs in these areas. 3. Gradually, the auditors should be taken out of civil service but with their own competitive examination and promotion prospects and service conditions. There is should be complete independence from establishment Division and Finance Division. The AGP should chart a map for this change and achieve it within a given time-frame. 4. Opportunities for greater interaction with auditees, other stakeholders, public account committees (PACs), etc should be consciously developed for greater communication. 5. Audit should be promoted as a service to the society. The audit should take steps to check reality relating to various government programs and then give a feedback to the government about its actual achievement. Move away from mere papers audit to a greater interaction with society. 6. Develop a clear media policy and follow it. 7. Auditors remain focused on petty procedural matters and ignore major systemic issues. They need training in defining and determining significant issues for investigation and reporting.
Develop and popularize new maxims The AGP should provide leadership in developing a set of new maxims and popularize them by wide circulation through meetings, seminars, workshops, display on walls and corridors of the departmental buildings and offices, training courses and prize competitions through essays on various maxim. In the following table, we provide some examples of the maxim which can be adopted/adapted by the AGP. There is nothing sacrosanct about this table. An entirely different set of maxims can also be developed and made popular through various means.
Set of Maxims for Auditors S. No.
Maxim
1. Independence from audit clients is the greatest value to cherish.
Implications for Behavior (a) Auditors will not demand or accept anything from the clients for their professional work except the ones decided through a proper protocol between the SAI and the client organization. It means the auditors would not ask for vehicles, accommodation, food, entertainment, etc from the clients. The
auditors will not be clients’ guests. (b) While on deputation with a client organization, the employees of the SAI will not report except to the chief executive or refuse to accept the assignment. Alternatively, they will not act as auditors. 2. Conflicts of interest in professional work must be declared.
(a) The auditors will not accept auditing assignment of an organization where they have worked in the executive position for the period under audit. (b) The auditors will declare conflict of interest arising from the employment of the near relatives, investments, contractual relationships with the client organization before accepting the audit assignment.
3. Doors of professional knowledge are always open.
(a) The auditors will make conscious efforts to enhance their knowledge of the professional developments. (b) The auditors will frequently visit websites off other SAIs and audit organizations for updating their knowledge of the latest professional thinking and practice. (c) Every auditor will plan to attend professionally-relevant seminars, workshops and conferences on a routine basis.
4. New skills for professional work are ornaments of the auditors.
(a) Every auditor will undergo a certain minimum number of days of training in a year. (b) Every auditor will make conscious effort to transfer his or her new knowledge and skill to other colleagues.
5. Change is normal. Status quo is abnormal.
(a) The auditors should welcome changes in routines and procedures for improving
performance. (b) Personal plans of the auditors should have a distinct segment for “New Initiatives” and reporting on last year’s initiatives. 6. Professional auditors are service providers and add value to the social good.
(a) Auditors should be conscious of the value they can add to the social good by providing better auditing and accountability services. (b) As service providers they should adopt an attitude of a salesperson promoting its product. (c) The primary traits of economy, efficiency, effectiveness, integrity, ethics, courtesy, and cooperation for better sales should be the guiding principles of behavior.
7. Public resources are a trust and all are accountable for their management.
(a) The auditors should demonstrate with their behavior their complete regard for public property and assets and should avoid using them for personal ends. (b) The use of public resources by auditors should be transparent
8. Self-accountability should have a demonstration effect.
(a)The auditors should be willing to submit themselves for accountability for the use and management of public resources. (b) The auditors should account for the achievement of their objectives by using public resources in an appropriate manner.
9. Index of auditors’ success is number of positive changes made by the client.
(a) The auditors should focus on improvements as a result of audit and not on finding faults with the clients. (b) (b) the auditors should be willing to settle the audit observations if
appropriate action has been taken by the client to implement the audit recommendation. 10. Satisfied audit client can add greater value to the social good than a critical audit report.
(a) The auditors should listen to the point of view of the client with patience and take into account all positive actions taken by it. (b) The auditors, including senior management of audit, should be easily accessible to all levels of clients’ staff. (c) The auditors should adopt an reasonable attitude in all matters relating to clients’ point of view. It means avoiding unnecessary suspicion
11. Willingness to make amends in light of valid evidence is a matter of pride.
(a) Settle audit observations if you get satisfactory evidence to do so. Do not take pride in number of audit observations or their amounts contrary to the evidence to do so. (b) Be humble to admit your mistakes.
12. Communication with all stakeholders is necessary for effective auditing.
(a) Involve stakeholders in all phases of audit from planning through reporting. Keep them informed as you progress. (b) Reality check with actual performance of government programs and projects by taking feedback from the focus groups of the general public.
13. Achieving objective is more important than compliance with rules.
Focus on the broader objectives of the internal controls and decide the extent of compliance with rules in light of that.
14. Our assets are satisfied clients.
Focus on the client satisfaction without compromising on your own objectives.
15. Confidentiality and transparency
Keep a balance between confidentiality of information and need for remaining
are twin virtues.
transparent.
Concluding remarks We have tried to highlight the need for a cultural change in the department of the Auditor General. This is over and above the technical capacity that the department needs to build through technical training and use of technology. No amount of technical competence would be of help if the auditors do not change their attitudes. The change in attitude can come through a cultural change because no individual auditor would be able to change his or her attitude if the aggregate cultural trends of the departments are pushing to the reverse side. The cultural change would require the AGP and his senior managers (deputy auditors general, directors generals) to play an active role. For playing that role they shuld themselves be persuaded by the need for such a change.