New Auditor-General’s demanding mandate

First woman AG: Madinah receiving her letter of appointment from Chief Secretary to the Government Tan Sri Dr Ali Hamsa. – Bernama

TODAY is only the third day of Tan Sri Dr Madinah Mohamad’s two-year term as Auditor-General (AG). And yet, there is already scepticism out there about her ability to do the job well.

In fact, the expressions of doubt – some coming from politicians – began soon after the Government’s announcement on Monday that she would replace Tan Sri Ambrin Buang at the helm of the National Audit Department.

The questions about Madinah’s suitability are clustered around two things: that she is neither an auditor nor an accountant, and that her husband is an Umno division chief who declared in August 2015 that he was willing to die for Prime Minister Datuk Seri Najib Tun Razak.

It says something about the country’s political climate and level of trust in our public institutions when people’s apprehension about the new AG is based on what her spouse said at a party assembly.

The concern here is that the political allegiance of Madinah’s husband may somehow affect her work. This is, however, mere suspicion by association.

Yes, the AG’s role demands integrity and independence, but it is unfair and premature to conclude anything at this point, when there’s nothing on which we can judge her performance.

On the other hand, the argument that she lacks the training and experience to be an effective AG deserves some discussion.

As an undergraduate in Universiti Sains Malaysia, she studied political science. In 1981, she began her 35-year career in the civil service by joining the Foreign Ministry. Just before her retirement at 60 last year, she had been the Education Ministry secretary-general.

In between, she had stints in four other ministries and, longest of all, the Public Service Department, and she earned a Master’s and a PhD, both in human resource, from Universiti Putra Malaysia.

That’s a solid CV, but to the detractors, it doesn’t indicate that Madinah has the technical competence to oversee the audit of huge government operations and their accounts.

Then again, the law doesn’t specify who qualifies to be the AG.

The Federal Constitution broadly covers the AG’s appointment, resignation, removal (which has to be done in the same way as the removal of a Federal Court judge), remuneration, powers and duties. But it’s silent on the criteria for holding that post.

In comparison, the Federal Constitution says the Attorney-General has to be a “person who is qualified to be a judge of the Federal Court”.

The Audit Act 1957 fleshes out what the AG is supposed to do, but still, it doesn’t offer any guidance on the requirements of the job.

Some people have referred to the Accountants Act 1967 and wonder if Madinah’s appointment is illegal. They point out that the Act says nobody can hold himself out as an auditor unless he’s a chartered accountant registered with the Malaysian Institute of Accountants. Since there’s no evidence that Madinah is a chartered accountant, she can’t be the AG, they argue.

However, an auditor in this context is a company auditor, as described in the Companies Act 2016. That’s very different from the functions of the AG, whose duties, according to the Audit Act, is to “examine, enquire into and audit” the accounts of government bodies.

It’s interesting that many of the previous AGs weren’t accountants or auditors either.

Certainly, when Madinah’s predecessor, Ambrin, became the AG in 2006, he had no audit or accountancy background. He has an economics degree from Universiti Malaya and a Master’s in international business from an American university. Like Madinah, he had spent 35 years in the public sector and moved around a lot. And prior to being named the AG, he was the Education Ministry secretary-general too.

Despite Ambrin’s inexperience in audit, many people feel he has fared well in his 11 years as the AG. His reports have consistently highlighted many examples of weak management of public funds, and under him, the department has introduced changes that were designed to push the government agencies to respond faster to findings and recommendations in the reports.

He has also gained a reputation as a truthsayer who’s determined to always do the right thing and to get the job done.

The fact is, none of five previous AGs (starting from the late Tan Sri Ahmad Noordin Zakaria) were promoted from within the National Audit Department. They were career civil servants with varied experience in other agencies. They had limited expertise in audit and accounting, but that didn’t have to matter.

A company is audited so that the auditor can express an opinion on whether the annual financial statements give a true and fair view of the company’s financial position and performance. That’s very different from what’s expected of the AG.

According to Section 6 of the Audit Act, when the AG and his staff examine accounts, he’s checking to see if public monies are collected and spent according to procedures. He also needs to ascertain whether government assets are accounted for and that the agencies keep proper accounts and records.

It’s also part of the AG’s audit to find out if public funds have been spent according to authorised purposes and that the “activities related to such purposes were carried out or managed in an efficient manner with due regard for economy and the avoidance of waste or extravagance”.

This mandate is a lot more about a commitment to accountability and transparency than it is about knowing accounting and audit rules.

Ahmad Noordin received the 1985 Ramon Magsaysay Award for Government Service in recognition of “his effective, fearless exposure of inefficiency and corruption in government”. When he was still the AG, he chaired the commission that investigated the Bumiputra Malaysia Finance scandal.

In response to getting the award, he said: “I believe that with trained and experienced officers, the Audit Department could play a more useful role in public administration. True, we still have to look for errors and omissions. But this is not an end in itself.

“What is more important for auditors is to identify weaknesses in the system, analyse their causes, and suggest that administrators and managers take remedial measures as quickly as possible. We should try to make people aware of the need to be careful with public money. It is everybody’s money.”

If Madinah shares this view, she has already started off on the right foot.

Executive editor Errol Oh would like to point out that Madinah is the first woman to head the National Audit Department.


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