Should the Director of Audit,
audit the IADC? by Anesia O. Baptiste
My Thesis:
The Director of Audit (DOA) has legal duty to audit the
accounts of the International Airport Development Company
(IADC) and this is supported by 1. The Constitution of St.
Vincent and the Grenadines Section 75, sub-section (2) (a)
and sub-section (6) and 2. The Audit Act, 2005, focus being
on sections 18 and 19.
I will show here that the nature of the IADC legally permits
the DOA to audit it under the above laws for the following
reasons: 1 (a) - It is involved in the expenditure of monies
appropriated and disbursed by parliament, (b)-It qualifies
among bodies established by law for public purposes, 2.
It qualifies as a recipient of government money and 3. It
qualifies as a government owned or controlled corporation.
Constitutional Grounds:
1. 1. Section 75, sub-section (2), paragraph (a)
of SVGs Constitution states, The Director of
Audit shall-a. satisfy himself that all moneys that
have been appropriated by Parliament and
disbursed have been applied to the purposes to
which they were so appropriated and that the
expenditure conforms to the authority that governs
it; and.
It has been argued that since companies accounts are not
listed in the list of accounts in paragraph (b) which the DOA
shall audit and report on, this section does not apply to the
IADC. However, proper reading of paragraph (a) clearly
shows to any reasonable man that in order for the DOA to
satisfy himself that monies appropriated and disbursed by
parliament were applied to the relevant purposes and that its
expenditure conforms to the governing authority, the
constitution must intend for the DOA to both audit the
government accounts from which monies are disbursed
(having been approved by parliament), as well as to audit the
accounts of the body/corporation/company to which they
were disbursed and to check the expenditure. It matters not
that the body is not an authority or statutory body because
in reality Parliament approves and disburses monies to other
corporations apart from statutory bodies and the Director of
Audit must account for ALL governments monies disbursed.
Furthermore, sub-section 6 of section 75 of the constitution
supports the DOAs auditing of the IADC for the following
reasons. It says,
1. 2. (6) The Director of Audit shall exercise
such other functions in relation to the accounts
of the Government or the accounts of other
authorities or bodies established by law for public
purposes as may be prescribed by or under any
law enacted by Parliament.
It is clear that apart from the duties of the DOA outlined in
subsection 2 of section 75 above, the highest law of the land-
the Constitution- also supports such other functions of
the DOA, prescribed in law passed in parliament, which
relate to other accounts. Note that one such account is the
accounts ofBODIES ESTABLISHED BY LAW FOR
PUBLIC PURPOSES. (Emphasis supplied). The Audit
Act, 2005 is one such law passed in parliament which
outlines other functions of the DOA, which are not
specifically outlined in the constitution, and these functions
relate to the auditing of the accounts of what the constitution
calls bodies established by law for public purposes. The
IADC is such a body as seen in its incorporation articles
filed at the Commercial and Intellectual Property Office
(CIPO). Incorporated under the Companies Act of 1994, the
IADCs purpose is described under (3) Main types of
business the company carries on or proposes to carry on as,
(a) To provide for the financing and construction of an
international airport on the mainland St. Vincent; and (b) To
provide for the management of all airports in the state. We
are also told under (4) Derivation of Name,
From nature of business as a government owned entity
responsible for the financing and construction of an
international airport on St. Vincent and the efficient
management of airports throughout the state.
Leader - Democratic Republican Party (DRP)
Audit Mandate
Evidently, the constitution says the DOA SHALL audit the
accounts of such a body! The intention and spirit of the
constitution is clear; it gives its constitutional strength-
support to the DOAs duties, in auditing ALL public monies
and it does not put a difference between government accounts
and the accounts of companies, as long as such a company
is a body with public purpose who receive disbursed
government monies. Those who use craftiness to give an
opposing interpretation are not sincere about accountability
to taxpayers. A body established by law for public purposes
can also be a recipient of government money and a
government owned or controlled corporation.
Audit Act, 2005-Section 18
Section 18 of the above Act is described thus, Audit of
recipients of government money and report to House of
Assembly. This is clear. The DOA must audit recipients of
government money and submit such reports to the Finance
Minister to be submitted to the House of Assembly. Sub-
section (1) says,
The Director of Audit may examine and audit the accounts
of a recipient of government money in relation to
government money received to enable him to report as
required by this Act.
It is argued by the crafty ones that the word may here
denies a duty. They argue that the DOA can do it if he/she
wants as well as he/she does not have to do it, if they do not
wish to. However, proper reading of the subsection, in its
context shows this reasoning is erroneous. It plainly says
that the examination and audit of the accounts of a recipient
of government money is in order to enable the DOA to
REPORT AS REQUIRED BY THIS ACT- a statement
which clearly shows the DOA MUST perform this function.
After all, the DOAs report as required by the Audit Act
2005 is not left to his/her desire but it is constitutionally
required and supported in the Act. Therefore, the correct
interpretation of may above should be that the DOA has
legal permission to examine and audit the accounts of a
recipient of government money. It is NECESSARY in order
for the DOA to be able to do what the Audit ACT demands
of him/her.
Furthermore, so much it is truly the intent of sub-section (1)
to grant legal permission to the DOA to audit the accounts
of a recipient of government money, it outlines ways in
which the DOA can do this audit and then it states in sub-
section (5), (6) the DOAs DUTY to see to it that this report
is laid before the House of Assembly. Note,
(5) Without delay after he has completed the audit
report, the Director of Audit SHALL give it to the
appropriate minister and the Minister of Finance, if he is
other than the appropriate minister.
(6) The appropriate minister SHALL, not later than seven
days after the House of Assembly first meets after he has
received the report of
the Director of Audit,
lay it before the
House of Assembly.
(7) If the appropriate
minister fails to lay
the report of the
Director of Audit
before the House of Assembly in accordance with subsection
(6), the Director of Audit SHALL transmit the report to
the Speaker.
Clear as crystal is the fact here that Audited Reports of a
recipient of government money must be done by the DOA
and must be laid before the House of parliament by the
Finance Minister as sub-section 8 shows. The intent of the
law is clear when it says the report SHALL be laid before the
parliament. If this relates to a report that may only be
done, in the interpretation of the crafty ones, then what sense
would it make to impose duty using shall when speaking
of laying the report to parliament? Even if the law can be
reformed to say shall where it says may, the context
here in section 18 shows that it does not remove the DUTY
from the DOA to examine and audit the accounts of a
recipient of government money, which the IADC is as shall
be proven next.
IADC is a Recipient of Government
Money
In the interpretation section of the Audit Act 2005 (section
2, sub-section (1)) a recipient of government money is
defined by three things but one only needs establish one of
the 3 to conclude that a body is a recipient of government
money. It says,
THE NEWS Friday May 19, 2017 Page 3
recipient of government money means a corporation,
association, organization or other body
(a) that has received, directly or indirectly, a grant, loan
or advance from the Government;
(b) to whom the Government has transferred property
for no consideration or for a consideration substantially
less than its fair market value; or
(c) for whom the Government has guaranteed the
performance of an obligation or given an indemnity,
but does not include a statutory body;
Now we know that the IADC is not a statutory body but can
it qualify as a recipient of government money? Yes!
Numerous accurate reports exist in the media on the hundreds
of millions of dollars that parliament appropriated and
approved for the IADC for the construction of the Argyle
International Airport. IADC has received grants from the
government of SVG, fulfilling paragraph (a). Additionally,
Deed #3346 of 2005, which can be found via a search at the
Registry, shows that the government of SVG, acting by the
Chief Surveyor in the Lands and Surveys Department (the
government is the Grantor), transferred in excess of 100
acres of land to the IADC. The Deed goes on to state that the
transfer was done in consideration of the Grantors
beneficial interest in the company. This fulfills paragraph
(b) of the definition of a recipient of government money.
Obviously government has interest because, as we will see,
the government is the sole shareholder of the IADC. An
important fact to note is that among those transferred lands
in 2005 was 23.13 acres in Cane Grove. And later in 2009,
19.05 acres of land in Cane Grove was then sold by the
IADC to Harlequin Property (SVG) Limited of Kingstown
SVG, for EC $7,109,496.00, according to Deed no. 1078 of
2009. Has government guaranteed the performance of any
obligation for IADC? Perhaps. However, even if it did not,
we have still established that the IADC fits under the
definition of a recipient of government money and as such
must be audited by the DOA as proven above in Section 18
of the Audit Act, 2005.
Continues on page 4